Is anyone going to be living just on state pension when they retire?

[Shinyseas]

It looks like I will be. Never really earned enough to put money aside for a pension, married someone who was terrible with money and at the age of 51, have youngish DC so even though I’m earning better money now, I’ve got to get them through teenage years, then off to Uni. All feels too late to save anything decent. I’ll be early 60s before my youngest leaves home.

When I checked this week, my private pension is set to give me 1.5k a year 🙁

People do survive on the state pension I know - but it must be very very tight.

I mean I agree it's contributes to gulf of inequality we have in the UK.

"On average, those leaving estates valued between £1 million and £8 million pay 20 per cent of what they leave in tax; those with estates of around £10 million pay just 10 per cent"

Re. The deprivation of assets thing. In the example I gave the house was signed over to kids 20 years prior to knowing they would need care in a home, and primarily to avoid dispute between children.

If for example someone develops dementia, signs over the house, and then goes into a home 3 years later that would be a different story.

Kitcat15 is right about inheritance tax avoidance - has to be done 7 years prior to death.

I know of several families who have set up their house/s as a limited company, naming their children as directors which also avoids inheritance tax and possibly care costs.

Unfortunately people who have worked to have significant assets are very much at risk of seeing them come to nothing if they don’t plan ahead long before old age.

@Robinni
Your first post made it sound as though claiming attendance allowance was a simple matter:

If you found you were too unwell to work 16hrs, you could claim attendance allowance

My sister is claiming state pension, has been left very poor by the sudden death of her husband and shocking state of finances, has a serious disability that means she takes multiple painkillers and cannot walk without using a frame, or has to be pushed in a wheelchair (could not work even 1 hour a week never mind 16) and has been refused AA.

So it's not quite as simple as 'you can claim AA'

Unfortunately people who have worked to have significant assets are very much at risk of seeing them come to nothing if they don’t plan ahead long before old age

I don’t think it’s unfortunate at all. I find it abhorrent that people who have the money and assets to pay for their care attempt to weasel out of it. Why should they be subsidised by people who have less than they do?

@chimichangaz I wasn’t suggesting it is an easy process. It’s extremely stressful and requires a lot of input. I have supported several wheelchair bound family members through it. Two with significant continence needs and difficulty eating. A lot of it is filling in the form properly, having proper expert support to do so and having proper medical reports from several consultants/assessments etc. to back up the evidence given.

If your sister has been refused she can apply for mandatory reconsideration, and I would suggest she has a citizens advice representative oversee her case and accompany her for any meetings. Also, that if any further medical reports in process that these are provided.

@Robinni
I wasn't suggesting you were trying to mislead anyone, only that at first sight it might look like a straightforward 'apply and you'll get it' type of thing. I certainly would have thought that on reading. I can see in subsequent posts you've referenced needing to take care in the process.

Your advice is really helpful, and I'll definitely talk to my sister about what you suggest. The application came at the end of a long process of sorting out pensions, unravelling policies and dealing with two house moves, so it probably wasn't given the attention it deserved.

@chimichangaz glad the rest of my posts put things in context and I hope the advice helps - she should have reports from any consultant/CPN etc done, prescription list, and info should be as detailed as possible, if it doesn’t fit in the box write it on a separate page (all numbered with details at the top and questions marked clearly). There are guides available online if you google, they explain the points per question and what information is relevant, so she will be able to see what applies to her. The process for those with illness and disability has been made very hard and people who are genuine are almost demonised due to the actions of a few who are not. I really hope your sister has some resolution with this.

@Blossomtoes
I don’t think it’s unfortunate at all. I find it abhorrent that people who have the money and assets to pay for their care attempt to weasel out of it. Why should they be subsidised by people who have less than they do?

They are certainly not subsidised. Many of these people have contributed massively to the system and never claimed a benefit for the majority of their lives. For the people who have accumulated assets many will have spent tens of thousands on an education. They will have worked 40+ hours per week. They will have contributed a very much greater amount of money in tax and NI to the system. And then are told they are not going to be taken care of and will lose virtually everything they have worked hard for. This was very hard for my relative to grasp considering they had worked hard in the service of others for so long.

Meanwhile the other relative who had only worked part time for 15yrs gets free care.

There is a serious imbalance in the system. The adult social care reforms go some way to redressing this imbalance but really needs to go further.

If joe bloggs who has contributed zero NI and tax is entitled to free care. Then Jane bloggs who has contributed £10k a year should get it too.

As for weaseling out of it. There is such a thing as wealth planning and people should be as vigilant with this as they are with their pension. It’s common sense.

Unless you have significant savings you should check whether you are eligible to claim Universal credit to top up your low wages, especially as you have rent to pay.

Sorry I quoted the wrong post - that response was to @MeanderingGently

Then she needs to get help with a mandatory reconsideration of the decision. I have rarely know AA be turned down. In my experience it is one of the easiest benefit to claim.

Yeah my parents have no assets and I'm quite happy morally that they aren't paying for care (except for the pensions)
Dad worked from 15 - 70 and had three jobs at one point and was still working 7 days a week age 70. One DC (me) and barely used the NHS unless his leg was hanging off

And I’m happy with that too. It’s absolutely right that the state should pay for their care.

What I wouldn’t be happy with is for me not to pay for my care. I have a house and I have savings, those should be used to pay for my care, should I need it. I worked and paid tax for 45 years, that doesn’t mean it’s OK for me to sponge off younger tax payers if I need care. You spend your life saving for a rainy day so when the skies open you have an umbrella to put up. To me it makes zero sense to protect my assets to pass on to already comfortably off adults.

Added to which I want the choice financing my own care brings. I don’t want to be at the mercy of the state and living in the kind of institution the council deems appropriate.

I'm actually surprised at the care home TBH - it's only got 14 people! Looked it up online and all the CQC reports etc can't find a single fault with it
My dad is really pleased, mum hates it but she hates anything that isn't home...

Added to which I want the choice financing my own care brings. I don’t want to be at the mercy of the state and living in the kind of institution the council deems appropriate.

This is actually a very good point - if you are self funded you get a choice about where you go.

My relative did feel comfortable with using their savings initially. However when they were completely blown, and they were worrying about paying for a hair cut and under pressure to sell the house it took away their dignity. Caused depression and we kept hearing things such as “why can’t I just die now, please let me die”… on a daily basis. It was horrendous. Meanwhile as I say the other relative had not a care in the world. Although with dementia hadn’t a clue anyway….

I think we can agree to disagree. Could people get back on topic re. Op’s pension concerns.

All depends on the fund. Many years of DH's contributions went into an equitable life pot. They went bust.

I pondered that. Maybe Kim was contacted out (COPE) for some years under the old state pension scheme so doesn't have enough full NI contributions?

I am in exactly the same position as you OP. It keeps me awake at night if I let myself think about it. I can also relate to what you say about your friends. Neither me or my husband have ever had any family help for anything (no child care, babysitting, financial help etc...) And neither of us has ever, or will ever, inherit a thing. It is all down to us which amongst our friends is unusual. My husband has worked all his life and will just have state pension. I will have a small private pension as well but it really is very small. I am same age as you.

I am 63 and have 3 years until I can retire. I will only get state pension, I have nothing else. With the new style state pension you don't qualify for pension credit. I do rent, so hopefully will get help with that, but other than that I am really worried about how I am going to manage.

So you do you....and leave others to do their thing....my Aunty paid thousands in taxes....she paid hundreds of thousands in care costs ( until the money ran out) .....but the house was safe and able to be passed to her son

She should appeal

Start saving right now, you've still got loads of time. Even just a couple of hundred a month will really add up. I know it's the worst possible time to be saving but you will be unbelievably thankful when the time comes around. It's literally never too late.

I will only have a state pension too plus savings

The priority for us is paying off the mortgage in 5 years and saving like mad (youngest dc will be 18 in 5 years)

I've only ever worked in low paid or nmw jobs and most didn't have pension schemes

I remember working full time in the early 90s for £390 pm!

I may need to top up my NI contributions at some point