Can anyone live on a state pension?

[whatisforteamum]

I've never had a pension,bought a house on a low income so scrimped and scraped to make ends meet and paid the mortgage with no outstanding debt .Dh put into a small pension over 30 yrs.
We are in our 50s and 60s and feel the thought of living on the state pension daunting.
We do have life savings and I will call the government pension advice line.
AIBU to think the state pension won't cover the bills of most pensioners?
Can anyone survive on just state pension.

@myheartskippedabeat

The thought of working at nearly 70 fills me with dread I have to say

I think I could as long as in good health and in the same job I do now.

No mine was a private pension with v little in it.
Ringing for advice this week though asap.

@tanguero one measure of average UK life expectancy at 66 is more than 20 years for a woman so deferring where the benefit accrues after 18 years might not look a bad deal.

Zilla1 Sat 21-Aug-21 16:09:38
@tanguero one measure of average UK life expectancy at 66 is more than 20 years for a woman so deferring where the benefit accrues after 18 years might not look a bad deal.

Essentially it's a bet with the Government on how long you will live.
Die within 18 years and you have lost the bet.

Another consideration; deferring assumes that in the next 18 years the Government's won't change the pension rules to one's disadvantages and that the Government will still pay you the money. Waspie women ?

You could of course take your pension at 66 - so that's say c£8000 for the year you have chosen not to defer - and invest it for 18 years, during which time the money will be in your, and not the government's bank account.

I think as a generation those of us due to retire in the next decades will need to accept we need to downsize. The idea of staying in a larger home, even if it was the family home, will be less acceptable.

Home owners may struggle to afford repairs, bills and council tax on larger places and I can't see the exemption from the 'bedroom tax' remaining for pensioners claiming housing benefit. But if it becomes the norm people will accept it more and environmentally it is the least wasteful thing to do too.

@OddBoots

I think as a generation those of us due to retire in the next decades will need to accept we need to downsize. The idea of staying in a larger home, even if it was the family home, will be less acceptable.

Home owners may struggle to afford repairs, bills and council tax on larger places and I can't see the exemption from the 'bedroom tax' remaining for pensioners claiming housing benefit. But if it becomes the norm people will accept it more and environmentally it is the least wasteful thing to do too.

Yes, but as a single person in a one-bed flat, where could I downsize to? A bedsit or just a room? :(

@Gwenhwyfar I didn't mean everyone, I was thinking of those who have been in 3+ bed houses and feel it is their right to stay there come what may, in a 1 bed flat (assuming the charges for the leasehold etc aren't unfair) should be able to afford to stay on the basic pension.

[quote OddBoots]@Gwenhwyfar I didn't mean everyone, I was thinking of those who have been in 3+ bed houses and feel it is their right to stay there come what may, in a 1 bed flat (assuming the charges for the leasehold etc aren't unfair) should be able to afford to stay on the basic pension.[/quote]
I agree with you about family homes. The higher council tax for larger properties should act as an incentive for people to move, but obviously doesn't.
Another issue is that if people don't move to a more manageable place when they can, they may end up going straight from their big house into a home.

What happens to private renters? Can they get help with their rent if they only have a basic state pension?

So do those who slog their guts out on minimum wage get exactly the same support as those who have never worked and then get pension credit?

[quote bojo7]@tanguero, I realise there is a fair payback time, but if I take the state pension when I am still working I would pay 40% tax on it. And my family is long -lived.[/quote]
however, if you use it to make contributions to a private pension scheme, you will get the tax rebated.
www.gov.uk/tax-on-your-private-pension/pension-tax-relief

and you can start taking the benefits after retirement, when your income has reduced and you are in a lower tax band. If you go for drawdown or partial encashment you can choose when, and how much, you take.

you would probably get the excess above basic rate quicker if you write and claim it, otherwise it would arrive sometime after the end of the tax year.

If you don't already have a private pension, I should think a low-cost SIPP, and a low-cost tracker, with one of the online providers, would be better value than any scheme with retail charges.

I think that with private renting, you get HB but there is a cap, so a single person (maybe a couple too) would be expected to have a 1 bed flat and have to top up above that level.

@GenderApostatemk2

I think that with private renting, you get HB but there is a cap, so a single person (maybe a couple too) would be expected to have a 1 bed flat and have to top up above that level.

So would a middle-age renter be better off trying to buy (assuming they're accepted for a mortgage at their age) or getting a private pension, or neither of the two because they would make them not eligible for pension credit/housing benefit?

You could of course take your pension at 66 - so that's say c£8000 for the year you have chosen not to defer - and invest it for 18 years, during which time the money will be in your, and not the government's bank account.

This is the obvious thing to do. A bird in the hand being worth two in the bush and all that!

Sandysmam, in some cases, those who have very small other pensions from working end up worse off than those who never worked/paid into a pension.
I know my Sister was shafted, she had a tiny pension annuity of about £20 a week and it put her £5 above the limit for HB/ Council Tax benefit etc. It was only the fact that she was able to finally get PiP that saved her, she would have been evicted from her 1 bed HA flat. She went From getting £140 a week and paying full rent of £70 and council tax to getting £250 a week and not paying rent or CT, unfortunately she had to be severely ill/disabled to benefit.

Our state pension won't provide us with enough for our living costs which is why we have savings and investments to top it up.
We've managed to get in a position to retire early but it's took years of planning and investing. We haven't worked all our lives to have the same lifestyle as those who haven't.

@PigletJohn, thank you for this. I see I shall have to look into all this a bit more. My first (and main) pension was a non-contributory final-salary one payable at 60. I am now in the Teachers' Pension scheme, and I think I can make extra payments next year when the scheme changes for most members. When a teacher reaches retirement age, I think you resign for the day and then start a new pension if you want, with the old pension payable at that point. But I am going to investigate properly now.

We have had "pension advisors" at school offering free advice. However they could not answer simple questions and just wanted to sell products.

[quote OddBoots]@Gwenhwyfar I didn't mean everyone, I was thinking of those who have been in 3+ bed houses and feel it is their right to stay there come what may, in a 1 bed flat (assuming the charges for the leasehold etc aren't unfair) should be able to afford to stay on the basic pension.[/quote]
Well it is their right if they have paid for it. Who are you to tell people what to do with things they own. None of your business

@Dreamstate Absolutely none of my business if its not me paying for it, if they have pensions that cover the costs of a big house then I doubt anyone will stop them.

My point was though that as people in my generation (in their 40s/50s) are likely to have a smaller retirement income then it's not likely to be affordable so downsizing will just have to be more normal. It is realistic most of us will have to get over the collective 'it's been mine for years so I deserve to keep it' attitude.

@SandysMam

So do those who slog their guts out on minimum wage get exactly the same support as those who have never worked and then get pension credit?

Yes.

@SandysMam

So do those who slog their guts out on minimum wage get exactly the same support as those who have never worked and then get pension credit?

Yes, they do. You’d go a very long way to find anyone who’d never worked who was capable of holding down a job. Life’s made bloody uncomfortable for people who are out of work these days.

@MiddlesexGirl

If you contracted out of state pension then you will have an alternative pension from your workplace so it's not like there will be less money overall as some seem to be suggesting.

There will be less if you worked for a small company with no pension scheme. We were all early twenties, and encouraged to contract out. No other payments made into the pension at all. It in no way covers what we lost in NI contributions. At the time it was sold as a way of reducing tax and maximising pay.

OP if I were you I’d just keep working as long as I was physically able. That’s what I plan to do - I’ll work until I drop. I think people retire far too young generally.

[quote OddBoots]@Dreamstate Absolutely none of my business if its not me paying for it, if they have pensions that cover the costs of a big house then I doubt anyone will stop them.

My point was though that as people in my generation (in their 40s/50s) are likely to have a smaller retirement income then it's not likely to be affordable so downsizing will just have to be more normal. It is realistic most of us will have to get over the collective 'it's been mine for years so I deserve to keep it' attitude.[/quote]
Well you don't pay for it. If they cant afford to live they end up selling or having a crap retirement or like my neighbour let their house look like crap but its still their house they have paid for.

You say we cant stop them staying erm hello they paid for it with their money of course you cant force them to sell and its not a case of ots been mine for years I deserve to keep it attitude...how presumptuous of you.

People stay because they worked hard for that property it has memories and they enjoy where they live have friends etc. Its not always easy to downsize in the same area either.

Think you should stick to making sure you have enough reitement money and mind your own business instead of looking at other people and deciding what they should do

Could you try living on a budget equivalent to it for a few months (and put any extra into a private pension...every little helps!)? It will help give you an idea of what life would be like. If it's unbearable you could always delay retirement to try and save a bit more.