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.

I currently spend less than £170 a week on outgoings. I don’t count housing costs as I won’t have those in old age. So I don’t see why I won’t manage. I don’t drive, never have (live in London) so no car costs. I’ll get things free that I pay for now, like my glasses etc. I’m not a big socialiser so I won’t want to go for lots of meals out or whatever. Currently my additional wages go into savings for things like holidays. Like a pp, I’m doing all my travelling now and I think I’ll be ready for a slower pace come retirement. I rent from a HA so my rent will be covered by HB and no housing repair costs. I’m not worried.

You can always liquidate such assets gradually (if you need to) and still claim benefit.

That's morally questionable

What happens to people that have never really paid NI contributions and has no pension of their own? I know someone like this, and their mortgage is one of those equity ones where you are supposed to pay it of at the end.

If you were contracted out though you had to have a workplace pension and you paid less NI contributions.

You now need 35 years NI contributions (it used to only be 30) and if you claim child benefits you get 12 of those years credited with no need for contributions. So most women should be able to qualify for a full pension with no issues even with time off work for kids.

Also you don’t need “your dh to take the tax hit” (or indeed yourself if you work but still want the NI credits for any reason) if you earn more than 50k and claim child benefit. You can tick a box on the form and get the credit but not the child benefits (so no need to self assess.

@3Br1tnee - if they didn’t pay at least 10 years they wouldn’t get any state pension. But if they had no other income they would get pension credit (which is same as new state pension anyway) and would be eligible for housing benefit. They would need to sell the house first though if it’s on an interest only mortgage.

OP, you are in a rather privileged position! House paid off, a bit of private pension. All you have to do now is save as much as you can. Good luck.

We are in our 50s. State pension should be enough to maintain us in our declining years I reckon. We are saving into pension now to have some money to pay for holidays and hobbies for the first part of retirement.
Tbh, looking at our parents, over 80 seems to full of cognitive problems and mobility issues, so it's 13 years of extras to save for between 67 and that.
We are making sure we have decent holidays now!

The pension forecast for me is the current standard amount. I was contracted out for several years, but my understanding is that when the rules around this changed, my employer 'bought us back in' to the state scheme. I currently have 41 years of full NI conts, and will have something like 48 years by the time I receive my state pension.
I think that it is probably doable to live on state pension alone, but not easily, unless you are entitled to other payments. My DM manages OK, but she lives in a council property so gets help with her rent and council tax and the LA is responsible for the maintenance of her home, so she has no big bills to pay whereas somebody who owns their own home has that responsibility.

Sorry, probably not the best place to ask on your thread OP but I have accessed the link re the state pension forecast. On my records it states that between 1998-99 and 1999-2000 I did not make the full contributions. I was in my third year at university and was on a work placement, so I couldn't work like I did in my first and second year. Then I graduated, got a graduate job, moved to London, a traumatic incident occurred, I got diagnosed with PTSD and could not work for a year. I was a psychiatric inpatient on and off for most of 2000, recovered and worked since then. I didn't get SSP or anything as I was too poorly to claim it, my parents financially supported me in the few weeks when I was not in hospital. Will this affect my state pension? I have one local government and one NHS pension too? Thanks everyone. Panicking a bit!

Even if you are missing those years you can still buy them back if you haven't got 35 years contributions.

But you can only go back six years. Gosh its complicated. Just checked.

@SafeMove when do you plan to retire?

If you pay NI from 17 to 68 that's 51 years of contributions when you only need 35 so many people don't need to worry about skipping a few yrs.

@countrytown at the retirement age hopefully (is it 67 now? Lost track) so I have 24 years full, plus another 25 years working life left. Oh that's good, I will have contributed 49 years. I didn't know about the 35 years expectation.

I think it's 68 for me but expect it to move again. You'll be fine, if you go on the f/c it will tell you how many years you still need to earn.

@SpiderinaWingMirror

We are in our 50s. State pension should be enough to maintain us in our declining years I reckon. We are saving into pension now to have some money to pay for holidays and hobbies for the first part of retirement. Tbh, looking at our parents, over 80 seems to full of cognitive problems and mobility issues, so it's 13 years of extras to save for between 67 and that. We are making sure we have decent holidays now!

This is the dilemma isn't it. people say save for a pension now. My dh inherited money after losing both his parents in a short space of time and because he doesn't have much of a private pension, due to short term contracts, time spent out of the country etc, I encouraged him to put some of the inheritance into a private pension,. However as he has quite severe health problems which mean he could perhaps not live to a great age, he sees this as a waste and wants to enjoy the money asap doing things he wants to do. We could both pay extra into our pensions but we both feel we may not live to be a great age.

@countrytown

If you pay NI from 17 to 68 that's 51 years of contributions when you only need 35 so many people don't need to worry about skipping a few yrs.

You need to worry if they're not qualifying years. Unless you get your personal forecast you can't be sure if you'll get the full amount. If you were contracted out - and many people don't realise they were - you won't get the maximum.

People are going to be affected by this for some years to come.

@Babyroobs
Absolutely the dilemma! My own ddad did not make it to retirement age. He had put off all sorts until his retirement. So sensible savings and spending on nice stuff now is the balance for us.

Yes lots survive just about.

@campion yes of course you need to check on the gov link. I wouldn't know how many years I had paid without checking on there. The fact remains many younger people will be paying more than 35 yrs worth.

@Babyroobs it is a dilemma & often I don't believe some of the "you should save X for retirement". You don't need the same budget at 90 as you do at 70 for one. I will be taking my lump sum from my private pension for sure.

Problem is, it goes both ways and insight is gold. My MIL had health issues all her life and was convinced she wouldn't make it pass her 70s. She's now 92 and although not fully mobile any longer, is in perfect health, and her mind is as sharp as it ever was. No reason why she can't continue until pass 100.

Thankfully, she did make arrangement that means that all in all, she has a very good life. She still travels abroad, and is currently planning her next stay in Portugal. She is enjoying life in the full and has done so since she retired at 60.

I would think that a ‘nice’ life could be had on £2000 a month for a couple, so if basic pension is £1500 then there is a need to find the £500 shortfall /£6000 a year.
Other pension/savings etc. would need iro £120k in order to last 20 years and would need to be invested to at least keep up with inflation.

My late FiL lived on SP of £7k plus an annuity of a similar amount so £14k total and he ran 2 cars with very expensive upkeep ( he used to spend £50 a week on petrol!) and had 3/4 Warner holidays a year.

DH will have a much better retirement than me if anything happens to the other, he has a military pension to come at 60 that would have cost @£200k to ‘buy’ but should he die first I will only get half of it, so I’ll be perhaps £400 a month worse off than he would be if I went first.

One thing I ALWAYS say on pension threads is that non tax payers can pay into a SIPP and get tax relief - pay in £240 monthly and it gets made up to £300. If you can afford it then it’s a great way to save but you have to weigh up whether the extra pot is worth having i.e someone in rented housing may well be better off with NO pension provision, someone who has sacrificed a lot for a pension could well be worse off in retirement than someone with no personal pension.

My MIL lives on just state pension, topped up by pension credit (she doesn't get the full amount, as she only worked for 15 years). She gets full housing benefit and full council tax benefit, plus free tv licence.
She only has to pay her electricity, phone/internet and water charges (no gas at the property).

She always seems to have plenty of money, buys clothes occasionally, books, is generous with presents and in the last couple of years has replaced carpets and some furniture.

I don't know how she does it, tbh. I have just qualified for my state pension and have a small private pension (less than £300 a month pre-tax). I can't afford to retire and have any spare money for treats, running a car, replacing clothes, the occasional bottle of wine, going out etc. My bills alone come to £300 a month (nearly half of which is council tax).

I'm going to have to move to a cheaper area to release some equity and either live on it or invest it to give me more income.