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 have worked from 1980, 8 years off as a sahm, 10 years contracted out. Gives me 31 years. If I keep going for another 4 years I'll be eligible for the full state pension but each year is worth about a fiver a week and if I have to I'll bite the bullet. My occupational pension more than covers it.

Our advice to the dc is to pit as much as possible into their pensions as early as possible. I transferred 10 years of private pension into the local government scheme in 2013 and overall from 2014 have 20 years service locked into a final salary pension.

I have colleagues in their mid 30s educated to level 7 who refuse to contribute to the pension scheme due to cost and "they might die and never see the money". They give away the employer's significant contribution and tax benefits. It's quite bizarre.

@whatisforteamum

Ah ok.Yes I work ridiculously long hours to put something aside.I never heard of pension credit tbh. It just hit me we may have to sell our little house which would be heart breaking. Like I say financial advisors couldn't sell me a pension as we were pushed for money for decades.

If you are both employed are you eligible for their Workplace pension schemes?

[quote countrytown]@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.
[/quote]
You may well need more at 90 than 70

At 70 many still look after house and garden including painting and other such diy, at 90 they need to pay for all these things to be done , and heating bills are rising as older people feels the cold badly , and going forward they will need to take taxis where before they could drive or take the bus ( even just shopping )

You may well need more at 90 than 70

statistically it's unlikely though looking at life expectancy.

"I'm in my 60s and would have normally retired by now but the extension to retirement age means I'm still having to work. However, when I get to 66 I shall be on a state pension."

But workplace pensions are compulsory now aren't they so you will have at least a few years of a workplace pension.

I wish I could say that like you I'd be happy for a quiet life in my old age, but while I never thought I'd be doing cruises, the thought that I won't be able to buy a cappuccino out or buy a new book or magazine horrifies me.

@Babyroobs
If she's on pension credit, I thought she would get her rent covered fully by housing benefit?

Her housing benefit covers some of her rent but not all of it, she still has to pay a portion of it.

@tanguero

Viviennemary Fri 20-Aug-21 22:21:20 Id love to see anybody live well on 9k a year which is what the new basic increased state pension will provide. And thats only for folk with 35 years NI contribution

No it's not ! Pension Credit (which is what really counts here) is for anybody. Even if they have never made a single National Insurance contribution in their life.

If you get the full new state pension of £179.60 pw, it puts you over the threshold for pension credit. Pension credit is £177.10 for a single person.

So for working all your life, and paying off your mortgage rather than renting, you end up £2.50 a week better off than someone who's never worked, don't get a free tv licence and may not qualify for much help with your council tax.

That extra £2.50 can end up costing a lot.

"You don't need the same budget at 90 as you do at 70 for one."

Yes, but there's inflation as well. And what if you live to a 100 and you budgeted for 90?

LakieLady.....I agree

@LakieLady I agree too.

It's worth paying into pensions at any age, it shouldn't come as a surprise that money is needed to support yourself in old age.

OP can you not increase your pension contributions now?

"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."

What a dilemma. I rent so am I better off not getting a private pension? I will get state pension and some years of workplace pensions as well if I manage to collect them (I have loads of small ones that I can't consolidate). Can I be sure that the pension credit will even still be there when I reach 70 or whatever it will be.

When I started work in 1971, private pensions weren't really a thing.

If I'd known then what I know now, I'd have paid into a pension and had fewer nights out, holidays, shoes and handbags.

@Gwenhwyfar

"You don't need the same budget at 90 as you do at 70 for one."

Yes, but there's inflation as well. And what if you live to a 100 and you budgeted for 90?

Unless you are having to pay for support for personal care, cleaning etc. Far more likely at 90 than at 70.

Until relatively recently the amount paid by the State Pension and Pension Credit were the same, but the rules changed so that whilst SP increases by the 'triple lock' (a minimum of 2.5%), PC only increases by CPI.....so slowly the two rates are beginning to diverge, and SP is now a bit more than PC. So there is a small reward for those who have 'paid in' to the system via National Insurance contributions.....though (because they are not on PC) they then miss out on the 'over 75s free tv licence.

Yes, but there's inflation as well. And what if you live to a 100 and you budgeted for 90?

I didn't say don't budget zero but not everyone is going to live till 100. And if I did live to 100 & I had only budgeted for 90 I would use equity release.

@LakieLady

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.

Could she have savings in cash under the mattress?

"If you are both employed are you eligible for their Workplace pension schemes?"

Aren't these compulsory these days? Or at least compulsory for the employer to have them? I seem to remember that coming into force around 2014, but not compulsory for small employers straight away.

"Unless you are having to pay for support for personal care, cleaning etc. Far more likely at 90 than at 70."

Isn't that provided by the council?

@tanguero

Until relatively recently the amount paid by the State Pension and Pension Credit were the same, but the rules changed so that whilst SP increases by the 'triple lock' (a minimum of 2.5%), PC only increases by CPI.....so slowly the two rates are beginning to diverge, and SP is now a bit more than PC. So there is a small reward for those who have 'paid in' to the system via National Insurance contributions.....though (because they are not on PC) they then miss out on the 'over 75s free tv licence.

And also the ones on state pension rather than pension credit may have additional income from workplace and private pensions, savings, etc.

@adeleh

How can you not be eligible for full statepension with 50 years contributions? I’m not doubting you, just wanting to know.

Some years contracted out. My bloke has 44 years contributions but his employer contracted out so he won’t get a full state pension.

We could exist on state pensions but it wouldn’t be much fun.

Sorry if this is a really stupid question but neither me nor my dh will be eligible for the full state pension, although he will be entitled to slightly more than me. We could manage on these two pensions added together but if he died would my sole state pension rise at all?

Personal care is means tested in most councils. A lot of people end up paying for it. As well as paying for gardeners and cleaners never mind house repairs.

I thought care in the home was state funded? Wasn't that Teresa Mays proposal to make some people pay?

The means testing doesn't include value of home or pension does it? It's just savings?

@countrytown

I thought care in the home was state funded? Wasn't that Teresa Mays proposal to make some people pay?

DM paid £850 per week for a live in carer, plus food and obviously free lodgings. Plus gardener, plus cleaner, plus, plus, plus.

Not many people get state funded care anymore.