Parental income

[glassdarker]

So, context, just seen 10% pension increase.

At same time I've been talking about doing something jointly with my mum and dad. So as a result we talked about income. My parents worked in manual/ administrative roles, neither went to Uni, but worked hard all their lives. Retired ten years ago, own house and car. I appreciate that many pensioners won't be in that position.

They both have small final salary schemes (one less than 10k, one less than 20k). They both get full state pensions. After normal bills their disposable income is a 2k a month. 2k a month ! I am blown away !

But bloody hell we are both higher rate tax payers and we are counting every penny (though we have a lot of extra spend due to a disabled DC). But AIBU to be a bit shocked by the difference in how we are experiencing the cost of living crisis ? I am glad they are doing OK and we don't need money from them but I am still a bit jaw dropped by this... and fantasy spending even 1/4 of that monthly disposable income !

Of course £20k is a small pension. If they live 20 years past retirement it's only £1000 a year.

Oh if you meant £20k a year then no that's not small that's quite large.

It’s £20k per year.

@IDontWantToBeAPie a 20k a year pension is what it pays out.

OP if we didn't have the mortgage we would have more than that free on fairly normal salaries if we include over payment 25% of our income goes on the mortgage (minimum is 10%).

My 82 yonDM is in this category. She has plenty of disposable income. She is always happy to help and family members who are a bit strapped for cash. She can well remember being young, married with two small children with only my DFs tradesman's wage to live on. They really struggled then. She went to college when I was an adult, got a decent job and began paying as much as she could into a pension and other tax free savings. She made great financial decisions in her 40/50's and now she is comfortable. Why would this be an issue for anyone? I'm glad she can afford food and heating in the current economic climate.

I hope when I retire my child doesn’t begrudge my pension or the fact that I own my own home/car. Would you rather some of your parents pension money come to you instead as clearly your situation is more deserving?

Is it about begrudging their home and car or is it just pondering whether they, and plenty of people like them, are in need the triple lock at the expense of so many others who are hit with higher taxes paying for the triple lock?

I don’t know what I’d do if I were in charge btw. Plenty and plenty of pensioners do not need all the extra help they get and obviously we need to remember that 20k a year as a pensioner is different to 20k a year as a younger person as in the majority of cases they don’t have a mortgage, rent, childcare costs etc. It does seem vastly unfair and just very political.. however, I also know that means testing everything to make things “fairer” is very expensive and that’s why governments often don’t want to do it.
I don’t think my grandparents, for instance, who are very comfortable but not wealthy, need the extra help for their energy bills but of course they get it and we don’t.
My grandparents worked hard and saved hard and I don’t begrudge them a comfortable retirement in the slightest.. but I do begrudge all this extra help directed at them.

I doubt that the OP is unhappy that her parents are comfortable. It's perhaps more of a reflection that public finances are finite; and difficult choices need to be made.

10% rise to basic pension will help poorer pensioners that are really struggling from the impact of inflation. It will also benefit well off pensioners with index linked final salary pensions and other substantial assets. The money could be spent on something else (eg universal childcare benefit or increased funding for CAHMS services).

It's healthy for intergenerational financial challenges to be discussed; particularly when families face significant challenges in accessing affordable housing

£20k per year with no housing costs is pretty great imho.
I am on a low income but I am old enough to have bought a house in the early 00s. I am not mortgage free but I am much better off than someone who earns the same but renting. Plus my kids don't need childcare which was a 5 figure sum per child per year.

Of course £20k is a small pension. If they live 20 years past retirement it's only £1000 a year.

🤔😆

I think the issue is younger generations won't have anything like the same experience when they are pensioners. I have dc, we are meant to progress not go backwards!

You will likely be paying childcare, mortgage and into your own pensions right now. In time that won't be the case and you can enjoy retirement too.

Why oh why do pensioners who have 2 cars, foreign holidays, private medical treatment, gym membership got a 10% rise. The pensioners I describe are not rich they had private pensions from normal jobs but they have high disposable income. And still they moan......

I'm older (not yet pension though) I agree.
I don't begrudge pensioners all their money. What does piss me off though is the attitude some of them have and refusal to acknowledge that young people have it harder than they did and will have to work harder for less reward.

Yet.

In my area care homes are far more expensive. Recently late FIL was paying £1800 a week. He was there for four years. At home care is also eye wateringly expensive.

So some pensioners are in the sweet spot of having no mortgage, children to provide for or other associated costs of having a family. The lucky ones who keep alive may be facing some huge financial outgoings as old age catches up with them.

£20k and £10k in DB pension income is a BIG pension pot.

Transfer value (actual pension value to move to a different pension) is likely somewhere around £750k.

Actually I'd prefer my children to have all those things (own house etc) rather than me just get richer and richer while the struggle with less and less. This is the situation we have now.

Yeah, I'm wondering what's the problem here??

They worked for it.

I don't resent them, I'm pretty thankful they don't have to worry about this late in life.

However:

1. On a personal level, my parents are already brilliantly out of touch (in a sweet way) with the realities of parenting (my dad can't get his head around the fact that my job often means I have to do some work on holiday). I hadn't really turned my mind to this being such a big area of difference but it's obvious really.

1. From a sociable perspective with so many services cut (especially for disabled children) it does seem that there is an area of society that could be squeezed more without really feeling the pain.

1. This won't be the experience of later generations - who rent, can't save for pensions etc.

Ps - one of their occ pensions is not 20k total occ and state is.

Look at this way you won’t ever have to worry about your parents not being able to afford heating or eating. Surely knowing they are financially comfortable is a relief.

I am early 50’s and have far more disposable income than at any other time.
Mortgage is paid off, no childcare, only one child (17) at home, no commuting costs as wfh.

10 years ago we were in a different position having just remortgaged to extend, childcare needed, school fees, expensive commute.

Who knows where I will be financially 10 years from now or if I will get my State pension at 67. Whatever happens I don’t begrudge todays pensioners the increase.

Yes - other than in the public sector next to no one gets offered a final salary pension anymore because they were unaffordable and bankrupted many small business. There are many people now retired or approaching retirement that have far, far better pensions than the people who took the same jobs a few years later. This needs discussing.

I don’t think it’s just jealousy. Of course people are richer when they don’t have a mortgage or rent.. this is the reason we over pay on our mortgage when we can, to get rid of it sooner and to pay less (interest) overall.. I’m not jealous because I also hope/ plan on having not mortgage costs at some point in the distant future. But the point is, many pensioners have pension plans that were simply not offered to the current workforce and they do not need the triple lock or the extra energy rebate. Some do and plenty don’t.

@ZeldaWillTellYourFortune @Aprilx

As I said on a very personal level I'm delighted for them, but I had never really thought about it before and, you may be in a different position, but whether I can afford something and where and how we spend any discretionary income we have left is something I think about multiple times a day. My parents will freely admit that, other than making sure that something is good value, they don't really think about any of their day to day spend. For example, DH haven't eaten out at all this year. My parents eat out once or twice a week. I'm fine with this, it's a luxury I 100% don't begrudge them at this age. But if I compare that to someone on much less than us who can't afford to eat at all or the slashing of school funding etc,I guess I am challenging whether our tax and welfare benefits are structured in the right way.

The pensioners you describe are very rich. They’re certainly better off than we are and we’re very comfortable indeed. You won’t catch me moaning because I’m well aware that we’re very fortunate.

It’s annoying though to get so much flak for doing the right thing - working for more than four decades, making NI contributions to pay two previous generations’ pensions, paying the mortgage off, contributing to a pension scheme, bringing our kids up with no help from anyone. I really don’t remember being so envious and resentful of my parents when I was a struggling single parent.

They had their lean years, no doubt. And they paid into the pension schemes for decades. They deserve to collect without the rules being switched up on them.

Means-testing pension payouts would be unfair and a social nightmare.

Begrudging people their well-earned financial comfort is unseemly.