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 !

Only up to SP age. If they're over that and working they don't. Pensioner NI levy was scrubbed.

The government is giving you money - it’s up to you what you do with it.
Should they be doing it in the first place without means testing is more my question. PLENTY of people were annoyed that everyone gets the £400.. well even the King will get his £400 and then additionally his winter fuel allowance as normal and then an additional £300 as Pensioner Cost of Living. Should he be getting the £300 + winter fuel more than the servants who work for him just because of his age? Does he need it more?

And yes I agree @entropynow - I mentioned this before and I don’t know what I’d do if I were in Number 11 because I know means testing costs so much it’s often not worth doing it. But they must know how it looks to people.. it just looks (repeatedly) like the only people they care are about are pensioners because they care about their votes.

The payment based on council tax band was obviously a bit ridiculous because they haven’t re-banded for 40 years but I do appreciate they needed to help people fast and they can’t come up with a good means testing system quickly. In many ways badly targeted help administered quickly was better than something better administered too late.. but there we go.

the King will get his £400 and then additionally his winter fuel allowance as normal and then an additional £300 as Pensioner Cost of Living.

If the King ever claimed his state pension I’d be astounded.

My work pension is 6k (local authority final salary pension), my OH's pension is £12k. Yes, we have paid off our mortgage but we certainly aren't rolling in it. We look after our grandchildren one day a week for free and we help our kids out where and when we can. Neither of us have our state pensions yet as we have to wait until we are 67. We are in our early 60s and both still working part-time so generate about another £8k on top of our pensions. We don't have an extravagant lifestyle or expensive hobbies so we are comfortable but certainly not well-off!

Everyone pays NI towards their state pension.

If you also manage to save into a private pension then yes you will be better off.

So are you saying that the state pension should increase with inflation but not if you also have a private pension, a sort of two tier system?

Because I think that would be unfair. It would penalise people who've sensibly paid into a private pension and discourage people from doing so. I expect it would also be costly to means test, which would reduce or eradicate any savings.

They do.

No they don't

I'd like to know if there are any figures for pensioners who don't claim their SP as they have decided they don't need it, as well.

My dad's pension was £28k. All I've ever thought was 'good for you'. And, to make you feel even sicker, he retired at 58 and died at 84.

I love the fact he rinsed his pension scheme.

In life there are winners and losers. What do we do, hate the winners and only respect the losers?

Pension payments being means tested? Sheesh.

They didn’t means test me when they took the contributions from me when i earnt less than £6k a year and could barely afford rent and food. thankfully i didn’t stay on that wage but it was still a sizeable amount every year running into thousands of pounds a year later in my career, when my salary peaked in my 30-40’s…. Now in my 50’s and i prefer a more mundane stress free non. managerial and forget about work outside 9-5pm role, so my money is far less but still i’m paying in even though i’m beyond the 35 year point. So even though i can’t get any more out of the system ar some point over a decade away, i still have to pay in for the next decade.

So i believe whatever i get from the state pension isn’t a benefit, it’s been well and truly paid for many times over and im still having to pay more!!

And guess what, if i croak it before it starts to pay out, my kids get nowt.

Yeah systems broken, but not in the way the OP suggests.

My 73yo boss earns £29k tto a year, has several pensions plus the government one...he probably has twice that as disposable income. We think the only reason he stays working is so he can keep paying for everything his wife wants new in the house now she's retired.

Haha, having Googled it apparently he does! I suppose he was advised that claiming it would be a nice headline reminding people who long he had been PoW…

amp.theguardian.com/uk-news/2013/nov/07/prince-charles-claim-state-pension-navy-donate-charity

Excellent points.

The pension income is not a handout.

YABU. Many pensioners are in this position.

I’m sure when you’re time comes, you’d be pissed off if anyone begrudged you a comfortable retirement after working for years, raising your children and paying off your mortgage.

He also used his severance pay to set up the Princes' Trust.

The OP did further clarify that the Parent receiving £20k pa was their total annual income (private pension + state pension) so her DP's total annual from pensions totals £30k for both of them. Probably the £20k earner has to pay some Income Tax too.

So, for a couple, compared to a younger working couple, the OP's parents have far less than 2 working people on NMW, and far less than a couple on National Average, even with one on PT wages.

They are only better off because their mortgage is paid, although they still need to fund repairs. They're not well off but they''re not struggling either, would you rather they did OP? Well done them I think.

I've no skin in this game, just a knackered 60yr old LP of a young adult with additional needs, work when I can now, small mortgage, somehow get by. Just the full State Pension (that I've already qualified for under the 40+ year rules inc 2nd) that I now get to scrub around for another 7 years before I can get it.

For the mathematicians amongst us, yes that does mean I started working full-time when I was 15. Go figure.

Presumably your parents had their lean years when they were your age and had less disposable income than they do now? So it’s all swings and roundabouts, hopefully your own kids will be equally aghast at how much you have to live on when you’re retired.

Encourage them to spend it well - locally and ethically.

So averaged out pensions of £ 15k each. Car was probably paid for with a pension lump sum.And the OP, higher rate taxpayer, is thankful that she doesn't need money from them.

Their pension is good, not small. They’ve paid off their mortgage, they’ve probably benefited from low house prices and probably have a lot of equity in their home. Things are different now. I earn 60k a year, more than double what my parents combined income would have been when working. They bought a property for a very small amount, lived in a cheap area and were able to save so now my mums living comfortably in retirement (dad sadly passed). I live in the south, single parent, can’t get a mortgage here so only chance of ever owning is by going back north. Even if I do I’ll still get paying mortgage when I retire. Life’s different for people now, especially if you live in the South East or other expensive area

The issue is that the state is giving a substantial amount of money each year to pensioners who are very well off. State pensions are about 100 billion a year yet pensioners as a whole are the wealthiest demographic. I hope when I’m a pensioner I won’t vote to line my own pockets while others are in such need

The OP did further clarify that the Parent receiving £20k pa was their total annual income (private pension + state pension) so her DP's total annual from pensions totals £30k for both of them. Probably the £20k earner has to pay some Income Tax too.

This can't be true, the numbers don't stack up.

The OP says they have £2k disposable income a month. That's £24k a year - impossible if their starting income is a little under £30k.

It only works if the state pension is additional.

And the issue with what you suggest is that if you deny people what they have paid for, in their working life, it’s probably going to end up in court and still have to be paid anyway.

It’s not a benefit. It’s something those who worked and paid for.

I can agree that maybe the triple lock is unsustainable, or there should be a means tested element to it, but to get nothing after 40 years of paying for it, is simply not acceptable.

You need to be at least a higher rate taxpayer to be a net contributor. Sounds like you were a low earner and have not paid for the public services you used. That’s how the system works of course but you can’t claim that you have paid your way when you haven’t.

the state pension is a benefit- it’s paid from current taxation .

the state pension is a contribution based benefit. There is no right to be paint - the government can abolish it tomorrow and there would be no recourse to the courts.

Right for it to be paid not paint!

people bizarrely seem to think the state pension is like a private pension and “they have paid in” to some kind of pot. There is no pot - it’s just a benefit. Also if it was based on contributions it would be a lot lower- you would need about £300,000 in an annuity to get the income equal to a state pension.