Is living on the state pension really that bad?

[cateringday]

I mean, if you own your home then you’re getting around £250 a week just for bills and spends.
i have a tiny pension and DH has none. I am always worrying about this but then realised that we will have no rent or mortgage to pay.
im just wondering if it would be as awful as people make out? I hear stuff saying you need £300000 in pension pot to have a comfortable retirement, why would you need that much?

yes unfortunately you will, my state pension plus very small teachers pension comes to £15000 ( plus I have a small inheritance from my dad which gives just over the tax free £1000 interest a year) so I pay tax on about £4000 - which works out at about 800 a year ( it comes out monthly or I think I was given the option of paying it yearly)
It comes out of my teachers pension monthly as ( currently!) state pension can not be taxed.

"currently state pension can not be taxed"

Wrong. It's not taxed at source but if it takes you over the threshold (which yours obviously does) then of course it's taxed.

You should sort this now so that you don't get a nasty surprise in 5 years time.

@Storynanny1

state pension on its own is not taxed!
Your post contradicts yourself! The pension/income that takes you over the personal tax allowance is taxed not the state pension.
No nasty surprise for me, I know how pension stuff works

OP has nothing to sort…she pays her tax on her other incomings….I think you are getting confused

Absolutely!
State pension on its own is not taxed
State pension is taxable income which is added to any other income - once that goes over personal allowance that amount is taxed
You will not see “ tax deduction” on your state pension “ statement/info” etc

She’s already stated that the tax is being taken off her teacher’s pension. It anyone receives a work place pension where PAYE is a possibility that is how they will take your tax, and will in lude any tax owing on investments. HMRC will allocate a special tax code to enable the tax to be taken this way.

The state pension is at the cusp of the personal allowance, by a few pounds, and it's either falling into the income tax range this tax year or next if the triple lock is still in place.

Yes, I think it’s April 2027. However some politician ( can’t remember who) said a few weeks ago when questioned “ we won’t be chasing up pensioners for tax if they go over the tax allowance by £50.
Its all a shambles really

Any that’s enough about that, it’s distracting from the original question about how realistic it is to live on the state pension

Unless you die before pensionable age we will all need a pension when we can no longer work. First world countries acknowledge this and it isn't to anyone's advantage to do away with the state pension unless you are very rich or likely to die before you are eligible. As most of us will eventually get a state pension it doesn't seem very wise to keep making it less through taxation or other means.
What surprises me is that as a relatively rich country we are only 11th best in Europe in providing pensions for our aged citizens. There are many countries no wealthier than us who provide much better state pensions both in monetary value and percentage of average working life wage.
If other countries can do it why not us ...especially since apart from death this is not a selective benefit. Any of us who live to state pension age would benefit from state pensions at a time when we are going to be more vulnerable and less able to work so decent pensions seem to me a good use of the taxes we've all paid.

There are many countries no wealthier than us who provide much better state pensions both in monetary value and percentage of average working life wage.

The last time I checked the people in those countries paid much higher taxes.

The UK state pension is a similar amount to the universal pension of similar countries.

Where the UK is different is that many European countries also have a 'second pillar' state pension, which is based on how much tax you've actually paid in during your working life. That's often capped at about the same amount as the universal state pension. (Ie if you've paid in lots of tax during your whole lifetime, you get twice as much pension as someone who has paid in nothing).

Personal/occupational pensions are a 'third pillar' and are in addition, as in the UK.

I think this is a much fairer approach. The same philosophy is repeated in the unemployment/welfare provision in most European countries, where if you lose your job the state pays a proportion of the salary you've paid tax on over the last 5-10 years, which gives a safety net for your usual outgoings and recognises that if you've supported others previously then it's fair for you to be supported in turn when you need it. Compared to the UK, where you get nothing until you've used up everything you've built up over your lifetime, no matter how much tax you've previously paid. Ie there's actually no state safety net for anyone older or higher paid.

The UK is ridiculously redistributive, and offers a terrible social deal to mid/high earners.

The UK is way behind other European countries with regard to state pension.

www.visualcapitalist.com/ranked-countries-with-the-highest-lowest-pensions-in-europe/
https://www.lv.com/pensions-retirement/articles/average-pension-by-country

Iceland: €35,959 (£30,251)
Luxembourg: €31,835 (£26,778)
Norway: €30,879 (£25,972)
Denmark: €30,211 (£25,410)
Switzerland: €27,010 (22,719
Austria: €24,349 (£20,480)
Netherlands: €24,092 (£20,264)
Belgium: €22,577 (£19,000)
Sweden: €22,436 (£18,882)
Ireland: €21,766 (£18,318)

Late to the party here, but do you honestly think MH or ND issues are never severe enough to make it impossible for someone to get, and keep, a job?

My last job before I retired was with an organisation that was incredibly supportive of people with MH and ND. They went to great lengths to make adjustments that accommodated a wide range of needs, but there were people whose MH/ND conditions led them to behave in ways which would be unacceptable in any workplace and they had to be let go.

My DB is bipolar, and his MH is so poor that he has to have 4-weekly depot injections of an anti-psychotic medication that leave him like a zombie for around a fortnight, followed by a week or so of being relatively normal, then a week where he gets more and more manic and delusional. What employer would keep an employee on when they are only capable of working effectively one week in four?

Most of those countries have higher taxes and cost of living though

Pensions are contributed to and calculated very differently in different countries, so it's quite difficult to compare a single number, and you have to dig into it a bit more. I akso think that article must be looking at average pensions including occupational and state earnings- based pensions, because it's way off!!

I've put down more detail below for some of the countries here, just to show how misleading that table is. You do have to also consider salaries, to put the figures in context. And note that some countries give more to single pensioners, and less if you're a married couple- reflecting different living costs

UK Median gross/net salary £39k/£30k
Universal state pension: £12547

Netherlands Median gross/net salary £40k/£32k
£11600 if you are one of a couple, £17000 if you're single

Ireland Median gross/net salary £48k/£34k
Universal state pension: £13,500

Switzerland Median gross/net salary £90k/£67k
If single, the minimum is £14,650 after full 44 years of contributions on low earnings/contribution, going up to £29300 for the highest earnings/contributors
Married couples get 150% of a single person's pension: so £11000 each for minimum earners going up to £22000 each for maximum earners/contributions.

Several of the other countries work completely differently: they may be either based on your tax contributions or mandatory savings/investments but they are effectively based entirely on your lifetime earnings with no universal component. They additionally have a means-tested safety net/welfare

Sweden - 16% of your salary saved and 2.5% of your salary invested in funds of your choice

belgium 60% (single) to 75% (household) of your average gross career salary for a full 45-year career

Austria 80% of average lifetime earnings for those with 45 years of contributions, based on your 10 highest earning years

Differing state pension rates have been mentioned but anecdotes regarding how pensioners people know live now are irrelevant

If you are a man born before 1951 and a woman born before 1953 you are on the old rate of state pension. Anyone born after those years will be on the new rate which is above the threshold to claim pension credit.

Benefits legislation can always be changed, the removal of universal child benefit and the winter fuel fiasco are good examples. State provision for everything will shrink, whether by knee jerk or a more tiered approach remains to be seen.

MN loves Scandinavian welfare but their populations are generally very small. Icelands is under half a million for instance, they also have very strict immigration policies that In the eyes of liberals would be discriminatory. Asylum claims are minimal and very strict, they send people back to countries where they are in danger.

As @strawberrybubblegum points out some countries base benefits on what you have put in. It’s not just pensions either, some base unemployment benefits and other benefits on how much in contributions you have paid in.

Countries welfare policies need to be looked at as a whole and not in isolation.