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?

I'm retired. I get my State Pension (around £900 a month) and another small pension (about £750 a month). I don't have a mortgage. I live frugally but comfortably and within my means. I certainly couldn't manage on the State Pension alone.

300k over 30 years is only a £10k a year top up, shared between 2 people is £5k each. If you need additional care later in life, this won't cover it.

Currently, you would get around £25k a year as a couple. Cost of living is getting more expensive. State pension is expected to drop.

So can you afford to live on £10k a year if state pension becomes nothing. Probably not

Lots of people in this country are likely to be screwed, quite worrying that they aren't preparing

Houses require maintenance so I'd be cautious of thinking you have a free home.
My lump sum at retirement will probably fund a new roof on my home.

I think for a single person even a decent existence is difficult on that much.

things like electricity, water and gas bills used to be very low 20 years ago. Now they make up a huge chunk of people’s monthly expenditure.

there are also other costs - dentist, house maintenance, transport, etc.

Why did they spend their whole working lives on minimum wage and benefits?

Only about 10% of elderly end up in long term care (more than 12 months) so the 'vast majority' live at home in the community.

This all may change if the triple lock is ditched.

The injustice at the moment is that anyone who is eligible for pension credit (paid if they never made enough contributions to their state pension) are also eligible for lots of other freebies.

The discriminates against those pensioners who paid enough NI to get the basic state pension but who don't get all the other freebies and top ups.

But it often does unfortunately.

I'm currently viewing many care homes having cared for my mum for the past 8 years, her dementia is now getting beyond the care we, as a family, can provide for her.

As mentioned, most of the very nice care homes will only accept a resident if they can guarantee 2 years worth of fees in savings (often around £200k). The rest of the care homes are not so concerned as they know the LA will step in if and when any savings run out and most most of the nice ones are booked up for months/years in advance and often with waiting lists and the rest, well, let's just say most that I've viewed over the last few weeks I've stepped out of and have sobbed for the poor people stuck in there.

I’m in social housing so I don’t need to worry about needing a new boiler or roof, it will be covered by them. Rent will be covered by housing benefit. Council tax also covered if you’re on state pension alone.

I live in London and don’t drive so no car related expenses and I’ll have my free Oyster card to go where I want.

I won’t retire till 67 and I already know I won’t want to travel then. I’ll have done all I want to do at that point. I already find it quite tiring now at 56! Plus I’ll be alone, what 70 odd year old wants to go on expensive holidays abroad by themselves? Not many. Not interested in going with friends or other singles, tried that already, didn’t like it!

Theatre, meals out, well I find these things a bit of a waste of money anyway! I only now go for meals out for special occasions as the cost is ridiculous for what you get. I could afford it but I’m not really interested. Most of my hobbies are free or cheap.

I currently spend £50 a week on food, £50 a week on gas/electric/water/internet.
At the current rates that would leave me £130 a week. That’s enough to set some aside for any appliances breaking or whatever. Plus have some money to spend on hobby supplies, lunch out or a cinema trip, that kind of thing.

I’ve been getting what I call “retirement ready”. My house is decorated to my taste, not in any kind of trend that will date. All in colour, so not white walls that will look grubby. Furniture is also pieces I love that will last. Clothing, good quality, classic pieces (and there’s always things like vinted or whatever is popular in 10yrs time!). So I don’t predict any major expenses in those areas. Again being social housing, I won’t be forking out for a new kitchen or bathroom.

So for me personally, I will be fine. I was never going to have a large pension so anything I did get I would lose in rent and council tax so what would be the point. I wouldn’t be any better off by trying to scrimp and save now.

@Julen7 I think it’s unfair on those who will have a modest workplace pension. I think there needs to be some sort of media campaign as current young people will have to wait until 70 I reckon & there will be some who never work & spend a life on benefits & they will then get top ups. I can’t see how the current level of benefits will be sustainable for the next generation. However I can see the attraction of not working & not saving & then getting looked after into old age.

Yes - you’re better off having no savings or small pension if it means you don’t get pension credit, council tax reductions etc.

People used to live only 10 years or so in retirement, now we feel someone has died young if they don’t make it to their 90’s. Hopefully the auto-enrolment pension rules that came in 15(?) or so years ago will mean future generations are more aware of pension planning. I personally don’t think I could manage with 12k a year.

Because that's what lots of people do. They spend their whole lives doing the absolutely essential, but low paid work needed for society to function.

I thought a pot of 150k got you around 4k a year as a rough estimate?

Either way I want to retire as soon as I possibly can, the thought of going till 68 makes me want to cry tbh. Happy to be frugal but I want to finish work at 60 therefore a private pension is essential!

The ones who paid in contributed enough to cover the costs of the smaller generations before them, which is not the same thing. They also didn't have enough children to replace themselves, meaning there are fewer workers to pensioners than there used to be.

Most towns of a moderate size have a U3A and many an AIR as well. Both are very low cost to belong to, like £30 a year and most groups within the club are then free to attend.

Not exactly. There's no pension pot with your name on it provided by the government. The national insurance you pay goes towards many things including the pensions being paid for the retired people of today. You get credited as having paid, meaning when you retire you're eligible for the state pension, which will be paid for out of the national insurance of those people still of working age when you're retired.

The state pension is just another out-of-work benefit. It isn't means tested, the only criteria to collect it is having paid enough national insurance throughout your life and being over a certain age.

OP
If you live in social housing, so your rent is paid by housing benefit and your repairs are your landlords responsibility, then it's doable. These are probably the best off people, providing your landlord actually does the repairs and you're not living somewhere basically unfit for human habitation and full of damp issues which really needs demolition and rebuilding.
The issues come when people are in private rented and the housing benefit doesn't come close to paying the full rent, then they'd have to top it up out of their pension, as well as the risk of having to move out and the moving costs that incurs. These are the worst off people.

As a home owner your issue would be not having enough income for funding repairs.
On the plus side, if you own the property you can do what you like with it. So if you have spare rooms you have the option of renting to a lodger to increase your income. Or downsizing to a smaller/cheaper property to free up some cash for an emergency fund.

When you're young, in good health and there's the feeling it's temporary until you get a better job or the kids grow up, roughing it doesn't seem like the end of the world. When you're old with health issues, it's a different situation. Eating rubbish food when food is your only pleasure left in life because you're too creaky to do much socialising or hobbies, and rationing the heating when being chilly leaves you in pain, things feel miserable.

But you can't change what is. If you've no ability to save for a pension then you'll just have to make the best of whatever situation you find yourself in. Worrying about it won't help so may as well put it out of your mind.

Do you think minimum wage jobs like retail, care work, hospitality get done by magic?
Or do you think everyone can and should pull themselves up by their bootstraps and get on their bikes to earn more money?

Obviously, the owning your own home bit doesn’t apply to a lot of people. You also need to factor in, as you get older, that you cope less well with cold weather, so heating bills will increase; you may need to pay for help with physical tasks around the home that you used to do yourself; and you’ll need savings for unexpected expenses. Things you take for granted now you might not be able to do when you are elderly without paid help. Spare cash might help protect you against ending up leading a limited life in a home that is crumbling around your ears.

To be honest, I think it would be very difficult. The cost of everything is through the roof and doesn't seem to be slowing down, it keeps going up..

Have to factor actually having a life too. Petrol in the car, presents for grandchildren, getting your hair cut, feet done, clothes, paying for someone to come help the job you no longer can do etc. And what if something breaks in the house? Say your boiler broke down and needed replacing? Certainly need some sort of savings pot imo.

Older people often need a lot of heating and might struggle to cook and start buying more expensive options like ready meals.

Then you need to think about everything else you need to fund - travel, gifts for family, holidays, clothes, toiletries. If you just want to survive maybe its ok but you would likely be living in relative poverty.

Strange question, so many people live lives on minimum wage, there wouldn't be anyone in the shops, food places, cleaning etc if they didn't.
Then there's millions more who live about 50p an hour over minimum wage.

But that will change. Dementia is now the leading cause of death in the UK and cases expected to rise worldwide.

For most families trying to care for a loved one with this disease we have no choice but to place our LO in a care home as it will progresses to a point that care at home is no longer viable.

Sadly more care homes will need to be built and more people will end up in a care home setting towards the end of their lives.

Really? Do you have evidence for this fact? AI tells me that only 10% of over 80s live in care homes. Around half of over 65s need extra help. That's hardly pretty much everyone.

My DM seemed to think similar or just buried her.head in the sand, not sure which perhaps both.

Unfortunately we live in the south where it is more expensive.

She is still paying a mortgage and hasn't paid enough off, so no mortgage free house for her unless she sizes down which she's currently trying to do.

Problem is she hasn't maintained the house so it is worth a lot less than it should be.

She can't afford to heat it and it's freezing.

Even when she sizes down unless she puts some money aside from the sale she still won't have enough to cover her costs. Short of leaving her whole family and upping to somewhere cheaper she's going to have to make some very hard choices about her next move, which when you are mid 70s seem that much more difficult.

I would encourage anyone to plan and think about retirement as having even a small amount of money gives you more choice.

Before anyone thinks I haven't tried to help my DM believe me I have but that's another story.

That has nothing to do with how many children people have and as long as we have unemployment over about 2% it will never have any thing to do with how many children people have.

The change in the ratio of workers to pensioners is because of an increase in life expectancy.