Pensions - what's a reasonable income

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From the BBC website today the Pensions and Lifetime Savings Association have suggested these amounts to live on in retirement:

Minimum standard of living
Single £10,900
Couple £16,700

Moderate standard of living
Single £20,800
Couple £30,600

Comfortable standard of living
Single £33,600
Couple £49,700

BBC News - Pensions: Experts say £10,900 a year needed to retire
www.bbc.co.uk/news/business-58883053

Im off to tot up my pension pots...

DH was contracted out for a good portion of the 80’s and 90’s, he has enough NI contributions at the age of 55 so something doesn’t add up with yours, what about NI credits for child benefit for example.
I’m 9 years short for full SP but I have 11 years to make it up, which I’m doing by claiming some childcare credits from DD as I care for DGS, I can claim until he’s 12.
What does your State pension actually say?

State pension forecast

@Mia85 @userchange987 Thanks, spoke to my other half and he said we can see if we can put some money into a SIPP for me. Worst case of it's too much we can do less than the £240 a month. Once I can get back to work, it will help. I was looking at doing some part time work but not sure how that would affect my NI contributions. As a parent I am getting full contribution but if I worked a couple of hours a week would that cause issues. Tried googling but no help. We may need to see if we can find a financial adviser for advice.

I don't want to hold myself out as an expert on NI but I don't think it makes any difference at all to your NI credits if you work. You get the full credits through CB even if you also have employment contributions too.

@Mia85 that would be my interpretation too (also not an expert!)

Thanks both, that was also what my husband and I thought. I still have 28 years and have 31 NI already so it's not too bad...

You have 31 qualifying years already?

Lol sorry, typo 21 😂 I know I started work young but not that young

I don't understand the stuff about state pensions. I've just retired from 36 years in the public sector. My pension isn't huge (about £15k) as I worked part-time a lot. Will I not qualify for a full state pension when I get to 66?

@Medievalist how did you decide you could retire? That would give me the heebiejeebies to not know!

I think “isn’t huge” is very relative here. £15K a year, guaranteed defined benefit, index linked when you didn’t even work part time for it - and that’s in addition to state pension is, by many people’s reckoning, quite huge!

Going back to the OP, once you add in state pension that’s going to put you into the “moderate for single person” territory.
Not many people younger than you and me now, working mostly part time, will get anywhere near that guaranteed income.

And they’ll not get there state pension until after us.

You can check your personalised state pension entitlement online, with your NI number, via the government website. This will tell you what you’ll get. I’m pretty certain you’ll have full qualifying years (often part time is enough to meet the lower limit).

There was a period where one could “opt out” - basically extra money went into your occupational pension and you scarified some state pension. That idea being that the occupational pension would deliver more over the long term. On your governance by state pension statement you’ll see that as “COPE”.

I do recommend you look it up - unless you’re in the very lucky position of not needing to plan around what you’ll be getting!

www.gov.uk/check-state-pension

www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service

I have 10 years of public sector, will get full state and am now private sector on a DC scheme. I'm planning to use the DC as drawdown for lifestyle over 20ish years (say to age 85) when I probably won't have as expensive tastes so the state + public will see me to the crem.
I don't think that 100% annuity is appropriate for many people, your needs won't stay the same after retirement.

To put things in perspective, a £15k inflation linked pension would cost over £400k to buy. It’s huge, way beyond the average.
To have retired without checking your state pension forecast is quite astounding.
If you haven’t got full SP entitlement you can buy extra years but you have to be careful that the years that you buy actually count, it can be complicated.

how did you decide you could retire? That would give me the heebiejeebies to not know!

DH and I are a few years off state pension age but we can afford for me to retire now because DH also has a good pension. Don't worry - we did the sums!

I think “isn’t huge” is very relative here. £15K a year, guaranteed defined benefit, index linked when you didn’t even work part time for it - and that’s in addition to state pension is, by many people’s reckoning, quite huge!

Well of course, it's all relative isn't it. But believe me I certainly worked for it!!

Yes, but the point is that plenty of other people have worked equally hard and harder for far far less.

So it’s pretty tone deaf to say it isn’t huge (as the above poster estimated: £400K) and be all blasé about what your state pension might be! 😳

You may well have “done your sums”, but we should all be so lucky to be able to do our sums ignoring £9K!

To have retired without checking your state pension forecast is quite astounding.

I did check it and was under the impression that at 66 I would get the full state pension. Apparently I may be wrong.

Sorry you're astounded but between us DH and I can afford for me to retire - even if we weren't to get any state pension in a few years time. I also needed to retire for the sake of my health. Nailing down the precise amount of my state pension would not have changed that decision - at all.

Blimey.

With no mortgage to pay or pension fund to top up, I could live much better than ‘moderately’ on the moderate amount.

So it’s pretty tone deaf to say it isn’t huge (as the above poster estimated: £400K) and be all blasé about what your state pension might be!

But £15k after tax is about £14k - which, on my own, wouldn't even put me at the halfway point between minimum and moderate in the op's table. So, minimum plus £4k isn't huge is it?

I'm not blasé about my state pension.

@Medievalist

So it’s pretty tone deaf to say it isn’t huge (as the above poster estimated: £400K) and be all blasé about what your state pension might be!

But £15k after tax is about £14k - which, on my own, wouldn't even put me at the halfway point between minimum and moderate in the op's table. So, minimum plus £4k isn't huge is it?

I'm not blasé about my state pension.

But those tables aren’t about averages of what people actually have, or are projected to have. They’re simply about what’s needed - based on their measures.

So if the minimum was £11K, and most people only had that - would you say that 27% more than most people wasn’t huge?

And it’s disingenuous to compare it to the single rate when you’re not.

Most people will not be in a position to retire early without being absolutely sure what their state pension entitlement is. So yes, you did seem blasé about it.

It’s great that you have a good pension. I don’t doubt you’ve worked for it, and I don’t want a race to the bottom.

But please, spare some thought for others before you decide that £15K guaranteed and index linked for not even working full time isn’t huge. It’s absolutely life changing for many on here. And if that’s £15K now, at your early retirement age, then presumably your entitlement was even higher at 66. So another reason to just keep some awareness of your good position.

@Medievalist If you've worked for 36 years it is most likely you will qualify for the full state pension. It is really worth checking your personal situation via the link above.

Then, with your private pension of £15,000 + £9,300 (approx) state pension you have a total of £24,300, which brings it to around £22,000 annual income after tax.

Just to add that my retirement income will be £15,000 per year made up of full state pension and spouse's pension (50% of H's private pension) and tiny private pension of mine.

We were going to be fine as a retired couple, with an income of around £30,000 pa. The reality of getting by as a single retired person is only just beginning to sink in as my H has recently been diagnosed with a terminal illness. We even did the sensible thing just a year ago and turned down the 25% tax free cash lump sum in favour of a larger annual pension income. That has turned out to have been a mistake.

However, I like to think I will manage ok on £15,000 a year. Hope so, or else I will have to get a job, if I can at my age.

@Medievalist

I don't understand the stuff about state pensions. I've just retired from 36 years in the public sector. My pension isn't huge (about £15k) as I worked part-time a lot. Will I not qualify for a full state pension when I get to 66?

No, you will have ‘opted out’ of part of it, the extra going into the NHS pension. My husband (a retired teacher) and me (retired NHS) are in the same position. If you look on the Government state pension website (you just need your national insurance number), you will be able to get an estimate of your state pension. If you have already retired before you are due your state pension though, don’t go off the headline figure as it assumes you are continuing to pay national insurance until your state pension date. The rate you will get without doing so is a bit lower down the page.

Very sorry to hear that thisgardenlife , how awful. Life is very good at disrupting our plans.
Does your DH have any life insurance?

After 29 years in the NHS pension scheme, so only opted out for those years, not 36 like @Medievalist, my state pension is predicted to be £7,200, so a fair bit less than the full £9,300. My husband is on a little bit more than that (already receiving it) after 30 years in the Teachers pension scheme.