What will happen to those of us who can’t afford to pay in to a pension?

[whatnooow]

I’m starting to get a bit worried about how we are supposed to support ourselves as we get older as we basically live hand to mouth each month.

My DH and I are minimum wage workers and had to come out of the company pension contributions about 7 years ago to be able to get by, day to day. we’re both early 40s and are both knackered already. Another 30 years will definitely kill us off!

Will we just have to work until we drop dead? What if we can’t work due to ill health, but not actually disabled? Luckily we will have paid the mortgage off in about 20 years, but how will we survive, pay bills, buy food etc?

Neither of us will receive any inheritance. Time feels like it’s speeding up and I’m very worried.

I thought pension was only taxed at 20% if you claim it while still working,as it’s a 2nd income? My understanding is that once you retire and claim state pension then workplace pension will be untaxed.Or is that wrong?

Incorrect.
Any income over your tax free allowance is taxed.

The only difference I am aware of is the recent announcement that the SP will not be taxed if the triple lock takes it over the TFA (anyone like to confirm?).
Anything else will be taxed.

Anyone can apply for Attendance Allowance as it non means tested and a disability benefit. It's not just for people on low income. I regularly help pensioners to claim it and many have very decent private pensions and hundreds of thousands in the bank.
Agree that current pensioners are doing very well if they know what to claim. the press goes on and on about pensioners choosing between heating and eating. I visit loads of pensioners and rarely see them living in a cold house unless they are just turning the heating on for me visiting !

If your dh only has state pension and you don't have much state pension you may get topped up with pension credit. You'll then get most or possibly all of your rent and council tax paid, free dental and opticians etc. If you get PIP you'll continue to get that and your husband can have a carer premium added to your pension credit claim. I wouldn't worry too much. You may well have some state pension though if you've claimed child benefit.

I echo everyone who’s advising getting back into your workplace pensions and looking at jobs in the public sector. As a result you won’t get Pension Credit and there will always be some safety net for pensioners but I think it’s always best to err on the side of financial independence. Can you get a lodger before you finish your mortgage in 20 years? I would do anything and everything to maximise household income to prioritise pensions and overpaying the mortgage. There is very limited help from the government when you’re paying a mortgage.

I too worry what jobs will be around in the future and how we’re all going to pay our rent and mortgages 😔

If your employer does any kind of pension contribution or matching, you simply have to do that. If your pension is short now, you really need to get it invested in equities as that may be higher risk, but you need to get some compounding going.
My Dad put his life savings into premium bonds and bank savings accounts and he basically has the same money now as when he started 20/30 years ago (has only gone up with inflation).
I put money for my kids into junior ISA S&P 500 & Nasdaq trackers and these have gone up 200-400% over the last 10-15 yrs. They almost have more money than their grandfather now.
Spend some time looking at how you can put some money away into a pension, it is the best investment you will ever make and you will thank yourself later.

If your kids are no longer at home, you could lodge out a spare room - up to £7500 pa is tax free (so the equivalent of £10000 pre tax on your salary). You could then take advantage of your work pension which is well worth it. I've lodged with retired couples in the past & one lady who rented out a couple of rooms to help her save for retirement. You also might have the option to release equity in your home when you've paid off your mortgage to help top up your pension. I never got on the housing ladder so I'm a bit screwed re. pension as I'll need a HUGE pension to keep paying rent. So I intend to keep working past retirement age part-time until I'm unable to do so physically/mentally. Both my parents carried on working PT into their 70s, but both were lucky enough to enjoy their jobs & in fact it helped their mental/physical health to continue contributing to society & be out with people.

Don't lose any sleep over it. We paid into Private pensions, and here we are 66 years later still paying income tax. Let the state look after you. You will. Be £££ better off

Completely wrong. You pay tax on any income over PA.

I believe this is correct if your state pension is your only source of income. Could have misunderstood it though!

On retirement the SP is added to any other pension or income and the whole lot is taxed as appropriate.
What often leads to confusion is that the SP is paid as an untaxed amount into your bank account. It saves the Government Pension department having to work out the tax.

I thought it was announced at the budget that if the SP is your ONLY source of income and the TL took it over your TFA (something that could happen in the next 2-3 years) then the SP would not be taxed.
Did I imagine that?

There is something in the pipeline regarding this if the only income is state pension and takes you over the PA. However if you have any other income it will be taxed.

Yes, I think there will be some regarding SP not being taxed if it is your only income.

Are you claiming ESA & PIP (and other benefits too)?

You need to check some of your information.

Your total income has to be under £11809.20 a year (including state pension) to be eligible for pension credit. So someone on full SP of £11973.00 isn't normally able to claim it. I wonder how many on Mumsnet want to try living on under £12k a year.

Anyone of SP age gets free medication, free bus travel, heating allowance - it's only the last one that is clawed back if someone earns too much. One might get housing benefit of some sort but there's no guarantee. And you only get attendance allowance if you meet the health qualifications, an able bodied 80 yo wouldn't get it.

Yes a lot of pensioners don't, for whatever reason - lack of knowledge or too much pride - apply for other things. There's lots of advertising of what's available but it's hard to get that message across - illiteracy, language barriers, but mostly pride I think.

You nan is incredibly lucky and a very rare case I think.

if your are on the state pension and own your own home and small car £1000 a month is tight but doable for a singe person
£40 a week for food / cleaning / laundry toiletries basic £160 a month
council tax single person discount for band c flat average £115
heating etc £150
water £30
broadband £30
mobile phone SIm only £10
TV licence 15
house insurance £25
car expenses ( insurance servicing maintenance MOT £800 per year) £65
fuel £50
clothes haircuts etc £50
eating out coffees etc £50
Christmas and birthdays £80
holiday one week in uk self catering off season £50
house maintenance £50
savings £60 for emergencies
total £1000
however if you have to pay rent even if subsidised by council it becomes very difficult
if you are a couple both with £1000 a month your expenses will not be double for most things and so you will be fine

Only 7% of jobs pay minimum wage. 93% pay more than minimum wage.

Most big retailers pay more than minimum wage usually by a few pence more.

Does anyone know what happens if you private rent?

If you can’t afford the rent you mean on a state pension? Renters who’re pensioners may be entitled to housing benefit but that may not cover the whole rent.

It’s the private rent that’s going it be a massive problem. I hope there’s some planning going on!

Do you have anything helpful to add? Your post comes across like you’re gloating.

Apologies @berlinbaby2025I’m not gloating and believe this is going to be a massive problem for those in the middle, not getting benefits and private renting. I think these people are the ones who will be the worse off. They are the ones working hard, paying extortionate rent and not being able to save or save very little. If they even have a small about of savings they won’t get any extra help in retirement whilst those on benefits will. This has been in the press recently anyone not wealthy or on benefits will be worse off by 2030 for those retiring that situation is worse because they won’t have the income for the rent let along bills. No wonder young people aren’t bothering with working. It’s a terrible situation all round.

@1apenny2apenny I completely agree - people who will own their own home by retirement will be fine, it’s those of us who are single and private renting who will be struggling.

I work full time and can barely afford rent now, how will I manage when I retire? “Move somewhere cheaper” my area WAS cheap a few years ago! MN were berating Londoners for moaning about expensive rent and told them to move “up north”. Lots of people have done that (unlikely to be just because of MN advice!) Rents where I am have increased astronomically over the last few years. “Move again then!” We’ll all be living at the top of Ben Nevis if we carry on moving “up north” every time the rents go up!

”Pay into your workplace pension then!” I do but realistically, if MN who own their own home are struggling to get by on just a state pension when they have no rent to pay, how will I manage when my workplace pension won’t cover my rent? Which private landlords will rent to me? Workplace pensions aren’t as generous as they used to be and it’s hard to save outside of a pension when working full time when all your money goes on high rent and bills.

“Over 55 housing associations have loads of flats available” yeah they might do now when a lot of over 55s own their own homes but they won’t by the time my generation retires as most of us will be renting and in the same boat!