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    • Ashingtonian
    • By Ashingtonian 6th Jan 18, 5:51 PM
    • 135Posts
    • 102Thanks
    Ashingtonian
    Is the state pension really that bad?
    • #1
    • 6th Jan 18, 5:51 PM
    Is the state pension really that bad? 6th Jan 18 at 5:51 PM
    If I were to retire tomorrow I would get £690 month.

    Assuming my home would be paid off and I won't want or need to run a car, based to today's prices my monthly outgoings would be as follows:

    Groceries - 150
    Council Tax - 90
    Gas/Elec -40
    Phones/Internet - 40
    Water/TVL - 30
    Entertainment - 100
    Clothes - 20
    Emergency fund - 100
    Insurances - 20
    Xmas/Birthdays - 50

    In total £640. And I think I have been fairly generous in regards to groceries, entertainment and emergency fund, which should cover all miscellaneous spending. Obviously there would be no fancy foreign holidays or going out on the drink every night, but its certainly by no means an austerity lifestyle.

    I will have a small work pension that should add a couple of hundred a month into my pot but even without that I doubt I would starve or go without on anything fancy. Opinions?
    Current MFD 1st July 2026

    Target MFD 1st April 2023
Page 3
    • justme111
    • By justme111 7th Jan 18, 4:19 PM
    • 2,906 Posts
    • 2,804 Thanks
    justme111
    It is not bad. I a few times on this board argued against blindly telling people they need adfitional pension without knowing their circumstances. If average household income is 28 k after tax and NI it is reduced by 2 k at least giving 26. Children expenses come out of it - lets say modestly one child costing about 4 k a year ( no excesses like expensive holidays, hobbies, school trips, Christmases etc(. It leaves 22 k. Mortgage coming out - lets say 7 k a year , again very modest. It leaves 15 k - basically the same as 2 full SPs. so that couple does not need any additional pensions as their disposable income in retirement on SPs will be no less than while working.
    On another hand you not factoring anything for major expenses and household items seems very unrealistic. You think you will pay for everything just before retirement and the wind is not going to blow your fence 2 years into it or you will never again in your lifetime buy an electrical item?
    I suppose not including any medical,dental, professional, legal expenses and no transport is because you do not spend anything in those categories now. . Life id far better with being able to afford the above though and if you did not have sn occasion where you needed to spend 1O k on solicitors before who is to say it will not happen to you later...
    • drumtochty
    • By drumtochty 7th Jan 18, 9:55 PM
    • 73 Posts
    • 30 Thanks
    drumtochty
    I look after my mother in-laws finances. Basically checking she is not getting ripped off and getting some interest on her current account, she actually handles her own cash. I do a rough monthly spreadsheet to make sure she does not run out of money etc.

    Her state pension is £590 a month averaged out to include some 5 week months. She further gets say £250 a month in investment dividends. We also help some times ie. when she need a new TV we paid half of the costs so say add a further average of £40 a month to her income. Total income £880 a month but she pays a one bill you will not have of £130 a month. Therefore like for like with you she has £750 a month net into her account to compare her to you.

    Up until recently she was on average saving say £30 a month and her bank account was healthy. She is a good age and not a new retiree.

    She now needs cleaners to come in and she gets her windows cleaned once a month and also now buys ready made meals to put a cost on that say £150 a month. Therefore she is now spending say £120 a month more than is coming in.

    My opinion is that you are a bit tight with your estimate and that you will need a chunk of that few hundred a month or so from your works pension to top things up and pay your unexpected bills.

    Overall with your works pension you will have some room not to be too short of money in the next 10 years or so.
    Last edited by drumtochty; 07-01-2018 at 9:59 PM.
    • thorsoak
    • By thorsoak 7th Jan 18, 10:07 PM
    • 5,524 Posts
    • 25,180 Thanks
    thorsoak
    I am in reciept of DWP pension of £655 per 4 weeks, and a private pension of £110 per month. No mortgage - and apart from 25% council tax discount, I receive no additional benefit.

    I have no mortgage to pay but I find that I can survive on my pensions - but cannot really factor in such things as I might wish to do on a regular basis - such as yoga classes, u3a etc. You might need to think about that whilst you can.
    • Marvqn1
    • By Marvqn1 7th Jan 18, 11:14 PM
    • 362 Posts
    • 230 Thanks
    Marvqn1
    I am in reciept of DWP pension of £655 per 4 weeks, and a private pension of £110 per month. No mortgage - and apart from 25% council tax discount, I receive no additional benefit.

    I have no mortgage to pay but I find that I can survive on my pensions - but cannot really factor in such things as I might wish to do on a regular basis - such as yoga classes, u3a etc. You might need to think about that whilst you can.
    Originally posted by thorsoak
    The 25% council tax discount you mentioned, is that a standard amount of discount that people who have reached pension age get or does it depend on things such as what your income is?
    • molerat
    • By molerat 7th Jan 18, 11:17 PM
    • 17,701 Posts
    • 11,966 Thanks
    molerat
    The 25% council tax discount you mentioned, is that a standard amount of discount that people who have reached pension age get or does it depend on things such as what your income is?
    Originally posted by Marvqn1
    Single person discount, nothing to do with age.
    www.helpforheroes.org.uk/donations.html
    • Pollycat
    • By Pollycat 8th Jan 18, 9:16 AM
    • 18,681 Posts
    • 49,209 Thanks
    Pollycat
    I guess it depends if you want to live or want to merely exist.-

    After working for 45-50 years I want more from the remaining 30 years of my life than sitting at home watching television as I can't afford to leave the house

    By sacrificing a decent wedge of my income now I plan to retire by 60 and enjoy my free time, travel etc rather than sit at home choosing between eating or putting the heating on.

    You can exist on state pension - you will be kept alive but it sounds a pretty crap existance
    Originally posted by haras_nosirrah
    I too want much more from my retirement.
    We take at least 3 holidays abroad each year.

    The state pension doesn't feature heavily in my retirement planning because:
    - I won't receive it until I'm 67 at the earliest. Several of my relatives died before reaching 70.
    - Of all pension types, it's probably the one most subject to political interference. It might even become means-tested in future.
    - At present, although I live a pretty frugal lifestyle, I could spend a five figure sum on house repairs or helping out a relative if I wanted and barely notice. The thought of not having that kind of financial freedom is scary.
    Originally posted by WobblyDog
    It didn't feature at all in our retirement planning.

    And that was a pretty good decision we took as my state retirement date was pushed back by 15 months (woman born late 1953 - but that is another debate altogether. ) and I took early retirement aged just over 50.
    My state pension date will also give me free bus travel (I hope) giving me an additional £60 per month in my pocket.
    • Silvertabby
    • By Silvertabby 8th Jan 18, 9:38 AM
    • 2,127 Posts
    • 2,834 Thanks
    Silvertabby
    The 25% council tax discount you mentioned, is that a standard amount of discount that people who have reached pension age get or does it depend on things such as what your income is?
    Originally posted by Marvqn1
    It's the single occupancy discount for those living alone. It isn't age related or means tested.
    • molerat
    • By molerat 8th Jan 18, 9:52 AM
    • 17,701 Posts
    • 11,966 Thanks
    molerat
    ...........
    Originally posted by DavidJulie1955
    Please stop spamming your ill informed rubbish.

    As you can clearly see I will receive £ 37.25 per week less that I believe I should which is £ 1937.00 per year.

    Based on the change in the age using their lower figure of £ 193.25 per week I have already lost £ 10083.51 in that year together with the Extra payment I firmly believe I should get of £ 1937.00 per year the total now is some £ 12020.51.
    Just about sums up your greed and lack of knowledge. You will actually receive no more or less than you are due under the old system which is more than you are due under the new system.
    Last edited by molerat; 08-01-2018 at 9:56 AM.
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    • Pollycat
    • By Pollycat 8th Jan 18, 9:59 AM
    • 18,681 Posts
    • 49,209 Thanks
    Pollycat
    DavidJulie1955
    you have already received very comprehensive responses to the identical thread you started here:
    http://forums.moneysavingexpert.com/showthread.php?t=5769344

    I appreciate you're a newbie but your issue with your state pension forecast is not relevant to the discussion on this thread.

    molerat is correct.
    Posting the same thing more than once is against MSE rules:
    • What's spam?
      Forum users mustn't post comments more than once on the forum (the only exception is members of the MSE Team; when needed). It's called spamming and most internet forums forbid it. Where spam is reported to the Forum Team, the posts are deleted and the user's posting privileges may be removed. Please don't quote any post you believe is spam, as this causes the team more work.
    I suggest you use the 'edit' button to delete your post on this thread.
    • msallen
    • By msallen 8th Jan 18, 11:14 AM
    • 623 Posts
    • 608 Thanks
    msallen
    I suggest you use the 'edit' button to delete your post on this thread.
    Originally posted by Pollycat
    I would further suggest that it would be wise for them to ....

    1) Check their facts
    2) Check their spelling/grammar

    ... before contacting their MP.
    • longleggedhair
    • By longleggedhair 8th Jan 18, 11:46 AM
    • 288 Posts
    • 363 Thanks
    longleggedhair
    I recently sent the following letter to my M.P.

    Dear Conor McGinn M.P.

    I would be grateful if I could arrange to discuss with you face to face at any of your surgeries about the current unfair practise by the UK Government.2

    In 2013 I have told that the Department of Works and Pensions issued a white paper on the new UK State Pension. It was decided that going forward all UK residents that payed all the required number of years of national insurance contributions would then receive the NEW BASIC STATE PENSION
    Of £ 159.55 per week.

    My date of birth is 21/09/1955. As we all know due to the recent changes I will not receive my State Pension till I reach 66.

    In 2012 I requested an estimate of my State Pension and on 23/07/2012 I was advised the following:-

    Basic State Pension = £ 107.45 per week
    Additional State Pension = £ 60.00 per week
    Graduated Retirement Benefit = £ 1.25 per week.
    Total State Pension = £ 168.70.


    I recently applied on line to the Department of Works and Pensions on 29/12/2017 and received an updated estimate.

    My new State Pension will be £ 193.25 per week when I reach 66.

    I enquired how this figure was created. Reluctantly the person I spoke to told me the following calculation that the UK Government have instructed them to follow:-

    Under the Old State Pension rules my State Pension had increased from £ 107.45 per week to £ 122.30 per week. My additional benefits had
    increased from £ 61.25 per week to £ 70.95 week. Their calculations then gave the new total state pension of £ 193.25 per week.

    I enquired why the calculation started with the lower figure from the old state pension rules and not follow the new rules starting the calculation
    Of the new State Pension of £ 159.55 per week and then add the additional benefit of £ 70.95 per week giving me a new state
    Pension of £ 230.50. I was told that the new rules do not allow this.

    As you can clearly see I will receive £ 37.25 per week less that I believe I should which is £ 1937.00 per year.

    Based on the change in the age using their lower figure of £ 193.25 per week I have already lost £ 10083.51 in that year together with the
    Extra payment I firmly believe I should get of £ 1937.00 per year the total now is some £ 12020.51.

    I have all the documents to support the above and would welcome the opportunity to show them to you and if possible I would like to request that you ask the following question in the House of Commons: -

    Due to the recent changes in the Department of Works and Pension in the white paper of 2013 there
    are people that are reaching pensionable age who are being miss-treated. Please therefore could I ask the Government to confirm how many people are affected by this. (Please give them my details to support the question). What cost would it be to rectify this? For the record all these people have paid their full required contributions to receive their State Pension and others have paid extra in to the pension scheme to receive a higher pension.
    Originally posted by DavidJulie1955
    You are receiving more money, and are complaining? I know MPs get a bad press but imagine having to deal with someone like the above and having to try and remain polite....perhaps they do deserve that 10% pay rise!
    • Pollycat
    • By Pollycat 8th Jan 18, 11:46 AM
    • 18,681 Posts
    • 49,209 Thanks
    Pollycat
    I would further suggest that it would be wise for them to ....

    1) Check their facts
    2) Check their spelling/grammar

    ... before contacting their MP.
    Originally posted by msallen
    I was taking note of this:

    • Spreadsheetman
    • By Spreadsheetman 8th Jan 18, 1:23 PM
    • 54 Posts
    • 44 Thanks
    Spreadsheetman
    My father has lived on the state pension plus a small occupational pension (equal to 1 weeks state pension/month) for a long time quite comfortably. (North East, so low cost of living) He actually saves money from his pension, so has enough to cover the one-off expenses as they arise.

    However, he is from the pre-war serious deprivation generation so his wants are very minimal. e.g. no holidays, very plain food, no eating out, no electronics (apart from TV+radio), no smoking, no drinking, no credit cards. He does still drive a small car and have a warm well-insulated house and he's happy with his spartan lifestyle.

    I'd struggle to live on his budget, but it is definitely do-able even for a single person.
    • Ashingtonian
    • By Ashingtonian 8th Jan 18, 4:57 PM
    • 135 Posts
    • 102 Thanks
    Ashingtonian
    My father has lived on the state pension plus a small occupational pension (equal to 1 weeks state pension/month) for a long time quite comfortably. (North East, so low cost of living) He actually saves money from his pension, so has enough to cover the one-off expenses as they arise.

    However, he is from the pre-war serious deprivation generation so his wants are very minimal. e.g. no holidays, very plain food, no eating out, no electronics (apart from TV+radio), no smoking, no drinking, no credit cards. He does still drive a small car and have a warm well-insulated house and he's happy with his spartan lifestyle.

    I'd struggle to live on his budget, but it is definitely do-able even for a single person.
    Originally posted by Spreadsheetman
    Sounds like me in the future, except swap the car for beer
    Current MFD 1st July 2026

    Target MFD 1st April 2023
    • molerat
    • By molerat 8th Jan 18, 5:12 PM
    • 17,701 Posts
    • 11,966 Thanks
    molerat
    The only problem we have for when we both reach SRA is what to do with the extra £900 pm net more than we currently live on
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    • Thrugelmir
    • By Thrugelmir 8th Jan 18, 5:39 PM
    • 56,764 Posts
    • 50,133 Thanks
    Thrugelmir
    Always worth putting numbers into context. Regarding the level of Spanish state pension.

    Spanish State Pension system about to go Bankrupt?
    By Chris Burke - Topics: Barcelona, Pensions, Retirement, spain

    During 2017 or early in 2018, the Spanish State Pension system is due to run out of money. At one point, the reserve fund the government created for this was standing at 66 million Euros.
    Why has this happened?
    During the crisis, millions of jobs were lost, and with them, an almost parallel reduction in contributions to the Social Security. Furthermore, a large part of the new jobs are precarious – temporary, part-time or free-lance – and with low salaries. This means that contributions to the system are way below expectations and the minimum required for it to be able to meet outgoings with incomings.
    While this has been happening, payments to retirees have been increasing. In the last 11 years the number of actual pensioners has increased by over a million (8.3 million up to 9.4 million). The average pension amount paid out has also increased, from €647 per month to €906 from 2006 to 2016. In 2007, 79 billion Euros was paid out in pensions, compared to 117 billion in 2016, an increase of 48%. In real terms, the annual deficit for the year is 19 billion Euros.
    This issue of funding pensions is made even harder by the lack of people in employment. In many European countries it’s normal for 50% of the population to be in work, in Spain it’s only 40%.
    Ideas on how to solve the problems being explored
    These range from not putting a cap on contributions (this would generate more income in the short term, but mean more pensions payable in the long run). A more popular idea is to allow those people retired to still work and receive their entire pension, which would generate increased state contributions. Gaining more support is the change to stop those who are not contributing to the system to not receive state pensions/handout, such as widows and orphans. These would instead be funded from current tax revenues.
    In essence Spain may have to look at what many other countries are changing, such as making people contribute for more years and lower percentages to effectively cut the average pension payments. As well as increasing Social Security contributions. But what does remain clear is, if you are ONLY relying on the state to fund your retirement, you could be looking at grave consequences.
    “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”
    ― Warren Buffett
    • BBH123
    • By BBH123 9th Jan 18, 10:51 AM
    • 526 Posts
    • 833 Thanks
    BBH123
    I am in reciept of DWP pension of £655 per 4 weeks, and a private pension of £110 per month. No mortgage - and apart from 25% council tax discount, I receive no additional benefit.

    I have no mortgage to pay but I find that I can survive on my pensions - but cannot really factor in such things as I might wish to do on a regular basis - such as yoga classes, u3a etc. You might need to think about that whilst you can.
    Originally posted by thorsoak


    That is key for me.


    I don't want to survive I want to live. I view any state pension as an added extra and don't even think about it in my pension planning.


    Yes you may be able to pay the necessities but in retirement as annual leave I spend an awful lot more money because I have the time to do things and I don't want to worry about whether I can visit the garden centre but not afford a pot plant or refuse a weekend away etc etc.


    State Pension is to exist not live IMO.
    • NineDeuce
    • By NineDeuce 9th Jan 18, 11:50 AM
    • 683 Posts
    • 601 Thanks
    NineDeuce
    Like with most issues today, the OP uses one example, in this case his/her own, to generalise about a massive subject.

    It's like the pompous section of homeowners who use their own fortune, luck or particular circumstances to preach about deride other people for not being able to afford their own home.
    • enthusiasticsaver
    • By enthusiasticsaver 9th Jan 18, 11:55 AM
    • 5,194 Posts
    • 9,895 Thanks
    enthusiasticsaver
    Surely we all know we will be retiring one day so it is our responsibility to put plans in place in much the same way as planning for buying a home or a car or a child?

    We have been told for as long as I can remember that the state pension alone will only provide very basic subsistence level. Consequently we concentrated our efforts on saving for retirement on our investments/sipps and occupational pensions and the state pension is just something extra.

    I realise others are not so fortunate and we have not had periods of unemployment or illness during our working lives to contend with but I would say we made a certain level of sacrifice and financial discipline in aiming to save an average of 10%(sometimes up to 25%) of our income specifically for retirement for the best part of 25 -30 years before being confident to take voluntary early retirement at a date convenient to us and a lot earlier than the state would like.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
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