Understanding my state pension (quick question)

Ganga

homeless9 wrote: »

Yep, this is how I am looking at it. I'm just checking I understand how it works and that I will be getting a significant increase in pension amount compared to today, as obviously things in 34 years time will be more expensive.....

I am expecting to be mortgage free by retirement age. So lets say I had retired today, mortgage free. If I was to receive £164.35 a week, which is £715.63 a month, then that would be plenty right now. I calculated that my outgoings would be around £800 per month if I was to take out a mortgage now. Without the mortgage that would reduce to £400 - £500 per month in outgoings, so yes - £715.63 seems like enough pension to get by, especially as I should inherit a decent sum of money, will also save and invest, wages will increase, and as I plan to buy a house I will also have the opportunity to move to a cheaper property to free up capital, if needs be.

I am not someone who lives pay check to pay check, buys brand new cars, etc etc..... so I am sensible with money too.

I don't think I need to worry about a private pension then.

But feel free to disagree with anything I have said above, any advice is welcome.

A lot of what you have been posting on here made sense till you posted the bit highlited above.
What happens if a future goverment phases out the state pension.
What happens when the triple lock is cancelled and state pension does not rise as fast as assume.
Star a private pension or better still a workplace pension where your employer pays in ( free money )

Paul_Herring

Ganga wrote: »

What happens if a future goverment phases out the state pension.
What happens when the triple lock is cancelled and state pension does not rise as fast as assume.

Those would appear to fall under the category of

homeless9 wrote: »

faff[ing] about

and aren't worth any consideration.

Apparently.

p00hsticks

homeless9 wrote: »

I am in my early thirties.

homeless9 wrote: »

I will likely inherit a large some of money at some point in older age. I will likely buy a property soon and that will increase in price over time - then I will be able to downsize and free up capital. I also plan to put savings away and invest in stocks. Wages should rise over time. I think I estimate I will be ok, there is always the option to adjust as I go.

homeless9 wrote: »

I am expecting to be mortgage free by retirement age. So lets say I had retired today, mortgage free. If I was to receive £164.35 a week, which is £715.63 a month, then that would be plenty right now. I calculated that my outgoings would be around £800 per month if I was to take out a mortgage now. Without the mortgage that would reduce to £400 - £500 per month in outgoings, so yes - £715.63 seems like enough pension to get by, especially as I should inherit a decent sum of money, will also save and invest, wages will increase, and as I plan to buy a house I will also have the opportunity to move to a cheaper property to free up capital, if needs be.

I don't think I need to worry about a private pension then.

But feel free to disagree with anything I have said above, any advice is welcome.

My twopennyworth.....

I think you are being a bit optimistic to assume that you're going to be able to live comfortably with just the state pension, although you may scrape by. You;d be far better off having some sort of private pension as well.

You don't say whereabouts in the country you are, but if you are in your thirties and don't yet have a property then you may well be still paying off your mortgage at the point you retire. Also by the time you factor in moving costs, legal fees, stamp duty etc, downsizing doesn't tend to free up an awful lot of money unless you're moving from a mansion to a garrett.

Don't count on an inheritance. It may turn out in future that much of the money / property will go to pay for the elderly persons care needs, and even if not they may still be alive and well even after you've reached retirement age yourself.

And you are also assuming that you are going to be able to work all the way up to State Retirement age - don't count on it. Your health may not permit it, you might get made redundant or you might simply get fed up. A personal pension will allow you to plug the gap between when you actually retire and when you reach State Pension age.

And changes in circumstance such as marriage, divorce, children, ill health or major problems developing on the house you buy (neighbours form hell etc) can eat into savings / prevent saving more.

If we had to rely just on a single state pension we'd struggle, even though we live quite frugally. £715 sounds a lot but for us it would cover little more than the basics of council tax, gas, electricity, food / household shopping, TV licence, and basic phone / broadband. Then you have the occasional expenses for clothing, travel, presents, the occasional meal out, new cooker / boiler / repairs etc. We certainly wouldn't be able to afford to run a car, go on holiday etc. We'd survive, but it would'nt be a particularly enjoyable experience

VDOT47

Agree with what has been said above.


On the other hand if you get married and stay with your spouse, then they will likely be entitled to a state pension too, at least to the same extent as you are (assuming they have paid in for enough qualifying years), so your £715 per week is likely to be more than that.


That said, I wouldn't like to take my chances that circumstances won't change surrounding the state pension. If you have any spare at the end of each month you'd be sensible to get some sort of private pension too I would suggest.

LHW99

On the other hand if you get married and stay with your spouse, then they will likely be entitled to a state pension too, at least to the same extent as you are (assuming they have paid in for enough qualifying years), so your £715 per week is likely to be more than that.

Except that new state pension can't be inherited - so if spouse dies first your back to a single pension amount