How much to live on

thriftylynny

I had 44 years of NI contributions with another 3 to pay due to employer contracting out . Year 1 i paid full amount, but as i do a little £80 p/m job i registered as self employed last year in order to pay class 2 contributions , therefore i have just paid £159 instead of class 3 which would have been £780 ,next year will do same again. I wouldn't have known about this had it not been for the MSE forums ! also do the SIPP pay in £2880 /withdraw thing for the tax relief each year.

Xbigman

KxMx said:

[Deleted User] said:

Xbigman, thank you for your breakdown. Impressive gas/electricity costs! What type of property do you have may I ask? As said above we pay about 3 times yours annually.

I'm interested too as live in a 3 bed semi and pay approximately £800 annually which I thought was on the low side compared to most figures I've seen.

We heat every room but don't use a timer, it gets put on for 30-90 minutes as and when we need it, which now at the height of winter is 3 times daily.

I live in a 3 bed mid terrace. I live alone. I primarily use the front room so I have the radiators in the bedroom I use (the middle one) and the Kitchen as the other two heaters to make up the 3 in use. I don't use a timer, I just turn on the heating when I'm cold. It does mean getting out of bed in the cold each morning but the few minutes I'm cold is much cheaper than having the heating come on using a timer for half an hour just for a few minutes comfort. The rest of the day I don't skimp the heating. I keep the front room warm, which keeps the kitchen a reasonable temperature for when I pop out to cook or make some tea. Gas usage is budgeted at 30 units a month, 360 annually. That's about 3900 kws. Something like £210 a year as I recall.

The electric was averaging 150 units a month some years back but I replaced my old fridge and freezer with better ones, ditched the cooker and bought a mini oven and stand alone induction hob. Then I reorganised the plugs in the front room so I just have to flick one switch and everything in the front room is off at the mains.
I have a washing machine but no drier. I had my washing on the line outside earlier and now its on the Kitchen and bedroom radiators. It will be dry in a few hours once I turn on the heating, which I haven't needed yet today. Until Dec I had reduced my average electric usage to 109 units a month but its crept up a bit due to a new second freezer and being home all day. I think 130 units a month will be my new budget for electric but as I'm under budget on gas it should just squeak into my current £40 a month (£480 per year) budget. I've a 2 year fix with Bristol energy ending Aug 2022 so this looks good for a while yet. 

I know someone with a wood burner who spends half what I do on gas but my bills are pretty low for full time occupation and no secondary source of heating. 
Now my brothers wife is from Thailand and he had his heating on full blast during that cold spell we had in August. But that is another story...


Darren 

Silvertabby

billn said:

Silvertabby said:

I do hope you mean 'contracted out' rather than 'opted out' !

The number of qualifying years is unlikely to reduce.  Even if they increase (and there are no rumours of that to the best of my knowledge) then every extra (post 2016/17) year will benefit you.

I've already bought 2 years and will buy another 2 before this April (SPA 2022).  

Sorry you are correct to say contracted out although neither me or my wife can remember being told that we had been contracted out but this thread isn't the place for that discussion (I think it has been done to death on the pensions forum). I haven't heard any talk of an increase in qualifying years but I didn't hear anything when it went from 30 to 35 years but with the current situation I wouldn't rule anything out (and no I am not govenment bashing).

My SPA is 2024 so a bit to go.

To be fair, the 30 year requirement wasn't in place for long - before that it was 44 years for men and 39 years for women.

And the new single tier pension, long term, is intended to be a (tax payers) money saver.  Before contracting out was abolished in 2016, it wasn't just the employees
who paid reduced NI, it was employers as well.  For an employee on the average salary of £25K, the monthly NI saving was something like £15 per month.  3 times as much for the employer.  So, that's an average of an extra £60 per month/£720 per year being paid into NI funds for each and every worker.

The biggest difference, of course, is the £175 per week cap.  Under the old scheme, the maximum basic State person plus SERPS/SP2 is over £300 per week.

203846930

Y'all got me thinking about my pension forecast and whether I should buy extra NI credits to boost my pension and I seem to remember something on my statement saying it was not worth my while so I had time this afternoon and went and checked it again.
This covers what I remembered:

£183.44 is the most you can get
You cannot improve your forecast any more.

and this

You have:

• 36 years of full contributions

• 5 years to contribute before 5 April 2025

• 9 years when you did not contribute enough

  
  

[Deleted User]

duncanthedog, £183.44 may be the most you can get, but is it the figure you are currently entitled too? If you look lower down in your forecast and find the same figure (£183.44) you are fine. On my forecast it also tells me the most I can get at the top, but further down tells me what I will actually get if I don't pay in another 4 years of NI contributions up to April 2024. I have 43 full years up to April 2020. Even then after 47 years of payments I will be entitled to something like £174.54 at the current rate. I am not complaining at all, as I also have my DB pension in payment.

203846930

That seems to be the figure.
I am not that concerned as it is more than twice what I get from my personal P and I live well enough on that.

[Deleted User]

That's good news duncanthedog.

mark55man

You may not need it, but it is there for the taking - 5 years contributions is at least £20 and maybe £25 a week for the rest of your life  (I can't quite be sure as the last payment will buy you a 1p if that's all you are short and the same amount will buy you £5 if it fits!!).  Plus it pays pack the lump sum in under 3 years.  (ie £700 or so buys you £5 a week = £260 a year.  Also if you are or could be doing anything that counts as self employed, then you can pay a different class of contribution that makes your payment £5 a week (and not £15pw) which entitles you to £5 extra a week for the rest of your life.

The only risk is that you make the payment(s) and then go over the rainbow bridge before you get your money's worth.  That would be sad, but how much would you really care! 

Good to chat again @duncanthedog - the Good Morning thread seem a lifetime ago
 

203846930

As I said @mark55man, I have no spare cash to risk on an investment even if it is a guaranteed return.
Remember you are talking to someone that still smiles when he picks up a penny in the street
Yes, The Arms was a long time ago.

mark55man

Thanks Duncan - sorry didn't mean to focus on what you didn't have.  As you say - you're managing now on far less than you will be getting in due course, so that's a real plus.