Retirement planning when you're 50s, not a home-owner and don't have a decent pension pot/savings

Terron

NannaH said:

I think that most people on this board have no idea that for low earners who also rent,  having a small pension pot can be hugely detrimental to their retirement.
Someone with no personal pension provision, who is pennies under the limit for housing benefit/pension credit etc.  will end up far better off (as in their rent paid plus other benefits) than someone a few pennies over the limit, it’s a cliff edge and very unfair.  
They also use wildly optimistic figures for actual income from capital / £4 per week per £1000, it’s insane.  Then if you actually spend that amount, they want to know why and can stop any/all benefits.   

The people who try  to put money away for the future are actually penalised for doing so.  

I’d argue that for a renter who may only be able to get a pension pot of £50k, it’s absolutely NOT worth having.  You could end up far worse off and your pension would be gone within 5-7 years anyway.  

It is, thankfully,  different if you are disabled and on non-means tested benefits.  

People who haven’t lived it/seen someone else live it,  generally have no idea just how ludicrously unfair it is.
It will also be more widespread in say 20+ years time, it’s obvious what’s going to happen. 

It is £1 per £500 over £10,000 

If you have £10,000 or less in savings and investments this will not affect your Pension Credit.

If you have more than £10,000, every £500 over £10,000 counts as £1 income a week. For example, if you have £11,000 in savings, this counts as £2 income a week.

Kim1965

Nanna H has a point, irrespective of the actual figures. If your a low earner, renting, no existing pension provision in your late 40s. Auto enrolement comes along and you start saving.
 Very noble indeed because that person could well be saving the tax payer (me included) money. At the same time as denying themselves a better standard of living in retirement. Good for their dignity i guess.
Lets assume rent in todays terms is £500 pm, 6k pa. Many posters on here would want a pot of 150k to cover that on a sw of 4%, and many argue that 4 % is optomistic. Something wrong with that imho. 

the_mixer

Kim1965 said:

Nanna H has a point, irrespective of the actual figures. If your a low earner, renting, no existing pension provision in your late 40s. Auto enrolement comes along and you start saving.
 Very noble indeed because that person could well be saving the tax payer (me included) money. At the same time as denying themselves a better standard of living in retirement. Good for their dignity i guess.
Lets assume rent in todays terms is £500 pm, 6k pa. Many posters on here would want a pot of 150k to cover that on a sw of 4%, and many argue that 4 % is optomistic. Something wrong with that imho. 

Can you explain what auto enrolement would do for me, as all of the things you outlined in the first senetence?

Kim1965

As others have also pointed out,  a small pension may deny some people benefits and help paying the rent. However the gamble remains as to whether the benefit system will become  even less generous in the future.  Its a conundrum for many.