Is State Pension Alone Enough To Live On?

bostonerimus

MalMonroe said:

Hi, many pages later, I'd just like to say that no, the state pension is not enough to live on. At all.

I retired 12 years ago at the very young age of 60 and if I hadn't have had two small private pensions, I'd have been in a very poor financial situation.

However, having said that, if retirees rely solely on the state pension they can claim benefits and my next door neighbour (sadly now no longer with us) was able to claim pension credits which led her to being eligible to claim housing benefit and council tax benefit and she ended up in quite a good financial position. 

I realise that the way benefits are now allocated has changed and probably will always be changing but more and more people are now living well after the age of retirement (a trend that will continue - the so called 'demographic time bomb') so the government will have to find some way to help them financially in the future.

When I was younger I never worried about retirement or pensions - maybe I should have given it some thought but things haven't turned out too badly. I'm still able to maintain a good lifestyle, run a decent car, etc. and I'm also registered self-employed with a small online business. 

Is the "pension credit" relevant to people who will be retiring on the new flat rate pension? If retired on just the flat rate pension what other benefits are you eligible for...and most importantly how easy is it to find out about and get them.

Being sensible about this, even if you owned your own home it would be very difficult to live on just SP without extra benefits as it puts you well below the official poverty level. So we need to know what extra benefits you could get. But, I agree, that the answer to the question as asked is "no" for all but the most ludicrously frugal of people.

sevenhills

MalMonroe said:

Hi, many pages later, I'd just like to say that no, the state pension is not enough to live on. At all.

I retired 12 years ago at the very young age of 60 and if I hadn't have had two small private pensions, I'd have been in a very poor financial situation.

If you retired at 60 and it wasn't because of ill health, you must have done ok. Most have some sort of extra pension and work until 65/67

Home ownership makes a big difference, 76% of those between 65 and 74 years owning their dwelling outright.

zagfles

bostonerimus said:

MalMonroe said:

Hi, many pages later, I'd just like to say that no, the state pension is not enough to live on. At all.

I retired 12 years ago at the very young age of 60 and if I hadn't have had two small private pensions, I'd have been in a very poor financial situation.

However, having said that, if retirees rely solely on the state pension they can claim benefits and my next door neighbour (sadly now no longer with us) was able to claim pension credits which led her to being eligible to claim housing benefit and council tax benefit and she ended up in quite a good financial position. 

I realise that the way benefits are now allocated has changed and probably will always be changing but more and more people are now living well after the age of retirement (a trend that will continue - the so called 'demographic time bomb') so the government will have to find some way to help them financially in the future.

When I was younger I never worried about retirement or pensions - maybe I should have given it some thought but things haven't turned out too badly. I'm still able to maintain a good lifestyle, run a decent car, etc. and I'm also registered self-employed with a small online business. 

Is the "pension credit" relevant to people who will be retiring on the new flat rate pension?

Generally not if they're getting the full NSP, as the pension credit amount is about the same as the full NSP for a single person. If they're getting less than the full NSP, then yes.

If retired on just the flat rate pension what other benefits are you eligible for...and most importantly how easy is it to find out about and get them.

Housing benefit if renting or SMI (mortgage interest support) if still paying a mortgage. Council tax support. Winter fuel payment. Free bus pass and usually other local transport eg trams/trains. Extra payments for disabilities eg attendance allowance. Easy to find out with internet access through online calculators https://www.gov.uk/benefits-calculators or at Citizen's Advice.

Being sensible about this, even if you owned your own home it would be very difficult to live on just SP without extra benefits as it puts you well below the official poverty level. So we need to know what extra benefits you could get. But, I agree, that the answer to the question as asked is "no" for all but the most ludicrously frugal of people.

As discussed above, you'd be slightly below it if single, not well below it. Read Sea Shell's "squirrelled nuts" thread, they live on about 1.5x the NSP between 2 of them and not through necessity. It's well below average income in the UK, but probably above average worldwide income even in PPP terms. But we do seem to have a sense of privilege for living in a "rich" country.

Sunnylifeover50plan

My wife and I were talking today, as it's raining and has been for 10 days. We were talking about the new state pension and the fact that at today's prices for two it works out at around Eur 22k. We have 14 and 11 years until state pension. 

We spend about Eur 27k a year (self financing) net including private healthcare costs. If we take off those healthcare costs, given we'd have our healthcare exported from the UK at state retirement age, our spend comes down to Eur 25.4k at todays prices.

We are homeowners here in Spain and tbh we probably could manage on Eur 22k net without feeling like we were anywhere near the poverty line and I suspect there are many Spanish nationals living on less. A bit extra in SIPPS and cash will provide for the extras.

bostonerimus

Sunnylifeover50plan said:

My wife and I were talking today, as it's raining and has been for 10 days. We were talking about the new state pension and the fact that at today's prices for two it works out at around Eur 22k. We have 14 and 11 years until state pension. 

We spend about Eur 27k a year (self financing) net including private healthcare costs. If we take off those healthcare costs, given we'd have our healthcare exported from the UK at state retirement age, our spend comes down to Eur 25.4k at todays prices.

We are homeowners here in Spain and tbh we probably could manage on Eur 22k net without feeling like we were anywhere near the poverty line and I suspect there are many Spanish nationals living on less. A bit extra in SIPPS and cash will provide for the extras.

I'd be interested to see how your budget is allocated. I'm a retired home owner in the US and I'm comfortable on around $25-30k (Eur 23k-27k). My biggest single expense is the equivalent of council tax to my city, that costs $6k/year, home owners insurance is $1.8k/year; health insurance is $1.5k, gas and electric $2k, phone and cable $1k...so that's almost half my budget already.

Sunnylifeover50plan

bostonerimus said:

Sunnylifeover50plan said:

My wife and I were talking today, as it's raining and has been for 10 days. We were talking about the new state pension and the fact that at today's prices for two it works out at around Eur 22k. We have 14 and 11 years until state pension. 

We spend about Eur 27k a year (self financing) net including private healthcare costs. If we take off those healthcare costs, given we'd have our healthcare exported from the UK at state retirement age, our spend comes down to Eur 25.4k at todays prices.

We are homeowners here in Spain and tbh we probably could manage on Eur 22k net without feeling like we were anywhere near the poverty line and I suspect there are many Spanish nationals living on less. A bit extra in SIPPS and cash will provide for the extras.

I'd be interested to see how your budget is allocated. I'm a retired home owner in the US and I'm comfortable on around $25-30k (Eur 23k-27k). My biggest single expense is the equivalent of council tax to my city, that costs $6k/year, home owners insurance is $1.8k/year; health insurance is $1.5k, gas and electric $2k, phone and cable $1k...so that's almost half my budget already.

The equivalent to council tax here, per annum, is around Eur 312, home insurance is similar to UK at around Eur 260, Health insurance is around Eur 1800 for two, we should have been on the state healthcare @ 1440 per annum but we had an issue with the application (very common in Spain). Phone and broadband = 480 a year. Here our top 3 are food/ drink = EUR 7280 pa, meals out (entertainment) = 5720 pa, incidentals = 3016 pa - this is buying flights to UK, house repairs - typically in year one this was a larger number and included buying set up items which were one off buys. Electricity/ gas is at a floating rate and although we consume more in winter the annual average is around Eur 1k a year, we do have 3 aircon units and ceiling fans but as we have mosquito nets over every window and door we can get an airflow to cool in the summer.

Where Spain penalises is on income tax, given it's a relatively low income environment the income tax levels are higher and personal allowances lower than in Northern European countries. Stamp duty on property purchases is 10%.

bostonerimus

Sunnylifeover50plan said:

bostonerimus said:

Sunnylifeover50plan said:

My wife and I were talking today, as it's raining and has been for 10 days. We were talking about the new state pension and the fact that at today's prices for two it works out at around Eur 22k. We have 14 and 11 years until state pension. 

We spend about Eur 27k a year (self financing) net including private healthcare costs. If we take off those healthcare costs, given we'd have our healthcare exported from the UK at state retirement age, our spend comes down to Eur 25.4k at todays prices.

We are homeowners here in Spain and tbh we probably could manage on Eur 22k net without feeling like we were anywhere near the poverty line and I suspect there are many Spanish nationals living on less. A bit extra in SIPPS and cash will provide for the extras.

I'd be interested to see how your budget is allocated. I'm a retired home owner in the US and I'm comfortable on around $25-30k (Eur 23k-27k). My biggest single expense is the equivalent of council tax to my city, that costs $6k/year, home owners insurance is $1.8k/year; health insurance is $1.5k, gas and electric $2k, phone and cable $1k...so that's almost half my budget already.

The equivalent to council tax here, per annum, is around Eur 312, home insurance is similar to UK at around Eur 260, Health insurance is around Eur 1800 for two, we should have been on the state healthcare @ 1440 per annum but we had an issue with the application (very common in Spain). Phone and broadband = 480 a year. Here our top 3 are food/ drink = EUR 7280 pa, meals out (entertainment) = 5720 pa, incidentals = 3016 pa - this is buying flights to UK, house repairs - typically in year one this was a larger number and included buying set up items which were one off buys. Electricity/ gas is at a floating rate and although we consume more in winter the annual average is around Eur 1k a year, we do have 3 aircon units and ceiling fans but as we have mosquito nets over every window and door we can get an airflow to cool in the summer.

Where Spain penalises is on income tax, given it's a relatively low income environment the income tax levels are higher and personal allowances lower than in Northern European countries. Stamp duty on property purchases is 10%.

That's a massive difference in "council tax". I'm paying on two properties with a pretty high combined value and live in a city that provides a lot of facilities and has a well funded school system, I can see my taxes being spend on shiny a new high school, so I comfort myself with that...

marycanary

zagfles said:

marycanary said:

Speaking of strawmen, where in anything I posted does it say landlords have to change a light bulb? If a particular council do that it's because they are a super good, caring landlord. It is certainly is not standard. practice, much less a legal requirement in single occupied homes. 

Did I say you did? Someone else mentioned it above. Which is why I wrote "as above". I was answering your question, not imposing assumptions on what you meant, like your "Do you mean not expecting people to pay for unsafe homes which will make them ill or put them in hospital A&E?"

It should take time to evict someone from their home. Delays in doing this are not due to the "nanny state" they are created by an inefficient, underfunded court system. We are often urged to feel sorry for landlords who don't get their rent but we seldom hear about tenants evicted for complaining about unsafe conditions. 

The usual rule is if you don't pay for a product or service, you don't receive that product or service. If you deliberately take a product or service with the intention of not paying for it, you get arrested for theft. That's what would happen if you shoplifted at Tesco for instance. That's why you you get "no DSS" on adverts for rentals, why landlords want references, why people with troubled pasts find it hard to get somewhere to rent.

If Tesco weren't able to get a shoplifter arrested for stealing, and had to let them walk out with stolen food and had to go through a 6 month process to get them banned from their store, you can be sure they'd have "no DSS" notices on their stores, that you'd need references to get a pass to allow you to enter etc. Poor people and people with troubled pasts would find it hard to buy food even if they've turned their life around. Just like now they struggle to find somewhere to live.

Many years ago a friend of mine was in this sort of situation after a messy divorce and loss of job. He kipped on my sofa for 3 months because he couldn't find anywhere to rent. He'd have probably been on the streets otherwise. It wasn't a financial issue, he could have got HB to pay the rent, it was that no landlord wanted to take the risk on someone in his situation. 

Does every business always get paid for every job they do? Are all the defaulters arrested and prosecuted? An ex-partner of mine was a small business owner and he did not get his money from customers 100% of the time. Even shoplifters are offered a day in court and so are tenants. 

zagfles

marycanary said:

zagfles said:

marycanary said:

Speaking of strawmen, where in anything I posted does it say landlords have to change a light bulb? If a particular council do that it's because they are a super good, caring landlord. It is certainly is not standard. practice, much less a legal requirement in single occupied homes. 

Did I say you did? Someone else mentioned it above. Which is why I wrote "as above". I was answering your question, not imposing assumptions on what you meant, like your "Do you mean not expecting people to pay for unsafe homes which will make them ill or put them in hospital A&E?"

It should take time to evict someone from their home. Delays in doing this are not due to the "nanny state" they are created by an inefficient, underfunded court system. We are often urged to feel sorry for landlords who don't get their rent but we seldom hear about tenants evicted for complaining about unsafe conditions. 

The usual rule is if you don't pay for a product or service, you don't receive that product or service. If you deliberately take a product or service with the intention of not paying for it, you get arrested for theft. That's what would happen if you shoplifted at Tesco for instance. That's why you you get "no DSS" on adverts for rentals, why landlords want references, why people with troubled pasts find it hard to get somewhere to rent.

If Tesco weren't able to get a shoplifter arrested for stealing, and had to let them walk out with stolen food and had to go through a 6 month process to get them banned from their store, you can be sure they'd have "no DSS" notices on their stores, that you'd need references to get a pass to allow you to enter etc. Poor people and people with troubled pasts would find it hard to buy food even if they've turned their life around. Just like now they struggle to find somewhere to live.

Many years ago a friend of mine was in this sort of situation after a messy divorce and loss of job. He kipped on my sofa for 3 months because he couldn't find anywhere to rent. He'd have probably been on the streets otherwise. It wasn't a financial issue, he could have got HB to pay the rent, it was that no landlord wanted to take the risk on someone in his situation. 

Does every business always get paid for every job they do? Are all the defaulters arrested and prosecuted? An ex-partner of mine was a small business owner and he did not get his money from customers 100% of the time. Even shoplifters are offered a day in court and so are tenants. 

Did he have to carry on providing the service for 6 months after it became clear he wasn't going to get paid?