Is State Pension Alone Enough To Live On?

MovingForwards

Audaxer said:

MovingForwards said:

Excluding mortgage, work related costs, less petrol etc, even with the current rise in gas / electric, having a full state pension (£179.60) would be more than enough to fund my lifestyle / monthly / annual outgoings, including running a car and having pets.

Not many pensioners would find the State Pension of £179.60 per week, anywhere near enough to fund even a basic lifestyle in retirement.

It depends on their pre-retirement lifestyle and income. 

Someone going from £50k income to SP only would have a massive shock, compared to someone on NMW; that's assuming both own mortgage free homes by the time they retire.

The £50k person is used to flying abroad a couple of times a year, updating their car every 3 years, eating out a few times per week, buying coffee, have hobbies and interests which cost a lot to continue.

The NMW person has a UK holiday every 5 years, has the same £700 runabout car for 10 years or uses public transport (free bus pass on retirement), makes takeaways at home, packs a lunch and their hobbies include walking.

On this pension board there's people talking about various pensions, savings, investments, elsewhere on the boards there are people now who don't even have £9339.20 a year talking about their lifestyles. 

jimpwarsop

Yes the basic state pension is enough to live on.

Try entitledto.com you will get all sorts of add ons to the basic state pension.

But you are 32, your retirement age is currently 35 years away, the Chinese could be running the shop by then.

Steve182

Conan1Sett said:

So I am talking about pure survival here...

I've worked out that state pension would be £179 per month approximately. 

At the moment I'm 32 and the pension I have my employer is somewhat dire. I worked out that making a £50 contribution every month until retirement age would give me an extra £2k per year on top of state pension.

I am just wondering if state pension is enough to live on. Talking a residential care home at £77 per week, council tax, power, water and food. Possibly a TV subscription and basic phone contract?

Assuming you plan to stay in the same accommodation in retirement, look at what you need to live on now, then take away any expenses that you have now but will no longer have in retirement, such as -

the cost of supporting dependent children
commuting costs
bus fares 
mortgage
plus anything else you can think of

Can you live without a car in retirement? Bear in mind as a pensioner you would have free bus travel if it's not phased out by then.

Probably forget about any help from winter fuel allowance as that's likely to be offset by the additional hours per day that you will need to heat the house/flat when retired. I know there are some pensioners sit on the bus for a few hours a day just to keep warm when they cannot afford to heat their house.

What will you do with your time in retirement. Will you take up hobbies that add an extra cost?

After removing (or adding) these items from your current spending, what number are you left with and how does it compare with the state pension?

For me, the answer is a definite no. I might survive but I would be cold, hungry, bored and miserable.

marlot

As others have pointed out, your numbers are off.

>> I am just wondering if state pension is enough to live on.
No, most people would find it not enough.  That's why we have generous tax relief on pension contributions.  You'll get tax relief right up to a pension pot of £1,000,000.

sevenhills

Audaxer said:

Not many pensioners would find the State Pension of £179.60 per week, anywhere near enough to fund even a basic lifestyle in retirement.

I look after a 94 yr old relative and his outgoings are around half of that. He has no rent and does few social events. That is his basic lifestyle.

Chickereeeee

Care home at £77 per DAY is more likely.

MEM62

Conan1Sett said:

comeandgo said:

How did you work out that state pension would be £179 a month? 

 My friend is self paying in a home and she is close to £1,500 a week for the home.
.

I don't know what to tell you. The figure I was given was £77 a week. Maybe the care isn't as good? 

Then what you have been quoted for and what we are talking about are different.  

Conan1Sett said:

comeandgo said:

How did you work out that state pension would be £179 a month? 

 My friend is self paying in a home and she is close to £1,500 a week for the home.
.

And I should say that I looked up the state pension amount, rather than I worked it out. 

And you misunderstood what you were reading.  

Both your figures are wrong by some measure.  Can you exist on the state pension?  If that is all you had you would have no choice but it would not be pleasant.  

Conan1Sett said:

At the moment I'm 32 and the pension I have my employer is somewhat dire. I worked out that making a £50 contribution every month until retirement age would give me an extra £2k per year on top of state pension.

That simply tells you that you are not paying enough in.  A common mistake as we often see posts  from individuals complaining that their pension forecast is peanuts yet completely failing to recognize that they are only contributing peanuts.  Even without the math's, common sense will tell your that £50 a month is not going to fund two decades or so of retirement.    

Albermarle

Maybe be worth pointing out that most older people do not actually go into a care home anyway, and it seems a bit odd for a 32 year old to be even thinking about the subject.

GibbsRule_No3.

I’d say no, especially if you are still renting. Until this coming year my State Pension would cover my rent to a Housing Association for a one bedroom bungalow and a little bit of the Council Tax, band D. The rent has just gone up six pounds a week, so the SP no longer covers the rent, let alone any of the CTax.

Alice_Holt

GibbsRule_No3. said:

I’d say no, especially if you are still renting. Until this coming year my State Pension would cover my rent to a Housing Association for a one bedroom bungalow and a little bit of the Council Tax, band D. The rent has just gone up six pounds a week, so the SP no longer covers the rent, let alone any of the CTax.

        A pensioner in receipt of just SP would be able claim both Housing Benefit (if renting), and Ctax support. 

     Pensioner benefits are considerably more generous than benefits for working age claimants.
   Someone with an illness or disability and assessed as not fit for work & placed in the LCW group of Universal Credit would receive £75 pw.   Pension Credit is £177 pw,