Is State Pension Alone Enough To Live On?

Kim1965

Alice_Holt said:

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,  

In which case if your a low paid renter putting away £100 pm for retirement there may be little point. Probs need a 200k dc pot to pay the rent alone. 

bostonerimus

You are living below the poverty level if your household income is less than 60% of the median...so that's 0.6 * 30k = 18k/year. If all you got was the current 9k/year SP you would be firmly classified as "poor". Of course you outgoings are going to influence your lifestyle and there a plenty of people surviving on SP, heating allowance etc. This highlights the paltry SP in the UK. If you had no other savings and just SP coming in I don't think you'd be paying for residential care.

jimpwarsop

Kim1965 said:

In which case if your a low paid renter putting away £100 pm for retirement there may be little point. Probs need a 200k dc pot to pay the rent alone. 

Thats why millions dont bother.

t

Nebulous2

bostonerimus said:

You are living below the poverty level if your household income is less than 60% of the median...so that's 0.6 * 30k = 18k/year. If all you got was the current 9k/year SP you would be firmly classified as "poor". Of course you outgoings are going to influence your lifestyle and there a plenty of people surviving on SP, heating allowance etc. This highlights the paltry SP in the UK. If you had no other savings and just SP coming in I don't think you'd be paying for residential care.

It's quite a while since I've had to deal with this, but people in residential care were expected to commit almost all of their benefits / income to pay for it.

The starting point for people in residential care was that they had a personal allowance, which used to be around £23 a week. This was designed to meet personal needs, toiletries, clothing etc. Everything else above that was committed towards paying for the care home. 

eastcorkram

Alice_Holt said:

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,  

So , what happens to someone who, as a simple example reaches SPA and stops working. They have little or no pension other than state. They have little or no savings. They live in private rented accommodation, paying let's say £800 per month , and have lived in the same place for years.  While they were working, that was all ticking along nicely. Once they stop working, what happens? 

Kim1965

eastcorkram said:

Alice_Holt said:

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,  

So , what happens to someone who, as a simple example reaches SPA and stops working. They have little or no pension other than state. They have little or no savings. They live in private rented accommodation, paying let's say £800 per month , and have lived in the same place for years.  While they were working, that was all ticking along nicely. Once they stop working, what happens? 

The state pays i guess. 

Kim1965

So if a person reaches spa and only has the new state pension as income. If they are paying the £800 as a mortgage payment are they still able to get state help?? 

eastcorkram

Kim1965 said:

So if a person reaches spa and only has the new state pension as income. If they are paying the £800 as a mortgage payment are they still able to get state help?? 

I have no idea to be honest, which is why I asked the question about renting.  I've no idea how many people end up in a situation like that, but for various reasons, it must be a lot . 

p00hsticks

Alice_Holt said:

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. 

      Pension Credit is £177 pw,  

Pension Credit is only £177 a week if you have no State Pension income at all.

It's not a fixed amount - it tops up any State Pension you may have to get to a total of £177 combined.

hugheskevi

bostonerimus said:

You are living below the poverty level if your household income is less than 60% of the median...so that's 0.6 * 30k = 18k/year. If all you got was the current 9k/year SP you would be firmly classified as "poor". Of course you outgoings are going to influence your lifestyle and there a plenty of people surviving on SP, heating allowance etc. This highlights the paltry SP in the UK. If you had no other savings and just SP coming in I don't think you'd be paying for residential care.

The 60% figure is based on household equivalised income, ie, adjusting for household size. The DWP publication Households Below Average Income 2021 uses an equivalisation scale for individuals of 0.67.

Household median income is £547 per week, applying equivalisation reduces this to £366, and taking 60% of that figure gives £220 p/w (net income, before housing costs). On an annual basis that is £11,479.