Is State Pension Alone Enough To Live On?

Kim1965

eastcorkram said:

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 . 

I think people get their rent and ct paid but not the mortgage. 

jimpwarsop

Kim1965 said:

eastcorkram said:

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 . 

I think people get their rent and ct paid but not the mortgage. 

I think people might get their mortgage paid but with the state wanting its money back on death.

https://www.gov.uk/support-for-mortgage-interest/what-youll-get

sevenhills

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?? 

Why would someone that is able to buy their own house and likely have £100k+ in equity need more state help?

People bash the state pension, but people have known for decades that the state pension is not a millionaires income, so they need to save.

Alice_Holt

p00hsticks 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. 

      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.

       Thanks for clarifying. 

       What I should have written is PC tops up your retirement income (SP plus any private pensions) to a minimum level up £177. 
       
       It also gives automatic entitlement to full Housing Benefit (if renting), and Council tax support. 


     Re: Mortgage interest when retired. If entitled to PC then SMI may help with this:     
     https://www.gov.uk/support-for-mortgage-interest/what-youll-get
    Note that this is a loan, and secured on the property.

bostonerimus

hugheskevi said:

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.

Good to know, that's even worse and on just SP you'd still be below the poverty line.

Kim1965

sevenhills said:

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?? 

Why would someone that is able to buy their own house and likely have £100k+ in equity need more state help?

People bash the state pension, but people have known for decades that the state pension is not a millionaires income, so they need to save.

I agree. What i cant get my head around is that the monthly rent is of ten as much as a mortgage. I  cannot understand how our housing/house building strategy cannot come up with a more accessible home buying. If a family can rent for 25 yrs surely they can buy. 

itchyfeet123

Kim1965 said:

eastcorkram said:

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 . 

I think people get their rent and ct paid but not the mortgage. 

I don't HB would cover the full rent, unless the formula is dramatically different for pensioners. It was set several years ago to be the 30th %ile of local rent for a given home size, and then frozen for many years. So pre pandemic in 97% of local authorities HB was not enough to cover local rent for even the cheapest 30% of properties. 

I believe HB was unfrozen during the pandemic, but would be surprised if it was adequate for the long term. Local authorities do have the ability to pay discretionary top up payments, but that makes it a bit of a postcode lottery  especially if you're in an area where there are families with young children needing the same pot and LA funding has been radically cut. 

MattMattMattUK

Kim1965 said:

sevenhills said:

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?? 

Why would someone that is able to buy their own house and likely have £100k+ in equity need more state help?

People bash the state pension, but people have known for decades that the state pension is not a millionaires income, so they need to save.

I agree. What i cant get my head around is that the monthly rent is of ten as much as a mortgage. I  cannot understand how our housing/house building strategy cannot come up with a more accessible home buying. If a family can rent for 25 yrs surely they can buy. 

If they funded the renting themselves then they probably can/could, although it may well require lifestyle changes they are not willing to make. If the rent was funded via benefits then they almost certainly cannot.

Housing is a supply and demand issue, the population increases and proportionally enough homes are not built to meet that demand. Population growth in the UK is entirely caused by immigration (te reproduction rate in the native population is below replacement levels), low home building is in many ways a planning and community issue, with local populations almost always objecting to any building of new homes.

Lifematters

itchyfeet123 said:

Kim1965 said:

eastcorkram said:

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 . 

I think people get their rent and ct paid but not the mortgage. 

I don't HB would cover the full rent, unless the formula is dramatically different for pensioners. It was set several years ago to be the 30th %ile of local rent for a given home size, and then frozen for many years. So pre pandemic in 97% of local authorities HB was not enough to cover local rent for even the cheapest 30% of properties. 

I believe HB was unfrozen during the pandemic, but would be surprised if it was adequate for the long term. Local authorities do have the ability to pay discretionary top up payments, but that makes it a bit of a postcode lottery  especially if you're in an area where there are families with young children needing the same pot and LA funding has been radically cut. 

HB rent is not restricted if you are a pensioner living in Council or Social Housing. The 30th  percentile only applies to private tenants who receive the Local Housing Allowance rate.  

zagfles

bostonerimus said:

hugheskevi said:

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.

Good to know, that's even worse and on just SP you'd still be below the poverty line.

Not usually when you include stuff like HB/SMI (which obviously need including for a BHC basis), plus council tax support, WFA, warm home discount etc. Other countries have higher state pensions but lower/no means test tested add-ons like these for those on low incomes.