Is State Pension Alone Enough To Live On?

zagfles

nigelbb said:

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. 

Buy to let landlords have priced out first time buyers because they were given tax advantages not available to non-landlords & the criteria for lenders are too strict. My stepson mid-20s on pays about £500/month to rent a flat but a mortgage to buy the flat would be about £400/month except he cannot get a mortgage because the lenders want too high a deposit.

What tax advantages? BTL'ers pay higher stamp duty when they buy, CGT when they sell, and unlike virtually all businesses can't even fully offset genuine expenses like mortgage interest against rental income. Owners get the tax advantages.

That partly why buying is cheaper than renting, I don't know why that surprises anyone but it seems to. Plus obviously rent includes stuff that a buyer has to pay for eg property maintenance, insurance etc. Something often forgotten about when comparing the two, I've probably spent about £2-3k pa on average on property maintenance.

zagfles

nigelbb said:

DT2001 said:

My mother from 85 to 90 lived off about the equivalent of the SP. She had a small private pension but not a full SP. She owned her retirement flat, didn’t run a car, smoke, drink (much) or have cable/satelliteTV. She did the odd day trip and cafe visits.

The years before 85 were supplemented by savings to pay for her car and the occasional overseas holiday. The change was her choice and she was quite happy.
Now her care home fees (£1k p.w.) are paid from having downsized early in retirement.
You can live off SP but it does limit your choices so even having a small private pension pot might be good?

You can live off state pension but only if you own your home.

Why? If you rent you'd be able to get HB, if you've got an outstanding mortgage SMI. Someone renting with the SP as only income could be better off than someone who owns outright as they don't have property maintenance costs to pay.

Silvertabby

zagfles said:

nigelbb said:

DT2001 said:

My mother from 85 to 90 lived off about the equivalent of the SP. She had a small private pension but not a full SP. She owned her retirement flat, didn’t run a car, smoke, drink (much) or have cable/satelliteTV. She did the odd day trip and cafe visits.

The years before 85 were supplemented by savings to pay for her car and the occasional overseas holiday. The change was her choice and she was quite happy.
Now her care home fees (£1k p.w.) are paid from having downsized early in retirement.
You can live off SP but it does limit your choices so even having a small private pension pot might be good?

You can live off state pension but only if you own your home.

Why? If you rent you'd be able to get HB, if you've got an outstanding mortgage SMI. Someone renting with the SP as only income could be better off than someone who owns outright as they don't have property maintenance costs to pay.

My dad had the State pension (mum had paid the married woman's stamp) plus £100 per month private pension.  This was back in the 1990s, so they had enough to live reasonably well.

However, their finances didn't run to property maintenance, not helped by dad's life-long reluctance to pay someone to do a job that he could do (bodge) himself.

After they died, the house was in such a poor state of repair it could only be sold by auction.

nigelbb

zagfles said:

nigelbb said:

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. 

Buy to let landlords have priced out first time buyers because they were given tax advantages not available to non-landlords & the criteria for lenders are too strict. My stepson mid-20s on pays about £500/month to rent a flat but a mortgage to buy the flat would be about £400/month except he cannot get a mortgage because the lenders want too high a deposit.

What tax advantages? BTL'ers pay higher stamp duty when they buy, CGT when they sell, and unlike virtually all businesses can't even fully offset genuine expenses like mortgage interest against rental income. Owners get the tax advantages.

That partly why buying is cheaper than renting, I don't know why that surprises anyone but it seems to. Plus obviously rent includes stuff that a buyer has to pay for eg property maintenance, insurance etc. Something often forgotten about when comparing the two, I've probably spent about £2-3k pa on average on property maintenance.

Until 2020 BTL landlords could offset mortgage interest in full against other income eg salary & receive relief at their marginal tax rate unlike private purchasers. Now they only get tax relief at 20% the poor things. If they were running a proper business through a limited company they could still offset all expenses against income including mortgage interest.  It seems that private BTL landlords  still want to have their cake & eat it. Are you a BTL landlord by any chance?

The reason that renting is more expensive than buying is partly because BTL landlords have forced up low end house prices but also because the renter is not only paying the BTL landlord's mortgage but also a premium on top for profit.

nigelbb

zagfles said:

nigelbb said:

DT2001 said:

My mother from 85 to 90 lived off about the equivalent of the SP. She had a small private pension but not a full SP. She owned her retirement flat, didn’t run a car, smoke, drink (much) or have cable/satelliteTV. She did the odd day trip and cafe visits.

The years before 85 were supplemented by savings to pay for her car and the occasional overseas holiday. The change was her choice and she was quite happy.
Now her care home fees (£1k p.w.) are paid from having downsized early in retirement.
You can live off SP but it does limit your choices so even having a small private pension pot might be good?

You can live off state pension but only if you own your home.

Why? If you rent you'd be able to get HB, if you've got an outstanding mortgage SMI. Someone renting with the SP as only income could be better off than someone who owns outright as they don't have property maintenance costs to pay.

If you receive housing benefit you aren't living off state pension.

Someone renting with state pension as their only income will not be better off than someone who owns outright as the renter won't have the option of realising a capital asset worth hundreds of thousands of pounds.

sevenhills

nigelbb said:

The reason that renting is more expensive than buying is partly because BTL landlords have forced up low end house prices but also because the renter is not only paying the BTL landlord's mortgage but also a premium on top for profit.

Now that I have bought my council house, I will need to pay for a new boiler and roof maintenance in around five years, so there are many expenses for homeowners.

My ex rents from the council, she is suited to renting because the council do all the repairs, they even replaced a bulb in her outdoor light - no charge.

bostonerimus

sevenhills said:

nigelbb said:

The reason that renting is more expensive than buying is partly because BTL landlords have forced up low end house prices but also because the renter is not only paying the BTL landlord's mortgage but also a premium on top for profit.

Now that I have bought my council house, I will need to pay for a new boiler and roof maintenance in around five years, so there are many expenses for homeowners.

My ex rents from the council, she is suited to renting because the council do all the repairs, they even replaced a bulb in her outdoor light - no charge.

That's what landlords are supposed to do. They maintain the property and that is paid for ultimately by the rent that is paid. I just fixed a door knob, a leaking kitchen sink sprayer and installed a new CO/fire alarm for my tenant and I didn't ask her to pay for anything because it's all baked into the rent. I also provide her with energy efficient LED light bulbs.

michaels

sevenhills said:

MattMattMattUK said:

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.

Population growth is driven by two things—net migration, and “natural change” (the difference between the number of births and deaths). From 2001 to 2016, migration accounted for 58% of this change in the UK.

https://fullfact.org/immigration/population-growth-migration/

Depends how you count the offspring who are born in the UK to non-uk nationals and/or parents who were not born in the UK.  Very easy to present statistics in a manner that supports your point of view on this, whatever that viewpoint might be.

zagfles

nigelbb said:

zagfles said:

nigelbb said:

DT2001 said:

My mother from 85 to 90 lived off about the equivalent of the SP. She had a small private pension but not a full SP. She owned her retirement flat, didn’t run a car, smoke, drink (much) or have cable/satelliteTV. She did the odd day trip and cafe visits.

The years before 85 were supplemented by savings to pay for her car and the occasional overseas holiday. The change was her choice and she was quite happy.
Now her care home fees (£1k p.w.) are paid from having downsized early in retirement.
You can live off SP but it does limit your choices so even having a small private pension pot might be good?

You can live off state pension but only if you own your home.

Why? If you rent you'd be able to get HB, if you've got an outstanding mortgage SMI. Someone renting with the SP as only income could be better off than someone who owns outright as they don't have property maintenance costs to pay.

If you receive housing benefit you aren't living off state pension.

I need Mr Logic here. OK, someone whose only income excluding potential means tested benefits is the state pension and who has no savings, would be entitled to HB if renting.

Someone renting with state pension as their only income will not be better off than someone who owns outright as the renter won't have the option of realising a capital asset worth hundreds of thousands of pounds.

Yeah, plenty of room on park benches. They might be able to downsize, but I would imagine someone whose only retirement income is the state pension isn't likely to be living in a mansion with 3 spare bedrooms.

hugheskevi

zagfles said:

nigelbb said:

zagfles said:

nigelbb said:

DT2001 said:

My mother from 85 to 90 lived off about the equivalent of the SP. She had a small private pension but not a full SP. She owned her retirement flat, didn’t run a car, smoke, drink (much) or have cable/satelliteTV. She did the odd day trip and cafe visits.

The years before 85 were supplemented by savings to pay for her car and the occasional overseas holiday. The change was her choice and she was quite happy.
Now her care home fees (£1k p.w.) are paid from having downsized early in retirement.
You can live off SP but it does limit your choices so even having a small private pension pot might be good?

You can live off state pension but only if you own your home.

Why? If you rent you'd be able to get HB, if you've got an outstanding mortgage SMI. Someone renting with the SP as only income could be better off than someone who owns outright as they don't have property maintenance costs to pay.

If you receive housing benefit you aren't living off state pension.

I need Mr Logic here. OK, someone whose only income excluding potential means tested benefits is the state pension, would be entitled to HB if renting.

Someone renting with state pension as their only income will not be better off than someone who owns outright as the renter won't have the option of realising a capital asset worth hundreds of thousands of pounds.

Yeah, because they don't really need the house do they, plenty of room on park benches. They might be able to downsize, but I would imagine someone whose only retirement income is the state pension isn't likely to be living in a mansion with 3 spare bedrooms.

They would have the option to sell the house and rent, or to take out a lifetime mortgage to gain funds. Either approach would impact on means-tested benefits.

Personally I would very much like my elderly mother to do this. Like many older people, she is living alone in a 3 bedroom house that is far too much for her to maintain. Realistically she is into her last few years of life. It would be much better for her to sell the house and move into a much smaller 1 bedroom property (either owned or rented) and use additional money to support lifestyle (eg cleaner, or whatever). Sadly she has made the typical mistake of leaving such adjustments too late, and sees that as all too much trouble. 

Whilst in theory it is possible to live off very small amounts, in practice doing so puts you at the whim of councils and government. For example, there are schemes to get boilers replaced, but you won't have much, if any, choice about what you get, and the contractor will have won the contract by offering the bare minimum so are unlikely to make good areas after doing work, etc. Having your own money makes everything a lot more straightforward and adds a lot to quality of life.