The peoples pension and housing benefit on retirement

Albermarle

Silvertabby said:

Nothing new.  Many years ago, when I asked a (full time, good salary) Local Government employee why they wanted to opt out of the LGPS, they replied that they didn't want to 'waste money' on a pension that they would only be expected to live off in retirement.  

It is a strange attitude isn't it ?
Then again I suppose many people would think hanging around a forum about pensions was a bit strange as well !

Silvertabby

Albermarle said:

Silvertabby said:

Nothing new.  Many years ago, when I asked a (full time, good salary) Local Government employee why they wanted to opt out of the LGPS, they replied that they didn't want to 'waste money' on a pension that they would only be expected to live off in retirement.  

It is a strange attitude isn't it ?
Then again I suppose many people would think hanging around a forum about pensions was a bit strange as well !

Another memorable reason given for opting out was "The LGPS is a rip-off - you want to charge me over £100 per month, but I can get a  Stakeholder pension for just £20 per month".  

Albermarle

Silvertabby said:

Albermarle said:

Silvertabby said:

Nothing new.  Many years ago, when I asked a (full time, good salary) Local Government employee why they wanted to opt out of the LGPS, they replied that they didn't want to 'waste money' on a pension that they would only be expected to live off in retirement.  

It is a strange attitude isn't it ?
Then again I suppose many people would think hanging around a forum about pensions was a bit strange as well !

Another memorable reason given for opting out was "The LGPS is a rip-off - you want to charge me over £100 per month, but I can get a  Stakeholder pension for just £20 per month".  

You can take a horse to water, but you can't make it drink.........

xylophone

you can't make it drink.........

Unless you legislate....

Oddly enough, I knew somebody who for years maintained that he could not afford contributions to his excellent DB occupational pension.

Then at some point (back in the seventies?) he was required to join.

It was a mercy for his widow (he died in service, years before SPA) who otherwise would have been left with only SP and a very modest DB pension of her own.

xylophone

I think the trouble is that if a person had  a very small occupational/private pension, it could leave him in  the situation where when added to SP, he d wouldn't qualify for Pension Credit (which acts as a gateway to other benefits) even though his total income  would still be very modest.

Take for example a person who has weekly old SP of say  £180 and private pension of £50 a week - too high for PC  but hardly a fortune!

A full NSP is above the level where a person would qualify for  PC so if he knows he'll be in this situation, he'd do well to join his workplace pension scheme.

Kim1965

xylophone said:

I think the trouble is that if a person had  a very small occupational/private pension, it could leave him in  the situation where when added to SP, he d wouldn't qualify for Pension Credit (which acts as a gateway to other benefits) even though his total income  would still be very modest.

Take for example a person who has weekly old SP of say  £180 and private pension of £50 a week - too high for PC  but hardly a fortune!

A full NSP is above the level where a person would qualify for  PC so if he knows he'll be in this situation, he'd do well to join his workplace pension scheme.

But would that person with a full new stste pension plus £50 a week private pension get help if their rent was £150 per week? Would it still be beneficial for renters to have small private provisions or is there a threshold? 

xylophone

But would that person with a full new stste pension plus £50 a week private pension get help if their rent was £150 per week?

I think that would depend on Govt/LA policy with regard to housing/council tax support for  those on low income.

https://www.gov.uk/housing-benefit

https://www.turn2us.org.uk/Benefit-guides/Council-Tax-Support/What-is-Council-Tax-Support?gclid=EAIaIQobChMIosniooiA_wIVwu13Ch108w6FEAAYASAAEgK4YfD_BwE

Kim1965

Unfortunately i think there is a whiff of truth in what the op mate has said. 
 Someone who goes into retirement as a renter is more likely to have not had the means to buy. Im guessing that person is also less likely to have amassed a huge pot to cover their rent. Hope i am wrong because as i understand it, the trend is that more people are retiring as renters. 
 I bet not many regular posters rent?  Just to cover rent alone of £600 pm, a pot of £150kplus is needed. Being mortgage free is a must before retirement. 
 

GibbsRule_No3.

Kim1965 said:

Unfortunately i think there is a whiff of truth in what the op mate has said. 
 Someone who goes into retirement as a renter is more likely to have not had the means to buy. Im guessing that person is also less likely to have amassed a huge pot to cover their rent. Hope i am wrong because as i understand it, the trend is that more people are retiring as renters. 
 I bet not many regular posters rent?  Just to cover rent alone of £600 pm, a pot of £150kplus is needed. Being mortgage free is a must before retirement. 
 

I am one of those who rents, (luckily from a Housing Association in a leafy London Borough)I worked out that the entire State Pension would be needed to pay the rent and part of the CT when I moved here eight years ago. I do have two DB pensions so will never get any help with Pension Credit. At present I am probably just ahead of the game but if the rent and CT rise much more, along with fuel and food bills, in the coming years, I’m sure I would have been better off not having the DB pensions but access to the other benefits that accrue when on Pension Credit. At 69 I do still work for two days a week, so that helps but luckily, though my work is manual/office I am (touch wood!) fairly actively healthy so can continue to work.  It is an interesting topic, not sure I’ve seen any predictions on who should or who should not take up enrolment in Pensions or hope that PC and benefits continue to top up retirements.

Silvertabby

One of the long term aims of the nSP was to pitch the full pension at a level just above the PC means test limit.  However, someone on just the nSP MAY still qualify for housing benefits etc (subject to any future changes).

Don't know how that would play out with a pensioner couple, both on full nSP, as a household income of £20K + will probably at least limit the amount of housing benefit payable.

Plus, don't forget that someone retiring in their own, mortgage free, house will still have to cover the cost of everything from decorating to a whole new roof.  Unlike someone in rented.