Can you live solely off state pension?

ukdw

pseudodox said:

I have no private pension provision because I was in and out of low paid jobs, unemployed or in self-employment all my working life & never earned enough to pay into a scheme anyway.  I saw friends in high paid jobs who hated their lives but stuck it for the pension.  Some did not live long enough to collect it.

I bought my perfect brand new car 21 years ago and she runs like a dream.  Cheap motoring gets me from A to B & the guys at the service garage treat her with TLC.  My standard of living does not depend on gadgets and being able to shop at M&S.  We are all different thank goodness.

My monthly spend is arouind £700 as a single household.  Most costs would be the same if there were 2 of me, except C Tax and household/food.

In the last 12 months on top of the £10,000 SP I received the EBSS, WFA, C Tax rebate, so income was around £920 per calendar month

My expenditure average per month was
Council Tax                        130
gas/elec/water                   122
car exps inc petrol             110 (I have my free bus pass, plus paying £10 gives me free train/metro travel)
house ins                             13
food, household                165
phone/BB/mobile                49
TV  licence                          13
annual servicing (boiler etc)  17
subscriptions/donations       80 National Trust, Ancestry, e-card site 

TOTAL  £699

which left £220 for frivolities like garden, holiday, books, meals out/takeaways, small repairs/replacements around the house, some new walking boots & NHS dental costs.  I had a glorious week walking the Yorkshire coast for under £400 & some days out on cheap train tickets.  I don't drink, smoke or pay anyone to cut my hair & have no-one to buy pressies for.  I get free annual eye tests & prescriptions should I need anything.

My parents educated me to live within my means so apart from a mortgage I have never had any debt.  As a child I got the best shoes but hand me down clothes, so I can happily dress from charity shops and chain stores, or make my own clothes.

I dipped into savings last year for essentail private dental work (which put paid to some 2022 holiday plans) and this year need to have new glasses, but will have previous frames re-glazed, so that might be covered by the £220 monthly "surplus".  I also took a major decision to replace my 18 year old boiler with a more efficient model with a 12 year guarantee to mitigate against any more repairs/problems or a major breakdown.  A capital investment which I wil not recoup anytime soon in saved running costs but which gives me peace of mind.

I know this all sounds like some people's idea of hell.  But I would be thoroughly miserable on a luxury cruise, in a posh hotel, wearing smart clothes, driving a prestige car, eating at a restaurant where the meal was a design on a plate not real food, or waving around the latest "look what I got" gadget.  I have slept in airports on my travels, walked on the Great Wall of China, cruised the Yangtse River, flown over Sydney Harbour in a seaplane, back-packed the east coast of Australia, climbed the lower reaches of Mt Olympos in Greece.  I have my photographs & my travel journals to read and re-live my journeys and have been almost everywhere on my bucket list.  I spent my life making memories whilst I was young and fit in case I was unable to do such stuff when I retired.  Maybe that is why I am now old and fit!  Like someone above said - my ambition was to stop work.  Make a life, not a living.

Great breakdown of monthly figures - which for most things are impressively low.  The only figure that jumps out to me is phone/bb/mobile £49 - I think it should be possible to reduce that down to less than £30 if you are willing to switch providers.

Also if you are younger than 75 they it's still not too late to build up a little bit of extra pension from savings - as this can provide a tax advantage of up to £60 a month.

Pollycat

barnstar2077 said:

pseudodox said:

Where did the ability/inability to manage one's own finances stem from?  I got my ability from my parents, who got it from their parents - no-one in my family ever had much to spare, but no-one got into debt.  Everyone benefits from education now up until the age of 18 - money and life skills should be part of that education, especially for thiose who get no example to follow at home.  My example of someone in the queue at the food bank who apparently had money for tattoos, bling, fashion clothes, iPhones along with the example above of someone putting beer and ciggies before their child's school clothes are examples of people who are not really poor, but they are tarring the really struggling with the same brush.  Foodbanks are such a good idea, but they are abused by the likes of those benefit cheats in Benidorm on the sick.

But I wonder if the top of the slippery slide was the descent into living on credit and max-ing out credit cards because everyone wanted everything they saw other had and wanted stuff today.  My family could not afford a colour TV and Dad was not prepared to go into debt to get one.  He could not afford a car until I was in my teens, when a he bought a second hand one outright, having saved for it.  I could not have a record player like a lot of my friends because as Dad observed even if he was prepared to buy the player where was the money for records coming from?  But I had Radio Caroline and the new Radio One on my tranny so I never felt I missed out.  I saved a lot of my pocket money so I could buy more than comics, pop and sweets and earned money from age 11 to save for my holiday spends.  Today was my SP day and because I have been careful the last month there was still money left over at the end of that month, not month left over at the end of the money!  So I gave myself a treat of a new pair of jeans AND a bar of good chocolate.  They are as satisfying to me as any meal out or foreign holiday.  The jeans will last several years.  The chocolate . . . . . . will be enjoyed.

And hasn't the housing market created a "us and them" society?  Houses are no longer purchased purely as homes - they are assets, a means to make money.  And must be furnished with the latest items and gadgets.  As financial institutions have been amenable to lending more and more in relation to people's incomes the price of property has escalated.  And buy to lets are now a business for many who years back would have been content just to own their own home and not the roofs over other heads.  Recent years saw people getting on the housing ladder higher up than they might have if interest rates had not been so low.  They wanted to be as high if not higher than their peers.  And now they cannot afford to be up there, cannot climb higher, and in many cases cannot downsize because they cannot sell.  And who really wants to move from their modern detached with garage and garden to a Victorian mid-terrace opening onto the pavement?  Not enough "affordable" housing is being built, which pushes people to buy above their comfort level.  Many in rented are trapped by escalating rents, which in many case cost more per month than a mortgage would.  Something has gone horribly wrong.

I think the problem is that house prices are too high.  If people weren't allowed to buy dozens of residential houses in order to rent them out, then house prices would be lower.  If there was a cap on the number of homes you could buy, then surely it would have to bring down prices, and free up housing for people.

Don't even get me started on the whole "Help to Buy" idea!  House prices are too expensive and their solution is to lend people a proportion of the money?  What does that do I wonder..  Oh yeah, it keeps the prices high!

I know too many good, hard working, honest people that just can't get away from the renting rut.  

I think the problem is that young people have other priorities in life than saving for a mortgage.
Newest model i-phones, expensive foreign holidays, top-of-the-range cars, designer clothes and shoes - mostly put on credit.

When I started work over 50 years ago, you set up an account at a building society and saved regularly and hoped they'd give you a mortgage when you found a house you wanted to buy.
You furnished that house with family cast-offs.
We had sheets at the windows of our first house because we couldn't afford to buy the curtains we wanted. So we saved up.
We didn't have new cars, we didn't have any cars - we just used the bus.
Nowadays, young people just jump in and out of taxis.

SouthCoastBoy

hugheskevi said:

QrizB said:

MarkCarnage said:

This only shows the distribution of income from State Pension and does not include other benefits (which you note), nor does it include other sources of income including occupational pensions, personal pensions or investment income. Therefore I don't think it could be said that it indicates that many pensioners cope on full State Pension or less. 

How about the data table though?

Table 4.1 gives quintiles of pensioner incomes for single pensioners and couples.

Net income before housing costs, £ per week:

• Single pensioner quintiles: 153 / 222 / 277 / 355 / 507 mean 323
• Pensioner couple quintiles: 287 / 410 / 519 / 683 / 1041 mean 640
  

From those stats it seems that the least-well-off 20% of single pensioners, and married couples, are living on less than one full NSP per person.

There is more recent data available for this, from 2021/22. Table 4.1 from 2021/22 shows:

Net income before housing costs, £ per week:

• Single pensioner quintiles: 159 / 233 / 288 / 372 / 530 mean 337
• Pensioner couple quintiles: 299 / 428 / 544 / 715 / 1082 mean 665

Interestingly, the income of the lowest fifth of single pensioners actually fell slightly in real terms over the ten-year period to 2022, both before and after housing costs.

How are these figures calculated? As when I retire I will be using a combination of savings and drawdown so maybe not all of it will be classed as income, therefore figures above may not be that accurate?

MarkCarnage

QrizB said:

MarkCarnage said:

This only shows the distribution of income from State Pension and does not include other benefits (which you note), nor does it include other sources of income including occupational pensions, personal pensions or investment income. Therefore I don't think it could be said that it indicates that many pensioners cope on full State Pension or less. 

How about the data table though?

Table 4.1 gives quintiles of pensioner incomes for single pensioners and couples.

Net income before housing costs, £ per week:

• Single pensioner quintiles: 153 / 222 / 277 / 355 / 507 mean 323
• Pensioner couple quintiles: 287 / 410 / 519 / 683 / 1041 mean 640
  

From those stats it seems that the least-well-off 20% of single pensioners, and married couples, are living on less than one full NSP per person.

Yes, that's true, but the statement that 'many pensioners cope on full State pension or less' when combined with that table showing SP benefits only (where the distribution was left skewed naturally as none will get more than full SP!)  was a bit misleading I thought.
There are a whole range of tables/charts in the document which outline the various sources of income received by pensioners by average amount and distribution. I agree that the bottom quintile (and probably a little above) appear to receive less than SP....the median appears to be about £250/£470 which is significantly less than the mean, reflecting the small number of very high outliers I expect. 

2childmum2

Pollycat said:

barnstar2077 said:

pseudodox said:

Where did the ability/inability to manage one's own finances stem from?  I got my ability from my parents, who got it from their parents - no-one in my family ever had much to spare, but no-one got into debt.  Everyone benefits from education now up until the age of 18 - money and life skills should be part of that education, especially for thiose who get no example to follow at home.  My example of someone in the queue at the food bank who apparently had money for tattoos, bling, fashion clothes, iPhones along with the example above of someone putting beer and ciggies before their child's school clothes are examples of people who are not really poor, but they are tarring the really struggling with the same brush.  Foodbanks are such a good idea, but they are abused by the likes of those benefit cheats in Benidorm on the sick.

But I wonder if the top of the slippery slide was the descent into living on credit and max-ing out credit cards because everyone wanted everything they saw other had and wanted stuff today.  My family could not afford a colour TV and Dad was not prepared to go into debt to get one.  He could not afford a car until I was in my teens, when a he bought a second hand one outright, having saved for it.  I could not have a record player like a lot of my friends because as Dad observed even if he was prepared to buy the player where was the money for records coming from?  But I had Radio Caroline and the new Radio One on my tranny so I never felt I missed out.  I saved a lot of my pocket money so I could buy more than comics, pop and sweets and earned money from age 11 to save for my holiday spends.  Today was my SP day and because I have been careful the last month there was still money left over at the end of that month, not month left over at the end of the money!  So I gave myself a treat of a new pair of jeans AND a bar of good chocolate.  They are as satisfying to me as any meal out or foreign holiday.  The jeans will last several years.  The chocolate . . . . . . will be enjoyed.

And hasn't the housing market created a "us and them" society?  Houses are no longer purchased purely as homes - they are assets, a means to make money.  And must be furnished with the latest items and gadgets.  As financial institutions have been amenable to lending more and more in relation to people's incomes the price of property has escalated.  And buy to lets are now a business for many who years back would have been content just to own their own home and not the roofs over other heads.  Recent years saw people getting on the housing ladder higher up than they might have if interest rates had not been so low.  They wanted to be as high if not higher than their peers.  And now they cannot afford to be up there, cannot climb higher, and in many cases cannot downsize because they cannot sell.  And who really wants to move from their modern detached with garage and garden to a Victorian mid-terrace opening onto the pavement?  Not enough "affordable" housing is being built, which pushes people to buy above their comfort level.  Many in rented are trapped by escalating rents, which in many case cost more per month than a mortgage would.  Something has gone horribly wrong.

I think the problem is that house prices are too high.  If people weren't allowed to buy dozens of residential houses in order to rent them out, then house prices would be lower.  If there was a cap on the number of homes you could buy, then surely it would have to bring down prices, and free up housing for people.

Don't even get me started on the whole "Help to Buy" idea!  House prices are too expensive and their solution is to lend people a proportion of the money?  What does that do I wonder..  Oh yeah, it keeps the prices high!

I know too many good, hard working, honest people that just can't get away from the renting rut.  

I think the problem is that young people have other priorities in life than saving for a mortgage.
Newest model i-phones, expensive foreign holidays, top-of-the-range cars, designer clothes and shoes - mostly put on credit.

When I started work over 50 years ago, you set up an account at a building society and saved regularly and hoped they'd give you a mortgage when you found a house you wanted to buy.
You furnished that house with family cast-offs.
We had sheets at the windows of our first house because we couldn't afford to buy the curtains we wanted. So we saved up.
We didn't have new cars, we didn't have any cars - we just used the bus.
Nowadays, young people just jump in and out of taxis.

I don't recognise that picture of young people either in my own children (both in their 20s) or their friends. They have bought cheap phones, with cheap SIM cards, neither own cars nor designer anything. They live cheaply and attempt to save.

When DH and I bought our first flat it cost about twice our joint income (trainee accountant and new teacher) and we had a 100% mortgage. The same flat now costs 5 times the joint earnings of a trainee accountant and new teacher.
And 15% interest rate on what we borrowed is less than 5% interest rate on what would need to be borrowed on the mortgage to buy that flat now.

pseudodox

@ukdw
Thanks.  But I am happy where I am as I get reliable service & value for money, being online whenever. wherever with unlimited use, unlimted mobile calls/texts etc.  Where I live is a mobile signal blackspot - not all providers work reliably - so I am still using a landline at home.  It's my little bit of luxury & at maybe £5 per week over the odds is a lot less than others on this thread spend on meals out, new cars, cinema, bottles of wine, holidays etc.  I can no longer afford foreign trips (I did my bucket list when younger so now I am happy exploring UK) - where I live a taxi to the airport would be over £80 round trip so it's all about priorities.

Thanks for the thought but I don't need to build up any extra pension.  I don't pay tax, my "emergency" savings pot sits in an ISA and my house is my pension - downsizing could get me a lump sum, selling would pay for residential care.  Instead of paying into pension schemes I moved up the housing ladder, via a series of "worst house in best road" scenarios, and so am cash poor but asset rich.  I have no-one to leave the house to and no-one to nurse me in old age.

@Pollycat
Exactly!  My Dad gave me £20 to open a building society account for my 16th birthday, explained mortgages and I even managed to save whilst living on a studen grant.  By the time I was working and ready to buy my first house I had the deposit and was happy to get my own roof even if I had no carpets, no C/Htg, no modern kitchen, a 1930s bathroom, furniture from junk shops or family cast-offs.  I got a second hand fridge for £8 and was given a single tub washing machine with mangle.  The height of luxury!  Like you I made curtains from sheets and eventually gathered enough carpet offcuts to do the main living room - with 8 different patterns!  I did (still do) my own decorating, DIY & repairs (other than electric, gas, plumbing & roofing).  I did not have TV, telephone and had no concept of what gadgets would become available later in my life.  But I was content to make a home I could be proud of - and still am!

SouthCoastBoy

There is a housing crisis in the UK, I think most people recognise that, the income multiples are ridiculous, long gone are the days of 2.5 times joint income, or 3  times single income. I think a lot of younger generation feel that house owning is unrealistic and therefore they may as well enjoy life. I have a lot of sympathy for them, they have got the short end of the straw, when you add student debt and the removal of defined benefit pensions in the private sector.

Tucosalamanca

2childmum2 said:

Pollycat said:

barnstar2077 said:

pseudodox said:

Where did the ability/inability to manage one's own finances stem from?  I got my ability from my parents, who got it from their parents - no-one in my family ever had much to spare, but no-one got into debt.  Everyone benefits from education now up until the age of 18 - money and life skills should be part of that education, especially for thiose who get no example to follow at home.  My example of someone in the queue at the food bank who apparently had money for tattoos, bling, fashion clothes, iPhones along with the example above of someone putting beer and ciggies before their child's school clothes are examples of people who are not really poor, but they are tarring the really struggling with the same brush.  Foodbanks are such a good idea, but they are abused by the likes of those benefit cheats in Benidorm on the sick.

But I wonder if the top of the slippery slide was the descent into living on credit and max-ing out credit cards because everyone wanted everything they saw other had and wanted stuff today.  My family could not afford a colour TV and Dad was not prepared to go into debt to get one.  He could not afford a car until I was in my teens, when a he bought a second hand one outright, having saved for it.  I could not have a record player like a lot of my friends because as Dad observed even if he was prepared to buy the player where was the money for records coming from?  But I had Radio Caroline and the new Radio One on my tranny so I never felt I missed out.  I saved a lot of my pocket money so I could buy more than comics, pop and sweets and earned money from age 11 to save for my holiday spends.  Today was my SP day and because I have been careful the last month there was still money left over at the end of that month, not month left over at the end of the money!  So I gave myself a treat of a new pair of jeans AND a bar of good chocolate.  They are as satisfying to me as any meal out or foreign holiday.  The jeans will last several years.  The chocolate . . . . . . will be enjoyed.

And hasn't the housing market created a "us and them" society?  Houses are no longer purchased purely as homes - they are assets, a means to make money.  And must be furnished with the latest items and gadgets.  As financial institutions have been amenable to lending more and more in relation to people's incomes the price of property has escalated.  And buy to lets are now a business for many who years back would have been content just to own their own home and not the roofs over other heads.  Recent years saw people getting on the housing ladder higher up than they might have if interest rates had not been so low.  They wanted to be as high if not higher than their peers.  And now they cannot afford to be up there, cannot climb higher, and in many cases cannot downsize because they cannot sell.  And who really wants to move from their modern detached with garage and garden to a Victorian mid-terrace opening onto the pavement?  Not enough "affordable" housing is being built, which pushes people to buy above their comfort level.  Many in rented are trapped by escalating rents, which in many case cost more per month than a mortgage would.  Something has gone horribly wrong.

I think the problem is that house prices are too high.  If people weren't allowed to buy dozens of residential houses in order to rent them out, then house prices would be lower.  If there was a cap on the number of homes you could buy, then surely it would have to bring down prices, and free up housing for people.

Don't even get me started on the whole "Help to Buy" idea!  House prices are too expensive and their solution is to lend people a proportion of the money?  What does that do I wonder..  Oh yeah, it keeps the prices high!

I know too many good, hard working, honest people that just can't get away from the renting rut.  

I think the problem is that young people have other priorities in life than saving for a mortgage.
Newest model i-phones, expensive foreign holidays, top-of-the-range cars, designer clothes and shoes - mostly put on credit.

When I started work over 50 years ago, you set up an account at a building society and saved regularly and hoped they'd give you a mortgage when you found a house you wanted to buy.
You furnished that house with family cast-offs.
We had sheets at the windows of our first house because we couldn't afford to buy the curtains we wanted. So we saved up.
We didn't have new cars, we didn't have any cars - we just used the bus.
Nowadays, young people just jump in and out of taxis.

I don't recognise that picture of young people either in my own children (both in their 20s) or their friends. They have bought cheap phones, with cheap SIM cards, neither own cars nor designer anything. They live cheaply and attempt to save.

When DH and I bought our first flat it cost about twice our joint income (trainee accountant and new teacher) and we had a 100% mortgage. The same flat now costs 5 times the joint earnings of a trainee accountant and new teacher.
And 15% interest rate on what we borrowed is less than 5% interest rate on what would need to be borrowed on the mortgage to buy that flat now.

This is my experience too.

Older model phones, low car ownership, limited social life (virtually no drinking), modest holidays (if at all) and highly focussed on careers, working and saving. Second hand clothes, anti-consumerism mentality, public transport, and push bikes are front and centre of their day-to-day lives.

I'm impressed at young people's ability to gain well paid employment and even today, get on to the property ladder.

Kids are smart, confident and determined. They've grown up in a tough world and they know what they need to do.
It's one of the reasons why I'm not pessimistic on house prices (or the economy in general).
Even in the crazy expensive south west, there's enough well paid workers to sustain the property market (both sales and rentals).
Yes, some are destined for life on benefits and minimum wage jobs but certainly in my area these are very much the minority. So much work available and so few people to do it.

sevenhills

SouthCoastBoy said:

There is a housing crisis in the UK, I think most people recognise that, the income multiples are ridiculous, long gone are the days of 2.5 times joint income, or 3  times single income. I think a lot of younger generation feel that house owning is unrealistic and therefore they may as well enjoy life. I have a lot of sympathy for them, they have got the short end of the straw, when you add student debt and the removal of defined benefit pensions in the private sector.

Life expectancy is now 80+, if you go back to the 70's it was 70+ so that is a factor too.

MarkCarnage

Pollycat said:

barnstar2077 said:

pseudodox said:

Where did the ability/inability to manage one's own finances stem from?  I got my ability from my parents, who got it from their parents - no-one in my family ever had much to spare, but no-one got into debt.  Everyone benefits from education now up until the age of 18 - money and life skills should be part of that education, especially for thiose who get no example to follow at home.  My example of someone in the queue at the food bank who apparently had money for tattoos, bling, fashion clothes, iPhones along with the example above of someone putting beer and ciggies before their child's school clothes are examples of people who are not really poor, but they are tarring the really struggling with the same brush.  Foodbanks are such a good idea, but they are abused by the likes of those benefit cheats in Benidorm on the sick.

But I wonder if the top of the slippery slide was the descent into living on credit and max-ing out credit cards because everyone wanted everything they saw other had and wanted stuff today.  My family could not afford a colour TV and Dad was not prepared to go into debt to get one.  He could not afford a car until I was in my teens, when a he bought a second hand one outright, having saved for it.  I could not have a record player like a lot of my friends because as Dad observed even if he was prepared to buy the player where was the money for records coming from?  But I had Radio Caroline and the new Radio One on my tranny so I never felt I missed out.  I saved a lot of my pocket money so I could buy more than comics, pop and sweets and earned money from age 11 to save for my holiday spends.  Today was my SP day and because I have been careful the last month there was still money left over at the end of that month, not month left over at the end of the money!  So I gave myself a treat of a new pair of jeans AND a bar of good chocolate.  They are as satisfying to me as any meal out or foreign holiday.  The jeans will last several years.  The chocolate . . . . . . will be enjoyed.

And hasn't the housing market created a "us and them" society?  Houses are no longer purchased purely as homes - they are assets, a means to make money.  And must be furnished with the latest items and gadgets.  As financial institutions have been amenable to lending more and more in relation to people's incomes the price of property has escalated.  And buy to lets are now a business for many who years back would have been content just to own their own home and not the roofs over other heads.  Recent years saw people getting on the housing ladder higher up than they might have if interest rates had not been so low.  They wanted to be as high if not higher than their peers.  And now they cannot afford to be up there, cannot climb higher, and in many cases cannot downsize because they cannot sell.  And who really wants to move from their modern detached with garage and garden to a Victorian mid-terrace opening onto the pavement?  Not enough "affordable" housing is being built, which pushes people to buy above their comfort level.  Many in rented are trapped by escalating rents, which in many case cost more per month than a mortgage would.  Something has gone horribly wrong.

I think the problem is that house prices are too high.  If people weren't allowed to buy dozens of residential houses in order to rent them out, then house prices would be lower.  If there was a cap on the number of homes you could buy, then surely it would have to bring down prices, and free up housing for people.

Don't even get me started on the whole "Help to Buy" idea!  House prices are too expensive and their solution is to lend people a proportion of the money?  What does that do I wonder..  Oh yeah, it keeps the prices high!

I know too many good, hard working, honest people that just can't get away from the renting rut.  

I think the problem is that young people have other priorities in life than saving for a mortgage.
Newest model i-phones, expensive foreign holidays, top-of-the-range cars, designer clothes and shoes - mostly put on credit.

When I started work over 50 years ago, you set up an account at a building society and saved regularly and hoped they'd give you a mortgage when you found a house you wanted to buy.
You furnished that house with family cast-offs.
We had sheets at the windows of our first house because we couldn't afford to buy the curtains we wanted. So we saved up.
We didn't have new cars, we didn't have any cars - we just used the bus.
Nowadays, young people just jump in and out of taxis.

I think this is a fairly sweeping generalisation, and often inaccurate. There are, and always have been, the feckless but many young people today are not as you characterise above. The best things we could do for them is make housing more affordable as others have said, and encourage worthwhile pension provision. Also, encourage them to consider vocational training as an alternative to some third rate university degrees.