Can you live solely off state pension?

michaels

MEM62 said:

michaels said:

MEM62 said:

RG2015 said:

MEM62 said:

scoobydoo8 said:

As per title, do you think you would be able to live just off a full state pension, currently £203pw /£10,6k per year, reasonably comfortably if you already owe your own home?

No chance.  It would be poverty existence at best.  We are not far from retirement and, will kids grown up and gone and no mortgage or debt our basic bills, exclusive of food, are round £900 per month.  While there are two of us the SP would cover living costs but you need the additional income from private pensions to cover all the extras - running a car, holidays, eating out, fun money etc etc etc.....          

Are you saying that pensioners with only the state pension are living in poverty?

I cannot make any such statement based on personal experience or observation as know of nobody who's income is only £203 per week.  It is however, my opinion that even the best at being frugal won't have much of a lifestyle beyond the most basic existence as Council tax, utilities and food would take up most, if not all, of £203 per week.  That seems like poverty to me.     

It seems very hard to find council tax info by band aside from band D but given the single person 25% discount it seems reasonable to guess that for band A/B it might be £100 per month.  Similarly average energy bill is about 2k so for a single person in a small dwelling again £100 per month does not sound unreasonable.  We are a family of 5 and our grocery bill is about 500pm including all toiletries etc so again a single person spending £150 does not sound impossible - so the 'essentials' you mention above could easily be about £450 per month leaving another £400 per month from the state pension for 'other stuff'.

Of course there are many other essentials not included in those 3 but it still sounds to me that a single person on the state pension could still have a decent chunk of discretionary spending each month assuming there were no ongoing rent/mortgage housing costs.

[More context, our spend ex housing costs but including council tax for a family of 5 is below 30k which includes a weeks UK holiday, a couple of weekends abroad, running 2 cars etc etc]

Based on our last month's bills stripped back to the essentials ;

Council Tax 193.00 - so with single person discount £144.75
Water £35.00
TV Lic £13.25
Utilities (Fairly modern 3-bed) £200.00
Window Cleaner £20.00
Total basics £413.00

If our pensioner has £880 per month coming in then they are taking care of all of their other needs (food, clothing, travel, house upkeep etc. etc.) out of £467 a month.  I don' t think there is much wiggle room there.  

I feel someone may be having a little fun here with regards to the essentials. 

However for a singleton a smaller place with lower fuel bills and council tax seems a reasonable assumption.

MallyGirl

interesting definition of essentials there. I would not count the window cleaner but certainly would count house insurance and a phone line or mobile of some sort.

[Deleted User]

Posters can present numerous possible combinations of possible budgets for the state pension amounts. (Do remember though it is paid every 4 weeks, about £817 for the full 'new' state pension). They can also doubt that it is possible to live on this amount. However, many pensioners DO only have the state pension and to live and do manage to do so. For some it it is difficult but many do not consider themselves to be having a 'miserable existence.'
It really does depend on lifestyle and priorities,

hugheskevi

[Deleted User] said:

However, many pensioners DO only have the state pension and to live and do manage to do so.

It perhaps isn't as many people as some may think - the Pensioner Income Series shows that 95% of recently retired pensioner couples have income in excess of State Benefits.

It tends to be single pensioners who don't have any income in excess of State Benefits (76% of recently retired single pensioners don't have anything above State Benefits).

Many of the group reliant solely on State Benefits will receive income in addition to their State Pension. Many will be in receipt of some combination of means-tested benefits (Pension Credit, housing and council tax support) and/or disability benefits (Personal Indepence Payments and Attendance Allowance) - remembering that a very large number of Pension Credit recipients are entitled to premia of one form or another (often disability premia) so will receive an amount exceeding the headline standard amount. 

Hence the number of pensioners who receive just State Pension and nothing else is going to be quite low, assuming they claim their full entitlement of benefits.

dealyboy

@hugheskevi said:

@[Deleted User] said:

However, many pensioners DO only have the state pension and to live and do manage to do so.

It perhaps isn't as many people as some may think - the Pensioner Income Series shows that 95% of recently retired pensioner couples have income in excess of State Benefits.

It tends to be single pensioners who don't have any income in excess of State Benefits (76% of recently retired single pensioners don't have anything above State Benefits).

Many of the group reliant solely on State Benefits will receive income in addition to their State Pension. Many will be in receipt of some combination of means-tested benefits (Pension Credit, housing and council tax support) and/or disability benefits (Personal Indepence Payments and Annual Allowance) - remembering that a very large number of Pension Credit recipients are entitled to premia of one form or another (often disability premia) so will receive an amount exceeding the headline standard amount. 

Hence the number of pensioners who receive just State Pension and nothing else is going to be quite low, assuming they claim their full entitlement of benefits.

I think we are in agreement that pensioner household finances are quite diverse and throw up what appear to be anomalies and cases of unfairness. I also think people are in broad agreement that having only a modest income is not a bar to happiness and having a good lifestyle.

There are broadly two classes of pensioner, the state dependent and the state independent.

The state dependent single person will have an 'allowance' of around £200 per week to spend on whatever they wish. Their housing costs (rent, mortgage interest, or ground rent/maintenance), if any, will be paid, and they will receive additional support including health care, optician and dental costs, and energy subsidy, as well as cost of living payments. They will not be subject to income tax or council tax. They may have savings up to £10,000 and own a property for their home outright. So the state dependent person is granted a modest or comfortable standard of living that £10,400 will provide.

The state independent single person either by choice or by way of income, savings and pensions is a DIY pensioner. They bear all the costs that a state dependent pensioner doesn't have, although they may be eligible for individual subsidies determined by their level of income/savings/pensions.

The state dependent person cannot have more than £10,000 without the 'allowance' being reduced by £1 per week for every £500, but they can have an asset worth hundreds of thousands of pounds.

The state independent person's income and capital gives the freedom to buy the lifestyle the person desires.

Then again there are the single pensioners who receive a full state pension perhaps just a couple of pounds more per week than the 'allowance' but nothing else, by virtue of £100k savings for future care. They have all the costs but with none or few subsidies and so their 'allowance' may be only £140 per week, but they are independent and happy nonetheless. 

Richard1212

As this controversial thread reaches its conclusion, it seems to me as though the majority of posters think that the basic state pension, alone, is not enough to live on or to live on without some degree of "hardship" or "sacrifice" in years which should reward elderly folk for all their hard work and contribution to society ( except perhaps for someone who has deliberately avoided work or responsibility ..........).

But a large minority definitely espouse the view that a basic state pension, with no extra income or charitable help etc, IS enough to live on without any hardship or any feeling of being at or close to the poverty line or feeling let down by the society that they have served.

It is a pity that we cannot have a poll of all members (didn't we once have a poll's facility---or am I thinking of a different forum ?) so that a much wider cross-section of folk could anonymously vote as to whether or not a person living alone on about £800 per 4 weeks in Britain could manage on the basic pension with no other extra income. I would greatly welcome such a poll in view of the schism on this thread.

In particular, wouldn't it be interesting to see what different age groups think of the question. What about those folk on low wages nearing the end of their working life but with nothing to look forward to but a basic state pension that is less than they currently earn?  I have a feeling that someone of 30-40 years old would say something completely different to someone nearing retirement and just a state pension; and elderly folk already living solely on the basic state pension would say something different and view the level of support differently to other groups. Who knows ? 

I suppose the bottom line comes down to what is the definition of "managing"/ "coping"/ "happiness"/ "way of life"/ etc etc----and all the words that can never be objectively defined. 

So I look at this thread and am left with only one conclusion : we're all different ----just like some of us have ambition and some do not; some like to see as much as possible of the world and its cultures and some have no inclination to see the Isle of Man, let alone the Great Pyramid; some of us view poverty as something that can only possibly occur in places such as Yemen and some feel they are experiencing it today in UK on a basic state pension with no help from relatives/ friends/ charities.

pseudodox

@Richard1212

You totally (or deliberately) misunderstood my reference to non responsible employment.  It meant I was never a manager, nor was I able to influence the way a company performed.  I started working at age 11 in a family business.  After tertiary education I was mostly in admin in small businesses almost run as co-operatives, where everyone had as much say as the boss in how we did things, with his word being the casting vote.  So I worked hard and earned my bread and chose not climb a career ladder or seek status.  But I paid taxes along the way all my life, which kept other people's children in education, helped to fund the NHS and social services, paid for pensions for previous generations  etc.  I have had no children of my own taking anything out of this system, so I have probably repaid my own education.  I have had minimal out of the NHS (only thing in last 20 years was covid jabs), apart from free eyetests.  I have never paid for a prescription because I never had anything since childhood and have not had a freebie yet having not been near a doctor in decades.  I pay proportionally more council tax per person than a couple, but use less services - I put out less rubbish.  I pay my home and car insurance into the communal pot and have never made a claim & am quite happy that others have been able to get money out of the pot when it was needed.  So I think know I have paid my fair share (in relation to my income) into society. And whooppee-do I managed to put myself in a postion with a small financial cushion that means I am not now claiming any benefits beyond the state pension.  And if I have to go into care my own assets will fund it, not the state and others taxes.  So snipe if you will - You will not make me feel any guilt over the way I chose to live my life.

Since retiring I work 2 days a week with a great local team on volunteer projects, putting back into the community for the benefit of everyone. That brings me more satisfaction with life and a happiness that no amount of expensive holidays or meals in restaurants would buy.

A poll would be a waste of space because as we have seen here some can manage to have a decent life on very little, some cannot envisage managing at all, some will never imagine achieving happiness and fulfilment no matter how much they have.  We are all different, circumstances are different, how we approach life is different, what satisfies each of us is different.  So an opinion in a poll can only be from one's own point of view as no-one can experience for themselves all the different possibilities out there unless they have actually walked the walk.

RG2015

@pseudodox,

I am finding your posts on this thread well balanced and informative, verging on the inspirational.

It is a breath of fresh air when the norm appears to be complete polarisation of opinion on virtually every subject.

pseudodox

@RG2015

You are very kind.  If just one person at the lower end of the financial heap in life who has read this thread & is facing retirement in perceived poverty takes some inspiration that they CAN enjoy life if they look at things from a different perspective then it will have been worthwhile.

The OP specified being a home owner on a SP.  Had they said a pensioner with no assets it would have required a very different discussion.  I qualified my participation by indicating I also had a small cushion for emergencies or unexpected costs.  If I spend it on meals, cruises, cars  I would have to replace that cushion by downsizing my home.  But I have a comfortable house, large garden, views to die for, great neighbours, so I am in a very secure position which results in peace of mind & satisfaction with my lot.  Others will perhaps require the security of money pots the size of which I could only ever have secured by robbing a bank!

barnstar2077

This has definitely been one of the most interesting threads I have read in a while.

I dare say that some of the people who don't think they could live on just the SP, in their own home with a small emergency fund, would be surprised just how easily they could adapt, and that they might even come to appreciate the simpler things in life.

I'm also sure that many people, such as myself, who could easily live on SP under the same circumstances could find a good use for some extra cash if they had it!