Is the State Pension enough to live on if you are single !!

BlackKnightMonty

kimwp said:

BlackKnightMonty said:

kimwp said:

BlackKnightMonty said:

Altior said:

Mustbeananswer?? said:

Altior said:

badmemory said:

With no debts & no mortgage then probably yes.  The real question of course is is surviving enough.  Then as you age & maybe not as nimble as you were are you likely to need a gardener or cleaner to help out.  What happens when cooking from scratch every day becomes a problem.  But a better chance on the new state pension than on the basic state pension

Surviving is enough if people expect others to fully fund their lifestyle. They have had 40-50 years of adulthood to prepare for this stage of their life. 

Thats deffo a bit harsh Alitor...Nobody knew what life was going to throw at people.Most of us have had to Duck and Dive a bit to get to this point??? 

Not really in my opinion, although many people don't like to look at it that way, the state pension is part of the welfare framework. Welfare should be the last resort. 

There is no miracle, no fantasy, no magic wand. If the state pension was high enough for people to live comfortably, and allow for discretionary spending then lots more people would not bother saving up/ build up capital to sustain their lifestyle in retirement, and expect others to pay for it.

This is the situation today. Back in 1977 only 37% pf households took more from benefits/services than they contributed in ALL taxes. Today it has risen to 53.8%; and will hit 60% in the 2040’s at this trajectory. With so few net contributors it is unrealistic to expect a reducing minority of wealthy people to sustain everyone else.

Wages need to be higher for people to pay more tax.

Or maybe expect/take less benefits/services?

If they had higher wages, they wouldn't need benefits. Do you not understand that lots of people on benefits have jobs? 

Also how do you think people should take less services? Not get ill so they don't use the NHS? Not work out so they don't use the council gym?

We really need to rid the employment system from having subsidised wages.

Yes, if we all took a healthier lifestyle we would save the NHS billions.

Moonwolf

BlackKnightMonty said:

It’s pretty simple actually. Means testing will consider all your assets and taper SP accordingly. The more you have, the less you get.

Means testing is administratively very expensive and would be complex. 

How do we measure wealth, it wasn't clear from the IFA how wealth is calculated. How do we value DB pensions? What about art, should an artists children be made to sell their dad's artwork to pay for their retirement because certain family memories have a monetary value?  How often do we check the value of the family home?  An annual check as detailed as probate with all the jewellery, books and collection of plates with pictures of kittens going for valuation?

Are we testing individual wealth or household wealth? If it is household wealth I assume you are happy to take someone's state pension off them because their partner is wealthy.  Someone who has no income of their own, perhaps they raised the kids.  

Lets imagine a simple situation, a DB pension belonging to one person in the household at £25,000 a year, is this a wealth of £500,000 using the 20x figure they used to use for LTA.  With that and a house worth £500,000 we now have a millionaire household.  Lets imagine both are 70 and are receiving full new pensions.  A household income of £48,000 which they have planned for.  This is certainly comfortable but they have planned for it.  A bit problematic if you now tell them they have to live on £25,000, at 70 if they want more they might struggle to get back into the jobs market.

If the one with the DB pension dies first and the other gets 50% DB pension so is now living on £24,000, should the survivor now live on £12,500 a year?

HMRC don't even have enough people to do basic taxes correctly, clearly you would fund the extra from pension savings, I'd be interested what you think the net saving would be.

Of course this would be political suicide, taking pensions off people who have already budgeted for it, people who vote.  At best you could perhaps implement it now for those 57 and under but I can't imagine that will go down well either.

BlackKnightMonty

Moonwolf said:

BlackKnightMonty said:

It’s pretty simple actually. Means testing will consider all your assets and taper SP accordingly. The more you have, the less you get.

Means testing is administratively very expensive and would be complex. 

How do we measure wealth, it wasn't clear from the IFA how wealth is calculated. How do we value DB pensions? What about art, should an artists children be made to sell their dad's artwork to pay for their retirement because certain family memories have a monetary value?  How often do we check the value of the family home?  An annual check as detailed as probate with all the jewellery, books and collection of plates with pictures of kittens going for valuation?

Are we testing individual wealth or household wealth? If it is household wealth I assume you are happy to take someone's state pension off them because their partner is wealthy.  Someone who has no income of their own, perhaps they raised the kids.  

Lets imagine a simple situation, a DB pension belonging to one person in the household at £25,000 a year, is this a wealth of £500,000 using the 20x figure they used to use for LTA.  With that and a house worth £500,000 we now have a millionaire household.  Lets imagine both are 70 and are receiving full new pensions.  A household income of £48,000 which they have planned for.  This is certainly comfortable but they have planned for it.  A bit problematic if you now tell them they have to live on £25,000, at 70 if they want more they might struggle to get back into the jobs market.

If the one with the DB pension dies first and the other gets 50% DB pension so is now living on £24,000, should the survivor now live on £12,500 a year?

HMRC don't even have enough people to do basic taxes correctly, clearly you would fund the extra from pension savings, I'd be interested what you think the net saving would be.

Of course this would be political suicide, taking pensions off people who have already budgeted for it, people who vote.  At best you could perhaps implement it now for those 57 and under but I can't imagine that will go down well either.

I think we can quite easily establish that a pensioner with a fine art collection probably has enough wealth to do without the SP. And the money repurposed to help those with only the SP to survive on.

maman

Fiscal drag is already acting as a sort of reverse means testing so that for better off pensioners they lose some of the SP increase in tax. 

Moonwolf

BlackKnightMonty said:

I think we can quite easily establish that a pensioner with a fine art collection probably has enough wealth to do without the SP. 

I didn't mention fine art or imply a big collection. I was imagining someone with four paintings they wanted to keep in the family, that between them are worth say £100,000.  The current value might not be representative of lifetimes earnings (cf Van Gogh) You are saying if they push someone over an arbitrary threshold they need to be sold to cover a state pension even if the sentimental value is greater than the cash value.  Of course they could be passed on earlier or put into a family trust, then we get into all the avoidance questions.

I would have thought is was clear anyway that this was just one example of the possible challenges to wealth calculations and using 'wealth' to means test something that is currently basically universal.

BlackKnightMonty

Moonwolf said:

BlackKnightMonty said:

I think we can quite easily establish that a pensioner with a fine art collection probably has enough wealth to do without the SP. 

I didn't mention fine art or imply a big collection. I was imagining someone with four paintings they wanted to keep in the family, that between them are worth say £100,000.  The current value might not be representative of lifetimes earnings (cf Van Gogh) You are saying if they push someone over an arbitrary threshold they need to be sold to cover a state pension even if the sentimental value is greater than the cash value.  Of course they could be passed on earlier or put into a family trust, then we get into all the avoidance questions.

I would have thought is was clear anyway that this was just one example of the possible challenges to wealth calculations and using 'wealth' to means test something that is currently basically universal.

I appreciate that it might not be easy. But that’s not a reason to dismiss the idea.

There’s a good chunk of pensioners who really don’t need the SP. Better the money goes to those who actually do need it. 

badmemory

Of course to keep the economy going we need people to spend money.  If you tell someone that the state pension they expected as part of their budget will not exist & they are already over the limit then they will just refrain from spending & the economy will suffer again.

Exodi

Another state pension thread complete with anecdotes about destitute pensioners, flawed comparisons to other countries pensions and excessive use of verbs like 'struggling' and 'surviving'.

Is the State Pension enough to live on if you are single

Yes.

It is ironic that despite this forums propensity to characterise pensioners as poor, the majority of forum members are of pension age/retired, yet about 1/8th earn the full state pension or less.

ader42

I know an old lady in her 80s, lives in a rented flat, on Pension Credit and is doing fine, no car of course but goes out for pub lunches twice a week, buys her clothes from Marks & Spencer etc. No major savings to speak of but her outgoings typically match in income. No holidays as such, but that’s no big deal. 

Linton

BlackKnightMonty said:

Moonwolf said:

BlackKnightMonty said:

I think we can quite easily establish that a pensioner with a fine art collection probably has enough wealth to do without the SP. 

I didn't mention fine art or imply a big collection. I was imagining someone with four paintings they wanted to keep in the family, that between them are worth say £100,000.  The current value might not be representative of lifetimes earnings (cf Van Gogh) You are saying if they push someone over an arbitrary threshold they need to be sold to cover a state pension even if the sentimental value is greater than the cash value.  Of course they could be passed on earlier or put into a family trust, then we get into all the avoidance questions.

I would have thought is was clear anyway that this was just one example of the possible challenges to wealth calculations and using 'wealth' to means test something that is currently basically universal.

I appreciate that it might not be easy. But that’s not a reason to dismiss the idea.

There’s a good chunk of pensioners who really don’t need the SP. Better the money goes to those who actually do need it. 

I am surprised that you are in favour of subsidising the poor at the expense of the rich.  Or does that just apply to pensioners?

Your proposal would affect a small minority rather than "a good chunk".  A much cheaper way of diverting money to the less well off could be to remove the tax perks given to the wealthy.

For example how  can the £20K annual limit for ISA contributions be justified.  Someone who can afford paying that over say 30 years would put the gains from £Ms of investments completely outside the tax system for the rest of their lives.  Noone on low pay could afford it.

Another good idea in my view is to move  most of NI into income tax.  This would reduce the tax paid by the poorest and increase the load on the rich who can afford it, in particular the millionaire pensioners,