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

BlackKnightMonty

Silvertabby said:

BlackKnightMonty said:

Silvertabby said:

ader42 said:

Brie said:

I know one woman who, for various reasons, has insufficient years to get any sort of SP and so when her OH dies she will have no income whatsoever.  Her only resource will be to sell the house they live in and hope to find some place to rent with the proceeds.  

She’d get Pension Cridet if nothing else, that she be enough, even if she has to downsize to a flat to reduce her household bills.

The extra she has from downsizing would surely provide an emergency or holiday fund. 

Pension credit is means tested.

Perhaps that’s the answer.

Make SP something you must claim; and only those showing hardship and poverty would get it.

That sounds fair.

The Australian State pension has been means tested from day 1.  An Oz friend tells me that some people 'live well' during their working lives in order to leave themselves under the means test in retirement.

Pensioners gaming the system for maximum personal gain? I don’t believe it.

FIREDreamer

BlackKnightMonty said:

Silvertabby said:

BlackKnightMonty said:

Silvertabby said:

ader42 said:

Brie said:

I know one woman who, for various reasons, has insufficient years to get any sort of SP and so when her OH dies she will have no income whatsoever.  Her only resource will be to sell the house they live in and hope to find some place to rent with the proceeds.  

She’d get Pension Cridet if nothing else, that she be enough, even if she has to downsize to a flat to reduce her household bills.

The extra she has from downsizing would surely provide an emergency or holiday fund. 

Pension credit is means tested.

Perhaps that’s the answer.

Make SP something you must claim; and only those showing hardship and poverty would get it.

That sounds fair.

The Australian State pension has been means tested from day 1.  An Oz friend tells me that some people 'live well' during their working lives in order to leave themselves under the means test in retirement.

Pensioners gaming the system for maximum personal gain? I don’t believe it.

Probably dont want to subsidise the deadbeats / lazy that do nothing but take all their lives. Dont blame them.

ader42

Silvertabby said:

ader42 said:

Brie said:

I know one woman who, for various reasons, has insufficient years to get any sort of SP and so when her OH dies she will have no income whatsoever.  Her only resource will be to sell the house they live in and hope to find some place to rent with the proceeds.  

She’d get Pension Cridet if nothing else, that she be enough, even if she has to downsize to a flat to reduce her household bills.

The extra she has from downsizing would surely provide an emergency or holiday fund. 

Pension credit is means tested.

Well if she ££££ in the bank then she can live on that until she is eligible for Pension Credit, I don’t see the problem. 

michaels

BlackKnightMonty said:

Linton said:

BlackKnightMonty said:

SouthCoastBoy said:

BlackKnightMonty said:

Linton said:

BlackKnightMonty said:

Mustbeananswer?? said:

GibbsRule_No3. said:

My SP just about covers my HA rent, as I live in a London Borough, it does not cover my Council Tax, so I'd say no. I do have other pensions and am still working, nearly 70, my choice, for two days a week. Went to a Pension talk last week and they reckon to survive you need £14,000, fairly comfortable was £30,000 and very comfortable was over £40,000 this was based on one person, they did say you did not need to double those numbers for two people. At present with working pay I am just a bit over fairly comfortable and when I stop I won't be as low as surviving, thanks to the other pensions already in payment.

Disgrace....even after a good hike upwards .....In 2024-25, the full level of the new state pension is £221.20 a week or £11,502.40 a year.Pensioners are not given enough just to survive (If they have no other Occupational Pensions in place they are £2500 behind the eight ball) No wonder we have 1.5 million Pensioners in debt Come on England...give us a break ??

And a quarter of all pensioners are millionaires.

Maybe we should means test it and then only those with no other pension provision, or those whom have not been able to make any other retirement provision could obtain a higher SP; perhaps quadruple locked to the NMW/NLW?

Does that sound fair?

I am sure that you would not want to mislead your readers.  I cannot find a reference for the 1/4 of retired peope being millionaires you quote but it would seem that the figures are in wealth/household not per person.  However if your look at https://www.nimblefins.co.uk/savings-accounts/average-household-savings-uk you will get a clearer picture:

For people of age 65+:........
I) The statistics here are in wealth per person, not wealth per household.
2) The wealth includes net value of house.  Obviously people who have been paying off mortgages for perhaps  and 30 years are going to have much higher net worth of houses than those who have only being doing this for 10 years.
3) The wealth also includes the value of non-state pensions in payment. Clearly a pension that is going to last you say 25 years is going to amount to a large sum of money.
4) Also included is the value of assets such as cars, furniture, ornaments, jewelry etc etc.  But one accumulates stuff over the years so the older you are the greater value of stuff.
5) The average liquid wealth eg savings and non pension investments amounts to about £39,200. So hardly rolling in money.  Again this is after a lifetime of work.

Now looking at the median annual gross income for people aged 65+ given in: https://www.gov.uk/government/statistics/distribution-of-median-and-mean-income-and-tax-by-age-range-and-gender-2010-to-2011. This gives a figure of about £22K, similar to the minimim wage.  This is less than during any 5 year period in the age range 26-64.

Again your story about OAPs living in luxury at the expense of younger people is simply not demonstrated by the statistics.

It’s from the IFS, here:

https://www.if.org.uk/wp-content/uploads/2022/06/pensioner_millionaires_FINAL.pdf

That's looks to be household wealth so numbers will be skewed, also I assume that includes all assets, e.g. property which isn't particularly useful as you need to live somewhere

There is no skew. This is a lot of pensioner households who can afford not to receive the SP. And thereby boost the SP for others. They might need an equity withdrawal plan, but that’s quite a simple solution.

Not such a simple solution.   Equity release in your 70's is limited to about 1/3 of the value of the house. The current average house price is £264K, so you are talking about a lump sum of around £80K-£90K.  Hardly enough to give your household  £11K/year or more likely 2X£11K per year income to replace SP.  Plus ER companies are not prepared to lend money on every house.

Buying an annuity at around 70 equivalent to SP inflation linked until death would cost around £200K/person.   According to the ONS as quoted by Nutmeg the average pension pot at 55-64 is currently £107K so being able to afford to pay for SP and still generate sufficient income left to live a reasonable basic life style would be way beyond the means of the large majority of pensioners.

Perhaps circumstances may be different in say 40 years time when the changes to pensions brought in over the past 10 years will be having a significant effect on pensioner wealth but in a much shorter time perod, no way.

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

Two people both have exactly one home, the homes are identical and cost the same.  One is forced to sell their home because it has suffered HPI so they are disqualified from the state pension whereas the other gets to keep their home because it hasn't.

BlackKnightMonty

michaels said:

BlackKnightMonty said:

Linton said:

BlackKnightMonty said:

SouthCoastBoy said:

BlackKnightMonty said:

Linton said:

BlackKnightMonty said:

Mustbeananswer?? said:

GibbsRule_No3. said:

My SP just about covers my HA rent, as I live in a London Borough, it does not cover my Council Tax, so I'd say no. I do have other pensions and am still working, nearly 70, my choice, for two days a week. Went to a Pension talk last week and they reckon to survive you need £14,000, fairly comfortable was £30,000 and very comfortable was over £40,000 this was based on one person, they did say you did not need to double those numbers for two people. At present with working pay I am just a bit over fairly comfortable and when I stop I won't be as low as surviving, thanks to the other pensions already in payment.

Disgrace....even after a good hike upwards .....In 2024-25, the full level of the new state pension is £221.20 a week or £11,502.40 a year.Pensioners are not given enough just to survive (If they have no other Occupational Pensions in place they are £2500 behind the eight ball) No wonder we have 1.5 million Pensioners in debt Come on England...give us a break ??

And a quarter of all pensioners are millionaires.

Maybe we should means test it and then only those with no other pension provision, or those whom have not been able to make any other retirement provision could obtain a higher SP; perhaps quadruple locked to the NMW/NLW?

Does that sound fair?

I am sure that you would not want to mislead your readers.  I cannot find a reference for the 1/4 of retired peope being millionaires you quote but it would seem that the figures are in wealth/household not per person.  However if your look at https://www.nimblefins.co.uk/savings-accounts/average-household-savings-uk you will get a clearer picture:

For people of age 65+:........
I) The statistics here are in wealth per person, not wealth per household.
2) The wealth includes net value of house.  Obviously people who have been paying off mortgages for perhaps  and 30 years are going to have much higher net worth of houses than those who have only being doing this for 10 years.
3) The wealth also includes the value of non-state pensions in payment. Clearly a pension that is going to last you say 25 years is going to amount to a large sum of money.
4) Also included is the value of assets such as cars, furniture, ornaments, jewelry etc etc.  But one accumulates stuff over the years so the older you are the greater value of stuff.
5) The average liquid wealth eg savings and non pension investments amounts to about £39,200. So hardly rolling in money.  Again this is after a lifetime of work.

Now looking at the median annual gross income for people aged 65+ given in: https://www.gov.uk/government/statistics/distribution-of-median-and-mean-income-and-tax-by-age-range-and-gender-2010-to-2011. This gives a figure of about £22K, similar to the minimim wage.  This is less than during any 5 year period in the age range 26-64.

Again your story about OAPs living in luxury at the expense of younger people is simply not demonstrated by the statistics.

It’s from the IFS, here:

https://www.if.org.uk/wp-content/uploads/2022/06/pensioner_millionaires_FINAL.pdf

That's looks to be household wealth so numbers will be skewed, also I assume that includes all assets, e.g. property which isn't particularly useful as you need to live somewhere

There is no skew. This is a lot of pensioner households who can afford not to receive the SP. And thereby boost the SP for others. They might need an equity withdrawal plan, but that’s quite a simple solution.

Not such a simple solution.   Equity release in your 70's is limited to about 1/3 of the value of the house. The current average house price is £264K, so you are talking about a lump sum of around £80K-£90K.  Hardly enough to give your household  £11K/year or more likely 2X£11K per year income to replace SP.  Plus ER companies are not prepared to lend money on every house.

Buying an annuity at around 70 equivalent to SP inflation linked until death would cost around £200K/person.   According to the ONS as quoted by Nutmeg the average pension pot at 55-64 is currently £107K so being able to afford to pay for SP and still generate sufficient income left to live a reasonable basic life style would be way beyond the means of the large majority of pensioners.

Perhaps circumstances may be different in say 40 years time when the changes to pensions brought in over the past 10 years will be having a significant effect on pensioner wealth but in a much shorter time perod, no way.

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

Two people both have exactly one home, the homes are identical and cost the same.  One is forced to sell their home because it has suffered HPI so they are disqualified from the state pension whereas the other gets to keep their home because it hasn't.

I have no idea what you are saying!

sgx2000

A senerio 
A minimum wage lady has 3 kids
Rents because she and husband cant afford to buy.....
Cant afford to pay into private pension
Kids leave home
Husband dies

She is now 70......

How the hell does she pay rent bills etc on a state pension?

This will only get worse if the uk continues to be the lowest pension in europe......
The french have approx 50% more pension

BlackKnightMonty

sgx2000 said:

A senerio 
A minimum wage lady has 3 kids
Rents because she and husband cant afford to buy.....
Cant afford to pay into private pension
Kids leave home
Husband dies

She is now 70......

How the hell does she pay rent bills etc on a state pension?

This will only get worse if the uk continues to be the lowest pension in europe......
The french have approx 50% more pension

So she’s renting; and therefore entitled to housing benefit.

If the property is too big because she is on her own she needs to move somewhere smaller/cheaper.

Shame on the husband leaving her with nothing, and the kids offering no help and support.

sgx2000

BlackKnightMonty said:

sgx2000 said:

A senerio 
A minimum wage lady has 3 kids
Rents because she and husband cant afford to buy.....
Cant afford to pay into private pension
Kids leave home
Husband dies

She is now 70......

How the hell does she pay rent bills etc on a state pension?

This will only get worse if the uk continues to be the lowest pension in europe......
The french have approx 50% more pension

So she’s renting; and therefore entitled to housing benefit.

If the property is too big because she is on her own she needs to move somewhere smaller/cheaper.

Shame on the husband leaving her with nothing, and the kids offering no help and support.

The thing is that we, the more affluent of the country, tend to have no concept of how poor many people actually are....
A very large number of people live literally hand to mouth....

Silvertabby

sgx2000 said:

A senerio 
A minimum wage lady has 3 kids
Rents because she and husband cant afford to buy.....
Cant afford to pay into private pension
Kids leave home
Husband dies

She is now 70......

How the hell does she pay rent bills etc on a state pension?

This will only get worse if the uk continues to be the lowest pension in europe......
The french have approx 50% more pension

She will have housing benefit and help with her council tax.  Plus, possibly, Pension Credit and all the other tasty add-ons that being in receipt of PC opens the door to.

The French pension may be more because it is a hybrid scheme, part State and part private, with both employees and employers paying in way more than we do in just NI.  And while the UK worker on minimum wage may choose not to pay into an occupational/private pension, that's not an option for the French worker as such payments are compulsary.

Plus the French pensioner doesn't get additional benefits such as housing, and not all elements of the healthcare system are 'free'.

westv

BlackNightMonty does seem to be obsessed with making sure everybody gets less and an assumption that most people are getting more than they pay in tax. However as this article points out (it's old but I think the conclusion is still valid)

https://ifs.org.uk/news/more-nine-ten-individuals-pay-more-taxes-they-receive-social-security-over-their-lifetime

Using an individual year does not give a true picture. In the year in question the figure was 64% for those that got more in. The lifetime figure was 93% that paid more out.