Converting state pension to a monthly income stream

Bostonerimus1

Linton said:

It seems foolish to run your current account so tightly that you cannot cope with a few days variation in debit and credit dates.  Just build up a buffer of 1 month’s SP.

That's what I thought. I know that many people don't have much headroom, but if you are forced to live so close to the limit there are more fundamental financial issues at play. If possible I would build up at least a few months of spending in the account.

Bostonerimus1

Moonwolf said:

Bostonerimus1 said:

Is this really a problem?

I doubt it is a problem for many people on this forum. 

However I know people who are living on very little and can be tripped up by an energy bill or rent going out the day before their money goes in. This is much more likely if you are paid 4 weekly but your big bills all go out monthly. While an energy bill doesn't have late payment penalties it could be enough to stop another payment or trip an overdraft.

I don't like direct debit and automatic payment from accounts. I know that you usually get a better price if you sign up, but you give up control. I pay my bills electronically, but decide myself when the money goes out.

Ivkoto

So why don't you change all direct debits and standing orders to be on the same date every month and you will know what is left after that?

german_keeper

I think the only real difference I can see for us now would be that I could get 4% interest on a small amount of money instead of 2% in my current account. I do have a linked saver at 4.2% so I just shovel any genuine excess in there but probably do hold a few hundred in my current account at certain times. So I suppose I could be more proactive in moving money around the 2 but for a few pence per month I can't be bothered.

Mind you things were a bit tight for us for a few years when the kids were young and we still had the mortgage so I do understand the issue some might face. But I am 7 years away from SP, my wife is 8 years away so who knows what will happen at the time, maybe it will be a problem. 

barnstar2077

Hoenir said:

dunstonh said:

Once upon a time budget accounts, as they were known, were extremely popular.  I still operate a budget account (although its called number 2 account now).   On a fixed day in the month, a fixed amount is transferred to the 2 account and all fixed bills are paid out of the number 2 account.    I did that from my late teens as a means to knowing what I had left after the standing order to the 2 account had gone through was mine to spend. 

Have run a second "bills" bank account for many years. Makes budgeting far easier. Copes with the oddities of Council Tax being paid over 10 months and the one off renewals of various insurances , TV licence etc. Simply keep a list all the items on an annual basis. Ensure sufficient money i.e. 1/12 or 1/13 is transferred across after every "pay day". 

I did this the day I moved into my own place.  No need to ring round and try and get all the direct debits to come out at a convenient time, just one standing order that comes out on the 28th of every month from my current account to my direct debit account.

I think it makes budgeting easier too, as what is left after my savings and direct debit chunks have been transfered is my food and spending money for the month.  I am not living hand to mouth, I just prefer to see a bit clearer where my money is going.

Has worked for me without any hiccups for the last twenty plus years, but each to their own.

Sarahspangles

People have a choice between actively budgeting so they have money set aside when bills are due, or running with a significant surplus so they don’t need to manage cash flow, just ensure their surplus is sufficient. 

The weekly pension arrangement is surely there for those who don’t have the surplus to play with. If people request it unnecessarily, and it costs more to administrate, then the taxpayer takes the hit.

GunJack

I dunno... I'll have 2 DB pensions in payment before SP is due so was thinking of having it paid weekly just for everyday spending like food, fuel and fun 🙂

westv

I'm glad I don't have to worry about which bills get paid when or any need to budget for them.

flaneurs_lobster

westv said:

I'm glad I don't have to worry about which bills get paid when or any need to budget for them.

Do you mean that you have no expenses or you are simply rich?

JoeCrystal

flaneurs_lobster said:

westv said:

I'm glad I don't have to worry about which bills get paid when or any need to budget for them.

Do you mean that you have no expenses or you are simply rich?

Or worse...., westv may be in a relationship or married!