How much pension income to break even

dont_use_vistaprint

ok quick search on .gov & various council & utilities  websites 

PC 3,300
Council tax reduction 2,800
water rates reduction £600
Dentists £500
Optical £500
Cold weather, warm home, Winter fuel - govt +  various other schemes £1800
TV Licence , never had one but guess about £100
Taxis to hospitals / doctors £240
gym membership £480

10-12K a year maybe once you’ve found all the small? 

What size pension pots needed to give that for life after tax ?

I think some are a bit out of touch on the support people who never saved can actually get 

my point for the post is whether these people actually benefit starting a pension in their 40s/50s if on low wages , I think not , but they seem to be encouraged to and that’s not a bad thing , reducing the benefits bill but I doubt that’s what they think they are doing 

dont_use_vistaprint

zagfles said:

DullGreyGuy said:

It would be easier if you add up the annual value of what you think these things are worth to you... 

Free boiler is only for those with a non-condensing boiler, ours therefore wouldn't be applicable and its a once in a lifetime thing

Taxi to GP... walk, wouldn't use a taxi

Optical voucher - my glasses were £25, they last about 10 years typically. So £2.50 per year. 


Agree with others, you cannot afford 6 foreign holidays a year on £11,502.40. Maybe she isn't the one paying for the holidays? Or have generous gifts from her kids etc? My gran used to go on 3-4 foreign holidays a year but that was her kids taking her (normally in exchange for baby sitting services) and not a penny was coming out her own pocket for them. 

Depends on the holidays. I've just been on a short trip to Eastern Europe, flights were £35 return, hotel was £30 a night but there were much cheaper accommodation options available, I spent around £30 a day on everything else but could easily have done it for under half that without missing out on too much. 

I reckon I could have done it for a week's PC if I'd really wanted to and would still have a had a good time  I used to have at least a month abroad when on less real terms income than PC. 

And if for instance OP is staying with friends/relatives abroad then it's very easily done. 

Yeah im planning to spend winters out of the uk and will spend less than staying at home ! 

My holidays currently cost 500-1000, I avoid Western Europe it’s quite pricey and  I can do much cheaper if needed. 

dont_use_vistaprint

SouthCoastBoy said:

dont_use_vistaprint said:

SouthCoastBoy said:

Pension credit does open up a number of other benefits. My mum received pension credit, which in turn led onto additional benefits such as not having to contribute council tax, she also got a free boiler and I think some additional winter fuel payment (but not sure on that one). 

I think there may well be a position where if you receive just enough to not get pension credit you may be worse of? I think that is the point the OP is making. I don't know if this is true, but I do know by my mum receiving pension credit it opened up a number of other benefits.

Thank you, finally someone  who actually read and understands the original post!

I think the sum of all those additional benefits is quite significant, especially when you consider it is all tax-free free. 

Yes, especially the council tax, which for a band d property around here is close to 2500 a year so 3k a year before tax

Person in question receives utilities support through 5 different schemes &  is always in positive credit without paying anything. 

None of these look at actual usage or ability to pay, simply are you on PC , yes, have this extra money then.

Also the new boiler, radiators , insulation etc is a big CAPEX project many of us will face at some point in retirement 

dont_use_vistaprint

FIREDreamer said:

dont_use_vistaprint said:

SouthCoastBoy said:

Pension credit does open up a number of other benefits. My mum received pension credit, which in turn led onto additional benefits such as not having to contribute council tax, she also got a free boiler and I think some additional winter fuel payment (but not sure on that one). 

I think there may well be a position where if you receive just enough to not get pension credit you may be worse of? I think that is the point the OP is making. I don't know if this is true, but I do know by my mum receiving pension credit it opened up a number of other benefits.

Thank you, finally someone  who actually read and understands the original post!

I think the sum of all those additional benefits is quite significant, especially when you consider it is all tax-free free. 

Assuming the value of these freebies is £4,000 per annum and a tax rate of 15% allowing for PCLS (the state pension pretty much uses up any personal allowance) and applying the oft quoted 4% rule, the amount needed in a pension plan to cover the loss of these freebies is …

£4,000.00 / 0.85 * 25 = £117,647

However there’s no guarantee that these freebies will be available in the future.

So about 350K for the real figure of freebies to break even. 

onomatopoeia99

dont_use_vistaprint said:

ok quick search on .gov & various council & utilities  websites 

PC 3,300
Council tax reduction 2,800
water rates reduction £600
Dentists £500
Optical £500
Cold weather, warm home, Winter fuel - govt +  various other schemes £1800
TV Licence , never had one but guess about £100
Taxis to hospitals / doctors £240
gym membership £480

10-12K a year maybe once you’ve found all the small? 

What size pension pots needed to give that for life after tax ?

I think some are a bit out of touch on the support people who never saved can actually get 

my point for the post is whether these people actually benefit starting a pension in their 40s/50s if on low wages , I think not , but they seem to be encouraged to and that’s not a bad thing , reducing the benefits bill but I doubt that’s what they think they are doing 

My annual figures of what I actually spend:

Council tax on my detatched home £1600, of course I'd welcome a refund for £2800 to leave me £1200 in credit but don't see that happening

Water (metered) less than £200, again a £600 reduction would mean they pay me.

Dentists £0 / year for the last 35 years

"Optical" £25 for a test.  Spectacle replacement when required averages around £100/year (varifocals, high refractive index as I am very short sighted an I don't stint at all on what I buy)

£1500 for energy to keep my home toasty as I'm not a "more layers" person.  Please explain what "various other schemes" totalling £1800 are.

Gym membership £0 because who would voluntarily go in a gym? I remember the people that were enthusiastic about "PE" at school and they aren't anyone I'd mix with as a adult.

Think you've over-egged the pudding a lot there.

dont_use_vistaprint

onomatopoeia99 said:

dont_use_vistaprint said:

ok quick search on .gov & various council & utilities  websites 

PC 3,300
Council tax reduction 2,800
water rates reduction £600
Dentists £500
Optical £500
Cold weather, warm home, Winter fuel - govt +  various other schemes £1800
TV Licence , never had one but guess about £100
Taxis to hospitals / doctors £240
gym membership £480

10-12K a year maybe once you’ve found all the small? 

What size pension pots needed to give that for life after tax ?

I think some are a bit out of touch on the support people who never saved can actually get 

my point for the post is whether these people actually benefit starting a pension in their 40s/50s if on low wages , I think not , but they seem to be encouraged to and that’s not a bad thing , reducing the benefits bill but I doubt that’s what they think they are doing 

My annual figures of what I actually spend:

Council tax on my detatched home £1600, of course I'd welcome a refund for £2800 to leave me £1200 in credit but don't see that happening

Water (metered) less than £200, again a £600 reduction would mean they pay me.

Dentists £0 / year for the last 35 years

"Optical" £25 for a test.  Spectacle replacement when required averages around £100/year (varifocals, high refractive index as I am very short sighted an I don't stint at all on what I buy)

£1500 for energy to keep my home toasty as I'm not a "more layers" person.  Please explain what "various other schemes" totalling £1800 are.

Gym membership £0 because who would voluntarily go in a gym? I remember the people that were enthusiastic about "PE" at school and they aren't anyone I'd mix with as a adult.

Think you've over-egged the pudding a lot there.

Well I pay £50 a month for water so based it on that 

The council tax system in England is based on bands of different prices & largely is going to depend on where you live and how much your house is worth.

dentists, when I was working and with BUPA, my bills  always just exceeded the £1000 a year allowance -  checkups, hygienist , whitening etc. while I can understand you are not wanting to spend anything and I’m with you on that I don’t bother anymore, my point being if something is free you tend to use it. And many pensioners have dentures, etc, I bet they are not cheap ? So I think £500 is accurate.same applies to optical 

for the various of schemes that are at at least three offered by the government and then other schemes offered by the council and the utilities company themselves. These are the winter fuel allowance, warm homes, Cold weather payment, hardship Payments etc. contact age UK they give you all the details of everything and help you fill in the forms, as long as you are in receipt of pension credit…..

gym - you clearly have not been to the likes of Nuffield or David Lloyd during the daytime for a long time? It’s pretty much a pension club of very fit and active old people, swimming, sauna etc as well as weights. It’s very important as you age to stay fit and healthy and also retain your muscle mass. This can prevent all kinds of injuries and problems, hence why councils and other organisations are happy to subsidise the elderly, as long as they are in receipt of pension credit

Anyway  this isn’t about what you spend:-) 

SouthCoastBoy

onomatopoeia99 said:

dont_use_vistaprint said:

ok quick search on .gov & various council & utilities  websites 

PC 3,300
Council tax reduction 2,800
water rates reduction £600
Dentists £500
Optical £500
Cold weather, warm home, Winter fuel - govt +  various other schemes £1800
TV Licence , never had one but guess about £100
Taxis to hospitals / doctors £240
gym membership £480

10-12K a year maybe once you’ve found all the small? 

What size pension pots needed to give that for life after tax ?

I think some are a bit out of touch on the support people who never saved can actually get 

my point for the post is whether these people actually benefit starting a pension in their 40s/50s if on low wages , I think not , but they seem to be encouraged to and that’s not a bad thing , reducing the benefits bill but I doubt that’s what they think they are doing 

My annual figures of what I actually spend:

Council tax on my detatched home £1600, of course I'd welcome a refund for £2800 to leave me £1200 in credit but don't see that happening

Water (metered) less than £200, again a £600 reduction would mean they pay me.

Dentists £0 / year for the last 35 years

"Optical" £25 for a test.  Spectacle replacement when required averages around £100/year (varifocals, high refractive index as I am very short sighted an I don't stint at all on what I buy)

£1500 for energy to keep my home toasty as I'm not a "more layers" person.  Please explain what "various other schemes" totalling £1800 are.

Gym membership £0 because who would voluntarily go in a gym? I remember the people that were enthusiastic about "PE" at school and they aren't anyone I'd mix with as a adult.

Think you've over-egged the pudding a lot there.

My council tax is around 2500 for band D and my water bill is around 600

Sarahspangles

I wouldn’t want to be on Pension Credit. If you own your own home then, without significant capital, how are you going to maintain it? And if you rent, what you can afford depends on the local Housing Benefit limits. There have been a few Press stories recently about homeless pensioners priced out of the area they’ve lived in long term.

Even if it’s currently true that there is an overlap point where someone just qualifying for Pension Credit is better off than someone just over the limit, those figures could diverge. Though reducing the PC bill shouldn’t be a higher priority than getting working age adults into jobs.

DairyQueen

My elderly aunt (aged 88) recently moved into a new retirement complex (part social housing and part privately owned). This a 'close care' development with 24/7 care on site. Auntie has no personal pension and no savings. She never worked outside of her late husband's business, and uncle didn't pay self-employed NI.

Auntie's lack of means entitles her to pension credit. This key unlocks a host of other benefits. She also receives attendance allowance. She pays nothing in rent, service charge, council tax, water or cleaning. Her only regular bills are energy, food and a contribution toward her carer. She receives free dental, optician and hearing aids and the winter fuel allowance.

Auntie tells me that she has "never had so much money". If I had to put a figure on the financial support auntie receives I suspect it would be in the ballpark of £25,000p.a.  

I think she has earned it. 

Auntie was my grandmother's sole carer for seven years until Granny's death (three years as a dementia sufferer). Auntie also took on the care of her husband for several years until his death. She has saved the taxpayer a small fortune in community carers and nursing home fees. She deserves every penny of the support that she now receives. 

Cus

Does she spend all of it or save some? (Based on her quote that she has never had so much money)