How much pension income to break even

zagfles

DairyQueen said:

pterri said:

Other issue, none of the state benefits are guaranteed for life. They can and will be tinkered with, to rely on that going forward would be insane. 

My thoughts exactly. To be at the mercy of government policy wouldn't make for a secure and happy retirement.

But we're all at the mercy of govt policy anyway. State pension, tax rates, pension rules, NHS, personal freedoms etc, and indirect results of govt policy such as inflation rates, interest rates etc

zagfles

indiasign said:

dont_use_vistaprint said:

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 

Just out of interest, could you detail these schemes? I have an elderly Aunt who is on Pension Credit, but is receiving no help with utilities, so I’d like to be able to point her in the right direction.

Thanks

See Warm Home Discount Scheme: Overview - GOV.UK

pterri

zagfles said:

DairyQueen said:

pterri said:

Other issue, none of the state benefits are guaranteed for life. They can and will be tinkered with, to rely on that going forward would be insane. 

My thoughts exactly. To be at the mercy of government policy wouldn't make for a secure and happy retirement.

But we're all at the mercy of govt policy anyway. State pension, tax rates, pension rules, NHS, personal freedoms etc, and indirect results of govt policy such as inflation rates, interest rates etc

Yes, so build up alternative/additional pensions and savings so not to be reliant to the (apparent) largess of current policy which (apparently) gives you 4-5 foreign holidays a year 

DullGreyGuy

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

What is the maximum it can possibly be is not the same as what is it worth to you... are you really going to forfeit your private pension so your income is low enough to get pension credits so you can have a TV licence for the first time in your life? 

Not sure where you are getting £500 years in Optical? The NHS says £15.55 for single focus lenses, those for me typically last 10 years, even if you say your eyes are detiotiating with age that £7.78 a year not £500. Are you replacing your glasses more often than every 2 years? Do you even wear glasses?

£480 for gyms? Our local council charges the same for over 60s as concessions, so no special treatment. Our private gyms dont offer discounts for pension credits or age

GunJack

What have you lot got against Rhyl??? 🤣🤣🤣🤣

Although Llandudno is, admittedly, far nicer 🙂

Nebulous2

You seem to be missing the point, which silver tabby has made twice now, that as the new state pension becomes increasingly significant, the minimum wage, struggling to get by people, won't qualify for pension credit. 

dont_use_vistaprint

Cobbler_tone said:

MeteredOut said:

dont_use_vistaprint said:

barnstar2077 said:

I know dozens of people who are highly likely to be on pension credit in old age.  They are struggling now, working their fingers to the bone on minimum wage for bosses and companies that treat them like dogs.  Meanwhile their rent is a grand a month and food prices feel like they have gone up fifty percent since covid.  I hope they get millions in retirement, because they have suffered their whole lives, being treated like scum by companies and landlords alike.  Not everyone on pension credit is there because they didn't try.  Many will be there because once you get trapped renting with little education and low self esteem (from being trodden on your whole working life) it is pretty hard to get out of it. 

This is true. If I was still there certainly wouldn’t bother paying into a pension to subsidise pension age benefits.

It takes decades of sacrifice, wise financial decisions and hard work  to get out of that, and sometimes luck and good friends to help !  and not many do get out 

I couldn't disagree more. Advice I'd give to my younger self (and to anyone currently younger who will listen) is to put as much as possible into a private pension, whilst not sacrificing their day-to-day living.

The trouble is your younger self would never have visualised being 55+
It is the one thing with pensions, they don't seem tangible until you almost get there!

I've been in a pension since I was 25 (all with one employer) and been all over it for the past 15 years. It took a while to appreciate the importance of them though.

But this isn’t about the merits of a pension , we know they work over the  long term even with modest contributions , or even in the shorter term as you get older if you can maximise extra annual payments at 40/45% relief. 

The people receiving pension credit missed out doing the first option and can’t do the second. 

As much as principles of saving are right, I think the numbers simply don’t add up for many 

dont_use_vistaprint

Cobbler_tone said:

dont_use_vistaprint said:

Better put that money into ISA savings ?

If someone is saving rather than paying into a pension, won't many of these 'benefits' drop off? At least those means tested.

No,  there is a savings cap of £10,000, within this pension credit it’s not impacted at all,  over this & it begins to reduce.  

As long as you are in receipt of ‘some’ pension credit all the other benefits are automatically given.

They state they are all  ‘means tested’ but it’s not correct, they use the simple rule of is this person getting any pension credit or not, to the point that if you are a low user of energy, you can easily end up permanently in credit without paying.

zagfles

pterri said:

zagfles said:

DairyQueen said:

pterri said:

Other issue, none of the state benefits are guaranteed for life. They can and will be tinkered with, to rely on that going forward would be insane. 

My thoughts exactly. To be at the mercy of government policy wouldn't make for a secure and happy retirement.

But we're all at the mercy of govt policy anyway. State pension, tax rates, pension rules, NHS, personal freedoms etc, and indirect results of govt policy such as inflation rates, interest rates etc

Yes, so build up alternative/additional pensions and savings so not to be reliant to the (apparent) largess of current policy which (apparently) gives you 4-5 foreign holidays a year 

Or read MSE and learn how to get value from your spending that will astonish others Then you'll be OK whatever govt policy is, whether they decide to abolish all means tested benefit and let people starve or whether they increase or introduce new wealth taxes to confiscate savings you've built up

dont_use_vistaprint

zagfles said:

pterri said:

zagfles said:

DairyQueen said:

pterri said:

Other issue, none of the state benefits are guaranteed for life. They can and will be tinkered with, to rely on that going forward would be insane. 

My thoughts exactly. To be at the mercy of government policy wouldn't make for a secure and happy retirement.

But we're all at the mercy of govt policy anyway. State pension, tax rates, pension rules, NHS, personal freedoms etc, and indirect results of govt policy such as inflation rates, interest rates etc

Yes, so build up alternative/additional pensions and savings so not to be reliant to the (apparent) largess of current policy which (apparently) gives you 4-5 foreign holidays a year 

Or read MSE and learn how to get value from your spending that will astonish others Then you'll be OK whatever govt policy is, whether they decide to abolish all means tested benefit and let people starve or whether they increase or introduce new wealth taxes to confiscate savings you've built up

I think for many people, unless they have actually been poor, they are very out of touch with how things work for normal people and what kinds of holidays you can have with very small amounts of money. 

I take a lot of satisfaction from spending months in nice warm countries during winter  at much lower cost than  staying in the UK :-) 

((Posted from the Pool on my roof…)