UK State Pension - Is it really enough?

Sadly, we are living in an age where intergenerational warfare is being stoked by politicians and political commentators, again this notion of one person’s pocket being picked to pay for another’s free or easy ride without regard to the challenges and extra costs that older age brings.

Once upon a time, the only people of retirement age who could afford a comfortable lifestyle where those of private means, the upper class person with a private annuity or trust fund. Nowadays, many middle and working class pensioners are very comfortable. Around a million now pay higher rate tax so have an income of over £50,250. There will be many who have income in the middle range and may have valuable homes. But until such time as one can pay a council tax bill with a brick or a roof slate, or there is a way to release capital from a home without the loansharking of equity release companies, then it boils down to income. Many are asset rich but cash poor but many are simply poor even after a lifetime of work.

That there’s less than £200 between the tax threshold and the Pension Credit ceiling is ludicrous. That’s a cliff edge that the previous government should have seen coming and this current government should do something about.

On a recent thread I suggested a reintroduction of the tax age allowance. This had been in force for decades until George Osborne abolished it. It was means-tested on a tapering scale just as the tax personal allowance is now for those with higher incomes. I’d set it at £1,000 for those under 80 and £1,500 for those above. It would be a basic rate tax break equivalent to the Winter Fuel Payment. It would solve the problem of those with income equivalent only to the rate of the the full nSP (not aSP) being caught in the tax net next year.

I would get rid of Winter Fuel Payment and pass the responsibility for support to energy companies without loading the cost onto younger consumers. British Gas, Octopus, E.ON et all aren’t going to go broke for lopping £4 or £6 a week off the energy bill of pensioner households. The overall cost of WFP is around £2 billion. Spread around the sector is won’t make a huge dent in their profits. It would go some way to compensating for the social tariffs that haven’t been introduced or the “moral poll tax” of standing charges that militate against customers who are trying to economise on their bills and get to a point where their standing charges cost more than the energy they use.

£4 a week off my bill and I might blow it on a cafe coffee or the utter decadence of a sourdough loaf from the hardworking artisan baker in the market.

It's called putting money into the local economy, which supports local business, provides jobs and yields tax revenue for local and central government.

I've always thought the pension was probably set with the idea that recipients would have no rent or mortgage by that stage of their life. Therefore less needed than at a younger age when still working on home ownership and paying rent/mortgage.

That's an assumption that, of course, makes it hard for those who aren't in the fortunate position of owning outright in their older years.

Coffee? Out? How very dare we!
Blimin love Cafes, Tea Shops & a 'Posh Hotel with a Garden View or Balcony' for a cup of the good stuff

I haven't received my SP yet, I'm one of those unfortunate women who has had to wait another 7 years! Once I reach pension age we will have a joint income of around £26,000 which I think is a good retirement income - but we don't have housing costs or any debts to pay luckily.

It does seem wrong though that pensioners with a very small private pension are having to pay tax - the tax threshold should be raised to at least £15,000 or even higher, maybe £20,000?

In addition to this pensioners should be eligible for various kinds of help with things such as dental costs, opticians and hearing costs, reduced council tax and free TV licences. Many of these essential services used to be free or reduced for pensioners but have slowly been taken away. The winter fuel payment has been reintroduced recently but is always under threat! The threshold for this should be lower, having a household income of £35,000 should be more than enough to manage fuel bills!

How can a single person living on £12,500 manage to find the money for these things? And how can it be right that if that person has a small pension of a few thousand a year they are taxed on it!

It is these measures that the government needs to look into, rather than raising the SP to be in line with minimum wage I feel

But do you 'need' that coffee, MayBee? That seems to be the question, with the implication that older people shouldn't have more than we 'need', and are somehow 'lucky' if we have paid into occupational pensions.

It's true that there are a lot of older women in cafes, but the reasons for that are pretty clear - women tend to outlive their husbands so they might otherwise be on their own, and younger women are likely to be at work during cafe opening hours, whereas older women have lived through that stage of life and finally have some free time.

How many cafes would survive if pensions were cut so that they no longer covered the cost of an occasional coffee?

Doodledog

*Molly*'s right - there is no reason why pensioners shouldn't have lunches and coffees with friends, ordinarygirl. Would you rather we all stayed at home out of the way, and talked to the houseplants?

I am sick of hearing about what people 'need' and the drive to draw the line there and stop anyone having more than we 'need'. If people can afford lunch and coffee out, the chances are they have worked for years and paid into pensions so they could do just that when the time came. I don't understand the resentment.

I was in my thirties before I could afford to have a coffee out and then it was an occasional treat. And an unmarried friend used to take us out for a meal once a year because, as a family we couldn’t afford to go out for meals. I probably wore my knees out working for the NHS and now it seems people are looking at me with resentment if I go out and have a cup of coffee. I met up with my family last week who were having a meal at the pub across the road and took some water with me because I don’t drink alcohol so I hope that is acceptable to some .

Molly's right - there is no reason why pensioners shouldn't have lunches and coffees with friends, ordinarygirl. Would you rather we all stayed at home out of the way, and talked to the houseplants?

I am sick of hearing about what people 'need' and the drive to draw the line there and stop anyone having more than we 'need'. If people can afford lunch and coffee out, the chances are they have worked for years and paid into pensions so they could do just that when the time came. I don't understand the resentment.

That state pension has always been taxable. It doesn’t matter how old you are, you will pay tax on income over £12,570.

A free bus pass is only any use if you live in an area with good bus services. Many do not and have to use trains and taxis if they do not have a car and, if they do, they have to find the cost of that.

Retirement Living Standards have calculated that a single person needs to spend £13,900 a year for a minimum lifestyle. That does not include having a car. It allows for £57 a week for groceries and £42 a month for food out or takeaway - just £10 a week. It isn’t going to buy a lot of coffees.

£13,900 equates to a pre-tax income of £14,200.

The current new State Pension for 35 years of NIC is £12,548. Many people do not receive this amount and need to claim Pension Credit which will give them an income of £12,376. They would be able to claim housing benefit if they rent plus council tax support. An owner occupier could claim council tax support.

The amount of Winter Fuel Payment was set 26 years ago and has not kept up with the rise in energy prices. The equivalent value in 2026 is almost £400.

Cossy’s idea of a Universal Basic Income of £15,000 is a good one to avoid all the faff of poorer pensioners having to make claims for support from several different agencies.

DWP surveys indicate that there are still thousands of pensioner households who are entitled to help but who are not claiming it. The poorest households are single pensioners particularly women. Having a UBI would help them.

ordinarygirl
I have no doubt that there are some elderly people who are not in a good financial state BUT just look at the coffee shops which are inundated by pensioners. I often listen to conversations when travelling on the bus about how pensioners have had a nice lunch in the local pub.

I’m glad you acknowledge that there are some elderly people who are not in a good financial state

I’ll make the same allowance for those younger people who are not in a good financial state.
Our town is full of eateries, cafés, restaurants, coffee shops, bubble tea shops etc. and despite the fact that there are young /younger people who are not in a good financial state these places are always full of young people-in school uniform, in hoodies, with babies in prams, in the latest fashions, with incredible eyelashes and huge lips, made up so similarly that it looks like a uniform.
Whichever group you look at there are always the haves and the have nots, but deciding that older people deserve less?
Karma will come back and bite you on the bum!

And those coffee shops will lose business if pensioners like me can't afford lifes little luxuries like having a coffee out. Shopping centres like the one in my town would be empty if pensioners couldn't get the free bus to them. As for prescriptions people get them at sixty now and, when I worked for the NHS many younger people didn't pay for prescriptions [and there is also the cheaper option of buying prescription prepayment certificates]. I bet many of those pensioners boasting about having a pub lunch probably provide free child care for their grandchildren...

1. Why do you need the minimum wage ? you are not working
2. the state pension itself is not taxable - the minimum wage is taxed
3. OAPs get free bus passes and free prescriptions. Younger people have to pay for both
4. for those on just the state pension you may be able to get pension credit -
5. the heating allowance has been reinstated for many

I have no doubt that there are some elderly people who are not in a good financial state BUT just look at the coffee shops which are inundated by pensioners. I often listen to conversations when travelling on the bus about how pensioners have had a nice lunch in the local pub.

I was never a fan of Maggie Thatcher but I did think the poll tax was a good idea as there would be so many single pensioners who would have benefited from a smaller outgoing than 2 thirds of council tax.

I think pensions should be tied to the average increase in wages and nothing else. Pension Credit can be used to bridge the gap between individual pensioners income and the minimum income considered necessary to live on. That is what it is there for.

Count Binface has it covered,
Pensions to be double-locked, with an extra little chain on the side.

That isn’t true. In most years there is little difference between the double and triple lock. This year it is just 1% representing an extra 30p a day pre-tax compared to the double lock.

The triple lock was to allow pensioners to benefit from wage growth if average earnings rose faster than inflation and why shouldn’t they? Wage growth contributes to cost-push inflation which affects everyone.

In addition, it’s based on wage growth in the summer of the preceding year. By the time we get it, pensions paid four weeks in arrear, it’s already May of the next year and wages are rising again. Always playing catch up.

The reason we have the triple lock. Is so that all governments can literally buy the votes of millions of pensioners and stay in power.

An ageing population, dying off soon. Lets get their votes while we can.

As for people in other Countries getting better State Pensions. This may be true but the same thing applies to them. Their votes have been bought.

M0nica

The simple answer is we cannot afford it in either the short or long term. We are already being held back by the huge cost of welfare benefits and with fewer and fewer children being born there will simply not be a taxpayer base sufficient to meet the cost of higher pensions.

In 1950, there were approximately 5 working-age people for every one retired person. By 2070, the Office for National Statistics (ONS) expects this fallen to about 2 workers for every pensioner.

The reason so many legal immigrants ( the vast majority) were invited or came her was because we simply did not have enough younger people, especially in the health industry, to meet the needs of the current population and had to go overseas. This goes right back to the Windrush generation who came over to feed London Transport's need for bus crews.

Now young immigrants are needed to help pay for older people's pensions.

I wonder what the ratio of people on benefits for long term unemployment compared to those working was back in the 1950's. I also wonder how successful the immigration policy is for boosting the number of working people compared to pensioners. I suspect that in both cases it has had a huge impact on our ability to ensure pensioners don't just get by but are able to live a little. I welcome working immigrants who come here legally and genuine refugees so it certainly isn't my intention to have a pop at them. I just remember reading an article recently about the real figures to do with immigration and they weren't as positive as we have been led to believe. I wish I could find the article!
My mother was a single parent with very young children and she certainly couldn't get enough benefit to even consider staying at home. She couldn't even get Child Benefit for the first child. There was no "funded" childcare and it was a struggle. She could certainly have managed these days by comparison.

www.moneysavingexpert.com/latesttip/?anchor=pension#pension

Martin Lewis is currently promoting a campaign for people (mainly women) to check their state pension entitlements. Apparently there is a review going on as errors have come to light affecting thousands of pensioners. Some will be corrected automatically, others will need to apply.
Check it out on MoneySavingExpert website. It is in his weekly email this week.

Well, we saw what happened when the WFA was taken from those who had previously said thy didn't need/want it, didn't we .

Also, as has been pointed out on this thread already, not everyone on the OSP is worse off than those on the NSP (and many on NSP don't get the full amount anyway). Not only that, but the UK SP is lower than that in many countries, so I don't see why it should be lowered further.

AFAIK you don't have to claim it if you don't want it. Everyone who claims it has made the choice to do so, usually because they paid NI for decades in the expectation that a pension would be the reward. Maybe that could be publicised more, but my guess is that the cost of the advertising would far exceed any profit.

I read online today our state pension is overly generous, so the triple lock should be removed!!! I would think whoever wrote that statement is struggling on around £100,000 a year.

I receive the "old" state pension which has crept up to 4 figures. I could live on that if I lived in one room! I have no idea how many people cope. So many are part of the "eat or heat" group.

silverlining48

The problem is whenever the sp is mentioned by the media it’s always the new rate and not the old rate that so many of us are on, which is quoted.

This is a niggle of mine too, very rarely is the old pension rate mentioned.
I often wonder if there is some way to stop the triple lock for those who don't need/want it in favour of giving more to those in need.

People keep implying that they are living on less than £12.5k, but if that is the case they are entitled to pension credit which will bring their income to far more than that. The benefits of getting PC have been outlined above, and they go above and beyond the obvious.

As an example, I am in a group who visits a local theatre regularly. Over 65s used to get reduced tickets, which made the trips affordable to those on SP only (and to those just above because of an occupational pension they had worked for and paid into). As of September, all ticket prices have risen, and the concession has been withdrawn for those not on PC, 'to be fair to everyone', so the old concessionary tickets have had a double increase - once to full price and then to the increase in full price, whilst the cost for those on PC stays the same. This means that some of the group will no longer be able to go, as the ticket prices for them are £15 more than if they had PC, taking them to a high price for someone budgeting carefully.

This sort of discount is available at a wide range of venues, so adds up over a year. Before anyone suggests that I am begrudging those on PC anything, I'm absolutely not. What I do feel, however, is that this sort of means-testing is deeply unfair to those who tried to make their later years more comfortable by paying for an extra pension (they are not free, despite the resentment they seem to cause) and find that yet again, taking responsibility for themselves has backfired. If fewer people can go, the bus hire price will go up too, as we split it between passengers.

I understand that the theatre company has to stay afloat and prices had to rise, but I want all group members to be able to attend all the performances that we used to, and I don't think that will be possible.

That is not a 'notion' that some pockets are being picked to put money in others - it is a lived (but far from isolated) example of how the current system can be very unfair to the very people who prop it up.

£12,500? I wish. My pension isn’t anywhere near that much.

My state pension is no where near £12000 pa. I’m not complaining because I never had a paid job and so never paid NIC.
I get maintenance/alimony payments, which due to a negligent solicitor , has stayed the same for the past 20+ years, despite inflation.. I have savings and I manage fine .

valdali

I'm fine on £10, 600 per year my occupational pension.
I sell a few things on Ebay & have savings I could use till I get my state pension in 18 months time at 67.
DH works & pays our council tax & most utilities, but I buy 95%
of food & household items, pay half tradesmen's bills, pay for our holidays, run a car, pay all the vets bills.
We're in an "expensive" area. I thought I would be dipping in to my savings, but so far I seem to have enough for what I want.

I can't see the logic in the state paying people the same p.a. whether they're top earners & single, or unemployed with 2 children & additional costs associated with disability, Cossy? Is this what you meant? I might be missing something....

Well of course you are fine....you have a husband...who works.....how can you compare yourself