Can you manage on just a state pension ?

I'm 64 and wondering whether to leave my depressing job this year when I'm 65 or stick it out another year. I may have to wait in any event as it might not be a good idea to take my private pension now as there remains some element of equities in the investments. It would probably be better to hang on until the stock market has gone up a bit with post Covid recovery. I'm hoping for great things from the Stock Market over the summer as I'd really prefer not to be working in this job after Christmas.

I've managed on the basic state pension for 12 years now. I run a home [no mortgage] and have a car to keep on the road, I have all bills and 75% council tax to pay on my own.

It's doable but I have a simple life out of choice, few holidays which are spent in the UK in holiday cottage split costs with a friend. I eat well, cooking from scratch every day, my hobbies are reading, gardening, walking, writing, renovating furniture, DIY. I [pre-covid] eat out now and then, and have many days out. I'm content with my life and family and don't feel I'm missing out or deprived at all.

However I have a lump sum of savings from an inheritance tucked away which means I do not qualify for pension credit. But I have never had to dip into those savings for everyday living costs, my pension takes care of it all. It means though that I wouldn't have any problem if I needed expensive house repairs or replace the car for example.

So I feel secure and have no money worries. Without this maybe I wouldn't feel so comfortable. If someone has a property there is always the option of releasing some equity if it means making life bearable...but only a reasonable amount and later years.

Something to consider is car purchase. There are 9 new car taxes coming, and one of them is going to be a purchase tax which will penalise you if you buy a car that is not considered energy efficient.

Thanks to everyone who has replied . We have allowed for 4% inflation in our calculations for price increases . We have also allowed for an extra 2 years without state pension in case the rules/ age changes again . I have looked at our current outgoings, both essential and non essential and we are spending under £1400 per month on average as we have been saving all the rest for retirement . Everyone has their own comfort level but @ JenniferEccles , I certainly don't feel impoverished at the moment on this level of income, although I appreciate that it being a choice rather than a necessity may make a difference.

The road tax for my small car Peugeot 107 is £20 per year because of its energy efficiency.
Your petrol, or other costs of commuting, may be less when not working.
I keep heating of the house to a minimum and make good use of cosy jackets and blankets plus hot water bottles.
I'm not in a couple on state pension so can't speak specifically about that, tho.

It sounds like a good idea to try living on the amount you would have as pension, while continuing to work, to give you a better idea of how it would be.

Thanks Goggins , we both already have 40 years plus of full NI contributions so will be entitled to full state pension .

Message withdrawn at poster's request.

We did this.Initially DH stopped working at 59 and we lived on my salary which was about the same as 2 state pensions. After 3 years and managing fine I took early retirement with reduced pension and hubby took his private pension as a drawdown monthly amount equal to state pension. We both took the tax free lump sum and bought a small property to rent out which gives us an income used for holidays and any large bills. I found having more time reduced outgoings as I can shop around for better deals for utilities insurance using cashback sites helps. Spent the first year doing a massive de clutter of STUFF which netted over £5000 by selling on eBay and local selling sites. I do odd bits of work such as mystery shopping and local elections but it's my choice how much I do. In my case I've never been happier

My mother has the basic pension plus housing benefit and attendance allowance. She manages because we are always buying her treats - wine, chocolates - and clothes. We also pay for other things like opticians. Basically, she couldn’t manage on the state pension alone.

Thank you Casdon and 3dognight . I already cook from scratch , batch cook and freeze all left overs and have only had a couple of takeaways since the start of lock down . We planned to set aside around £20k as an emergency fund , so this isnt included in the amount we will use to live on till our state pensions kick in. Our current thinking is that our mental health and time is more important than money and that many live on a lot less than £1400 per month after housing costs , but I get the feeling that many on here feel it's an existence rather than living and that's why I was interested in hearing of the experiences of those who are retired , as a couple, on a state pension .

We each put £400 into a joint account monthly and that pays all the bills (utilities, council tax, insurance etc) and buys the food and everyday household stuff. It builds up enough to cover annual bills like boiler maintenance.

All the essentials in fact.

What’s left of our pensions is our own to spend on clothes, hair, going out. The frills.

It doesn’t feel like a frugal life at all. We have everything we want. I suppose it depends on what you’re used to.

From experience I can tell you that state pension doesn't go far but I manage on a single state pension (and you would have two) and run a car. I don't spend money on clothes or regular holidays and I don't waste 'stuff'. It was a huge shock to me after earning a really good salary to come down to pension (my private pension company folded) but I manage. I have to.

We have just paid £150 road tax for our small car and from next year there will be MOT as well as service, tyres etc. and insurance increases every year for car and house also our water rates have just gone up again and we expect council tax to do the same, do figure in all these sort of expenses when you work out your budgeting. It also costs more for gas and electric than previously, £90 combined each month and there are only 2 of us. Good Luck

Surely it boils down to this for everyone....... do you really want to ‘live’ a very frugal life watching every penny, unable to be spontaneous with your money as it is all accounted for in advance?

It doesn’t sound a very attractive proposition does it?

We all know the old saying that money doesn’t buy happiness and up to a point it’s true, but to condemn ourselves to an impoverished old age is a pretty miserable proposition isn’t it?

You have to take into consideration any repairs and maintenance you may need to your house. it is recommended that you paint outside every three years and inside every five years, you would be sensible to get your electrics fully checked over before you retire so there are no unexpected expenditures. Depending how rural you are would it be cheaper to give up the car taking tax, insurance and running costs into account ands a community bus if you have one or a taxi once a week. worth working out before you commit to anything.

My husband had to retire at 57 because of increasing deafness. I had never worked and was unable to find a job. So we sold the house and bought a smaller one in a cheaper part of the country. Invested the money. Interest rates were higher then. He paid voluntary contributions so would get full state pension at 65.
We enjoyed the outdoor life camping and caravanning and a simple life. for ten years until my husband sadly died.
I am now 98 and manage very well on the state pension plus pension credit guarantee( because I have a little savings) and lower Attendance Allowance. I am able to employ daily help for the tasks I cannot manage.
I am not ashamed of living off the state because we both spent the wartime years fighting and getting wounded for our country.

Since retiring because of covid, heating and food bills have just shot up. However, I pay a lower premium for car insurance as the mileage is lower but it doesn’t cover the cost of the electricity hike.

Sandytoes, do look at your pension forecast carefully, it is only a forecast. I was forecast a full pension if my contributions continued at the same rate, £175 ish, in the following paragraph the forecast read... that if I stopped paying NI I would expect £134 per week! I thought I would retire early and like you I had worked from being 16 but I had been in a local government pension scheme, contracted out, and hadn’t paid enough NI contributions. I was made redundant 8 years ago and have paid Voluntary NI contributions and worked part time. Don’t forget that if you take a part time job you may not earn enough to continue paying NI and therefore will have a shortfall. Do talk to government pensions people they were really helpful. Good luck, I hope everything pans out for you both.

I wouldn't be in a hurry to retire if I didn't have to. My job disappeared when we sold our business at the end of 2019. My DH will retire this coming April aged 70+. We have ensured that we good pension plans to top up the state pension (which neither of us at 69 and 70 have yet drawn) as we could not possibly enjoy the travelling (hopefully to return after this pandemic nightmare is over) and other leisure pursuits on the state pension alone.
I would also fully endorse always having an emergency fund for the unexpected but inevitable repairs and replacements.

Check pension credit , had this situation 10+years ago even if it's only a small amount opens up other benefits.
It's your right you have payed in for this.
Many years ago in your situation given this advice did the deal for us, also don't listen to the but gang do it after all its your business

Some costs decreased when I retired; I didn't need 'smart' clothes for the office and meeting people, and our petrol bill dropped. Heating bills went up of course, but we also found we were doing lots of things ourselves that in the past we have paid others to do because we felt we didn't have the skills, time and energy. We have quite surprised ourselves in what we can do. It's difficult to work out what someone else needs in terms of finance - I have friends who have lived comfortable lives with a car and holidays on a lot less than our working income, and others who were constantly complaining of being hard up when I knew that they could have bought and sold us easily. The best suggestion I have seen on here is to have a practice run. A month or two living on the income you would have will give you a clear picture.

I do know someone who did this - they moved from a more rural (lovely) house to a much smaller terraced house in the nearest town (which cost the same money!) BUT they've been able to give up having to run a car and live not very far from a supermarket, doctor's surgery, etc. They live very frugally (their holidays are visiting other people), money is a constant issue, and I'm not sure that I would like it. She did "confess" to me recently that she had come to realise that they had both retired too early (and is, in fact, now looking for some paid work). But it has to be an individual decision (of course).

We're managing for bills and weekly shopping on both our basic state pension. But it doesn't run to Christmas and birthday presents for close family, clothes, household items that need repair or replacement, our cars, take aways, holidays etc.
We have savings and have spent at least 8k on levelling the garden (there was 15 different levels here in a small garden) building a shed, entertaining family before lockdown, power tools, new white goods for kitchen, etc etc.
You definitely need to stick to a budget and have an emergency fund. I'm also decluttering and selling on eBay as a hobby which helps in a small way.

Think really carefully about this. Is there the option for one of you to stop working initially or for you to both reduce the hours you do at work ? The sad reality of life is death and if you both left work, one of you died the other would be on a very reduced sum to live on and would make a sad situation increasingly difficult due to lack of money.
Do not consider a static / park home. These seem like a good option but annual fees are usually high and there are other restrictions too.

@lolee

How on earth do you live just on state pension AND save AND invest?!