What do you consider a low income in retirement?

£37,000 was the highest of three rates

Minimum: Single person £12,800. couple £19,900 'covers all your needs with some left over for fun.'

Moderate: Single person £23,300, couple £34,000 'more financial security and flexibility

Comfortable: Single person £33,700 couple £54,500 'more financial freedom amd some luxuries'
www.retirementlivingstandards.org.uk/ for all the details.

Considering how much many working families live on - and with housing costs, I think the moderate rate should be defined as 'Comfortable' and the top rate 'luxury'

I read somewhere that, for a comfortable retirement, a couple would need an income of around £37,000 p.a. before tax.

karmalady

DaisyAnne, what you say is a good way to reconcile the differences between renting and having your own property. Rent equating to maintenance would be a good starting point. Then the add-ons like council tax, food, energy, insurances, running a car for those without very frequent buses or perhaps running a car v paying for taxis (if available) Hobbies, holidays, entertainment

I think it is impossible to come up with a fair figure, we are not automatons nor directable robots, so free will comes into it too.

I don't think you could expect it to cover anything but essentials, and people will always make choices, even with a limited amount of money. We already decide what people need with the benefits system. It must be possible to do the same with a pension.

DaisyAnne, what you say is a good way to reconcile the differences between renting and having your own property. Rent equating to maintenance would be a good starting point. Then the add-ons like council tax, food, energy, insurances, running a car for those without very frequent buses or perhaps running a car v paying for taxis (if available) Hobbies, holidays, entertainment

I think it is impossible to come up with a fair figure, we are not automatons nor directable robots, so free will comes into it too.

CanadianGran

Sorry... getting off topic. If you are looking at yearly amounts required to get by, it would need to be regional. Some areas have very high rent, other remote areas may have higher food and transport costs. Here it is labeled a 'living wage'.

In my area the living wage,(converted to pounds) would be around 25,500 GBP.

I can see why you say this, but I don't think it necessarily turns out to be true. Different areas push up costs in different ways; they tend to even out one against another. The one often quoted is rent. However, people who own their own homes have the upkeep on that home. Those in cheaper rental areas are often in a fresh food desert, so getting reasonably priced good food is an extra expense.

HousePlantQueen

In response to the OP, my first thought is that the single person's SRP should be in line with the personal tax allowance at least, but.given the freezing of said allowances, this may not be a good idea.

The SP+Pension Credit+the bits and pieces which come with it have always been kept under the Personal Allowance. As you say, the freeze makes this interesting. It makes me feel that should Sunak et al., get in again and decide to keep the freeze (raising the tax on both the poor and middle incomes in a rather underhand way), we would not see the triple lock continue. Otherwise, by the time the five years are up, basic SP +Pension Credit could tip some past the Personal allowance.

Joseph Rowntree Trust's conclusion that a single pension needs to be £17,900 (now), takes it well into paying the basic tax. Not that paying tax is wrong in itself, but it is a bit daft to give with one hand and take with the other.

add to that retiring well before state retirement age and world trips. I don`t blame them tbh, knowledge is powerful and there are loopholes

oh dear, houseplantqueen, how dare you call me a liar, I am most certainly not. They are family, we had the conversation, they knew what they were doing. Dont make assumptions about pensions and about how long they worked at hmrc

The harder and longer you work and pay in, the more you get out or what incentive would anyone have to do so, you sacrifice a lot to provide for old age, my husband never had a pension dying at 60 and yet he worked 45 years. There are a lot not working that don't have anything wrong with them. Think the lower rate tax band should have been raised to £15,000 instead of £12.50.

In response to the OP, my first thought is that the single person's SRP should be in line with the personal tax allowance at least, but.given the freezing of said allowances, this may not be a good idea.

Message deleted by Gransnet. Here's a link to our Talk guidelines.

The thing that makes the biggest difference to the standard of living is housing. I live reasonably on my state pension, plus a tiny occupational pension of my own and a slightly bigger one inherited from my husband. I live reasonably because the mortgage was paid off which saved me £400 a month. It would be a very different situation if I was paying rent, especially with the levels rents are reaching now. It is worrying that the level of home ownership is falling. What are all the renters going to do when they are reduced to a pension, or is everyone going to continue working into their 80s and 90s?

Sorry... getting off topic. If you are looking at yearly amounts required to get by, it would need to be regional. Some areas have very high rent, other remote areas may have higher food and transport costs. Here it is labeled a 'living wage'.

In my area the living wage,(converted to pounds) would be around 25,500 GBP.

I worked with a woman years ago who was childless and quite resentful of having to pay for others' maternity leaves, school taxes, child benefits, etc.

Someone did remind her that one day she might rely on those children having the skills and knowlege to look after her in her old age.

Germanshepherdsmum

*DaisyAnne*, what does your suggestion assume? Rent and service charge, running a car, size of house (council tax, maintenance and heating), keeping a pet, holiday (s), any other outings, any group activities, Christmas etc gifts for family, clothes, hair etc???

It was more what the government had been paying. That's the New SP or the old one plus Pension Credit (originally, it was the same amount, but New SP is going up quicker). Then the sort of benefits that Pension Credit can bring with it, such as an amount for Council Tax, etc., and other one-off benefits which are currently paid. The government would be sensible to then run this past, Joseph Rowntree. They have revised their methodology to take account of current conditions and they now suggest that "To reach MIS [Minimum Income Standard] in 2022, a single pensioner would need to have an income of £17,900 per year; the full State Pension provides £9,627 per year ...". I have obviously underestimated.

Please don't try and challenge these thoughts as that is all they are - thoughts for a discussion. I am not handing them over to the government as a ready-made (over-ready?) plan. That is not my intention. However, I do think we need to think about how many people our current pension forces into poverty.

If you want to know how JR calculate this it is here: www.jrf.org.uk/report/minimum-income-standard-uk-2022 Scroll down to the bottom of the page and click on "Full Report"

GSM your high earning lawyers could not function without lower earning office staff and even lower earning maintenance staff. Yet you compare the lawyers only with those who choose not to work, not with their own equally hard working cleaners and caretakers. How do you see the old age of this last group panning out?

Doodledog

Because free prescriptions were meant to ensure that no older people died or became more ill because they couldn't afford prescriptions. They aren't meant to be either a bonus for those lucky enough not to be ill, or a contribution towards keeping those with multiple ailments alive. They are part of the 'strong looking after the weak' philosophy that should, IMO underpin our society.

Indeed! ITA!!!!!!!!!!

Not for those who don't need or are not sickly.

89% of prescriptions in England are free.
commonslibrary.parliament.uk/constituency-casework-nhs-prescription-charges-in-england/
Wales and Scotland decided that the cost to the people who were not collecting their prescriptions because they were unable to pay, and of administering the prescription charges outweighed the cost of prescriptions being free for all. It’s more a political debate than a cost to the NHS debate.

Because free prescriptions were meant to ensure that no older people died or became more ill because they couldn't afford prescriptions. They aren't meant to be either a bonus for those lucky enough not to be ill, or a contribution towards keeping those with multiple ailments alive. They are part of the 'strong looking after the weak' philosophy that should, IMO underpin our society.

But we do in England. The real problems is, that there are many bells and whistles, but not all of us can benefit from them. For example I cannot use a bus pass because I get travel sick on buses, especially local stop/start buses. I am nearly 80 but haveonly started taking daily medication this year, so for years I wasn't able to benefit from free prescriptions. Why not put all these sums together, average them aand then add the amount reached to the basic pension.

We could all then be treated as adults, given a sum of money and make our own decisions about how we spend it. Instead of having it handed out in little ring-fenced quantities as if we are to old, and therefore stupid to make our own decisions.

M0nica

Callistemon I so agree with you, I have been advocating for years that all the bells and whistles should be rolled into the basic pension. It would save a fortune in adminstrative costs.

I would even roll in the cost of Prescription season tickets so that we pay for our prescriptions like everyone else.

No-one pays for prescriptions in Wales, M0nica

I'm not sure how affordable it is.

Norah

Doodledog With your tax structure, who would replace workers who work 70-80 hours a week to provide for their family? My husband didn't work long hard hours, nor did I doing it all alone at home during his hours - for others who choose 20-30 hrs a week.

FTR, I haven't worked outside my home, but he's paid much more than 2 shares of tax and NI - because I did everything home related.

Lots of people work long hours - security guards, for instance, but not everyone gets well paid for doing so. Those who don't get well paid might not be able to afford to have someone at home 'doing it all'.

As you know, I don't believe that anyone can pay more than one share of tax - the system doesn't allow it. Even if it did, tax is structured so that higher earners pay more than lower earners. Both pay the proportion of their income deemed appropriate, regardless of whether or not other members of their households also contribute. Mr Dog doesn't get to pay less because I pay tax, nor I because so does he.

Germanshepherdsmum

So, Doodledog, if I as a high earning lawyer decided to take myself off to Jersey to escape your punitive taxes, which would have been an entirely feasible move when I was working, you would get an immigrant to take my place? I don’t think so. Similarly if I were a CEO or other high earner. People who work 70 hour weeks and earn big salaries don’t do so in order to enable those who decide not to get a more demanding and better paid job because it’s not all about money. They do so for themselves and their families. I would certainly not have worked in your Utopia. I would have taken my talents and money elsewhere without a shadow of a doubt.

Yes, I think at first there would be those who would emigrate rather than share their wealth, but I also think that they would settle down in time, and people would realise that not having so much in their pockets wouldn't necessarily mean that they were worse off. As with much of this sort of thing, the lucky ones are those who don't benefit as much from a comprehensive health system that treats everyone free, and an education system that gives a leg up to those who would otherwise struggle, as they don't need it; but living in a country where those who do need them get them benefits everyone in the long run.

DaisyAnne, what does your suggestion assume? Rent and service charge, running a car, size of house (council tax, maintenance and heating), keeping a pet, holiday (s), any other outings, any group activities, Christmas etc gifts for family, clothes, hair etc???

M0nica

Callistemon I so agree with you, I have been advocating for years that all the bells and whistles should be rolled into the basic pension. It would save a fortune in adminstrative costs.

I would even roll in the cost of Prescription season tickets so that we pay for our prescriptions like everyone else.

Oh yes! Nothing other than a proper liveable pension. No Christmas Box from those at the Big House.