Monday, 14 November 2016

Financial Post - Pension

So then, imagine the worst has happened and you are now on your own and hopefully, at the right age to be collecting your pension. You may have the full pension coming in or you may not. Other than the first year when extra government payments may kick in, after that, you are probably on your own. Could you cope?

We no longer have a mortgage to pay but if you are in rented accommodation, that might be an added problem, could you still afford it?

The chart below reflects our current monthly outgoings, living a reasonably frugal life but still able to treat ourselves occasionally. The reduction % refers to the amount that going down from two people to one person might reflect. See correction for the figures in my reply to Scarlet:

On the minimum pension there would be approximately £32 a week leftover for savings, treats or other unexpected expences. On the maximum pension, there would be £52 a week leftover. For me, this is a no brainer, the extra would be worth it especially as government is now thinking  about getting rid of the annual guaranteed inflation rate increase to the pension. We all know all the above rise annually way above inflation anyway so the extra pension if not required now, will certainly be needed later on.

As I am a few years away from collecting mine, I hope there will still be a little left over each week though I doubt it would be as much as this!

You may spend less than this each month or considerably more. You may still have a mortgage or be paying rent. You may have credit card or other loans to pay. You might have more than one car, numerous phones, like to sit in your tee shirt and shorts whilst your heating works overtime to keep you doing so. You might love takeaways, drinking out with friends, going away for holidays, buying whatever whenever.

Could you still afford to do so? This post isn't just of interest for those approaching pension time. Anyone can be left on their own at any time for whatever reason. You may be unable to work, have young children/elderly relatives to care for, be living on benefits etc. Would those change, would you be better or worse off?

Either way, work things out to see if you can manage, it takes a great weight of your mind I can tell you.

7 comments:

  1. I love these sort of posts. A quick tally makes our weekly outgoings 97.00 excluding food. We have roughly the same outgoings as yourself but have National Trust/Green Flag breakdown/Pet Plan cat ins/very basic Sky subscription plus 2 small mobile phone contracts. These could all be got rid of. The Sky won't be renewed from April and I'm going back to a basic pay as you go phone when my contract is up. My downfall is food spending. I need to cut this. I need to use up. I need to basically mend my frugal ways!! I have a small NHS pension but have a feeling that by the time I'm 67 they will somehow work this into my state pension allowance no doubt.

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    1. It is about trying to get the balance rightI think, somewhere inbetween managing and enjoyment.

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  2. Thanks for popping by my little bit of the internet! Rest assured Freddie does have his own shampoo but it was just an emergency x

    I've written down our outgoings and they are too high but I'm working on it!

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    1. I often read you especially when Freddie is mentioned, I just love your posts on him.

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  3. Can't remember if I pressed publish when I typed a comment earlier, so am leaving another! Our council tax alone would be almost £30 per week with the 25% reduction, so if you can get council tax, oil, electricity and logs for £18.80 per week we might have to move to Norfolk instead of East Yorkshire!

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    1. Ooops, yes there was an error. I checked and double checked and still felt something was wrong. However, the top box, all in, should read £39.19 per week, an extra £18.39 leaving just £13.61 or £33.61 left over from either pension.Sounds like our council tax is quite a bit lower.

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  4. Due to circumstances I am entitled to a very small pension I was born 1949 but as I am 9 years younger and he was entitled to a pension before me he received an increase in his pension for me as a dependant as I had no income. I now get this pension as it is at a higher rate than the amount of pension I am entitled to.

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