Now that I’m 60 and not far off joining all those folks unjustly branded ‘economically inactive’ by Chancellor Hunt, I’m spending more and more time pondering how the hell I’m going to survive once I only have a state pension to live on. I guess everyone approaching retirement goes through this process but as the newly inflated council tax bill has just hit the doormat, then it doesn’t take a rocket scientist to figure out that the current state pension isn’t going to go far.
As Dishy Rishi is so fond of maths then let’s crunch a few numbers to put things into perspective. I find it easier to think of state pensions in terms of pizza.
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| Super Supreme from Pizza Hut - my favourite |
Full
state pension as from April 2023: £10,600.20
per annum
Assuming you qualify for a full state pension and you have NO other income sources then this is what you’ll have to live on for a whole year, the full super supreme state pension pizza. Divide this into 12 portions (months) to give you a monthly wedge worth £883.35.
Now lets compare the full super supreme state pension pizza to the mighty meaty employment pizza. Pizza Hut vs Domino's.
For working a 20-hour week after tax and deductions, the mighty meaty employment pizza wedge is worth £997. Not bad I hear you say but not that great either. To maintain my current un-frivolous non-smoking, non-drinking, non-golfing lifestyle on a state pension I’d have to find £114 from somewhere if I want to continue to enjoy the same quality of life/pizza I have now.
Now let’s see if my full state pension is going to cover all my fixed household bills for the year. I’m using this year’s bills for this example starting with the new council tax bill.
Chichester District Council Band D council tax of £2,081 (recently increased by over £300 from last year) is almost 20% or a fifth of the full state pension. How much? Not something I’d really given much thought to previously but that's like having Domino's delivered with a big chunk of pizza missing. If pension income remains fairly static over the coming years, what happens when council tax gets to be 30% of your annual income or higher?
After paying off the council, I would have £8,519 of state pension to cover the rest of my household bills which before this years’ inflationary increases are currently:
Gas
& Electricity £2,440
Water
£66
Sewerage £143
TV
Licence £159
Broadband/House
phone £312
Total £3,120
Once utilities and household essentials have been paid for, annual pension income is now down to £5,399 before taking into account all those other monthly expenses of life in general. Approx half of my annual state pension pizza will disappear on bills alone.
Ah but wait a minute, we still have compulsory buildings insurance to deduct, the annual cost of a mobile phone and costs of running a car to take into account. Not to mention Netflix or other subscriptions. Slice off another £1,000 from the pensions pizza.
Kerrching! You’re now down to £4,399 or £366 per month/£91 per week to live on for the year. Your super supreme state pension pizza when divided into portions is now looking like this picture, your slice is the purple bit.
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| State pension pizza portion split |
Now you might think that if you live frugally, £91 per week could be a small fortune but not when you consider the cost of food, toiletries, replacement clothes, expensive dental bills, medication for all those aches & pains, grandchildren and even the odd night out at The ‘Spoons has to come out of that never mind things like holidays or emergencies. So just when you thought you still had a tasty, decent sized bit of pizza all to yourself - you realise what you're actually left with is just a few mouthfuls.
Remember £91 is what I’ll have to live on, when you do your own sums it could be even less.
Looked at from this perspective, the thought of just living on a state pension is bleak. There’s little financial scope to do anything much other than exist let alone play golf but I guess this is the future for anyone who has not made provision to fund their retirement from anything other than a state pension. I’m willing to bet millions of people currently fall into this category. Thankfully I'm not one of them.
Most certainly, this is the ghost of Christmas future I don’t want turning up in my own old age Christmas Carol! Without continued employment, private pensions or savings to tide you over, these days retirement is not something that many over 60’s can possibly contemplate. Like everything else in this life, it seems retirement is now becoming only for the rich or well-heeled middle classes unless you’ve saved up all your pocket money since the age of 5.
As I’ve always said ‘life is shit and then you die’ resulting in an inheritance tax windfall for the Treasury. After more than 40 years of continued employment and tax paying, this government can only show its appreciation by labelling people like me ‘economically inactive’ instead of wishing us a long and happy retirement for all those years of servitude.
Old
age – it’s a bummer!
