Cost of living · Fictional household · England · 2026/27
Owning outright: what is left each month?
Paul & Stacey (69 & 67 · retired · own their home outright). In this example £2,692 comes in each month and £1,425 goes on housing, bills and debts, leaving £1,267. A fictional household, built from 2026/27 rules and stated assumptions.
Evidence last reviewed 29 October 2026
Who they are
69 & 67 · retired · own their home outright
Meet Paul & Stacey
No mortgage buys room to breathe. The house still needs looking after.
Paul and Stacey have paid off their home. Both are assumed to receive the full new State Pension. Paul also has a £6,000 annual private pension and Stacey £3,000. Their pensions pay the bills; the value of their house is not counted as spending money.
A month in pounds
England · 2026/27 rules · fictional household · every line is listed below
Left each month
£1,267
Still to cover leisure, holidays, emergencies and any saving.
Money coming in
- Paul · pensions after taxFull new State Pension at published rate + assumed £6,000 private pension; income tax deducted
- £1,446
- Stacey · pensions after taxFull new State Pension at published rate + assumed £3,000 private pension; income tax deducted
- £1,246
- Total
- £2,692
Housing and bills
- Rent or mortgageScenario assumption
- £0
- Food & household shoppingScenario assumption
- −£420
- Energy & waterScenario assumption
- −£200
- Council taxScenario assumption
- −£180
- TransportScenario assumption
- −£180
- Phones & broadbandScenario assumption
- −£65
- Home maintenance reserveScenario assumption
- −£200
- Clothes, insurance & other essentialsScenario assumption
- −£180
- Total
- −£1,425
Debt repayments
- None
- £0
- Total
- £0
What would change it
Compare them with Zoe: a second pension and no rent change the monthly arithmetic. But this budget has no paid care; needing it would change the picture substantially.
What Budget 2026 could mean for them
These are announcements with dates and conditions, not money already in the budget above. None of them is added to Paul & Stacey’s month.
Household Energy Payment
£100 off council tax from January 2027 if their home is in bands A to D.
As announced: Household Energy Payment: £100 council tax rebate for bands A-D from January 2027. Who it covers: Payment: households in England in council tax bands A–D, up to 20 million of them; the devolved governments receive a Barnett share and decide its use. VAT cut: domestic electricity across the UK..
Support for Energy Bills
No VAT on electricity from October 2026 to July 2027.
As announced: Support for Energy Bills: Cut VAT on domestic electricity from 5% to 0% from 1 October 2026 to 1 July 2027. Who it covers: Payment: households in England in council tax bands A–D, up to 20 million of them; the devolved governments receive a Barnett share and decide its use. VAT cut: domestic electricity across the UK..
Pension Tax Allowance
Pensioners with income up to the new State Pension pay no income tax. Their private pensions take them over that, so it does not help them.
As announced: Pension Tax Allowance: Remove the income tax liability for pensioners with total income up to the value of the new State Pension from 6 April 2027 until 5 April 2030.
The Treasury’s average, shown separately
The Treasury estimates households in income group 3 of 10 (1 is the lowest) gain about £70 a year on average from Budget decisions (2027-28), counting tax, benefits and public services. That is an average for households with a similar income and make-up, not Paul & Stacey’s own gain, so it is not added to their month.
Assumptions, workings and sources
Assumptions. Both are assumed to qualify for the full new State Pension; that is not automatic from their age. The private pensions (£6,000 and £3,000 a year) are invented amounts. No paid care, disability benefits or work. Savings and the value of the house are not counted as income. £200 a month is set aside for repairs. No debts.
Benefits and support. Their combined pensions are well above the Pension Credit guarantee level, so none is included; no other means-tested support is assessed.
What is official and what is assumed. Pay after tax, National Insurance, workplace pension, student loans and benefit rates follow the 2026/27 rules for England (official statistic, checked 2026-10-29). Every line marked “Scenario assumption” is an amount chosen for this example. Paul & Stacey are not typical of any group, and one example cannot show how a whole group is doing.
The workings, to the penny
| Line | Exact amount |
|---|---|
| Paul · pensions after tax | £1,446.01 |
| Stacey · pensions after tax | £1,246.01 |
| Total coming in | £2,692.01 |
| Rent or mortgage | £0.00 |
| Food & household shopping | −£420.00 |
| Energy & water | −£200.00 |
| Council tax | −£180.00 |
| Transport | −£180.00 |
| Phones & broadband | −£65.00 |
| Home maintenance reserve | −£200.00 |
| Clothes, insurance & other essentials | −£180.00 |
| Total going out | −£1,425.00 |
| Left each month | £1,267.01 |
Sources
- HMRC income tax allowances and bands
- HMRC National Insurance rates
- DWP benefit and pension rates
- HMRC Child Benefit rates
- Workplace pension contributions
- Student Loans Company: how much you repay (2026/27 thresholds)
- HM Treasury, Impact on households: distributional analysis to accompany Budget 2026
- How the cost-of-living model works