Low Key Engagement - asking people to pay for drinks?

Your friends will absolutely understand! They might even offer to pay for themselves. Don't stress too much on this; I know that you consider paying for everything as etiquette, but it is okay to take a step back and ask others to meet you halfway.

If this is an event you're sending invites to, then I'd say paying for people is pretty standard. If you're framing the event as "we're thinking of hanging out at X pub on X date to celebrate our engagement and you're welcome to join," then I think people will come expecting to pay for themselves. As long as you don't make it an event that you're hosting, which inherently implies footing the bill.

If it is an event you are hosting, you should be covering food and drinks for all that come.

In my opinion, this is an optional event. And if you are choosing to host it at a pub or bar, clearly people will be drinking. If they are drinking, the host should be paying. I'd host something way more casual at your home or somewhere free. Or not have one at all.

I would absolutely take offense. You need to pay.

I would find this as a turn off & would take offense, pay for the drinks, cut the guest list down if you need to. Honestly don't understand how you could host a party at a beer garden and not pay for drinks?

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Like I said it would be a very low key, casual affair with more of a 'come join us at the pub for a get together' vibe, our wedding is a different story though as no one likes weddings where people are expected to fork out for booze!

I don't see the problem with having people BYO for something so low key though? It's not a big fancy sit down engagement where people are expected to dress up and bring cards/gifts etc.

I think you're fine for an engagement party, absolutely.