Pensions will never be sexy. A pension makes you lock away cash that you could be spending today on cars, holidays and school fees, to pay for a future that may never happen. About 12 million British adults are relying on the State to fund their retirement. Some can’t afford to save. But too many others believe that the state safety net will be adequate and choose not to save.
The Times Money team decided to put the state pension to the test by living on it for a week. We are seven, ranging in age from 23 to 50, and our hobbies and interests are somewhat different from those of the average pensioner. But a week on the state pension will give us a hint of what life will be like if we don’t save now for those distant retirements. Gordon Lishman, director-general of Age Concern, predicts that we will struggle: “Rises in the cost of living have outstripped increases in the basic state pension, and in the daily struggle to make ends meet many pensioners are forced to sacrifice simple pleasures to meet their rapidly rising bills.”
Before starting our experiment, we asked two real pensioners how they feel about coping on severely limited incomes. We spoke to friends Sybil Reid and Madeleine Kekwick, who met at the Southwark Pensioners Centre in South London.
Sybil, 69, lives alone in a three-bed council house. She gets by on nearly £120 a week. A divorcee, she has six children and eight grandchildren, all of whom live near by.
“Tony Blair and Gordon Brown should try living off the state pension, then perhaps they might raise it,” she says. “I get by mainly because of my children. When my brother died in Barbados they all clubbed together to pay for my air fare and spending money so I could go over for the funeral. I missed my other brother’s funeral because I couldn’t afford the flight.
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“I raised the children on my own. I worked part-time in between, cleaning and nursing, but paying for the bus fares and lunch money of six children cost more than I was earning. I would like to give something back to them by treating my grandchildren with presents sometimes, but I can’t afford it. The most I could manage was to give the twins £10 each on their birthday.
“I come to the centre three times a week for line-dancing, singing and Pilates, and I spend about £50 a week on food. If you include things like soap powder and washing-up liquid it looks more expensive. But I like to buy good quality washing-up liquid — it’s is better for your hands.
“London is expensive for pensioners. I have lived here for 40 years, I worked hard, I put money into the system. But I feel that as a pensioner I have no rights.
“I am very nervous about the cost of long-term care if I should need it, and I hate the idea of going into purpose-built flats where they coop you up like chickens. The people in those places seem so lonely and unhappy, like they are dead before they die. But as a Buddhist I’m hoping for some good karma.”
Madeleine, 76, also lives alone, in a ground-floor, one-bed flat that she owns in Peckham, southeast London. Her state pension allowance is £77 a week. On top of this she receives a small amount of extra cash from a company pension. She has two children, both in their fifties.
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“Because I have an allotment I don’t have to buy fruit and vegetables, which keeps costs down,” she says. “I can’t afford to spend £10 or £15 in a restaurant but sometimes, when my friends come over, we go to Soho to one of those all-you-can-eat-for-£5 Chinese buffets. You can eat enough to keep you going for the whole day.
“I don’t smoke or drink. Sometimes in the summer I treat myself to a glass of shandy. The centre is really important to my social life. I go to t’ai chi on a Monday, singing on a Wednesday and Pilates on a Friday. I’d love to go to the ballet or opera but £25 is too much for me. If there is something that I really want to see, I go very early in the morning to a booking office near Trafalgar Square, where you can get tickets to see shows that night for £5 or £6. I went to see The Marriage of Figaro this way.
“I don’t often go on holiday but sometimes I fly to France on Ryanair to see my sister. I am nervous that they will raise the price of flights because of pollution. Only rich people will be able to fly if they do that.
“It’s difficult to get by and it’s getting worse. I had a cataract operation recently and I was supposed to change my glasses afterwards but I couldn’t afford a new pair — they cost more than £100. Council tax is horrendous, too. It costs me £60 a month.”
()Would we self-elected guinea pigs manage to scrape by like Sybil and Madeleine, or would even surviving temporarily as pensioners prove beyond our powers? Here is the diary of our experiment:
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DAY 1
Antonia wonders how she will break the news to her husband that they have £68 to live on, between them, for a week. A couple who are entitled to a state pension and the means-tested pension credit receive £174.05 a week, a single pensioner just £114.05. We work out our budgets by adding up bills such as utilities and council tax, and subtracting them from the pension income. Our average weekly disposable income is just £37.36 each.
Rosemary tries to get a head start by going on a mushroom forage — free food! But after two hours and eight tiny mushrooms, she gives up.
Zoë is our first casualty. She spends her entire weekly allowance (£24.34) going out for dinner with friends. After the first glass of wine she convinced herself that she would be so full of nice food that she would need nothing for the rest of the week.
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DAY 2
Zoë’s cunning plan failed. She is starving by 11am. Rebecca manages to overspend her daily budget by £9 after her housemate appears with red wine, while Rosemary is trying to save for a haircut — £21.70 with 30 per cent OAP discount. She opts for Lidl stollen and a cup of tea for supper. This will be supper for the next four nights.
DAY 3
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Antonia suggests a group night out. We find the nearest bingo hall on the internet — the Mecca in Islington. It costs £10 to enter. Andrew points out that we might win, but the Money team bridles at the thought of gambling as an investment strategy and we settle on happy hour at a pub. James stops off to meet friends, telling himself that he will have just the one. Four glasses of sauvignon blanc later, he has just £6 left to last him the weekend.
DAY 4
Rebecca rings her mum, who confronts her with the serious side of our experiment. Her mum has no savings and is only ten years away from living on the state pension. James has a hangover and the prospect of yet another meal of sandwiches. He slips into M&S to blow his budget on a gastropub roast-beef ready meal. Our second failure.
Andrew works out that small acts of frivolity such as buying a pint or going to the cinema no longer cost £2.50 or £8, they cost two fillet steaks and one sticky toffee pudding. Every non-food purchase is a meal forgone.
DAY 5
Gráinne also faces temptation in M&S, in the shape of a pair of patent stack-heeled shoes. They cost £35. She hovers for 15 minutes, then reluctantly puts them back.
Rosemary decides to tackle some DIY to take her mind off wanting to see the new Bond film. She has a blind to put up but can’t now afford a spirit level.
Antonia spends £16 of the weekend budget on two bottles of wine and makes a big batch of lentil soup.
DAY 6
Antonia’s husband threatens divorce if he has to eat one more plate of bloody lentils. Andrew is bored, and Rosemary has only £1.21 left to put towards that haircut. She wonders what pensioners do if they face an expensive emergency. What if the boiler packs up in winter, say? Rebecca invites friends to dinner and spends £7 on wine and food, which takes her over her weekly budget. Three down. Four Money team members are left.
DAY 7
One day to go. We reflect that we have bought no Christmas presents in the past week, no clothes or treats. We have had to deal with no emergencies, just cheap food and boredom.
After a week of trying to run our lives on a pensioner’s budget, we have a profound respect for those who manage on such a pittance. Gordon Lishman says: “It is a disgrace that 1.8 million pensioners live in poverty. Today’s pensioners need help now.”
We realise that working for a living is not so bad, and that entertaining yourself on a pensioner’s budget is extremely difficult. The younger members of the team failed first; perhaps because socialising is central to their lives. The over-25s learnt to love I’m a Celebrity . . . Get Me Out of Here! and counted the days to a life beyond the TV.
Above all, we were glad that we were pretending to be this poor — and aware that we have some huge personal pension pots to build up.
()Lifestyles of the Money Team ‘pensioners’
Andrew Ellson, 29
Lives with girlfriend
Financial weakness: his girlfriend
Normal weekly spend: £275
New weekly budget: £52
Zoë Strimpel, 23
Lives with friends
Financial weakness: Waitrose
Normal weekly spend: £200
New weekly budget: £52
Rosemary Duffy, 50
Lives alone
Financial weakness: chocolate
Normal weekly spend: £160
New weekly budget: £42
Gráinne Gilmore, 31
Lives alone
Financial weakness: shoes
Usual weekly spend: £225
New weekly budget: £42
Antonia Senior, 30
Lives with husband
Financial weakness: eating out
Household weekly spend (excluding bills): £450
New weekly budget: £68
James Charles, 24
Lives with friends
Financial weakness: socialising
Normal weekly spend: £280
New weekly budget: £30
Rebecca O’Connor, 25
Lives with a friend
Financial weakness: smoking
Usual weekly spending: £200
New weekly budget: £36.50
Antonia Senior and her husband’s weekly shop
What we buy in one normal supermarket shop
Bread Wine — seven bottles of red at about £8
Parma ham
Feta cheese
Haloumi cheese
Bottle of extra virgin olive oil
2 Pizza Express pizzas
Apples
Bananas
Grapes
Pears
Basil
Coriander
Rosemary
Thyme
Mint
Garlic
Red onions
Butternut squash
Courgettes
Carrots
Mushrooms
Corn on the cob
Green beans
Celery
Pre-packaged salad
Avocados
Tomatoes
Dried pasta
Pine nuts
Almonds
Olives
Pancetta
2 lamb chops
2 steak
1 organic chicken
Salmon fillets
Dishwasher tablets
Washing-up liquid
Washing powder
TOTAL: £154.25
What we bought in one shop as “pensioners”
2 packs of special-offer mince
Sunflower oil
4 carrots
4 courgettes
1 pack of eggs
6 mushrooms
Bottle of really cheap white wine
Rice
3 onions
Bag of potatoes
Baked beans
Pack of cereal
Cheap bread
1 pack of bacon
Tin of tomatoes
1 pack of cheese
1 jar of pickle
TOTAL: £20.67
Additional reporting by Rebecca O’Connor