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State Pension Blog: the end is in sight

In the fifth part of his daily blog, Greg Kingston reveals the extra challenge he set himself, and reflects on what he's learnt from the week.

 

by Greg Kingston on Jul 06, 2012 at 08:59

State Pension Blog: the end is in sight

Greg Kingston (pictured), along with 100 of his colleagues at pension provider Suffolk Life, has accepted a challenge from his employer to live off £70 a week. That's how much charity AgeUK says a typical pensioner has left after bills, council tax etc. Here's yesterday's blog in case you missed it.

I started this challenge with a good deal of confidence. Despite living what I consider to be a very good lifestyle, I also believe that I keep an excellent grasp on my finances. I’m a saver at heart.

Upping the ante

Yesterday I promised you a surprise, and here it is: I quietly set myself a stiffer challenge than the one the organisers set out. All through this week my £67 budget has supported not only me but also, to a large extent, my partner.

Out of that budget we’ve cooked and eaten all our evening meals together, and she’s made her lunches out of the food I bought too. Her only advantage was to be able to add some additional ingredients to spice it up a bit.

So, with planning and discipline – setting out a plan for meals during the week, and sticking to it – I’ve been able to feed one and a half people this week instead of just me. I’ve only bought what’s necessary and cut out snacking, but I've also taken the time to enjoy myself when I thought I could afford it.

By the time you read this I will already have started my last day. I have £7.22 in my pocket – the same amount I had on Wednesday – and that, barring any extraordinary mishaps, will comfortably see me through to the end of tonight, when I can choose whether to enjoy a drink at my colleague’s leaving bash.

Success or failure?

In some respects, the week has been successful. We can argue endlessly about what parameters the challenge should have had, whether the £70 budget was correct and so on: that’s not important. I was given £70 for the week, had it reduced to £67, and if I choose not to go out after work tonight I’d still have more than 10% of my budget remaining.

In the week before this challenge I spent nearly four times at much.

From another perspective, the week has been less successful. I really wanted to end the week with £15 remaining. Saving that much every week, I told myself, would be sufficient to cover things such as new shoes, haircuts and other necessary costs over the longer term. I didn’t manage that, although it would have been possible by cutting out the cinema, popcorn and the bottle of wine I bought at the beginning of the week (which although opened remains unfinished).

Back one last time

I’ll be back at the beginning of next week to complete the comparison of my 'retired' life versus my working life. When I write I will have considerably more respect for those who do get by week after week, month after month on such a low fixed income.

They have many of their choices taken away from them, and for those they have remaining there’s likely to be a queue of people waiting to offer differing opinions on what they should do.

Further Reading:

For more information on this topic you can look at the following:

12 comments so far. Why not have your say?

Hotrod

Jul 06, 2012 at 13:25

@Greg

How are we supposed to take you seriously, as a representative of the financial industry.

You call your latest revelation a "SURPRISE" I consider you "LIED" to us at the outset.

Typical smart ass behaviour by your brigade.

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Greg Kingston

Jul 06, 2012 at 14:09

Hotrod,

I admit I'm a little taken aback by an accusation such as that, but you are of course welcome to your opinion. There are well over a hundred of my colleagues that have been taking the same challenge, and I guess each of us in our own way has wanted to get different things out of this week. For me, I wanted to stretch myself by making as few adjustments to my lifestyle as possible. That includes a treat of going out, and also includes not wanting to cook separate meals for a week. We both work long hours and like to eat together at the end of a day and, as I believe I explained earlier this week, I normally do all the cooking.

Opening up a window on my life, even without signifincant detail, for a week like this was always going to result in some interesting comments and feedback. It has been refreshing to read some of the constructive feedback and comments - if I'd known in advance the advice offered I would have done some things differently this week for sure.

I hope your view isn't representative of everyone reading the diaries this week. The challenge is genuine, as are my words reporting it. You may have also seen this challenge reported in The Guardian earlier this week: http://www.guardian.co.uk/housing-network-eac-partner-zone/70-pounds-for-7-days?INTCMP=SRCH . My employer, Suffolk Life, is part of the L&G Group.

I hope you'll keep reading long enough to catch my last blog next week, when I compare what differences there are between my working life and my 'retired'. I've been doing some calculations today and there are some really interesting conclusions to be drawn.

Greg

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Adrian Boulding

Jul 06, 2012 at 14:53

Greg, well done on your restraint and for providing such an enjoyable blog. What the exercise does show is that even a small amount of pension saving would have made a real difference, perhaps allowing you to buy your departing colleague a drink tonight. And that’s encouraging for those starting out on auto-enrolment in October, as some of them will end up on State Pension plus just a few years of rather low auto-enrolment level savings. Even that little pension will make a difference. Regards, Adrian

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Hotrod

Jul 06, 2012 at 15:39

@Greg

Thank you for your reply,

My main objection to the manner in which you conducted the test was that you failed to tell us that you are in fact living in a relationship as a couple.

Domestic finances are entirely different for single people living alone to that of two people cohabiting. e.g. When you went to the Cinema did you share your tub of popcorn with your partner. You didn't even give her a mention at that stage.

If you fail to make this distinction on official forms you could leave yourself open to prosecution.

In my opinion you should have conducted the test as a couple, and been given a couple's allowance. As it was you gave the impression, at the outset, that you were trying to make a comparison between the lifestyles of a young bachelor and that of a retired single person.

You must accept that pensions and other allowances for two people living singlely are greater than that for a married couple, because, as you have demonstrated, it works out more economical to share fixed expenses and buy and cook food for two people, than it does for one.

As a single person I try to get round this problem by cooking for more than one day at a time, but it is not always possible because I cannot take advantage of special offers and BOGOFs in the same way that couples can.

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Inge Jones

Jul 06, 2012 at 15:46

I have enjoyed the discussions too, except that a couple of people have been a bit ruder than was really required. But anyway, it was great to have some food for thought about the various pension scenaria and their ramifications, which people with different experiences were able to bring.

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Alan Morrice

Jul 06, 2012 at 16:23

Greg,

Have you managed to drum up new business from your blog?

We trust that after this week's learning experience you'll be explaining to your prospective clients how having a not-so-small pension will adversley affect their future benefits in retirement. That the annuity bought by a saved lump sum of say, £100,000 will disqualify the pensioner from benefit he/she would otherwise receive by right and that they'll be not a whit better off than someone who saves nary a penny?

Some IFAs do give this advice. Unfortunately many do not.

Best of luck in your new journalistic career.

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The Wills Man

Jul 06, 2012 at 16:42

Well done Greg.

My "in laws" retired some years ago expecting not only a good pension, (they had both worked for the same company and contributed extra to the pension scheme), but also a lump sum to pay for the "holiday of a lifetime".

Sadly, due to various factors that are now well known, they ended up with no pension and no lump sum.

Although the family clubbed together for the holiday, (already booked), they had to live on the state pension until my father-in-law died. That was hard enough but MiL found it a real struggle on her own when she had to employ tradesmen to do all the little DIY jobs that crop up from time to time. £70 can disappear in a morning and takes months to replace with such a small amount that can be saved each week. Factor in items such as washing machine or cooker that have to be replaced from time to time and it is easy to see why so many pensioners can never afford the little "luxuries" of a night out or holidays.

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Michael Hellman

Jul 06, 2012 at 21:02

By having a flat pension rate for all, no means testing, the 'average' person should benefit from their pension savings, which is clearly not the case now.

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vod

Jul 07, 2012 at 10:26

Interesting.

Didn't see much put aside for council tax, water rates, electricity, gas, house insure, though. Maybe rent too.

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ruth karp

Jul 07, 2012 at 10:48

Unfortunately I am now a widow, living alone, my property still has the same

outgoings, maintance, heating, lighting etc.. I get a 25% reduction for

council tax... a very tiny increase in state pension. Good thing we did

not rely on insurance pension plans etc.. Just planned carefully to be able

to live a comfortable lifestyle

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ljmuk

Jul 07, 2012 at 12:33

Greg

Wonder where you get your calculations from?? I am a lone pensioner and get a pension of £114.50 per week. My outgoings are £250 per month!! (Council tax, fuel, house insurance, phone line, TV Licence, central heating cover) This leaves me with about £56.50 per week for food, outings, clothes, house maintenance etc. I am still working and expect to work until I am 70 when my works pension will hopefully pay me another £200 per month. If I stopped working now, I would be on the breadline. Are you suggesting that I don't insure my central heating, get rid of my TV, don't insure my house????

If I included the cost of running my little car, I would not even be able to eat!

So in order to live on the state pension, I have to give up all life's pleasures??

Also - I own my own house. What about people who have rent to pay??

You are living in cloud cuckoo land!!

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Trish Davies

Nov 16, 2012 at 11:59

I've enjoyed your blog and thank you for the effort you made to 'live on a pension' . You have helped to highlight some of the issues. I would so love to retire soon but I'm still trying to work out how to live on such a low income ~ consider how it will change my life and how to make the best of it.

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