/ Money

So, we’ve never had it so good?

‘Let us be frank about it: most of our people have never had it so good.’ So said Prime Minister Harold Macmillan back in 1957, the year Which? was founded. But does it still hold true today?

On the one hand, in the 55 years since Which? launched, real household incomes have doubled, home ownership has soared and people are living longer than ever before.

The average UK household had a gross weekly income of just £18 in the 1960s, which equates to around £323 in 2010 prices. By 2010, however, the average household was earning £700 a week.

On the surface our standard of living has increased over the years. In the 70s, 52% of households owned a car or van, compared with 75% this decade. I was surprised to find out that just 30% of households had central heating in 1970, compared to the 96% who had it by 2010. By these measures, it all sounds rosy in the consumer garden.

Standard of living in reverse gear?

But on the other hand, we consumers now owe a total of £1.5 trillion, which puts debt at its highest level since the 80s. The amount we have to spend on anything but essentials has dropped to its lowest in over twenty years, while housing costs have hit record highs and food has been increasing in price faster than inflation in recent years.

Gazing back to 1965, housing costs made up 14% of our total expenditure. Today they account for 24% of our budgets and this looks likely to grow to more than 28% by 2030 due to rising rent costs and recovering house prices.

In a seemingly positive development, in 1965 people were spending much more of their income on utility bills – 5.6% as opposed to around 4.3% in 2012. However, most of us will be all too familiar with the recent increases in energy and utility bills and spending on these items is due to increase further: by 2030 it’s forecast that we’ll be spending a painful 6% or more on energy and utilities.

Feeling the squeeze

It’s a similar picture for food prices. While food costs as a proportion of our income are lower today than 50 years ago, they’re now rising again. Food price inflation is a major concern for you with 75% worried about rising costs according to our latest Which? Quarterly Consumer Report.

After years of telling ourselves that our standard of living has risen constantly, could the current generation be the first in decades to see these advances go into reverse? Or have we been living beyond our means for years, with the overdue collective credit card bill only now hitting the doormat?

How are you feeling about your own finances – are things better now than they were in previous decades or are you still feeling the pinch?

Comments
Guest
Sophie Gilbert says:
15 September 2012

Thinking about it, all things considered, keeping a sense of proportion, maybe we could say that most of us have seldom had it so good?

Guest

Not sure, I mean the amount I spend on my broadband connection and mobile phone service has skyrocketed compared with 1957.

Eating habits have changed too with more people buying prepared meals, more exotic foods and more wine and other drink for home consumption.

Guest

Let’s be honest, measuring happiness by how many material goods we have is not a good barometer. It has all been provided on credit. That’s it, now the credit boom is over, everything is contracting, except the salaries of the very rich.

So yeah, chin up eh?

Guest

It depends – when Macmillan was PM – Health care was free from cradle to grave – My parents were not forced to pay for anything – now it isn’t unless you are already a pauper – because if you are elderly and have a chronic illness – you will be forced to sell your house and all your assets to pay for care – even though you have already paid for your health care through NI. Nor were there food banks or “free breakfast clubs” in poverty stricken areas.

I was earning far more then with my own company. rather than being a teacher now.

Guest
Florriebunda says:
23 September 2012

Hi Richard
I do think you share a common misconception re NI. Unfortunately it is named badly as it is not insurance ie pay now and benefit later. The money we and our parents paid in NI contributions was spent as it went into the NI coffers. Just as it is today. The purse is empty.

Guest

Sorry – It is Called NATIONAL INSURANCE from the beginning – and when I started paying it in 1948 I was assured that it was payments I paid for welfare benefits UNTIL the day I DIED – Quote “FROM CRADLE TO GRAVE”, You are being misled by Tory propaganda. The fact that the governments misused MY payments has nothing to do with the contract. They PAY – Just like the BANKS who mis-sold PPI.have had to pay it back. Unless you buck up we will only have a private health service.left. The purse is not empty – there are vast sums paid to the rich for being rich and overseas aid…

As I said my parents HAD free care from cradle to grave – I demand it too.

Guest
Florriebunda says:
24 September 2012

Good morning Richard
I found your reply most interesting as I too am a retired teacher who thought I was reasonably well paid- I was never owned a company though.
I agree about overseas aid – we are out of date in supporting fast growing economies from what was the third world. However I think 1. Cradle to the Grave could be a media quote – not sure – do you know who FIRST said it? and 2 I always understood the phrase to mean that benefits were for people of all ages – young to old. I don’t think i meant that benefits would be paid for ever and ever to everyone. It goes without saying that no government can make promises for future ones – things change, much as we’d like them to continue in the same way that we find comfortable.
You might find the tv programme presented by Andrew Marr last night on the BBC worth considering – for the reality of what life is really like for the majority of the world’s population – not just our pampered bit of it. Oh and by the way, you talk of demanding your benefits Really ? You have had and still are enjoying being subsidised by young working taxpayers – what are you GIVING to those who are paying the price for pensioners??

Guest

Sorry Richard. It’s not going to work. You have been let down by Clement Atlee and his Labour government by making promises that neither the last Labour government or our current government could possibly fulfil.

The average life expectancy of people is much longer than it was just after the war and the medical treatment available through the NHS is very much improved. Coronary bypass, cancer treatment, MRI scanning, and so on. The amount spent on drugs is phenomenal. I have the small 1977/8 issue of the British National Formulary, the list of drugs available to GPs and hospital doctors. I have sometimes compared this with the current issue and the difference is amazing. Most treatment is free under the NHS, though the price of a few novel drugs makes the cost prohibitive. I don’t expect that doctors had much to offer those who were suffering in Atlee’s era.

Long-term care is expensive. A friend’s father is in a nice care home and the fees are around £1000 per week. At present, the costs are being paid from his assets, including the money from sale of his bungalow. He and his late wife were not extravagant, so hopefully their assets will be sufficient to pay for his care.

I cannot see a practical alternative to the present system, whereby the assets of someone going into long-term care are used to fund it. Even those who have made no effort to plan for later in life or who have not been able to for good reason often own a house, the sale of which could help fund care.

You are concerned that the NHS may fail, leaving us with private medical care. If the government had to fund long-term care that would happen very quickly. What is wrong with people using their assets to pay for care homes? After all, it would not be very fair for young people who can’t afford their own house and are struggling to make ends meet to foot the bill so that the elderly can have care and keep their assets.

Which government will pay for ‘cradle to grave’ welfare and how will they fund it?

Guest

Florriebunda

Lets see – I run adventure programs mainly camping for children – I run Budget programs for an OAP club – I run a computer club for the OAPs and all ages – I run a photographic club for all ages. – I sometimes run dog training classes for all ages – I run Maths and Science and IT coding tutoring for students who are struggling. While I taught I also ran similar clubs – excepting budgeting and dog training – for my school.

All for free I never ever have charged,

Now what do YOU do?

Guest
Florriebunda says:
25 September 2012

Good morning Richard
We could clearly benefit from more people doing voluntary work – as you and I – both pensioners – do. You are an asset to your community. cI agree with some of your views about the what is happening in this country – however knowing what is happening is not the same as changing what we don’t like. My final question for your consideration is Where is the money coming from? You said in your first comment that ‘there is plenty of money……..’. If this is the case why are we printing money? Not being privy to cabinet meetings at Number 10 I can only form my opinions on what is made public and it seems pretty clear that along with most of Europe we are in debt. Billions, Richard, billions. So my original question still stands where does the money come from – who pays for these long living ‘oldies’ ? More debt ??????? Heaven forbid !!!

Guest
florriebunda says:
21 September 2012

As a pensioner I’m having to take care about money. I was ‘comfortable’ but because my spending is on items that are increasingly more expensive ie food, utilities I am feeling the pinch as I’m sure are thousands of us in similar circumstances. I don’t take holidays; buy clothes rarely; have no mortgage and so on. However, depite rising costs, I am spending less on food and essentials because I avoid supermarkets now. There is no temptation to mpulse-buy non- essentials and the quality of my food is much, much better. I buy fresh, organic food on line from Abel & Cole and pay 99p for delivery. Superb service, quality and value. An unexpected benefit is the challenge of finding recipes I’m not used to for the veggies i wouldn’t normally buy but which come in my vegetable box. i’d recommend this way of shopping for oldies, and working Mums too – delivered to the door. A friend of mine buys a veggie box every week for her son who is at University. It costs her £10 approx. and his house mates are all agog waiting to see what he gets ! He cooks fresh food and his friends are envious while they resort to take-aways and ready meals or snacks – which cost the earth by comparison. Food for thought !!!!!!!

Guest
Florriebunda says:
24 September 2012

Richard
I too do a lot of voluntary work – unpaid like yourself- for literacy programmes; fund raising for holidays for folk who are needy and have families with problems; the financial accounts for a branch of a national charity; trustee of a community trust which is an active job several days a week – BUT I’m not aware this is a competition as to who does the most . I feel your answer sidetracks the main topic we were supposed to be discussing and I prefer rational and considered debate.

Guest

Florriebunda

I don’t know, but I suspect that many more people are involved with voluntary work, often for charities, nowadays. It is certainly better to do this or have a hobby rather than vegetate in front of the TV when you retire. The fact that most people are still fit and active when they retire could support the theory that ‘we’ve never had it so good’. The fact that charities desperately need help might contradict this hypothesis.

Guest

Florriebunda

May I remind you that you were the first to ask what I did to “pay back” – I simply asked you what you do – as previous experience has shown me that many objectors do absolutely nothing for their fellow man. Whereas I have tried to help my fellow man since the age of 10 by various long term charitable acts as taught by my rather good school (such a difference from today’s “me me me ” culture.so beloved of a strange woman)..

I did miss out my work with an adoption kennels for dogs that actually takes most mornings and fostering dogs for those in hospital that cannot afford to pay for their care. So most of my charitable acts are on a face to face basis – just as my teaching was.

My experience shows that help for some charities has seriously declined under the “me me me” culture of the last Tory government. For instance there are some 35.000 children on the waiting list to join the Scouts as too few adults can be bothered to give up an evening for a worthy cause. I was a Scout leader for 30 years.

As for ” we’ve never had it so good” I used to be able to afford go to the Caribbean first class every year for years – until I became a teacher which was far harder work and lower pay.

Now after paying my NI (Welfare Tax) my entire adult working life – to pay for my and others welfare – I find they’ve decided as an OAP I must be reduced to a pauper to have long term health and social care. This ignores that I paid for others to have long term health and social care while I was young and working (my mother and father both had the usual free long term health and social care).- but it is now considered “unfair” on the young that I have assets.(which I had wanted to leave to my children to assist them as I have already done while they were adults) Though in fact the young house buyer has never had it so good as regards finances – It is not my welfare costs that is the issue but the fact the BANKS will not loan them the money (when I bought my house I had to pay a 20% deposit just as now) and the Tory buy to rent initiative and rent regulation caused the housing shortage – not my welfare costs. It is also the migration issues not my welfare costs that causes the problems..

So all in all – I certainly “do not have it so good” as I did some years ago – it is far worse . Which is the topic of the convo.

Guest
gill sheehy says:
23 September 2012

Now retired and thinking on how I can reduce my telephone bill without loosing it all together.

Guest
Florriebunda says:
23 September 2012

Do you have a ‘bundle’ for your phone services ? I have broadband and phone together and pay no more than £30 maximum per month. I use the laptop every day and all my uk phone calls are paid for (I won’t say ‘free’ ) in the package. Changing phones is a doddle – with minor hiccoughs re broadband were soon sorted when I changed providers recently. That also includes my mobile package, which I only use for occasional texts and is kept for emergencies. I have web access on it which I don’t use often admittedly, but I got it because I had no internet for almost a week with my previous provider on my laptop and I need daily access for the voluntary work I do.

Guest

I agree with Florriebunda. I have saved a lot by moving to a ‘bundle’ for my phone and Internet services. Doing charity work was costing me a lot in phone calls so I switched to a tariff that included calls to most numbers and mobiles in the evening and at weekends. Sometimes I have to pay to call mobiles during the day, but my last two bills have been for the standard monthly tariff.

I try to avoid calling expensive numbers such as 084…. which some companies insist on using and are not covered by my tariff. There is usually a geographic number available on the ‘Say no to 0870’ website.

My PAYG phone costs me less than £20 a year because I rarely use it, preferring to ring people on the landline in the evening when we both have time to talk. One friend with an expensive mobile contract and plenty of time allowance will call me back if I ring during the day and hang up.

I’m wasting plenty of money in other ways, and really must get down to sorting out my finances. 🙁

Guest
Robbie says:
24 September 2012

Just read Consumers hits by rising costs of essentials. Where do these percentages come from? they dont reflect my costs. Rent is 61% of my monthly income. Food 20%. Bills take the rest. Savings slow being exhausted.
Admittely i am below the the tax threshold , just. However, im sure the percentage of people in my position is greater than any other income range. When i can no longer meet my obligations then the most obvious things to go are tv lic, phone line, broadband, and mobile. Collectively, this would effect the economy, as whole, with these services receiving less income, theirs costs go up, jobs get axed and so on! Nasty spiral effect shrinking the economy and rising poverty and ills that go with!

Guest

I don’t think it is easy to answer Martyn’s question, but I would like to say something positive about one change that has happened in my lifetime.

In my lifetime, the problems of pollution caused by coal fires, power stations and vehicles have been tackled very effectively. I also have effective drugs that prevent me from having frightening asthma attacks.

I still have problems in city centres, which is why I avoid London and Birmingham in particular. I did not believe that it would ever be possible to produce diesel vehicles that don’t produce smoke, but thanks to particulate filters this is a reality. The worst remaining problem for me is staying in villages where coal fires are still permitted.

It’s marvellous for me and even those who do not have respiratory problems are benefitting.