How a 75-Year-Old Pensioner Maximizes Savings With £10,700 in Premium Bonds
In our How I Manage My Money series, we seek to understand how individuals in the UK handle their finances, including their approaches to expenditures, savings, and investments, as they work towards meeting daily expenses and achieving personal objectives.
This week we spoke with Liz, aged 75, who resides in southwest Scotland alongside one of her two sons. For many years, she grappled with financial constraints and debts. Liz postponed claiming her state pension for two years and ceased work when she turned 62. Currently, Liz leads an energetic lifestyle in Scotland and believes individuals ought to ponder whether owning a vehicle is truly necessary.
Monthly budget
My monthly income:
State pension, £937.65; pension credit, £35; savings credit: £52.
My monthly outgoings:
Food and home essentials, £360; service fee for managing the apartment ourselves, £40; council tax post deductions, £52; utility costs, £100; yearly maintenance of the boiler, £8; internet access, £39; phone bill, £8; personal possessions insurance, £8; membership fees for the gym, Spotify, running groups, Strava, Cycle UK, Poetry Society, and The Scots Magazine, £50; contributions to charitable causes, £15; spending on literature, trips, events, concerts, and indulgences, £250. Occasionally, I allocate about £25 towards professional teeth cleaning, podiatry, or physical therapy sessions, though these expenses occur infrequently. I maintain an emergency fund with £75.I cut costs by foregoing a vehicle and often utilizing the Scottish Concession card for those over 60 on buses and coaches. I seldom visit the hair salon or order takeout meals. While I appreciate get-togethers with loved ones, dining at restaurants isn’t my preference. Additionally, I refrain from using makeup or facial products.
I was raised in Surrey, but eventually relocated to Cornwall after my parents bought a home there.
business there
I discovered that Cornwall is stunningly picturesque, yet it offers minimal attractions for younger folks. After attending university, traveling extensively, and working various jobs across the United Kingdom up until I turned 26, I engaged in archaeological endeavors where my initial excavation proved to be an outstanding experience in Orkney. Additionally, I pursued work in fields such as photography, hospitality including both hotels and cafés, healthcare settings like hospitals, manufacturing plants, and establishments like bars.
Afterward, I focused on developing database profiles for researchers at British Steel, earning £2,500 annually. Additionally, I served as an assistant occupational therapist for adults with intellectual disabilities and found great satisfaction in this role.
In 1978, I began my career at a firm of Chartered Accountants and obtained my qualification as an MAAT. Once my parents relocated, I had the opportunity to purchase my first house since they contributed a substantial down payment. Combined with my steady earnings from a ‘stable’ position, this allowed me to move forward with homeownership.
I might be able to secure a mortgage.
.
I have two sons from separate fathers. Both marriages ended poorly, leaving me in a tough financial situation. I had to quit working but still needed to take loans to prepare the bigger house we relocated to for accommodating three tenants. However, the large Victorian era home turned into a drain on resources. None of my ex-husbands owned property or maintained steady employment, and I did not receive any child support payments.
In 2004, I began working as a solicitor’s cashier alongside my self-employed job. To attempt fixing the house and finalizing the divorce, I borrowed increasingly larger sums by obtaining a second mortgage, securing a bank loan, getting multiple credit cards, and receiving funds from my relatives. The mounting debts eventually overwhelmed me. By 2006, at my lowest point, I found myself with an additional debt of around £25,000 atop the existing mortgages. Fortunately, I managed to have the interest on my credit cards and bank loan halted.
From January 2008 till my retirement and the collection of my state pension in January 2013, I spent five years working at a commercial laundry where I handled accounting tasks as well as payroll processing each week. Additionally, I would work shifts in the laundry every Sunday to supplement my income for repairing my roof. This role was enjoyable due to the varied nature of the duties which never spilled over into personal time outside of work hours. The friendly atmosphere among staff members and ensuring accurate payment along with proper leave allowances added further satisfaction to my experience.
I deferred my state pension for two years and chose to receive a lump sum. It amounted to £14,000 and I made sure to receive it in the next tax year from April 2013 so I didn’t pay tax on it. I used most of the money to pay off the final £3,000 owed to my sister and build a back porch on my house.
The state pension isn’t sufficient for most individuals if it stands as their sole source of income. I can cope solely due to my favorable conditions.
The steady rise in the retirement age for receiving a state pension has turned into something of a mockery, especially for those who have spent their careers in low-paying, labor-intensive positions. Many face health issues as early as their fifties and find it difficult to continue working past the age of 60.
If I had significantly more funds, I’d purchase an apartment in Glasgow for my youngest son to reside in. I would enroll in a photography program at Falmouth University and allocate resources towards either securing access to or establishing a music studio.
Five years back, I managed to purchase my two-bedroom apartment in Scotland without taking out a mortgage shortly before the pandemic began; this happened after selling my property in Cornwall. Living in Scotland has been a long-held dream of mine, and I am thoroughly enjoying it. The local people are very welcoming, plus I have easy access to the coast nearby. Life is fulfilling for me now as I indulge in activities like hiking, jogging, exploring new places, making music, and even swimming in the ocean.
I currently have CAD 10,700 saved up, which I’ve decided to put into Premium Bonds. This year, I’ve won CAD 175 in prizes. The previous year, my winnings wereCAD 350, and in 2023 they amounted to CAD 450. I’ll need to withdraw some of these funds for replacing the boiler and possibly updating the windows and installing a new kitchen. Besides this amount, I do not hold any additional savings and prefer not to invest in stocks and shares.
It feels incredibly wonderful to have zero mortgages and debts. Finally, I experience financial freedom and can allocate funds towards necessities or desires. Soon, I will be traveling from Edinburgh to Sweden, followed by Denmark, where I’ll participate in two parkrun events with my sister’s running group. Thankfully, I can cover lodging and flight costs using my earnings without any stress.
Staying fit and healthy is my main focus. About 13 years back, I underwent a highly effective hip replacement through the NHS. Despite financial challenges being common for many individuals, I feel it’s crucial for them to make an effort to lead fulfilling lives. Those facing monetary difficulties might also reflect on whether owning a vehicle is necessary. Personally, not having a car allows me to encounter more people, listen to their experiences, and engage in more intriguing adventures!
Interested in joining How I Manage My Money? Send an email.
money@inews.co.uk