Reading about the difficulties that many older people experience, with the cost of living going up significantly, reminded me of the work I did for the Retirement Commission in 2009. The aim was to find out how retired people spent their incomes. I first looked at the most recent Household Economic Survey, which records how much people spend in various areas.
The broad findings included differences based on age, gender, housing tenure, and household composition. For example, households of people aged 75 plus had, on average, lower expenditure than those in the 65-74 group. This was especially the case for one-person households. Men tended to spend less on food, especially fruit, and vegetables, but more than women on alcohol. Men spent more on recreation and private transport. Women spent more on clothing and personal care.
Based on what I found in the statistics I developed a range of “model” budgets. These were presented for discussion to focus groups of older people from Wellington/Kapiti/Wairarapa communities. They were asked to consider how realistic were they in their own experience. I then created seven “case studies” of how older people, in different circumstances, were managing their expenditure. I don’t look at these here because a lot has changed over the years. But here are some suggestions for economising strategies suggested by focus group participants.
- Where gas usage is low it is cheaper to use gas bottles, although these must be changed and refilled regularly. Many older people cannot lift the bottles, so they need to be delivered.
- Carrying and chopping wood may be too much for older people.
- Heat pumps are easy to use and effective, but they are expensive, and people must consider if they are worth the expense of purchase and installation.
- If you move to a smaller house or unit, it will be easier and cheaper to heat.
- You can cut down on heating costs by using electric blankets and hot water bottles for personal heating. Keeping warmer may save money on doctors’ bills.
- Shop around to find cheaper telephone, internet, and pay TV rates and packages.
- Ring when special rates are available or get people to ring you.
- An internet connection is important for entertainment and education and for contact with commercial and public sector services.
Housing (mainly relating to homeownership)
- Unexpected costs (e.g. replacing a water tank) may need urgent attention and are very expensive. Use capital if you have it or take out a loan/mortgage or an equity release scheme (reverse mortgage).
- If you can, budget for one major piece of house maintenance per year.
- Cheaper and reliable tradespeople can be found through community organisations (Grey Power and for example), but often what is needed is a handyman to do small things like changing light bulbs. A relative, friend, or neighbour may be able to help.
- Help in the garden can sometimes be covered by a Disability Allowance.
Furnishing and appliances
- It is often uneconomic to repair appliances. Try to look after them and extend their lives. Reconditioned appliances can be good buys. Discount stores and sales are good for buying small appliances.
- Small bench-top ovens, separate grills, and slow cookers are good for older people living alone and are economical on power.
- Sell off surplus furniture items and use the money to buy special chairs and beds and gadgets to help if disabilities develop.
Food and groceries
- Grow food if you have a garden and can manage the work.
- Make economies by buying food in bulk and going for “specials”. This may need freezer space.
- Supermarket shopping is cheaper than using local shops. Pre-prepared and delivered meals have greatly increased in availability since 2009.
- Free public transport with the Gold Card is much appreciated. Lobby to extend the afternoon free period. In rural areas, it may be difficult to fit trips into the current free period.
- Cutting down on car use can have advantages in terms of health (getting exercise), environmental protection, and economy (given car and license-related costs).
- Older people often stay at home more and cut down on travel, as it is often difficult to ask family or friends to provide lifts.
- Community transport is often available for medical appointments. Ask local service groups about this.
- Total Mobility vouchers cover half the cost of taxis for those who are eligible.
Entertainment and fun
- Find out which cafes in shopping centres give pensioner discounts. Meals out can be combined with going to the cinema and doing shopping.
- Take advantage of cheaper fares – older people can travel at less popular times.
- Holidays can be visits to relatives or to the holiday homes of friends and family.
- Club subscriptions can be costly, but some provide meals at reasonable prices and then visitors can be taken there, sometimes using group rates.
- Excursions with clubs can provide holidays for older people, e.g. bridge, and bowls tournaments.
- “It’s amazing what you can live without.” But cutting down on entertainment and socialising is a major cause of isolation and loneliness, which are clearly linked to mental and physical health deficits.
Clothing and footwear
- Many older people are not averse to buying clothes in “op-shops” or using “hand-me-downs” within families.
- Good shoes– not second-hand – are essential if you have bad feet.
- Find out what subsidies are available – dentures, glasses, hearing aids. (There are now no-cost prescriptions in some pharmacy outlets).
- Dentists try to preserve natural teeth, but some older people prefer extraction because of the cost. People said it was hard to be assertive against the advice of a dentist.
- Some medical practices have cheaper fees, but many people prefer to stay with a “family doctor” even when they move house.
- Podiatry is important for older people who have difficulty cutting toenails or have diabetes, but expensive. (It would be helpful if organisations for older people could negotiate discount rates.)
- Many people must decide between being on a long hospital waiting list or paying for private treatment if they have no insurance. Such a decision requires consideration of pain/suffering and priorities for the use of savings/options for borrowing, or equity release.
Gifts and donations
- Despite much reduced incomes, many older people feel they should continue to give to charities, out of duty or conscience, or because people close to them have used their services. But charity-giving may have to be selective, or help may be provided in other ways, e.g., volunteering, or fundraising.
- Family members must understand that expectations of marking birthdays and Christmas with gifts may be embarrassing for older people. An outing with grandchildren to the cinema in school holidays can cost a sizeable chunk of a weekly income.