State Pension challenge video updates

Sarah Pennells, our Consumer Finance Specialist, and a few customers spent a week taking part in the State Pension challenge. The goal was to live on the weekly State Pension amount for one week to show how this might impact their daily lives. These videos are all of Sarah’s video diaries and a selection of our customers’ videos, to show how the challenge went.

Day 7

As the State Pension Challenge comes to an end, we find out how the participants felt about the experience and what they have learnt.

Hi, it's Sunday, it's day seven, the last day of the State Pension challenge and I want to tell you how I've done and some next steps.

In all, I've spent £185.12 which is just under the full new state pension amount of £185.15, but I'm well aware that I've not included things like spending on birthday and Christmas presents, my holidays and my pet insurance, which I couldn't afford on the state pension.

There are three next steps I'm going to take, and the first is to get a state pension forecast, and that will tell me how much state pension I'm on track to get when I retire.

And because the amount of state pension you get depends on your National Insurance record, it's really important to get a state pension forecast, and you can do this on the government’s gov.uk website.

My second step is to take my state pension challenge budget and use it to do a life in retirement budget. So I can work out what the lifestyle I'd like, could cost me.

And the third step is to look at how much income my workplace and private pensions could generate on top of the state pension, and see if there's a gap between the life I'd like when I retire, and the life I could afford.

And if there is, the State Pension challenge has really incentivised me to do something about it.

Now you can see more State Pension challenge videos and follow our step-by-step guide to getting a state pension forecast on the state pension hub on our website, royallondon.com

So, my overall experience with a pension challenge is that I could probably survive on the pension. It would be just surviving, I wouldn't have much of a life to go out and do anything with, you know, you'd really have to cut back on things. And I think I’d have cut out my swimming membership and hairdressers ‘appointments, just to, you know, enjoy nicer things, treats and days out with grandchildren, etc. So, and I think could really have to rethink what I'm spending my money on and prioritise it.

When I'm a pensioner, that's going to be another thirty years plus, I'm only 34 at the minute. So, you know, I'm looking at least 65 by the time I come to retire. I don't know what the pension is going to be like by that point. It might still be state pension, that might have gone. It might just be the workplace pension, I'm not sure. And I don't know how much is in my actual workplace pension. But I just know that I would like to, you know, put as much as I can way now, that can afford, to live as comfortably as they come in the future because, this has not been a nice week, and for trying to put your epic, and then I wouldn't wanna look like this every week. So, that's my final experience of everything.

It's really me it made me think of how I want to spend my pension and how important it will be to budget, which I do anyway, but this seems to really be cutting it fine. I did a calculation on a spreadsheet and worked out that I had £43.14 left. Which to me, I'm happy about.

I'm a saver by nature, so status the themes. I'm glad I won the challenge as it were in that sense. But £40, you know, come a few years’ time. I don't think that will be much. And I don't want to be scraping the pennies together just so that I can live a life that, you know, a comfortable life, that I think every pensioner is, is deserving.

So yeah, it's left me with a lot of thoughts.

In a way that makes me think we need to really look at how we either fund pensioners or inform pensions and also make people aware.

I think too many of my contemporaries and the younger generation live in a sense of buy now, pay later. Live for the day. Live your best life now, you know, don't worry about saving for the future.

And that's why I think it's important that people are aware of having their own pensions because the state pension it's just going to pay for the basics.

This thing hasn't really changed my kind of outlook of what I'm doing anyway, I've been paying into a pension since 2014, I think.

And, uh, I think even, even together enough that would give you kind of an amount equal to the state pension, on top of the state pension in the future, would be a huge difference into the quality of life that you can look forward to retirement.

Because, you know, we, we're not working all that time, just have a subsistence kind of, you know, just getting by experience of life, right?

You want, you want to take time to do the things you enjoy.

So, it hasn't changed my perspective, or my goals.

It's just shown me that I'm going to keep doing exactly as I am, so that when, you know, unexpected things do happen, or if I want to try and go on a cruise or something, that I'll hopefully have the money to do that.

We'll see.

Day 6

Did the weekend mean participants found it easier or more difficult to stick to their State Pension budget? What impact did living on the State Pension have on their weekend plans?

Sarah day 6 transcript

0:00

Hi. It's Saturday, which means it's day six of the State Pension challenge, and I've been thinking about what I've been doing differently this week.

Now, there's lots of things but one example is that on a Saturday morning, I quite often join an online art class once or twice a month. It costs £20 and I absolutely love it! But I've decided not to do it this week because of my tight budget.

Now, at the moment, I'm on track to spend less than the State Pension challenge amount but I'm well aware that living on the state pension for a week is worlds apart from living on it day to day for the rest of your retired life.

And although I've tried to make this experience realistic, and I've tried to include all my regular spending, there have been some one-off costs, such as my holidays that I haven't included, and those would take me way over my state pension budget.

Now, I love my job, but when I finally do retire, there's lots that I want to be able to do.

So, one of the things I'm going to do next is to look in real detail at how much the lifestyle I'd like in retirement would cost me, and whether I'm on track to be able to afford it.

Now, I'll be back with a final State Pension challenge update tomorrow.

 

It's day six of the pension challenge, not too much to report today, but, uh, going out later for a party, as I may have alluded to already and no expense thankfully, because all food is being provided for the party, just a small gift that I've picked up two days ago, and, yeah, ready for that.

Tomorrow should be a challenge, because, it’s end of the week, but probably see what I need to do, and I have to stock up in terms of food. But other than that, all expenses going well and still have a little left in the kitty, which I'm really pleased about.

Day 5

What do the participants have planned for the weekend and will it blow their budgets? They share how socialising and leisure activities are something we might take for granted.

Hello, for day five of the State Pension challenge video. I've come to my local park, now I come here every day, I walk my dogs here, and I've recently started running again,

So, I do that a few times a week, and I've also signed up to online work outclasses, that cost me £16 a month or £3.70 a week.

In terms of my limited socialising budget, I don't really think it's been a problem this week, and that's partly because it's been so hot. And I also did go to work event where I got a meal, And I wouldn't normally go to those kind of things, and think, great, free food, but I sort of did this week because of my limited food budget.

At the weekends, I might meet up with friends on a Friday. We quite often might get a take-away, or one of us will cook. So, this Friday, I can't afford to take away. But I can cook for my friend and myself, the food I've already bought, and that's within my budget.

And I'd also signed up before I knew I was doing this State Pension challenge to an event on Saturday that happens to be free. So, I have got some things booked in, which I'm really pleased about.

Now, I did look in my local area to see what's available for people in their sixties, seventies, and older. And it's kind of a mix of, you know, free walks, and low-cost exercise classes. So costing £4 or £5. Lots of volunteering opportunities. And those kinds of things.

I am feeling a bit apprehensive about my weekend just because I'm much more aware of my budget than I would normally be, but I will do another update and let you know how I get on.

It's day five of the pension challenge, and not too much to report today. But I did have to go to the shops again, as I was running out a few things. So, basically, bought the bare essentials. One of them, I actually put back on the shelf, because I realised, I actually didn’t need it. And that was tomato sauce. But I realised I had still had a little left at home, but I ended up spending £14.93. So, whilst I still have just under £40 left, I thought that was still pretty cutting it fine, which has got me a little bit worried for the rest of the weekend. 

However, only two more days to go, so it should be okay. Other than that, happy where I'm at. And yeah, I'll just be glad when the week is done to know that I have survived or not.

Day 4

Could Sarah afford to keep her two dogs if she retired on the State Pension?

Hello, as you can see, I've got some company for my day for video.

So, these are my two rescue greyhounds Lottie and Maddie, and they're definitely part of the family. And I do more walking because I have them.

But they are expensive. So, it's not the cost of the dog food that works out. That works out to about £17 a week, but dry dog food, and another £3 or so for the chicken and tinned food.

But my lovely girls are very accident prone, so the vet bills are expensive, I have pet insurance, and that used to cost £130 a month for both of them.

But last month, because I've made a couple of expensive claims in the last year, it went up to 180 patents, that's £43 a week and I couldn't afford that on my state pension.

Now, not all dogs are as accident prone, of course, but in my case, if I would have paid the vet spills as I went along out of paid more, than I'd been doing in premiums, there is help available. The PDSA will give low cost, or sometimes free treatment, depending on your circumstances.

So, my case on the state pension, I qualify for low-cost help for both my dogs as long as I lived in a PDSA hospital catchment area.

But it has really given me some food for thought, because I definitely would like to have a dog when I retire.

I'll be back with another update tomorrow. Minus the dogs.

Day 3

Halfway through the State Pension challenge - what are the participants spending their money on?

For day three of the State Pension Challenge, I'd like to talk to you in a bit more detail about my bills.

My energy bill is definitely the biggest cost and I was on a fixed price tariff until last month, but since then, my direct debit has risen quite sharply. So, it's now £164 a month or £37 a week.

But, my other costs really add up to, so, my council tax is £26 a week.

My mobile phone is £6,30 a week, and my water bill, one of the few paper bills, I have, is another £5,34.

Now, I reckon I could save some money on my broadband and TV package when I retire because the package I have at the moment, is, is a lot for work and I also added in Netflix, which I could give up if I had to. I own my own car and I don't pay car finance. I own it outright but when I add up the cost of insurance and the MOT and servicing, that's about another £17.

Now it's pretty difficult to work out how much I'm spending on petrol because every time I go to the pumps the price has risen. But I think it's probably about £15 a week at the moment.

Now I've been pretty lucky with my car in that I haven't had any large repair bills over the last couple of years.

But I think what this challenge has shown me is that you definitely need some savings, some fallback to pay those unexpected bills because if I was to get a large repair bill that would really throw out my budget.

Anyway, that's my key takeaway for today. I'll be back again tomorrow, talking about my pets, and what they cost, and whether I can afford them on the State Pension.

Hi. It's the third day of the pension task. I've actually just come home from my yoga class. I took the train that cost me £10, but I'd allocated that in my budget. And the class that I took is also £10, but I've already paid for that in advance. So, I asked them what the concession would be if I was a pensioner.

And I, as far as I'm aware, I would get £2 of that. So, I would have paid effectively, £8 and because I know the yoga instructor, I think it might be a little bit less if I was a pensioner. So, yeah, all in all paid, effectively, £20 for today's activity. I consider it a hobby, but it's also a bit of entertainment, and it keeps me healthy and hopefully young and limber for many years to come. So that’s it for today, my own cost really that I had budget for and has come out of the expenses of the £60 left and I have to live on for the rest of the week.

Day 2

The participants have been shopping for food on their State Pension budget – how have they found it? What compromises did they have to make on their usual shopping habits?

I'm just back from doing my food shop as part of the state pension challenge and it's been a really interesting experience because I'm quite comfortable budgeting. And although I'm a bit of a foodie, I really like cooking and certainly like eating food. I'm quite happy to make meals from scratch, I do it all the time and I've done it on quite a tight budget.

So yesterday evening, I went back over my budget, and I looked at the foods that I thought I needed to buy. So, I looked online, to work out exactly how much everything cost. I went to discount supermarket that's just down the road from me. And when I got there, the price of a few items was different from what I expected. And I think in one case, something was out of stock, so I needed to buy a more expensive option.

In another case or two, I think the discount had ended so I was paying full price. So, I ended up spending about £2.50 more than I planned so here's my receipt.

I spent £14.63 and I have got a couple of other bits to buy. And although I don't think of myself as somebody who kind of throws money around when it comes to food, and I certainly try not to waste food.

It just gave me a glimpse into how different things would be if I was to retire just on the state pension.

Deliberately tried to buy in bulk when it comes to food for two reasons, one is you can probably get more value for money by buying large quantities.

I would imagine, I think that goes without saying, but secondly it allows you to plan out meals, portion sizes, and that has that knock on effect of hopefully reducing or avoiding food wastage altogether.

And that there has helped me massively in working at my budget and planning for the week ahead because I think if you weren't to do that you know it would leave you with the dilemma of obviously spending too much.

But again, having residual food, leftover that effectively goes to waste.

The experience so far has been very cathartic. It certainly focused the mind and has made me realise massively, with a combination of rising prices in conjunction with a fixed limited budget, how difficult it must be.

In regards to making sure that you get as much value as you possibly can out of the expenditure, you can make. So challenging, but not impossible.

Day 1

It’s the first full day of the State Pension challenge and Sarah and the customers taking part have been looking at how far the money they have to live on will go.

It’s the start of my week of living on the state pension, and I wanted to talk to you about my approach to the challenge. My starting point is to assume that I’m living my retired life today. Now there’s no doubt that the cost-of-living crisis is going to make this challenge harder, so I’ve included in my weekly income any money that the government is giving to people on a state pension to help with energy bills, or the cost of living. So, in my case that adds up to around £20, on top of the full state pension of £185.15. In terms of my spending, I’m not including any costs that I won’t be paying when I’ve retired. That means my mortgage and things like work related expenses.

Now, I’ve drawn up a budget so I can see exactly what I have coming in, and what I’m likely to spend. Now I’ve just used a spreadsheet but there are plenty of online budgeting templates if you prefer. I have to say, having seen the budget, I’m a bit nervous about trying to make this money last the week. But I’ll be back tomorrow with another update and I’ll be talking about my food shopping.

In terms of planning for the week ahead, key things I'm trying to do, centred around, having ample food supplies and meals well planned out for two reasons, one to avoid unnecessary takeaways if at all possible, and to also to ensure where possible that there's limited or no food wastage.

I think that latter point is something that is particularly important to do, knowing how fussy my children are when it comes to eating. But also recognising that, you know, good quality food can be put to further use after its initial meal use or that's the hope anyway, but now I'm looking forward to the challenge as the name gives away, and also having a greater perspective on how unfortunately, a lot of the population live in a period of their life where arguably, it should be those best years when they get to enjoy the fruits of their labour.

But at the same time now more than ever, I can only imagine it's particularly difficult and something they would never have envisaged in years gone by. But bring it on. Thank you

Hi, I'm Kate. I'm 34. And I'm full time employed as a veterinary nurse. I'm keen to do the pension challenge, just to see how we can work within a budget. I'm quite fortunate that I don't have to, you know, account for every penny, when going shopping and things like that. So, it'll be interesting to see how I work with when I've got quite a tight budget. I've gone through my outgoings and ingoings so weekly income on the pension would be £205. That would include all my discounts and things with the Winter Warmer energy bills and stuff like that. And my outgoings would be £119 pounds. That is taken off my mortgage because my mortgage should have hopefully been fully paid by then. I'm hoping to pay it the next 20 years. So, by pension age, I would have cleared my mortgage, so we've taken that off the actual outgoings and that leaves me £85.50 to spend.

Normally I go to the shops a couple of times a week, three or four times a week and just buy bits as and when I need to. I'm quite savvy when it comes to shopping anyway. You know, I hunt for the bargains and buy things that are on offer and things like that anyway, so I'm going to carry on with the way I'm spending generally and see how we do. I haven't planned for a budget yet. I might need to later on in the week, but we'll see how we get on. I plan to go shopping tomorrow and buy fresh bits and bobs to keep me going a little bit. Yeah, we'll see how we get on, exciting.

Introducing the challenge

Sarah explains the idea behind the State Pension challenge

Hi, I’m Sarah Pennells and I’m taking part in our State Pension challenge. That means I’ll be trying to live on the State Pension as my only source of pension income, for a week.

Now, the reason I’m taking part in the State Pension challenge is that for most people, the State Pension is the foundation of their income in retirement. And for others, it’s their only source of pension income. But the full State Pension is £185.15 a week or a little over £9,600 a year. And that may well not be enough to give you the kind of lifestyle you’d like when you retire.

Now it can be hard to think about life in retirement – what you’d like to do and what it will cost, but if you know what the State Pension could pay for, it could make those next steps of thinking about your life when you stop work, a little bit easier.

It’s important to say that this is not a scientific experiment, but I do hope to bring to life the realities of living on the State Pension.

I’ll be joined in the State Pension challenge by some of our customers and we’ll be posting regular videos about life on the State Pension and some of the decisions that we make about how we spend our money.

Now you can follow the State Pension challenge on our social media channels and we also have information on our website, Royallondon.com. Now, there you’ll find some of the videos along with guides to the State Pension and tools to help you work out what you might get from your own retirement savings.