Better The Devil You Know?

Some interviewees have said that in their long marriages there has been an unfair distribution of money through the years between husband and wife but that they have decided to live with it.

Typical phrases used were “Because I don’t think this is the time of life to have major disagreements”, “Better the Devil you know” or it “Causes too much stress” seemed to sum up the dilemma.

Is this something that all couples do or is it peculiar to people married for a long time?Do we learn to live with unfairness just to keep the peace when we think the relationship is more important than the distribution of money?

Employment and older people

Many older people have been affected by the recession and financial crises not only in terms of the reduced income from savings accounts and shares, but also because of losing jobs or having their hours cut. For example, in our research, one of our participants worked as a domestic carer for a range of people (as she put it, aged from 4 to 104) and had found that because her clients had to pay themselves (even though the care was organised through social services) they were having to cut down on the hours they could afford to pay her for.

On Monday 25th Jan I attended the launch of 'Working better: the over 50s - the new work generation' which was held at Tate Modern by the EHRC (Equality and Human Rights Commission). It is undoubtedly true that even beyond the present recession, most older people are going to have to continue working for longer than in the past, mainly in order to generate enough income to fund their eventual retirements.

However, it appears that despite the best efforts of the EHRC and the various bodies such as Age Concern, TAEN (The Age and Employment Network) and the EFA (Employers' Forum on Age), there are still many influential people who hold that older workers should somehow 'give up' their jobs for the benefit of younger ones.

We are all sympathetic to the plight of younger people who are finding it hard at present to get their foot on the career ladder. Indeed I have 2 children myself who are in this position. However, many economists think it is a myth that if one group of the population are cut out of the workforce, jobs for others automatically become available (this is known as the 'lump of labour' fallacy). Instead, it seems likely that as an economy becomes more prosperous, jobs increase for all population groups.

But there is a danger that the idea that younger people should be favoured versus older ones, could be used to justify the continuation of the use of forced early retirement, and other forms of age discrimination in the workplace. No worker can keep up to date on new working methods, etc., if they are denied the training to do so, and this is one way in which age discrimination in the workplace can occur.

We need to recognise the contribution that each age group can and does make to the economy, not penalise one group to favour another.

Please comment, particularly if you have had any personal experience of issues like this.

National Savings Stamps

I have been thinking about the Government's recent drive to encourage financial education in schools and the use of Child Trust Funds as a way of stimulating a life-long savings habit. The idea of developing savings habits early in life is not new and Governments have tried this before. I wondered whether anyone had experience of saving via the old National Saving's Scheme stamps at school? If so, do you think that this made you a more prudent saver in later life?

Were there other schemes or influences that encouraged you to save as a child and/or young adult?

I would be really interested to hear about your experiences

Lynne

Cutbacks in the recession

A recent article in the Telegraph suggested that despite the recession, people are more likely to cut back on their pension savings rather than curb their spending on clothes or eating out - you will find the link to article and the organisation that produced the survey below

http://www.telegraph.co.uk/finance/personalfinance/pensions/6416142/New-clothes-more-important-than-pensions.html


I wonder whether this is an example of people adopting a 'devil may care' attitude as suggested in the article or, is it more likely that people are more wary of investing in financial products at the moment - especially in view of the very low interest rates and recent instability in financial markets?

What do you think?
Lynne

Age limits and disability benefits

I am a new member of the research team and I am looking at social policy around money and savings.

One of my longstanding research interests is social care and how it should be funded in future. It is a 'hot topic' at the moment and is likely to be a high profile issue in the run up to the 2010 election. You may have seen the news debates about the future funding arrangements for long term care. One of the issues that is being discussed is whether disability benefits that are currently available without a means test, should be added to the general social care funding pot. In the recent Government consultation paper, two main benefits were included (1) Disability Living Allowance for those aged under 65 years and (2) Attendance Allowance for the over 65's. The Government has just announced that it will not include Disability Living Allowance for people under 65 in these proposals but Attendance Allowance is still 'up for grabs' (see the link below). I would be very interested to hear from anyone who receives Attendance Allowance or who has a relative who does, to find out what you think about these proposals?

As the Government increasingly wants people to work longer (e.g. past 65 years) it is going to become harder to justify age differences in benefit entitlements. The age at which people are deemed to be 'working age adults' and 'people who are retired' will become much less clear cut in future. On the one hand, we have anti-age discrimination legislation that seeks to challenge artificial age limits in some areas of policy and others where a distinction is being made on the basis of age (typically 65). Do you think this is fair ?

http://careandsupport.direct.gov.uk/news/2009/10/health-secretary-clarifies-government-position-on-disability-benefits/

Lynne

Older people paying too much tax?

A report by the National Audit Office has just been published which says that a lot of older people pay too much tax. This happens often because older people may have several different sources of income, rather than one simple salary. For example, tax may be deducted at source from interest-bearing accounts and many people are unsure how to claim it back. They have estimated that 1.5 million older people have overpaid tax by an average of £171, although some older people may have underpaid tax. Completing a tax return is complicated enough no matter what age you are, and however simple your income. It is worth finding out if you might be overpaying tax. I have always found the tax people to be very helpful if you phone them. Alternatively there are some sources of tax advice for older people - we are trying to find out which might be genuinely useful.

The NAO report may be found at http://www.nao.org.uk/publications/0809/dealing_with_the_tax_obligatio.aspx

Dinah 23.10.09

Is 'Financial Capability' the solution?

I have attended two conferences this week where the focus was on building 'financial capability' in individuals by education and the provision of information as the solution to the increasing complexity of managing household finances.  The conferences were very different but many of the messages were similar.  The first was on financial exclusion from the mainstream and was run by the Runnymede Trust, and the second on pensions and pension reform, run by the Pensions Policy Institute.  At both, many of the speakers commented on how in today's world it is becoming more and more difficult for people with low or middle incomes to know what to do for the best with their money.  One of (or possibly the only) solution that many saw was to give more and more information to individuals.  While accurate and easy to access information is important, I struggle to see how this will help in many cases or with some fundamental problems.  It will only serve to highlight more risks, uncertainties and insecurities, and won't magic spare money for people on low incomes or whose savings are now giving no interest, or who have put their money into pensions and have now lost large chunks of their life savings because of the problems in capital markets and equities around the world.

“Money : No need to Quarrel Anymore”

When couples first marry there are many excitements but also many adjustments to make.

One of the main adjustments is the arrival of children but also the pressure that it puts on the money available and who should be free to spend it. Some couples create ‘housekeeping’ but even then one spouse may feel free to spend money more readily than the other.

We asked older couples whether they were each free to spend as they wished. Older couples generally said ‘yes’ but there seemed to be limits. This was summed up by one woman who said “We know what we can’t do’.

This seems to reflect several older couples attitude and we wondered whether this is general. Do people in long relationships limit how they spend because they know anything else will lead to a painful quarrel?

How rich do you feel?

Some recent research by the TUC found that people on higher earnings thought they were closer to 'average income' than they really were, i.e. underestimated the extent to which their incomes exceeded average earnings. People on lower incomes did the opposite, i.e. did not realise just how low their incomes really are compared to the national average.

This is interesting because in our research we found that even quite wealthy older people might say that they were finding it hard to manage and felt that 'money was a bit tight', whereas people who were much poorer (e.g. on state pension only, with no significant savings) might say that they 'feel quite comfortable on the money we have'.

Of course, people get used to managing on the amount of income they have (and make commitments according to their income), and it is possible that those for whom investments and savings provide a significant part of their income, have felt squeezed due to the poor performance of the stock market and low interest rates, whereas people on state pensions may not actually have suffered a drop in income. However, we all suffer from rising prices and rising food and utility bills affect lower income households to a greater extent than higher income ones, because these costs make up a higher proportion of their expenditure.

Please post a comment about this, if you have any ideas!
Dinah 9th September 2009

Web Survey

We are starting to publicise our web survey and hoping that many people will fill it in - this is very different to other surveys that I have carried out, where I have always known how many people we are sending the survey to, and had a good idea of the anticipated response rate. We are trying to gather qualitative information from this survey and so of course accept that the people who fill it in will not be 'representative' in the sense that we use it in survey research. This has had me thinking rather a lot about the web, and who it reaches, and who it doesn't.

I have become really conscious, through doing this research, of divisions in society based on our increasing use of internet and web technology. I was told this week by one of our respondents that applications for a swap with their housing association are now all done online, and she is supposed to log on every week to register her continued interest. This is a complete impossibility for them as they do not have access to the internet, and help and assistance, or an advocate to do this for them, are not available. They need a swap as the stairs to their flat have become impossible to manage. This echoes much of the exclusion that we heard about the banking sector in the focus groups that we ran. I do feel very angry about this, and about the way in which things are organised for the convenience of the bureacratic organisation rather than the citizens we are supposed to serve.

I do see that by setting up a web survey we are guilty of this ourselves, and am torn by the ability that the web offers to reach large, dispersed numbers of people and automate the collection of information, as against those who we do not reach by using this format. I suppose that this is the reason that we are using a number of methods to gather data for this project, including the focus groups and interviews, and the ELSA dataset, where information is collected by personal appointments with thousands of households. But the other side of this is to remember that millions of older people do have internet connections and computers and that we need to be careful not to create a discourse that paints everyone over 65 as a helpless, disconnected, disenfranchised person. The message is to cater for all people, to recognise diversity, and to work out what people need and want for different purposes. I am sorry that we are only running this survey on the web but at the same time, I hope that it will reach some of the millions of those who do have internet connections.