“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.

Credit and the generations

As we've been doing the interviews with older couples, one recurring theme is the perception of fundamental changes to attitudes towards possessions, between the generations we are interviewing, and their children's and grandchildren's generations. Many of our sample have remarked to the effect that 'In my day we saved up - if we didn't have the money, we didn't get the thing we wanted' whereas there is the belief that nowadays, people firstly seem to consider as necessities things that the older generations considered luxuries (such as a washing machine, or new furniture as opposed to second hand) and that they are prepared to borrow money to finance these purchases, rather than save up for them.

My perception (based on years working in financial services marketing, as well as my own life experience) is that the growth of the credit industry, particularly in the 70s and 80s, meant that people got used to the idea of getting things instantly ("Buy now pay later"). Indeed one credit card marketed itself with the line "Take the waiting out of wanting." Further, the inflation of the 70s particularly meant that there was little point in waiting: if you tried to save up, the price of the item would have put it beyond your reach, so much better to buy on credit and have the thing at the lower price.

Now though, we have low inflation: so are these generational differences just due to the formation - at key stages of life - of different habits which persist into later life, or are there some other factors at work here? Why are older people so (apparently) afraid of credit? Why are younger people so relaxed about it, even when it costs them a fortune?

Income and Poverty in Later Life

I attended the launch of a new report today at the Pensions Policy Institute. The report is 'Retirement Income and Assets: Do Pensioners have sufficient income to meet their needs'. In keeping with the PPIs excellent reputation, it is a thorough and thought-provoking piece of research, and the launch event was too. The report covers many areas relating to income and poverty of older people but highlights what I think is one of the most problematic areas in the way that we think about income, poverty and older people. This is, what does it mean for your income, your quality of life, and your experience of hardship, if you or your partner, or both of you, develop ill health or become frail or unwell in later life? In official low income statistics, we have no way of accounting for the increased costs associated with disability, frailty and ill health. Some increased costs are pretty obvious - like if you have to heat your house all day to keep warm, or if you have increased washing to do and so on. But to really keep the quality of life that you had before, or as close to it as you can get, requires paying for things that are not so obvious - so for example, if you took great pleasure from your garden, but can no longer do the gardening, then to maintain that quality of life you would now have to pay a gardener. If you can no longer walk to the bus, then to get out as much as you used to, you may need taxis, or even to hire a car and a driver for example if you live in a rural area where there are no taxis. If you can no longer take routine exercise, then you may benefit strongly from having regular physiotherapy which you would have to pay for. I don't think governments really recognise that when older people adjust to a much reduced lifestyle, this may in fact only be the result of not having suffucient money to maintain their earlier lifestyle - it's not a preference. Their health problems have made them poorer. We have no poverty measures that take account of this. This is compounded in official statistics because in the UK, any disability benefits, which are meant to help towards these additional costs of disability, are counted as income BUT no account is taken of the additional costs that those benefits are meant to help with. The PPI report concludes that many pensioners will struggle to cope with health-related costs as they age. I think this is a topic that deserves much more research attention than it currently gets.

For Richer For Poorer Website Development

I have spent some time this week on developing the website. This has made me wonder about the process of qualitative research and how thoughts and findings slowly emerge from the process of research - we are putting these on the website, but is this the right thing to do? If one of the respondents looks at the website between recruitment and interview, does it 'contaminate' the data in any way to tell potential respondents what it is you are thinking? Or is it just a more honest way of communicating those higher level thoughts that are in your mind as you constantly refine your interview schema as you progress through the research? Either way, you are testing out your ideas about how the world works with the people who are informing you about how the world works. I feel pretty comfortable with it, but I do wonder what the purist methodologists might think.

Couples' Management of Money - The Story So Far?

Working within the National Audit Office for over 30 years has taught me that many people both young and old find management of money a difficult process. As people pass 65, and have to live on a fixed income, the need to manage their money effectively becomes even more important. This is not an easy time for people. As the graph in page 7 of HELP THE AGED SPOTLIGHT REPORT shows the level of income that some older people live on each week falls well below their minimum needs.
We have now talked to over 40 people in the discussion groups – both men and women; and 20 couples over the age of 65. As we anticipated there are still a number of puzzles and problems:
1. When asked why they organized the money in the way that they did, they said that there was no conscious decision: “It just happened”.
2. The lack of helpful financial information was a common theme; and the need for useful financial advice.
3. The part that family and friends played could be crucial: sometimes the immediate family might help at times of financial difficulty in giving money or emotional support. Equally, the older couple too might be supporting members of their family who had fallen on hard times. This could increase the difficulties of the older couple.
4. We have found in other contexts that when the main financial organiser in the family dies the surviving partner can find it difficult to pick up the pieces. Finance can be a frightening puzzle, especially when you have hitherto taken no interest in these matters.
There is an opportunity in our web survey - Link – to give your views and information on some aspects of interest. However, do you think that family and friends play an important part in how people organise and manage their money; and what role do they play? If you have recently had to organise the money after a spouse or partner has died what advice would you give others?