75-year-old Liz deferred her state pension for two years and stopped working at the age of 62
In our How I Manage My Money series we aim to find out how people in the UK are spending, saving and investing money to meet their costs and achieve their goals.
This week we speak to Liz, 75, who lives in south-west Scotland with one of her two sons. Liz struggled with a low income and debt for years. She deferred her state pension for two years and stopped working at the age of 62. Liz is now enjoying an active life in Scotland and thinks people should consider whether they genuinely need a car.
Monthly budget
My monthly income: State pension, £937.65; pension credit, £35; savings credit: £52.
My monthly outgoings: Groceries and household items, £360; service charge for the flat via self-management, £40; council tax after reductions, £52; energy bills, £100; annual boiler service, £8; broadband, £39; mobile, £8; contents insurance, £8; gym, Spotify, running clubs, Strava, Cycle UK, Poetry Society and The Scots Magazine, £50; donations to charities, £15; books, travel, festivals, gigs, treats, £250. I sometimes spend around £25 on a dental hygienist, chiropody or physio, but this is rare. I keep £75 in contingency funds.
I save money by not having a car and frequently using the Scottish Concession card for people over 60 on buses and coaches. I very rarely go to the hairdresser or have a takeaway. Although I like gatherings with family and friends, I don’t enjoy restaurants. I don’t use make-up or face creams.
I grew up in Surrey, but later moved to Cornwall as my parents purchased a business there. I found Cornwall beautiful but there was very little for young people. I went to university, travelled and worked away all around the UK until I was 26. I did archaeology, with my first dig and best experience in Orkney, and worked in photography, hotels and cafes, hospitals, factories and bars.
Later, I worked with databases creating profiles for scientists at British Steel for £2,500 per year. I also went on to work as an occupational therapist aide with adult males with learning difficulties and really enjoyed it.
In 1978 I started working for Chartered Accountants and qualified as an MAAT. When my parents moved away I was able to start buying my first home as they helped with a large deposit and together with my regular income in a ‘good’ job it meant I could get a mortgage.
I had two sons with different fathers. The marriages didn’t work out, and things became very difficult for me financially. I had to give up work, yet borrowed more money to make the larger house I’d moved to suitable for three lodgers. But the late Victorian town house I had was a money-pit. Neither of my husbands had property or regular work and I received no child maintenance.
In 2004 I started working as a solicitor’s cashier on top of my self-employed work. I was able to borrow more and more and got a second mortgage, bank loan, credit cards and money from my family to try and fix the house and get divorced. It all became too much. At my worst point in 2006 I owed about £25,000 on top of the mortgages. I was able to get the interest frozen on the credit cards and bank loan.
For five years from January 2008 until I retired and claimed my state pension in January 2013, I worked for a commercial laundry doing the accounts and weekly wages. I also worked in the laundry itself on Sundays to earn extra money to repair my roof. I did like this job because of the variety and the fact I didn’t have to take it home. I also enjoyed the camaraderie with the workers and making sure their pay and holiday entitlements were correct..
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 is not enough for most people if it’s their only income. I am only able to manage because of my fortunate circumstances.
The gradual increase in the age people are entitled to their state pension has become a bit of a joke, particularly for many who have worked all their lives in poorly paid, physically demanding jobs. Some suffer ill-health in their fifties and struggle to work beyond the age of 60.
If I had a lot more money I would buy a flat in Glasgow where my younger son could stay. I would do a photography degree at Falmouth University and pay to have access to or set up a music studio.
I was able to buy my two-bedroom flat in Scotland outright five years ago after I sold my house in Cornwall, just before the pandemic. I’d always wanted to live in Scotland and love living here. The community is friendly and I’m right by the sea. My life is full and I enjoy walking, running, travelling, playing music and a dip in the sea.
I have £10,700 in savings which I choose to keep in Premium Bonds, and have had £175 in prizes so far this year. Last year, I had £350 in prizes. In 2023 I had £450 in prizes. I will need to use some savings to replace the boiler and maybe replace my windows and get a new kitchen. I have no other savings and would not deal in stocks and shares.
It feels absolutely brilliant to be mortgage and debt-free. I feel financially free at last and can spend money on things I need or want. I’ll soon be flying from Edinburgh to Sweden and on to Denmark for two parkruns with my sister’s running club. Fortunately, I’m able to pay for accommodation and flights from my income without worrying.
My priority is to stay fit and healthy. I had a very successful hip replacement on the NHS nearly 13 years ago. Even though money can be a struggle for many, I think it’s important for people to try and get out there and live a full life. Anyone struggling with costs may also want to consider whether they really need a car. I believe I meet more people, hear their stories, and have more interesting adventures because I don’t have a car!
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