Comment from Byron McKeeby in at intemperate mood after falling out with TPR over yesterday’s blog – follow here.
The article Byron has read http://www.bbc.co.uk/news/articles/cj42022gqzwo
Having had a dig at TPR earlier, this nonsense from
PLSA is surely even worse:PLSA suggest the cost of a minimum retirement living standard for a one-person household has decreased by £1,000 a year to £13,400.
Their minimum standard is calculated to include money for a household’s weekly groceries, a week’s holiday in the UK, eating out about once a month and some affordable leisure activities about twice a week.
None of the estimates include housing costs, because the PLSA expect many pensioners have paid off a mortgage, while those who rent often have a benefit entitlement to help them pay.
Again, in reporting this patronising claptrap the BBC did not speak to any pensioners or charities far more familiar with the realities.
Instead they quoted people like Zoe Alexander, director of policy and advocacy at the PLSA, saying, “For many, retirement is about maintaining the life they already have, not living more extravagantly or cutting back to the bare essentials.”
Or Paula Llewellyn, from insurance company L&G, saying, “Planning how you’ll spend your retirement years is often exciting …”
Or Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, saying, “Once you’ve got an idea of what you want then you can start to put a figure on what that might cost and you can then use online calculators to see if what you’ve got in your pension will get you where you need to be.”
Make your mind up!
PLSA have a full on publicity blaze on social media
Here are the key findings from the mentioned “press release”
The numbers for households in more detail
and quite different numbers for those living alone in retirement
The BBC are reporting what the PLSA are saying on our behalf and Byron rightly asks why we aren’t asking people who are retired and experiencing a standard of living.
I think there is a lesson here for the PLSA. The publicity for this important work looks a little too cosy to the PLSA. The importance of this work is huge and needs validation from those who live in later age.
Not everyone in retirement live in their purchased home and increasing numbers of retired households have to take on mortgages to live the lives they promised themselves and children.
Well said Byron. No mention of health issues later in life either. Like the majority of politicians they don’t know what the real world is like (or don’t want to hear about it).
Thanks Rob (and Byron). If we want to understand the financial lives of pensioners then I recommend the FCA Financial Lives work with Ignition House. This is about people outside the bubble and more accurately represents what people actually target and how they achieve what they target. I speak a lot to Terry Pullinger who is a source of knowledge about what union members are doing – his insight is that many who retire with houses are living off their houses via equity release. This is more real to me than the DC target figures (£200-£500k) etc.
Could we get PLSA / RLS to talk to Pension Playpen about the methodology and the figures?
I thought they had actually interviewed retirees about actual lifestyles and costs, you seem to think not.
The PLSA’s research is done by the Centre for Research in Social Policy at Loughborough University.
The Centre works with worthy organisations like the Rowntree Foundation and Marie Curie, but I got one just don’t believe their modelling.
The Centre admit “In 2024 budgets for all household TYPES are being rebased (i.e. new primary research identifying the needs of parents and children, pensioners and working age adults without children, from scratch).
“This is the first time that all household budgets have been developed from first principles in the same year since the original Minimum
Income Standards research was published in 2008.
“The results will be published in September 2024 [sic].”
So pensioners are “types” now?
Do these researchers walk the talk and try living on these budgets? Are they anticipating energy price falls from next month, which we’ve been promised but which are yet to materialise?
“got” should be “for”, ie I for one above. Pesky AI autocorrect getting the better of me!
“Thumbs up for PLSA’s Retirement Living Standards”, wrote Henry in 2019. His conclusion paraphrased was they are useful but not perfect. They are supposed to be a rough guide to get people thinking. The methodology has been given some thought. Overall, a net positive. https://henrytapper.com/2019/10/18/thumbs-up-for-plsas-retirement-living-standards/
Which people need to get thinking, Chris?
Did you read Henry’s piece? “The PLSA has identified a problem, the average person has nothing to target as a retirement income ( Agewage).” Do you think he’s wrong?
He’s not wrong, but that piece was six years ago.
Henry also said more recently he doesn’t like an emphasis on the estimated pots people may need to sustain such higher
(”moderate” to “comfortable”) income levels, a Paul Lewis suggestion in 2019
which the PLSA then took up.
My beef is that, six years on, these PLSA estimates of budgeted income, and nineteen years since Loughborough started its research, feel to me to have limited basis in the reality of many impoverished pensioners, for whom benefits do not necessarily keep up with rent or ongoing mortgage costs.
Many pensioners may still have interest-bearing debts on credit cards, may not be claiming all the benefits they’re entitled to (eg the shortfall in the take up, even after the last “campaign”, of pension credit) and other issues, such as health.
It’s also well known that while politicians like to say they’re managing a CPI or CPIH level of inflation, older people may often be experiencing much higher
levels of inflation once care costs and other ill health costs are factored in.
The tone of the comments reported by the BBC accompanying the latest income estimates yesterday was what really got to me, hence my use of “patronising claptrap”.
We may agree to disagree, Chris, but at least Rob Collins seems to agree with me.
Well I probably agree with many of your criticisms, but I think that it’s better to have something like this rather than nothing at all.
Yesterday I was looking at a retirement income calculator tool built in to my wife’s DC pension platform and it used the comfortable/moderate/minimum standards as examples of target income, with the option to either select one or to create your own figure using a budgeting tool. I thought it was an interesting practical application. It could have just had the budgeting tool with blanks to fill in or default figures to change, but that would have been a faff and probably not very realistic without digging into paperwork. I thought incorporating the three standards quickly added some extra context about how her retirement finances were shaping up, which makes it a bit more engaging and arguably a bit more useful in terms of prompting action.
I would agree that the standards have limited basis in reality for many impoverished (or wealthy) pensioners. But as a tool, or a rule of thumb, it has a rough and ready relevance to the bulk of people in the middle.