Over 50s: never had it so good?

Posted in: Finance Last updated: 31 Jul 2014

The 1950s are often looked back on with rose-tinted glasses: when Britain “never had it so good”, policeman rode around on bicycles, workers had a job for life and your holiday wasn’t constantly interrupted by the beeping of a mobile phone…

The UK has undergone many social changes during the past six decades – both in the way that we live and our attitude to life in general.

What we do with our money has also seen huge changes – as has the cost of everyday items.

But were the fifties really so good? We look at how our spending habits have changed over the last sixty years.

The end of post-war austerity

1954 saw the end of 14 years of rationing – and took with it the monotony of making meals with limited amounts of food.

Food shopping was done every day and bought from local shops, as most families didn’t own a car, or a fridge. Only a handful of shops were ‘self-service’ – the first Sainsbury’s store to try out this innovation opened in 1950 in Croydon and was seen as a great novelty.

Household goods

The 1950s saw the introduction of fish fingers, electric fires and toilet paper. A typical home had a cooker, vacuum cleaner and a plug-in radio (or “wireless”). But household goods we take for granted today were a lot less common. Only 33% of households had a washing machine. Just 15% had a fridge, let alone a freezer – and only 10% of households had a telephone [1].

One of the biggest changes was the arriva; of the television. The coronation of Queen Elizabeth II on 2 June 1953 made anyone lucky enough to own a set very popular – families crowded into the home of television owners to watch the event in black and white. Only two-thirds of households owned a TV, and there was only one BBC channel – a second commercial channel ITA (later ITV) was added in 1955.

The launch of TV advertising

From a retailers’ point of view, the start of commercial television couldn’t have been better timed. Britain was enjoying a marked increase in investment and productivity against a background of low unemployment, which fell as low as 1.1%. Inflation too was relatively low. And although there were steep rises in prices in 1951 and 1952 as a consequence of the Korean War, between 1953 and 1960, the average annual rate of inflation was just under four %. The fact that the average growth in wages exceeded that of prices meant that there was an increase in consumers’ disposable income. So people were able to buy goods that had up until this point been beyond their reach. The most spectacular growth was in sales of consumer durables – fridges, washing machines, steam irons, vacuum cleaners and televisions – all of which would rise by 70% in the 1960s.

Longer working week and less holidays

Despite the relative prosperity in the UK, life was still far from easy. Workers had it harder than most today, with the average working week between 40-48 hours, compared to 37.5 now. The average amount of annual holiday at just 16 days, makes today’s 28 day average look almost decadent.

1952 vs 2014 [2]

 Statistics  1952  2014
 Average full-time working week  40-48 hours  37.5
 Annual holiday  16 days  28 days
 Total population  50 million  64.1 million
 Workforce  23 million  30.54 million
 Cost of a pint of milk  Four pence  49p
 Average weekly wage  £7.50  £474 (before tax)
 Pint of beer  Nine pence  £3.18
 Average house price  £2,000  £172,011

The professional services group Deloitte sums up the key feature of consumption in the ‘50s: “It would appear that the fundamentals of feeding the family dominated daily life.”

Using official data, Deloitte has tracked the huge changes in family budgets since the mid-50s. The essentials of life – clothing, footwear, food and drink take a smaller share of the family spending now than in 1957, a consistent trend across the decades.

The nature of the goods on offer has also radically changed. In the ‘50s, the following items were added to the “shopping basket” used to figure out the official measure of inflation, the Retail Prices Index (RPI):

  • Lard
  • Paraffin
  • Camera film
  • Replacement television tubes
  • Beetroot.

If they sound a bit old-fashioned, you should see the items that were deleted: soap flakes, tin kettles and rabbits, this last one being a foodstuff rather than a household pet.

Now it’s a matter of taste as to whether those items added in the ‘50s are more or less desirable than those added in the first decade of this century:

  • Pure fruit smoothies
  • 20-bottle packs of lager
  • Muffins
  • Portable digital storage devices.

Restrictive opening hours

This all goes to show that the over50s today are living a very different lifestyle from their counterparts 60 years ago. Not only were the goods highly dissimilar and relatively much more expensive than they are today, but getting access to them was difficult in comparison with our open-all-hours culture. Restrictions of the day included:

  • Early closing day
  • The licensing of tobacco retailers
  • Tight restrictions on the off-trade in alcoholic drinks
  • Afternoon pub closing
  • The monopoly position of the Post Office as supplier of telephones and answering machines.


The Government launched the Premium Bonds scheme in 1956 in an attempt to control inflation and encourage saving in the post-war era. Many people embraced the new scheme and 49 million Bonds were entered into the first draw.

Despite the introduction of more hire-purchase schemes, most people still saved up to buy goods and the State Pension in 1950 was 18.4% of the average wage.

But people still had less disposable income, so it’s unsurprising that the 1950s saw much lower savings ratios than now. The cost of living was much higher than now and more of the household budget was spent on food. Surveys which measure household spending began in the late‘50s, when on average some 33% of a family’s income (or £4.72) was spent on food and non-alcoholic drink. The percentage declined over the next few decades and is now around 15%. So the measure of improving living standards and the amount of money needed to feed a family has declined compared to income.

A report [3] which analysed savings from 1951 until 2012, found that there has been a 464% rise in the real value of UK household savings over the past 60 years.

The good news is that households have saved an average of 6% of their net income since the 1950s. However, while “savings” seem to have grown over this time – and now represent £150,000 per household – these figures include not so accessible or stable pots such as pensions & investments which have doubled from 24% to 53%.

Accessible savings – in ‘deposits’ has fallen from 42% to 29%

Worryingly though – this report does seem to tell a tale of extremes – as many households now have little or no savings. A fact backed up by recent research from the Post Office which found that the poorest 20% of us will spend £1,910 more than they earn.

The report [4] concluded that the savings figures were driven by the wealthiest people and that lower earners were suffering a debt crisis – a trend for over 12 years.

Pressure on families to spend money on “luxury” items, such as TVs, the latest clothes and electronic gadgets has led to many people getting into debt – something which families in the fifties would find hard to understand.

Automatic enrolment to workplace pensions, brought in by the Government in October 2012, is intended to help workers save for retirement. But many more people need to make changes to their savings habits in order to make ends meet in their later years – especially since life expectancy is increasing.

Pension changes

More confusion about whether to spend or save has come from the latest changes to pensions announced in this year’s Budget. The new changes mean that from 2015, at the age of 55 you’ll be able to take 25% of your pension savings as a tax-free lump sum and can then access the rest when you need it – but paying standard income tax when you withdraw that money.

If you’re a careful saver, the idea of spending your pension may fill you with horror, but there’s definitely some good news.

If you’re financially savvy the new rules give you complete freedom to use your pension fund however you like. If you’re uncertain, the changes could make you feel more confused. Should you leave your pension alone or take it out? And with life-expectancy now longer than in the 1950s, many people could spend their lump sum and end up as a pennyless 90-year-old.

However there is little point in hoarding your savings at the expense of having a fulfilling life – it may mean that you have more to pass onto your relatives – but it could ultimately have to be shared with the tax man, so moderation and planning is required.

Plan for your circumstances

The average life expectancy is now 79.5 years for men and 82.5 for women. But if you’re in good health and your relatives tend to live well into their 90s, it would be sensible to plan on being around for a lot longer.

In order to make plans in a changing retirement landscape you need to ask yourself some key questions:

  • At what age am I planning on retiring – and how many years of retirement income am I likely to need?
  • How much money will I need each month to maintain my lifestyle?
  • How much income will I get from the Government?
  • What income will I get from any company pension plans?
  • How much money can I take out from my personal retirement portfolio?

If you have any worries about your finances for retirement, it’s a good idea to talk to a financial adviser who can help you.

It’s never too late…

Even if you think that you’ve left it too late to plan for your retirement, recent government changes on how pensions are paid may mean that you’re forced into making some of these decisions. But it’s never too late to help out your family after you’ve gone.

By taking out life insurance – at any age –  you’ll have the reassurance that your family will be left more financially secure than if you had not. Recent figures [5] show that one-in-five over-50s now have life insurance cover. The main reasons behind taking out such financial protection have been cited as: taking care of the family, leaving a legacy or paying for their funeral.

Funeral costs are on the rise

Thinking about your death is never pleasant, but with the average funeral in the UK now costing over £3,000, by taking out insurance cover you can at least ease this financial burden from your family.

A recent survey undertaken by Engage Mutual uncovered that as well as funeral costs rising in recent years, your choice of “passage”– varies around the country – so to make sure that you’ve enough put aside.

What does this all mean for me?

Most of us now have more time off and more disposable income than our 1950s predecessors. We also have more choice about what we spend our money on – but our consumer-driven society encourages us to spend on “must-have” items rather than necessities.

The Government has worked hard over the years to encourage us to save for retirement, which to some extent has worked well. However the rise in savings is mostly driven by wealthier people – many working families on low incomes still have little or no savings.

The recent pension reforms, although meant to provide more financial freedom, are likely to create confusion if you are unsure on what to do with the money in your pension pot. If you have any doubts about your retirement options – it’s a good idea to talk to your financial adviser, who can help you work out a budget and make wise savings choices. But having considered all your options – spending some money now to make your life easier and more comfortable can be a good way to ensure you enjoy your later years.

1 Office for National Statistics (2013)
2 Office for National Statistics and Land Registry (2014)
3 Lloyds TSB (2014)
4The Centre for Economics and Business Research (2014)
5 Mintel (2014)

Note: Whilst we take care to ensure Hub content is accurate at the time of publication, individual circumstances can differ so please don’t rely on it when making financial decisions. OneFamily do not provide advice so it may be worth speaking to an independent financial advisor about your own circumstances.