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Take the #357challenge

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The New State Pension works out to a ‘wage’ of just £3.57 an hour. Could you live on that? 

Could you live on a wage of £3.57 an hour? What would you have to go without to make ends meet? 

The £155.65-a-week New State Pension comes into effect from 6 April 2016 and retiresavvy has calculated that it works out to an hourly rate of just £3.57. 

This got the retiresavvy team thinking - how easy would it be to live off the New State Pension alone? Research from Skipton Building Society shows that this is no mere speculation, as one in four (24%) people say the State Pension will be their main pension income in retirement. 

The #357challenge 

We want to raise awareness of what it would mean to live on the State Pension alone through the #357challenge.

Find out more about the #357challenge (opens in new window)

The retiresavvy team and top financial journalists have been living the #357challenge for the past few weeks – looking at what we spend day-to-day and whether we could survive on the New State Pension alone. 

You may think it sounds easy, but if you take the weekly amount and turn it into an hourly wage, based on an average working week of 43.6 hours, it equates to just £3.57 – less than half the £7.20 National Living Wage. 

Personal finance journalist Annie Shaw took the #357challenge and tried to live on the same amount as the New State Pension to see how she would cope with her normal spending habits.

She says: “Living on a reduced income is not impossible, but it is a challenge because you have to think about everything you do. It is very wearing to be creative constantly with diet and entertainment – and often physically hard work, too. 

“Flitting round the ‘reduced price’ sections of supermarkets may be fun now, but is not really going to be an option in extreme old age. I wouldn’t want to do it permanently, and I’m full of admiration for those who have no choice but to manage it without falling into debt.

“I would advise anyone who still has time to put savings aside for themselves for their retirement to do so, so they can relax and enjoy their later years.” 

Will you have to tighten your belt? 

Our research, conducted with polling organisation OnePoll, shows the average person nearing pension age will need to halve their spending if they are to live on the New State Pension. 

We found the average 50 to 65-year-old spends £320.70 a week on essential living costs such as utilities, bills, housing, food and clothing – which would leave them short of £165 a week if they had to live on just the New State Pension. 

Living on a reduced income is not impossible, but it is a challenge - I wouldn’t want to do it permanently

While four in 10 people said they would be okay as they have other financial plans in place for retirement, almost one in six respondents said they would never be able to cope, while one in five (21%) worried they would need to find an alternative form of income.

Perhaps unsurprisingly, two thirds of people aged 50 to 65 say they will definitely have to cut back on spending by the time they reach pension age – making the biggest cut-backs on things like eating out, treats such as magazines, beauty products and gadgets, clothes and shoes. Seven in 10 adults admit they’ll have to stop socialising so much when they reach pension age.

Thinking about how far the New State Pension goes in terms of a £3.57 hourly wage:

  • At £2.95 a cup, a takeaway cappuccino would cost you 50 minutes’ ‘State Pension wage’.
  • A £50 meal out for two would cost over 14 hours’ ‘State Pension wage’ – about a day and a half.
  • Seeing the latest blockbuster with popcorn could set you back about 3.5 hours’ ‘State Pension wage’ (and more than 5 hours’ to watch it in 3D).
  • Fancy getting a round in? You’d better make that drink last, as a pint, glass of wine and a G&T in a typical pub could cost just under 4 hours’ ‘State Pension wage’.

Could you live on £3.57 an hour? Take retiresavvy’s #357challenge and let us know how you get on below, on Facebook or on our #357challenge forum thread 

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Comments

Great idea to raise awareness. It's actually quite shocking how little you have to spend if you're relying fully on the state pension. I'll be giving it a go!
Inappropriate
Now look at what women born in the 1950's get!! No or less than 2 years notice that their State Pension age suddenly increased twice to 66 then after years of full National Insurance payments- mine is 44 years my projected pension will be £117.41 NO WHERE near the £155 being advertised everywhere!! Women took redundancy, had to leave work to care for elderly relatives or grandchildren so their children could work then suddenly they are being told that the qualifying years and age have been changed!! No help for 1950's women..no benefits, no pension, no one knew! Even DWP admitted that majority of women hadn't been notified!! Judges based divorce settlements on the fact that women would retire at 60, even DWP staff did not know what was happening!! Then we face the next hurdle-contracting out of state pension payments!! As a teacher I didn't know I had been contracted out..that was when you had a private pension with an insurance company or bank! I continued to pay my NI AND paid the ever increasing payment into my teachers pension-it is not free like the bankers with nothing deducted from their salaries!! Guess what..the latest DWP leaflet trying to explain the new pensions also informs us that most people did not know they had been contracted out!! Page 2. So... Some women born in the 1950's are not getting anything!! Neighbour's are feeding them and they are told there is no social housing for them!! I asked my local housing department about social housing as I will not be able to afford to pay my private rent and I was told "No home for you! You will have to live in a bed and breakfast or a hostel"!!!! Now tell me how 1950's women are expected to survive?! Homeless and forced to live in inner city squalor after being born into this country and paying all dues? Less than the £3 that you already think is hard to live off!! Please sign #WASPI petition on FB and Twitter and help get justice and a life for women who are already suffering! Thank you,
Inappropriate
I don't know what my monthly rate is, I get paid on a different day each time, but I get £542 a month (what does that work out per week ?) If I didn't have a private pension, I would have a choice, eat or pay bills, I couldn't afford both I get taxed on my pension (which I think is kind of unfair) I wouldn't mind getting the minimum wage as a pension, I would even do a bit of voluntary work for it Yes I have savings, but it took me a lifetime to save them, I invested them when I got a nearly decent interest rate, now I get 38p a month on my £11000 savings (I haven't declared that though, do I really have to pay tax on that ?) When I go shopping I am always hanging about the yellow label stand (well I have a freezer) My wife was born in 54, she don't retire until 2019, I don't think that was very fair, we hoped to retire together, so now I am in Gods waiting room for her to retire with me
Inappropriate
I am female and born in 1952; I had expected to retire at 60 and had to wait until I was 62 and a quarter. My meagre savings were swallowed up by some very necessary household repairs, likewise my tiny stakeholder pension! As I am disabled I do receive a little more each month but it is a challenge to live on such a small amount. I rarely eat out; I haven't had a holiday for three years; a coffee in town with a friend is a rare treat; I cook everything from scratch as it is much cheaper and better for me too but I do wonder how I shall cope as I get older! Not really a happy retirement!
Inappropriate
I was born in 1950, Worked most of my life and was made redundant in March 2015. Decided to have a break and return to employment after a break. I started job searching after Christmas. I am a careers advisor (that's ironic) in itself. I have been attending interviews, when I arrive at these interviews, all go well, they then ask for my ID. Once they have photo copied the ID they come back and say 'we will let you know, as we other people to interview', why do they bother I know as I am now 66 years of age I am too old. I have even started 2 jobs and not taken the P45 immediately, usually 2 days after start date. On both time I hand in the P45 and give my DOB, at the end of the day they say, we feel this is not working out and we have got to let you go. I have done nothing wrong, other than being born too early. It is so unfair, I am not able to live on the state pension, I am unable to claim pension credit as I have paid full stamp all my life. I do not know what to do. Any ideas?
Inappropriate
Although the above comment may have some validity, fiddling the figures to make a point only serves to reduce the effect of what you are saying. £155.65 divided by £3.57 is 43.6 hours a week. Normal people don't work that much and if they do, they're doing overtime to support a mortgage and children, neither of which pensioners have. I have NEVER worked 43.6 hours a week and nor does anyone I know except for junior doctors. If you divide by 37 or 40, the point is valid, but don't reduce the effect of your article by fixing the figures. It's not £3.57. It's either £4.21 or £3.89, which is still low but makes your point much better than fiddling it.
Inappropriate
Poor poor women. I would love to have retired at 60. I can only dream. Unfortunately, as a man, I will be 68 before I retire and with my family history, I'm more likely to win the lottery than live to 68. It makes me so cross to hear women moaning about their small pension. If I was given the choice of a small pension and retiring at 60, (before I die), I'd have taken it like a shot.
Inappropriate

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