MARGE YESTERDAY

and jam tomorrow

The state pension is still only a fifth of average earnings – as it was 100 years ago. But it’s not all bad, because the price of many things has dropped, says ROGER ANDERSON

You’d have thought that civilisation might have upped the ante a bit since the old-age pension was introduced by Lloyd George in the first decade of the last century. Far from it. With a few notable exceptions, successive governments have been very stingy indeed.

It’s true that the five bob a week (25p) awarded to the needy in 1909 has been described by one historian as ‘a paltry amount’. And even then pensioners got it only if they were deemed to be of ‘good character’.

However, although the country has become seven times richer in real terms over the past 100 years, the basic state pension has increased just fourfold in terms of what it can buy. And that was from a very measly start.

Moreover, for some items, a basic pension now will buy no more than five bob would have bought then. Take beer, for example. In 1909 a state pension would have bought you 30 pints (not that you would have received a pension at all if you were habitually drunk). And that’s pretty much the same as the basic pension will buy you now, at least down at my local.

More telling is that, as a proportion of the average wage, the basic state pension hasn’t really changed for more than 100 years. It was mean when it started off, and it’s still mean today.

As a child in the mid-Fifties, I remember walking to the post office with my grandfather to pick up his pension. In 1955 that would have been £2 – just under a quarter of the average weekly wage of about £8.6s. Average earnings now are £504 a week. That makes today’s weekly pension of £102.15 just over a fifth of the average pay packet. Go back to 1909 and, guess what, the five bob pension is about a fifth of the then average wage of £1.7s.

Even so, the fact is that, over the century, the price of many essential items (apart from beer, that is) has dropped considerably in real terms, so the amount your pension will buy has increased hugely. Let’s take a look at what five shillings could have bought in 1909 (thanks to that year’s edition of Mrs Beeton’s Everyday Cookery).

A thrifty trip to the grocer would probably have cost you the amounts on the shopping list on

Take beer... In 1909 a state pension would have bought you 30 pints – not that you would have received it at all if you were habitually drunk

5 shilling shopping list, 1909 ★ A quarter of a pound of ham (3d) ★ 3 white loaves (6d) ★ 2 lb of sugar (5d) ★ 3 pints of milk (6d) ★ 1 lb of cheddar (10d) ★ 1 dozen large eggs (2s) ★ 2 lb of onions (2d) ★ 1 lb of eating apples (4d)

the left. That’s a pretty frugal bag of shopping, but in 1909 it would have set you back five shillings – all your pension gone, and a week of butterless cheese and onion sandwiches to see you through, with a little bit of ham on Sunday.

By 1935 pensions were no longer means-tested and had increased to ten shillings a week. And with prices increasing only a tad, the same shopping bag would have left you with about half your pension to spend on other necessities. Things have continued to improve to the present day.

8 OLD MONEY March 2012