1952 vs 2012 - are we really better off?

1 June 2012

by Sandra Deeble for Standard Life

Which is the real austerity Britain? The Coronation year, with post-war rationing, or the present day, four years after financial meltdown? We take a look at how our daily lives and future prospects have changed over the past 60 years.

Cost of living

In 1952, milk cost the equivalent of 2p a pint and one in twenty homes had a fridge to store it in1. Meat, sugar, tea and coffee, sweets and chocolate were still rationed.  

Only one in five households had a car. It might have been a new Morris Minor, bought for £385. Today, four in five households have wheels and a basic Ford Fiesta will set you back £8,2502. A basic 14" TV set cost £633, the equivalent of £1,487 today.

Adjusting prices for inflation, food is slightly more expensive today, but electronics and white goods are cheaper.

Verdict: better off now.

House prices

The average house price was £1,8914, 4.2 times the average annual wage. Today it’s £162,7224; 5.5 times average earnings.

In the Coronation year, 29% of householders owned their own homes or were mortgage payers. Now, 69% of us are owner-occupiers4.

Verdict: better off now on home ownership levels, worse off now on earnings to house price ratio.

Work / life balance

In an average week in 1952, a person would have worked 42 hours for a weekly wage of £8.68 per week, the equivalent of £204.41 today. In 2012, the average weekly wage is £400 for a 32-hour working week5.

Verdict: better off now.

Life expectancy

Sixty years ago, there were only 225 people who received a Royal telegram on their 100th birthday. Today, 14,500 centenarians are alive and kicking5.  

In 1952, life expectancy at birth for men was 66.7 years and 71.8 years for women. That has risen to 77.2 years and 81.6 years respectively. And one in three babies born today can expect to live to 1005.

Verdict: better off now.

Pensions

In 1952, men retired at 65, and could expect to live another 12 years. Women retired at 60, and could expect to spend another 18 years in retirement. Today, men can expect to spend another 18 years in retirement and women 20.6 years5.

The average state pension in 1952 was the equivalent of £30.69 a week; in 2012 it’s £107.456.

Verdict: better off now.

However gloomy the present economic climate may seem, looking back at 1952 living standards, it’s clear that we’re materially better off on almost every count. And while our longer life expectancy in 2012 is a reason to celebrate, it raises some important issues around retirement planning.

Planning ahead

If we’re living longer, we’ll need more money to support us in old age. But recent research by Standard Life shows that many people don’t take inflation into account when they’re planning their retirement.

“Many of the people we talked to told us that five or ten years into their retirement, their standard of living was suffering because they hadn’t budgeted for inflation,” says Julie Russell, Head of Customer Relationships at Standard Life.  

“People retiring today can expect to live for at least another twenty years, while the impact of inflation on their pension was only going to increase. So it’s vital to be realistic and to look carefully at all the available options when you are making plans for your retirement.”

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Source

  1. Parliament UK
  2. Dagenham Motors, 25/05/2012
  3. Kingston University, Dept of Media Arts
  4. Nationwide UK House Price Index
  5. Office of National Statistics
  6. Department of Work & Pensions

Prices adjusted for inflation using Bank of England Inflation Calculator.

About this article

Please note that the opinions and comments expressed by contributors in the article are personal and not necessarily those of Standard Life group (Standard Life Plc and its subsidiaries).

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