Money-saving tips for pensioners

The current cost-of-living crisis is putting a strain on many people’s finances, making it more of a challenge to make ends meet. The 11 million people in the UK over the age of 65 (19% of the population), are no different, with a recent survey showing that three-quarters of them are worried about rising costs.

In this article, we look at how pensioners in the UK can ensure they are getting all the help with the cost of living that they are eligible for, along with tips for saving money in lots of different areas of life.

Jump to:

• Tips for living frugally in retirement in the UK
• Check eligibility for pension credit
• Eligibility for other benefits for seniors over 60
• Saving money on household bills for pensioners
• Saving money on groceries for pensioners
• Saving money on travel for pensioners
• Getting financial advice for elderly parents
• Saving money on care costs for older people

Tips for living frugally in retirement in the UK

For many pensioners, retirement is supposed to be a time when they can relax and enjoy their later years, spending time and money on things that they enjoy and that matters most to them - rather than worrying about paying for essentials and not getting the chance to do the things they’ve been looking forward to.

We hope that these money-saving tips will help some people to find a balance and make the most of life’s little luxuries whilst also enjoying their later life to the full.

Check eligibility for pension credit

Government figures estimate that nearly a million eligible pensioners in the UK are not currently claiming Pension Credit, a pension top-up scheme that can not only increase regular income but can also give access to additional benefits and discounts for older people who qualify.

Pension Credit is a UK benefit which is designed to top-up pension payments for older people on low incomes and is worth an average of £1,600 per household every year for those that qualify.

In addition to this, those in receipt of pension credit can also be entitled to more support with the cost of living, which we outline in more detail below.

Eligibility for other benefits for seniors over 60

The current age that someone can start claiming a state pension, and therefore might become eligible for pensioner-related benefits and discounts, is 66 for both men and women.

Those who are claiming Pension Credit can often be eligible for other elderly benefits and discounts, all of which can make a difference to the rising costs of everyday life and essential services.

There can sometimes be variations in schemes and benefits in different parts of the UK, as there are differences between some schemes in England, Wales and Scotland.

An additional one-off payment of £650 has been promised to those claiming Pension Credit in 2022, paid in two parts, directly into bank accounts in the summer and autumn.

This is as well as the £400 per household off energy bills in autumn/winter 2022, which is a grant that does not need to be repaid and will be paid directly to energy suppliers. This is a one-off measure by the government.

Other areas of additional help could also include:

• The Warm Home Discount Scheme provides a one-off discount of £150 (direct to the energy provider) for energy costs during the colder months of the year. This should be applied automatically to those who receive the Guarantee Credit element of Pension Credit and a letter should be received from the energy provider in the autumn or winter to outline this.
• Cold Weather Payments automatically pays £25 to the individual when the average temperature is 0°C or below for over seven consecutive days.
• Free NHS dental treatment
• Help towards the cost of glasses (eye tests for pensioners are also free)
• Help with the costs of travel to the hospital
• Help with Council Tax
• Help with rent costs
• Discounted water bills
• Discounted telephone and home broadband deals from some providers
• Additional Pension Credit amount for some carers, worth up to £37.70 a week
• Free TV licence (only applies if also over the age of 75)
• Winter fuel payment (only requires receiving the state pension to be eligible) of up to £300 to help with heating bills)

In addition to the above, other benefits or discounts for those over 60s in the UK who have disabilities may include:

• The Disability Living Allowance (DLA): a benefit for helping with mobility and care costs, but for any pensioner who has not already started claiming DLA, the system is changing and they will need to apply for Attendance Allowance instead.
• The Attendance Allowance: a benefit for pensioners with a disability who need help and supervision at home
• The Carer’s Allowance: a benefit claimed by the person who cares for someone for at least 35 hours a week. Eligibility requirements include the person being cared for receiving one of the qualifying benefits, such as DLA or Attendance Allowance

Ensuring that a pensioner is receiving all the help and benefits that they are entitled to can be challenging, as most will have separate application processes and can be time-consuming and complex to fill out.

Many older people find it useful if a family member or friend helps them with checking eligibility and completing applications.

Whether it’s information on benefits for pensioners over 70, or local discounts that might be available in your area, community websites and Facebook groups can be a good place to find information for those who are comfortable online and with social media.

Saving money on household bills for pensioners

Energy bill savings for pensioners

Home energy costs are extremely high right now, with ‘cheap’ fixed rate deals no longer available to most households, so saving money on gas and electricity bills is a real challenge.

Some people will be able to reduce how much they are using to some degree, but it’s also important for older people to ensure that they stay warm and look after their health. Some potential energy-saving steps you can take include:

• Turning off lights when not using the room
• Closing doors so that occupied rooms can be heated more efficiently
• Turning down the heating thermostat slightly
• Turning devices off at the plug rather than leaving them on standby when not in use

Saving money on water bills for older people

If you are currently paying your water bills based on the home’s rateable value (the traditional way of calculating water bills) then you may find that you can save significantly by getting a water meter fitted.

With a water meter, you’ll be billed based on how much you use, rather than the flat fee charged with the traditional water billing method. If you are a low water user or have fewer people living in the home than there are bedrooms, it is likely that you will pay less for your water if you have a free meter fitted.

If you do have a water meter fitted, you can save water, and therefore money, by making small changes like:

• Showering instead of taking a bath
• Having any dripping or leaking taps fixed
• Not having taps running when they’re not needed e.g. when shaving or brushing teeth
• Using a watering can rather than a hosepipe in the garden
• Wash vegetables in a bowl rather than leaving the tap running as you rinse them
• Wait until you have a full load before using the washing machine or dishwasher (a single full load cycle uses less water than two half-loads)

Saving money on insurance policies for pensioners

While comparison websites can’t do much to help with energy costs at the moment, many households will be able to save some money when it comes to renewing insurance policies such as home insurance (building and contents), car insurance if they drive (along with breakdown cover), pet insurance and travel insurance, if applicable.

When a renewal letter comes through from a current insurer, it’s always worth checking to see if it’s possible to get the same level of cover for less from someone else. The easiest and quickest way to do this is online, using comparison websites.

There’s a fair bit of admin involved with finding a good deal, which sometimes makes it challenging for older people who perhaps aren’t as comfortable online as others - so it can be great to get a relative or friend involved to help.

Here’s a few examples of established comparison websites:

• Confused.com
• Money Supermarket
• Compare the Market
• Go Compare

Saving money on groceries for pensioners

Trying to spend less on food and household essentials is even tougher when prices are continuing to rise, but we do have some tips that might help pensioners to make some savings in this area. These include:

Switching to another supermarket

While most people tend to stick with one supermarket to do their grocery shopping, if there are other options available locally then it can be a great way to make savings.

Trying alternatives that are known for offering value, such as Aldi or Lidl can save money – but they’re award-winning for quality too.

Using supermarket loyalty schemes

Supermarket loyalty schemes can help you to save money on your shop, but only if the discounts or offers available apply to things you were planning to buy anyway. It’s usually worth signing up for the loyalty scheme at the supermarket you shop at the most if you haven’t already, as this can provide useful savings over time.

Sometimes the offers are only available or need to be activated online (or using a smartphone), which isn’t always ideal for older people who aren’t perhaps as used to this kind of technology, but some will offer paper vouchers to use in-store, such as Tesco Clubcard and My Morrisons.

Making meal plans

One of the best ways to ensure that you only buy what you need when shopping for groceries is to do a meal plan for each day of the week so that you don’t buy any unnecessary ingredients, and also ensure that the cupboards and fridge/freezer are also checked before a shop - so you’re not buying something you already have.

You might also be interesting in retirement hobbies that make money.

Saving money on travel for pensioners

For pensioners who either don’t have their own transport or want to use their car less to save money on fuel; free travel passes are usually available for all those above retirement ages that can be used on local public transport networks.

The details vary, depending on the area, but you can apply for a pass from your local council when you become a pensioner, and some locations offer free travel earlier than that too.

For example, London residents over the age of 60 can travel for free on buses, the tube, tram, and most rail services in London at off-peak times if they apply for a free 60+ London Oyster photocard, and then receive a Freedom Pass once they reach the age of 66.

Getting financial advice for elderly parents

While many older people are perfectly capable and happy in handling their own finances, there might come a point where they want to prepare for the future and what should happen if they do lose the capacity to make some or all of the financial decisions that might be needed.

Helping elderly family members with finances can be a tricky conversation. It’s important for family members to talk to their elderly parents about changes that might need to be made now or in the future, and discuss things such as Lasting Powers of Attorney, as well as making sure that there is a valid Will in place and other measures to help ensure that the individual’s wishes and best interests are taken into account for every aspect of their later life and after they pass on.

These are not always easy conversations to have, but they are crucial. Getting professional financial advice might also be an option if the older individual has a complex estate and wishes to plan for the future.

A regulated independent financial advisor may be able to recommend ways of making the most of their assets, which can result in saving money or getting a better return down the line.

Saving money on care costs for older people

If an elderly person needs professional care in a residential setting or at home, the costs of care can soon add up. It can be a real worry to older people and their loved ones who are thinking about the future or know that they might soon need some extra support to live independently.

An option that could help save money is a 24/7 monitored personal alarm service which means that help is just the push of a button away if needed.

For a monthly or annual subscription fee, which is a fraction of the cost of home care visits, the individual is provided with an alarm pendant or watch to wear at all times (even in the shower) that has a button that they can press if there is an emergency or if they need some reassurance.

Personal alarms with a variety of different features are available so there is one suited to every individual, such as GPS personal alarms for those who are very active and love to spend time out and about, or personal fall alarms for those who are at risk of a fall at home, which automatically detect if the wearer has a fall in the home or garden.

There are also elderly monitoring devices that can be placed around the home to non-intrusively detect if anything suddenly changes with the individual’s usual routine. This can help to pre-empt some problems and even potentially prevent incidents from happening in the home that could incur costs or mean more care is required.

A personal alarm is not designed to replace home care for those who need assistance with their daily activities, but it can provide peace of mind for older people and their loved ones that help is at hand if something happens when no one is there, at any time of the day or night.

This type of system can help elderly people to stay in their homes for as long as possible, saving money on paying for care that isn’t yet needed because of the reassurance that the personal alarm brings.