How I Manage My Money: 65-Year-Old Repaying £24k on £1k Benefits

Understanding Des Murphy's Financial Journey

In the "How I Manage My Money" series, we explore how individuals in the UK manage their finances to meet their daily needs and long-term goals. This week, we speak with Des Murphy, a 65-year-old man living in Manchester with his daughter and her two children. Des relies on various forms of support due to an accident at work and does not currently contribute to savings or investments. He is working towards improving his financial situation by anticipating future income from the state pension and pension credit.

Monthly Budget Overview

Des has a monthly income that includes several benefits and sources of support. He receives £600 in personal independence payment, £140 in universal credit, and £360 in employment and support allowance. However, the latter is changing, and he also gets £300 a month from a work pension. His daughter, who lives with him, works as a facilities manager at a university and contributes to the household income.

His monthly expenses include rent at £320, food costing around £200, debt repayment of £90, broadband at £10, mobile phone payments of £75, and Netflix at £10.95. Additional costs include a funeral plan at £7.50, occasional takeaways of £20 to £30, and clothing at £30. He has a bus pass for free travel and no longer drives a car.

Background and Career History

Des was adopted at four months old and has no knowledge of his biological parents. He grew up in Manchester with his adoptive parents, who worked hard but struggled financially. His father was a bus driver who passed away at 56, and his mother worked in factories and shops before becoming ill and relying on benefits.

After leaving school at 17, Des moved to Ireland to work on car ferries but found it unsatisfying. He later worked at Smithfield Market as a forklift truck driver and then at a biscuit factory for 26 years. As he aged, he found the shift patterns challenging and eventually took voluntary redundancy, receiving a £29,000 payout.

Impact of the Accident

In August 2024, Des started a new job as a forklift truck driver, earning £13 per hour. Unfortunately, he fell off a ladder and suffered serious injuries, including a broken femur and a damaged hip. He spent six weeks in the hospital and underwent two operations. The accident left him with anxiety, depression, and post-traumatic stress disorder, preventing him from returning to work.

The financial strain after the accident was significant. He had a £24,000 loan to repay from a side business and faced a £450 parking fine from a friend who borrowed his car. The situation spiraled out of control, prompting him to seek help from an organization called Money Wellness.

Financial Assistance and Future Plans

Money Wellness helped Des claim the benefits he was entitled to and assured him of increased income once he becomes eligible for the state pension and pension credit next year. He has also entered into a debt management plan. While he prefers to be independent and not rely on benefits, he acknowledges that they are essential for his current financial stability.

Des is surprised by the high cost of living in the UK, particularly for basic necessities like food. He has stopped going to the pub and no longer drives a car. He encourages his children and grandchildren to prioritize pensions, suggesting they join unions and contribute to their retirement funds. Although he has a work pension, he is unsure of its total value.

Looking Ahead

Des will be eligible for the state pension next year and is likely to qualify for pension credit, which will provide additional support. He hopes this will allow him to enjoy his retirement more fully. For now, he lives in a council house with his daughter and her two children, paying £320 in rent each month. He previously owned his own home but moved to council properties after changing jobs.

Des recalls earning £34,000 a year earlier, which he considered a comfortable income. He would like to treat his grandchildren more, travel widely, and drive a car again. Despite his challenges, he remains hopeful about the future and continues to seek ways to improve his financial situation.