How our finances have changed over 70 years
This week, we mark the Queen’s Platinum Jubilee – an incredible 70 years on the throne. When Queen Elizabeth II was crowned, the way we managed our money was very different, with many of the innovations we take for granted a distant possibility.
Here, we take a look at how our finances have changed.
Our house prices
Houses were cheaper, relative to everything else. According to analysis from estate agency Savills, homes were worth an average of £2000 when the Queen ascended to the throne. They are now 130 times higher than this.
However, this figure does not take inflation into account. If we allow for the increase in the cost of living, the equivalent average price is still far higher now than it was – Savills says £2000 is the equivalent of £56,000 in today’s money. Today’s average price is around £260,000.
Homes have appreciated in value by around 2.2 per cent more than inflation every year since the Queen was crowned, but the performance hasn’t been linear.
Most of the growth has come from the Thatcher years, or the period after 1995.
Our food prices
Back in the 1950s, food price inflation was very much on people’s minds as it is today. Prices look cheap – a pound of butter was 18p, a loaf was 4p, a pint of milk 3p and six eggs just 8p – however, this was a huge amount of family income.
In November 1952 Frederick Willey, MP for Sunderland North, told Parliament that increases in food prices were costing housewives millions of pounds between them . Many foods were still rationed after WWII but families could not afford to buy their full ration in some cases, he said.
The stock market
The FTSE 100 was not launched until the 1980s, so when the Queen came to the throne the most widely used index was the FT30 – an index of the UK’s biggest companies.
Many of these – Bass Breweries, Morris Motors and London Brick for example – are no longer names we see on our high streets, however many have been amalgamated into bigger UK companies or bought by rivals.
Some of the constituents of the FT30 at the time of the Coronation remain, however, although many are no longer part of the top Index. Thread maker Coats, retailer Marks & Spencer and British American Tobacco are familiar names, while others (such as Grand Metropolitan Hotels, which became part of Diageo) retain their place on the market, if not the name they held at the Coronation.
Our currency and spending
The way we spend money has changed immeasurably since the Queen was crowned. Decimalisation saw off shillings in 1971, while the first credit card, a Barclaycard,was introduced in 1966.
Barclays also introduced the first ATM back in 1967, meaning the practice of queuing in a branch to withdraw money gradually came to an end.
Online banking was not introduced until 1997, by both Nationwide and Royal Bank of Scotland in the same year.
Meanwhile, many of us assume that a popular way of sending cash in the 1950s – the postal order- has been phased out entirely. However, these are still available at the Post Office for those who wish to buy them.
The investment trusts that are still available
While some investments from 1952 are no longer available, there are large numbers of listed investment trusts that have lasted longer than the Queen’s reign. Many of these trusts were founded to help fund expansion overseas, including in former Commonwealth companies and the US and were designed so that those ‘of moderate means’ could have access to pooled investment.
The Association of Investment Companies (AIC) says that these 35 listed trusts have stood the test of time because they have been flexible and invested in a wide range of assets, including emerging markets and renewable energy. Their structure also allows them to hold back cash in the good times to distribute in tougher years, which helps with smoothing performance over time.
“It’s reassuring for investors to see that over the last 70 years, investment companies have survived bouts of market turbulence including the 1973 to 74 crash, Black Monday in 1987, the dot-com boom and bust, the financial crisis and the pandemic. Since the first investment company launched in 1868, the industry has weathered two World Wars and the Great Depression,” says Annabel Brodie-Smith, AIC Director of Communications.
Taking the long view
Events like the Platinum Jubilee are good times for taking a long view on everything, including our finances, and over a 70 year horizon, volatile stock markets tend to come good. Figures from Credit Suisse, show that investing has paid dividends throughout the Queen’s reign, with an average annual return on equities of 5.1 per cent since 1900 rising to 6.1 per cent between 1972 and 2021.