An interesting idea Hokkaido Brit, I suppose that storing money at home to prevent the government from having knowledge of your savings is the most sensible reason we have come across so far. When my grandmother went into a nursing home the government said that as she had sufficient money in her account (I think she had around £16,000 at the time) to pay for her own care that money would be used first, then when it had nearly run out the government would foot the bill. I suppose if she had kept the money in cash her savings could have been left in her will, rather than being spent on her nursing home fees.
However, having said that her home was destroyed by a burst water pipe and any money in the house would have gone with it unless it was in a waterproof container.
One thing you should understand is that, somewhat surprisingly, many retired people are in better financial shape than they were when they were employed. They acquired frugal habits when they were younger, having to be more thrifty then to raise children, and they just weren’t interested in changing their habits when they retired. They had been careful to get their pensions and other benefits to be large enough that they would have enough money to live on after retirement, and they now don’t realize how much they are saving from their pension and benefits (which aren’t generally taxed and thus go further than you might expect). Old people thus often have large amounts of money saved, and thus they are obvious targets for thieves (if they keep the money in cash) or for scammers who pose as their friends and con them out of their money (if they keep the money in banks).
Here are two examples from people I know: There is a couple who had eight children. The husband worked a full-time job and a second part-time job before retirement. The wife was a housewife. The husband retired from the first job at 62 and the second one at 68. They continued to live as frugally as they did before retirement. The pension and benefits weren’t actually very good, but they had learned to live within their means. Seventeen years after the husband retired from his full-time job, their children discovered that the couple had enough money in their checking account to live for two years. They didn’t have a savings account, let alone mutual funds or investments. It simply had never occurred to them before. During all their time of working and raising children, they had barely kept their heads above water, so there had never been any money to save. The children had to carefully explain to their parents that one shouldn’t leave amounts of money this large in a checking account but should put it in savings accounts and/or mutual funds.
The second example is a woman who never married and had no children. She worked at a low-level office job that paid O.K. but not great. She had never felt the need to buy a house. She shared a house with friends and presumably paid them rent. She retired (presumably at 65) and lived to be 97. She had invested her money very well, spent very little of it after her retirement, and had a quite substantial amount of money left after she died. It was enough that she could have bought three or four good houses in well-off suburbs if she had wanted to.
I suspect that there are lots of cases of old people who have large savings.
Another thought, those who like to live without the Inland Revenue man coming after them. When my Dad worked as an assistant bank manager, a customer came in to meet with him in private. She produced a briefcase full of ten and twenty pound notes and asked if Dad could give her some fifties to ease the strain on her briefcase
Would British notes be destroyed by getting wet? I’ve laundered my wallet more than once (by forgetting to remove it from my pants pocket when doing laundry) and American currency is not affected by the wash, although perhaps ironing the bills after wasn’t such a good idea. (I was trying to flatten them.)
No they tend to survive trips through the washing machine but the flooding in the case of my grandma’s house was more extensive and prolonged. Basically she went to visit my cousins in London for about a month over christmas, whilst she was gone a thick water pipe in the attic froze and cracked when it thawed. It had been running full flow for weeks before we found out about it, by which time everything was under two foot of water, I doubt any money stored under the bed would have survived for that long.
My mother says that her uncle (my great uncle) didn’t trust banks. When he died, they found thousands of dollars in cash sewn into the lining of his coat.
from a friend who worked as a bank clerk.(back in the 1970’s–no ATM machines !):
It was very common for old people to come to his branch on the first of the month with their social security checks. They would take half in cash for daily shopping and deposit the rest. But they demanded that the transactions be separate: first, they made the clerk give them the entire amount in bills of 10’s and 20’s. Then they would hand him back a few of the bills to deposit.
He never succeeded in explaining to them that they didn’t have to physically handle the bills before depositing the check.
And my grandfather lost all his savings during the Depression when his bank failed.
The lesson he drew from this was never to trust banks. So he put all his savings (after he got some - he was a carpenter) into stocks. He doesn’t seem to have noticed that the stock market crashed a little before his bank failed.
Many of my family members are like that - not quite on the beam, but it works out for them. After my grandfather died (at the age of 57), my grandmother did not need to work for the remainder of her life.
Hypothetical:
“If a robber comes to my house he’s unlikely to find my clever hiding place.” (Under the mattress.) “And besides I’d beat him up before he got that far.” (Never mind that I now have arthritis and haven’t been able to lift my cane more than six inches off the floor for year.) “And if they threaten me I won’t reveal where the money is.” (Until they’ve bent a couple of my arthritic fingers all the way back.)
Some of the reasons why there are lots of stories about elderly people being robbed of their life savings:
Elderly person loosing their life savings = newsworthy, criminals very evil to brutalize them that way, poor old people can’t be blamed for being stupid, old person doesn’t have time to save up again.
Young person loosing their life savings = not news worthy, they haven’t had time to save up so much, a young person with that much cash at home was probably a drug dealer, young people have no excuse for being that stupid, young person has the rest of their life to save up again.
You’re an oddball who don’t trust banks, or the government, or MacDonalds, your type makes up .032% of the population. At which point in your life are you more likely to have saved up lots of money under your mattress? a) when you’re young? b) when you’re old?
As above, but the question is: At which point in your life is it more likely ‘everyong’ knows you as the oddball with the money under the mattress?
You’re not an oddball, but you’ve saved up quite a bit of money, but it’s become an almost impossible chore to get to the bank to withdraw some money for grociers, so you decide to get it all at once and hide it at home. Are you likely to be: a) old? b) young?
You’re a criminal who likes easy break-ins with high yields, you know all of the above. Who are you more likely to concentrate your research on?
When my grandmother died they found small sums of cash concealed in various places around the house. Added up to a tidy sum. She never had a bank account until after her husband died. Didn’t need it.
In the past working people just didn’t have any contact with banks. Often they lived hand-to-mouth from one payday to the next. They paid their bills with cash. If they had any surplus cash they would put it in a jar to feed the gas meter, or hide it somewhere for a rainy day. Banks were for people with lots of money, they didn’t want to be bothered with Penny Annie savers, and they were often snooty about letting you open an account at all, and as for getting a loan…
Now first, be sure you are defining “elderly” as really, really old – like at least 90.
My late step-father-in-law (husband’s mother’s second husband) did not trust anybody, especially not banks. Of course, having lived in the Ukraine during the Communist era, and having suffered through the Nazi invasion, WWII, labor camps, and finally successfully emigrating to the U.S., he may have had reason. He did not believe that if the bank failed some other agency would bail him out. During any international crisis, he would go out and stockpile sugar and other likely-to-be-rationed items. He had hidden money buried in secret places in the back yard.
He did not understand ATM cards at all. When we stopped and got money from the ATM, he chastised us for borrowing money with our credit card and having to pay interest. No one could convince him that wasn’t what we were doing.
He also believed that if a gas station was selling gas for substantially more than one across the street, it was probably not really a gas station at all, but a front for a government agency, the Mob, or narcotics dealer, and was posting high prices specifically so no one would go there.
My MIL, OTOH, just turned 90, understands banks and finance quite well. I’ve seen her politely refuse to let a bank officer talk her into something she didn’t want. She had a lovely time doing so, since she had literally all day to chat. She still doesn’t use an ATM, though.
