How do you make the most of your workplace pension? Ask us anything

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0:50We'll be back with our full length interviews next week. In the meantime, we've been answering your questions. Telehunter asks, how do you stay motivated to save and invest when you use a compound calculator and know you are years away from your goals. Because I use a compound calculator and I look at the number at the end and it gets me excited. Yeah, this guy's slapping in. But if I got 90 % a year retired. Literally. And I'm like, if I put in five grand in my life, it just gets exciting for me just playing with the numbers and seeing how much you can make. And it's not that hard to get to a million.

1:19But then again, a million is not that much in your retirement now, apparently. Yeah, once I saw the six figures, I was like, hello. Just getting to a million is a piece of piss, mate. It's light work, mate. Easy business. this guy no but over a long time yeah it's not as impossible as you think okay i see what you're saying um i i i just keep getting older and and i realize that that's not slowing down that process and i think that that makes it a lot easier to start saving when i was in my 20s it felt like retirement was a million years away now it doesn't feel that far away i know when i used to um work in finance we'd have these clients that had limited companies and they would just slam everything into their pensions that they were earning basically as much as they could because they knew five years down the line they were going to get to access that now to me at 30 ish 29 and a half add a few plus or minus five or six yeah it doesn't feel that far away and you know if you're in your early 20s it can feel like eons away but you know this is why pensions are great because they lock it away from you once you've thrown it in it's kind of gone yeah but yeah i've never had that thing of looking at a compound interest calculator and thinking oh god that's miles away i've always been like yes look at that really motivating yeah like how do you guys deal with the fact that like all of the gains of compounding will come right at the end i mean i don't i don't i don't think that's necessarily the case we tend to focus on the start and the end and we say if i invest 50 pound a month or 100 pound a month for 30 years at the end i'll have x amount people don't realize that you have a load of other amounts in between it all comes at the end but year four year 25 still pretty good year 20 still pretty good in the last year say i will have probably produced a return that was more than i earned in my first year of working and that to me is mental so i know what you're saying that a lot of it's like a hockey stick isn't it it goes like this but i still think if you look along the way it's still pretty nice you mean you get excited by a little bit i get super excited then when i go into training 212 into my uh son's sip junior sip it's just it's just seeing the returns it's like oh that's nice for me it's like uh something tangible you can actually like check on all the time it's it's it's a nice almost not physical but it's black and white representation of progress in your life which i think is quite hard to get yeah i think a lot of people in the modern world love computer games because they have this sort of linear progression that makes you feel like you've achieved something yeah whereas in day-to-day life it's quite hard to pick out the moments where we've progressed i think the hardest part is that first five to ten years yeah because it's not that sexy in that period why am i not rich yet yeah yeah yeah and yeah that that's the bit you kind of got to get through but then after you've done it for five to ten years it's it is life-changing and being a very optimistic person i always assume that i'm gonna get 10 a year but yeah i don't but i still i'm like what if i do get 10 a year for the next like 30 years oh wow so it's like yeah i'm finding out what you're actually in summation

4:33robro i don't want to get too political but what's your opinion on future growth for our country i mean it's been pretty bad since 08 i don't know is the answer and in terms of i'm not i can't you know i don't have a crystal ball what i would say is i think an over reliance on the finance sector got us into this mess in the terms of we we put all of our chips into finance we put all of our chips into a finance industry based in london and that centralization has caused a rot around the rest of the country and i live in the north of england i feel that if we if we want to grow incredibly long term relying on the same industry that's got us into the mess i got nothing against the finance industry i work in the finance industry but i think post 08 we've been in this lackluster decline because of the issues that the finance industry faced we should look for devolution we should look to empower other cities we should look to make the other 90 percent of the uk population more productive so that this country can grow growth doesn't necessarily have to be that we find new heights it might just be that the people in the country that have got their arm tied behind their back we bring them up to the same level as the people that haven't and then instantly we're more productive i don't know if the short-term focused political system has the desire appetite or ability to provide long-term growth when all they really care about is power in the next four years um pretty bleak outlook really isn't it son what you that's a little bit bleak but you always say a lot about like devolution and up north but anytime i'm in manchester and obviously i used to live there there's so much building going on yeah like there's so like in london like it's very hard to find a flat like but and there isn't as much building but manchester every road there's a sky there's a crane and they're building building building so for me it feels like the future is a little bit better a little bit more i'm a bit more i'm optimistic about everything but i think i feel like manchester's like it's becoming a second london slowly i'm have i'm heavily up becoming a second london is probably the wrong way of framing it it's becoming a better manchester this is your london-centric view of the world where you're like everything is is a bitch version of my city i did not i love manchester i did not say that but yeah i feel you not as much as i love london no yeah baby yeah no i i um i i just I think it's possible and I am optimistic about the future and I never know what's around the corner but you framed it from a political point of view and it just seems to me like they don't they're not making long-term decisions they're just making short-term promises if we look at the big sweeping things that changed the UK over the time the things that we became so proud of like the NHS like the state pension these were massive long-term viewed cross-party agreement decisions whereas at the minute it seems like politics is all about divide and divisiveness and no matter what Labour say we will say the opposite and no matter what the Conservatives say we will say the opposite so we can try and win votes I think that needs to change for us to credibly grow but I also believe that the the UK people are some of the best educated and most creative both in in the sense of the creative arts but also in the sense of things like engineering and things and i think we we have a lot to offer the world we also have the the very good the luxury of our languages the chosen language of of the of the world essentially thank you empire you know the legacy effects of us gallivanting around the world and robbing everyone um is that our language is still the first language and i think that that gives us a unique position i think that we have opportunity as well with with things like biotech who we're going to speak to andrew craig and stuff so i am optimistic i just think i don't know if the answer politics.

8:25Lewis asks, could you cover how young people should go about selecting appropriate pension funds, weighing up fees, and how to make the most of your workplace pension? You make the most of your workplace pension by maximising the match contribution that they offer first of all. So walk into the HR department and say, what's the maximum amount that you will give me from a pension benefit in terms of how much do I need to put in to max that out? The second thing I would also do is make sure that you're claiming all tax relief back from that workplace pension. This doesn't apply to everyone, but there's a lot of people in the UK who are higher rate and additional rate taxpayers who are paying money into their pensions through work, and they're not then claiming back the tax relief that they should via self-assessment.

9:06Some workplace pensions, quite a lot of them, you get the tax relief at source, so you don't need to do that. But there's still a large number that don't, and no one's telling them. So those two things are great ways to maximise. I would certainly maximize the full contribution because that guaranteed return is amazing. Some places will do like 10%, 12%, which is wild. So if you put 12 % in, they match it. You earn 24 % of your income. Arguably, that might just be the only retirement saving you need to do at that kind of level. And then in terms of picking funds, first of all, you need to know what the options are.

9:42Certain providers are very limited. nest is it only has like seven or eight um it might be people's pension i think it might be nest so log on figure out what you're in at the minute figure out does that suit what you need and your risk profile if you're unsure about what your risk profile is you can do things like the morning star risk profile which is how um a lot of financial advisors compile theirs it's quite basic but it'll just at least answer your the questions about you and what kind of fund that you would want and then take a look around on the platform at funds that meet that profile like i said if there's not many the you it's an it gets quite easy to choose at least some platforms have thousands aviva have so many then you're going to need to use the filtering options to whittle down the funds that meet your profile what i would say there is call the pension provider and put them to task they one thing that i hate about the pension providers is or the way that they're positioned is people don't realize that they work for you you're they they are selling you funds and they're making billions and billions a year out of it so call them up and be like oi this is my risk profile this is the kind of fund i want how the hell do i filter through the thousands of funds that you've got they'll invariably say we can't give fund advice but i don't want fund advice i just want you to tell me about the the products that you sell, you know, in terms of what do they do?

11:09What does this fund do? And what does that fund do? And I've got this list of global funds here. Can you tell me which ones are active and which ones are passive? You know, and then if they say, no, I can't, get me someone on the phone that can, you know, because it's not advice. It's just them saying what color the cars are on the parking lot, you know. That's probably how I would go about it. If you're unsure, nothing wrong with sticking in the default. You know, don't do something that might, don't do something that you're unsure of. you can build confidence over time and all of that and then move from there but yeah keep it simple and then with fees people always say fees aren't the be all and end all but they're the only thing that we can control as investors so if there's two funds that do the exact same thing and one is cheaper than the other relatively obvious choice which one you should go for yeah i have no comments on this and i have a workplace pension i'm self-employed you ain't getting one here either are you sure i'd rather suck you to give you a pension sort me out

12:07please remember this is not financial advice like we say a lot on the podcast investments can fall and rise in fact it's pretty much a guarantee past performance is no guarantee of future results so your money is at risk with investing and other fees may apply as with everything financial please do your own research we really encourage that because no one cares more about your money than you