How to fix your pension before it's too late

29:54But I probably won't like be able to say, right, that's it. No more work. Draw my pension because I'll potentially have like eight years to cover with no state pension. Although the state pension is not amazing, you know, if you're if you're if you're in a couple, that's like 24 grand, you know, and it's linked to inflation. And it's like, you know, guaranteed. Well, arguably, but it's guaranteed, you know, as opposed to inflation dependent. So for most of us, even like high earners, that is quite a big chunk of your your retirement income and is also gives you that backstop. how do people deal with the uncertainty around state pension that are younger though because to me it feels like it's probably not going to be it's not sustainable in the current format we can't keep indexing it you know the triple lock seems more a political vote winner than it does a sensible policy for a sustainable state pension you know means testing i worry about this or just the age getting ratcheted over and over and over like how can someone in their 30s or below sit here and plan around the state pension being meaningful for them so i think this this comes back to just um you know i think we are going to be increasingly reliant on what we're saving ourselves not just if the state pension is uncertain but this big gap people are going to have as you say state pension age is going up is 68 for for um if you're under under fit a mile i'm how old am I?

31:2246. So really my age here. But if you're my age or younger, you'll say pension age is 68 already. Denmark, they've just put up to 70. Is it going to go up more? Possibly there's a limit. I think personally, I'm not, you know, I haven't got a crystal ball or anything, but, you know, people aren't necessarily able to be, you know, doing physical jobs into their 70s. so but yeah I mean the more you've saved the more you're aware of it the more you're investing you've got time on your side hopefully to to build that up and to you know be reliant I mean I guess another rule of thumb is people talk about drawing four percent incomes if you think and this is very rough but you know you think of that and you think what sort of pot do I need I mean that only really works if you've got a really decent sized pot because that's drawing the income obviously a lot of people are going to have to draw capital as well so um but that gives you a rough idea and you can think what sort of pot size do i need and don't forget inflation as well because um you know if you're thinking oh i could live on i've hopefully paid off my mortgage i could live on 30 40k you're going to need more if you're in your um 20s or 30s yeah yeah people might spend less or it's hard to kind of know really so hard to know where you're going to be when you're 60 or 70.

32:45Yeah, exactly. And I mean, on the plus side, you can actually, like, I've looked at stuff on this a lot and people, even people who don't have much money in retirement often say they're happier than ever. So it really is a case of money isn't everything. And, you know, hopefully if you've covered your basic needs, you know, you're still going to have a really nice time in retirement. You haven't got some of those big financial commitments anymore if you've got on the housing ladder, that is. Because that's another big issue. If you're going to be renting in retirement, you need more. It's a huge issue, especially property prices in London right now.

33:21I think about the things that I do, though, in my leisure time. When I go for a walk, go down the beach, that's free. There is a lot of stuff that I do that's actually pretty cheap. Really fun. Most of the costs I incur are around work. Yeah. And my kids. Yeah, and the kids. Yeah, so get rid of that. Kids. Get rid of the jungle. Get rid of the kids. Get rid of the kids. See ya. but also when you're retired you're on holiday every day and I mean when I'm not working I spend way more than I do when I'm working because I'm just like oh I'll just go get some food here you've got time to get the OAP fish and chips and you know the National Trust they do OAP fish and chips oh yeah they do around that National Trust cheese scones yeah exactly this sounds alright get your lifetime membership and then that's your weekly treat National Trust cheese scones there was like you've got pasties yeah yeah you've got a fruit scone as well got a balanced meal then Yeah, what else do they get?

34:13Do you get like Nando's discount or is that just nurses and stuff? Oh, we don't have Nando's. I don't know. Everywhere has a Nando's. Yeah, that's true. It's like a blue, they call it a blue badge discount, don't they? Yeah, probably. You still get cheap bus rides. Cheap bus pass. Free bus. Well, if that's still around. I don't know if anything's free in this city anymore. No, yeah. Well, I'm just, I didn't know that you could get cheese scones. I know, that's a win. That is a win. That is a win. What should, what about employers though? And sorry, not employers, What about policymakers? What's their responsibility in terms of contributions and getting people to where they need to be?

34:48I think it's going to be very hard for policymakers because the cost for employers have just gone up, haven't they, recently with all the national insurance changes? So, you know, if you employ, especially if you're in an industry where it's really labour intensive, then your costs have just skyrocketed. because not only have they increased the rate, but they've reduced the limit for paying employers NI and the minimum wage has gone up. So I think long term, they really do need to ratchet up what employers are paying in. But I think it's going to take a while to A, come round to that and B, they'll have to do it gradually because you can't just suddenly whop employers with another, what, 4 % a year on wage costs.

35:32It's just not sustainable at the moment. But I think it will be something they need to gradually look at, yeah. Well, if you say to them, obviously, that you save on the NI or, do you know what I mean? It's not a true 4%. They need to provide the tax incentives to do it, don't they? They can't just say, oh, find the money. Yeah. But they see more the priorities to raise tax revenues. Well, ultimately, you need, as a policymaker, you need to be having people more self-sufficient in retirement, don't you? So it has to be a priority, you know, surely, I would think. Yeah. Well, the problem is the short-term view, right?

36:05Every politician that's around today won't be around when we're retiring. And I think that there's a massive conflict in terms of the fact that they all have these DB schemes. I would love to see politicians be on DC schemes and see what changes they would make to the system then. You know, would they be whacking up the ages and tinkering around the edges and saying, oh, every time we whack up your state pension, the age that you can access your private pension also goes up because, you know, we think that that's fair. Whereas their DB schemes, what's going on there? I think there's a huge mindset shift that needs to happen.

36:39I mean, stuff like you guys talking loads about investing, we still don't really have an investing mindset in this country. I think if you talk to the average person on the street about pensions, they just still think about you pay in, you get, you know, you build up your entitlement. They don't really think of it in terms of an investment pot that you're then having to manage yourself and having to like, you know, potentially make quite complex decisions. And then how do you how do you possibly know at retirement how long you're going to live for? I mean, we're just talking about accumulation at the moment.

37:10When you get to retirement, you've then got to manage that pot for you don't know how long. Potentially 40 years. Potentially as long as you've been working. Yeah. Which is a crazy thing to think about. I think a lot of people think about pensions. They think about Robert Maxwell and these kind of things as well. I get a lot of, is it Robert Maxwell? Oh, they're a scam. They get raided. I don't trust them. They see them as a tax. They don't see it as theirs. They see it as like, oh, that's an annoying thing I have to pay. You know, which I think is the biggest issue. There's no sense of ownership.

37:39It's why I quite like the pot for life thing. Because at least it's people, theirs then. It's like, this is your pot. You know, you take it with you to your employers. It's another problem with our system. Every time you move employees, you get a new pension. so it's like collecting them as you move around you can have like seven pensions you do and then it's like how you're supposed to even know how much you've got it's a bit of a nightmare isn't it yeah exactly remember where it's all invested and also the fact that the employer dictates who the pension is with it's not do you mean like the employee should have a say in the australian system you start with a pension when you start your first job and then you just carry on paying into that one and it's not linked to the employer it's your pension plus they have higher contribution rates and they're managing to get you know much more engagement much more people saving and obviously like getting decent pensions by the time they retire I think we are getting there but it's like glacial steps are we getting there but we are getting there in the sense that when I started work employers didn't even have to provide a pension and i've just done an article recently talking to some older ladies and like they they didn't even have pensions literally no pension when they retired so auto enrollment from 2012 means that we have pensions but it's still far too low it's not enough your generation sorry to call you that but you said your age so you're 10 years older than us i think your age to like retirement age are the most at risk because they missed out on the db schemes and they missed out on the dc pretty much most of the time we've been in work i've been in a dc scheme and i think if someone's starting work at 21 say and paying in eight percent their whole career they probably they could be okay you know we don't know we've not they've not run through the system but yeah people of your age like they potentially had 10 15 20 years of nothing yeah exactly and they're are people that i think they don't get talked about enough yeah they've fallen through the cracks a bit yeah i agree i think it is a big issue you've got like um you know the ones who retire now some didn't have anything to be fair there are a lot of poorer pensioners as well you always hear about richer pensioners um but yeah there are the cohort um you mentioned um public sector but there's also a lot of private sector people with really good pensions who are coming up for retirement um but that isn't going to be the case going forward really um i had like one one employer where i got like two years of a um db pension i'm clinging on to that you'll get like a half of an 80th of something yeah it'd be like a few hundred quid a year every year but um for the forgotten people the self-employed but also for everyone what's like we don't have any dc or db they don't care about us but if you're picking your right your fund you do have a dc you have your own ability to set up a sip yeah but i don't have anyone contributing to it you should contribute yeah but i need my employer to contribute to it you are your employer because you're self-employed it's not fair i want more money i want like more contributions it's called the tax relief yeah um how do you pick the right fund or like yeah Right fund, yeah.

40:57It's a big issue as well for people with workplace pensions. Yeah, of course, exactly. I mean, if you've got a work, I'll start with workplace actually. If you've got a workplace pension, you will have a default fund and like 95 % of people are in the default fund. You know, that may be absolutely fine. If you're self-employed, you're obviously looking at probably a SIP where you pick your own investments. and most SIP providers will have like suggested sort of easy pick funds that you can choose from that if you if you don't want to get stuck in the weeds of the 4 ,000 different funds to pick from if you are comfortable managing your own and you you can like pick a strategy that suits you if you're in that default fund the thing to watch out for is de-risking so basically back in before pension freedoms came in now most people stay invested in retirement but before pension freedoms came in in 2015 um you had to um you had to buy an annuity which is as you know when you're kind of like it's kind of mimicking these kind of db pensions you're basically exchanging your pot for a guaranteed income till you die um so what happened was these pensions were set up so that by the time you bought your annuity, you basically had more or less cash.

42:20But the problem is now people tend to stay invested. So say you start your employer, you're happily working along, blah, blah, blah. And you've said, right, you filled in some form on your first day saying you're going to retire at 62 and you just randomly picked it, didn't you? let's be fair. And then like 10 years before you get there, your fund unknown to you starts de-risking. So what that means is you're targeting an annuity at 62. So you're gradually moving into fixed income, moving more into bonds, moving into more into gilts. So by the time you get to 62, you're not really that much invested in equity at all.

43:00But you carry on with your fund invested drawing on that pension but your fund is potentially really underperforming um and a lot of people are being de-risked which you know is a bit of a jargon isn't it to be honest but basically you're you're being de-risked which sounds great doesn't it but what it means is like sometimes you need a bit of investing risk to get that growth exactly so that is like probably the biggest issue potentially for people in workplace in terms of their fund like just look look at your fund look it up they call it lifestyling as well they do lifestyle and if you hear like lifestyle in the fund that means they're tapping the brakes as you get near to retirement you get it at the start as well in some the foundation period is what nest call it five years of basically low equity because their logic is people might get scared and stop contributing to an auto-enrolment scheme that they can't leave i think they're worried that you look and go whoops my pension's gone down but we know that 90 of people for auto-enrolment don't opt out they never even look at it but then the biggest pension providers going we're worried if the performance is bad that they're going to leave the scheme even though we know that most never leave the scheme and it seems like a stupid decision.

44:21We talked to the head of Invest about it, actually. He sat there and we asked him why he did it. And he was like, we're not de-risking. And I was like, oh, you are, aren't you? And if you're in your 20s, you've got, you know, investment compound is working in your favour and you've got, you know, years and years for that to grow. You shouldn't be tapping the brakes at that point. You shouldn't be like heavy bond allocation. Exactly. And whereas, I mean, if you are thinking of getting an annuity, then it might be right for you. you know it's just really dependent if you are thinking of taking a tax-free lump sum you might want to ring fence some of that if you're drawing it soon but in general if you're planning to stay invested then you know you're probably best off staying more invested and not being overly in bonds and guilts and things it seems like the pension industry's antiquated or out of date with the modern way that people retire and they seem to be preparing people for a system or an older way of thinking about drawdown and retirement income yeah i think so and i think that is going to be a challenge with the industry going forwards is um you know a lot of stuff we've talked about is really depressing but we are going to get more and more people with a decent size pot um getting to retirement and then they've got to manage that pot for you know 20 30 40 years like how do they do that in a way that's sustainable that gives them the best lifestyle they can that make sure they don't run out of money.

45:46And I could probably say a lot on that. It's probably on another podcast. But I think there are going to grow up more and more tools people can use to help them with that. And obviously, if you've got a decent pot, then it probably does make sense to get advice at that point. But there also are like in between. We know a lot of people don't get advice. And I think there are more and more tools that are going to help people with those decisions. You looked at the performance of funds as well in general. to the market, what did you find? Well, they vary quite a lot. They do vary quite a lot. So there's been more focus on this recently.

46:20The regulator looks at all the main sort of pension providers and they rate them. And you can look up if you want to geek out for a few hours, there's literally a report on value for money for each of the pension funds. And they'll be rated green, orange, red on value. And I think a lot of the more modern pensions are roughly comparable in terms of performance, but unless they're de-risking too early, which we've already talked about. But some of these, there is a lot of variation between them, depending what provider you're with. I'm not going to get into the individual providers, but you could sometimes look and say, well, I don't actually want to be in their default fund, so I don't want to be de-risking.

47:05Have they got an equivalent of sort of a tracker fund that I could switch to? Or a 100 % equities fund or an 80 % equity fund. Yeah, and they'll often have quite a lot of choice, but you have to do a bit of digging. You have to dig around online and go, what sort of fund is that? It's not really that easy. You do have to do quite a lot of digging. I used to do all this years ago, probably while I got into being a pensions king. But look them up on Trustnet or Morningstar, and you can see what's that fund performance been over five years compared to the benchmark. you get it on the fact sheets a lot of the time as well so if you get if you just click it opens up and they'll normally have like a bar chart that says benchmark yeah and then us and if they're way off you're like this is not great you can see what that funds benchmarking to is if you decided you wanted a global tracker or something you could like try and work out which of their funds is like most similar to it say and i think a good thing to do is to go find a global index or a tracker so you could find like a big ticket one like vwrl vanguard's world fund and have that there the performance of that so if you think that your pension should be along align that you can kind of sit them side by side and go my pension is way off this why did the global stock market got 15 but my pension went up free you know you know it's you're not capturing the returns of the market then yeah and if you're in your 20s and 30s and you're looking to do that you go what is what is replicating the market the best i know that the worst performers were like negative returns over five years in some categories.

48:36In a crazy ball run, like, you know, we've just had a good time on the stock market. So it can vary. How are they missing it? What are they doing? And some of the providers, when you dig through, like, their value for money report, it will say, this particular legacy, because what happens is, like, they mopped up a lot of the smaller pension providers over the years, and they'll say, well, this legacy fund is really poorly performing. So if you've got a pension that, you know, you've had for 15 years 20 years or something and you haven't paid it much attention you could well be in one of these older funds that's really poorly performing has quite high fees as well potentially um and you just you can transfer out but they're not necessarily going to do it for you yeah when I was I set up my sip uh like last like during the podcast last year and the first thing I was doing is I spent a lot of time trying to figure out which provider to go for does it really matter which provider to go for or is it better to just focus like you said focus on the funds because I end up with Hargreech Lansdowne but I'm like I keep thinking should I go for someone else is that better provider or is it just about mainly the fund and doesn't screw the provider so most of the providers are similar in terms of what funds you can buy some have slightly different funds so there might be some more obscure funds you can get with some providers and not others but generally most of the main ones you can get with most of the main providers they're pretty similar i guess the the you know it's going to depend on what you like the feel of like what you find's got a good interface for you there's also some nuances on fees and things like that between providers but um yeah they are relatively similar um so hargreaves um you know they they charge a percentage fee some other providers i give a shout out to interactive to invest in my old employer.

50:23They're a flat fee. So, you know, if you've got a big fund, then it's going to be cheaper for you potentially because it doesn't go up as your pension gets bigger. Yeah. On financial interests, slight plug for the website that I own. We do a comparison of all SIP brokers. It updates, it's got fees, features, all of that. So I link that to you. I was my friend. He didn't tell me about this. You didn't ask? When I was setting up my SIP. Because, you know, you've even got like Invest Engine, which is fee free potentially on the platform side. But then like there's questions around long-term, like how long does that last?

50:58So fees aren't everything. You know, I think different providers for different things. You could do like an IBKR or HL. They're a bit more, they lean more towards the person who wants like all the bells and whistles. Or you could get like a Vanguard, which is only Vanguard funds, pretty stripped back. You know, do you want to deal shares inside of your SIP or do you just want to buy funds? Do you want ETFs? Do you want, you know, you kind of got to ask yourself a few questions before you can say who the best platform is. I think it's not like supermarkets where it's like you can get pretty much the same kind of food at all of them.

51:27They do offer different features, benefits. With the fund stuff, so we've got someone here that says, should I stick with the DC default fund or change? So I know you've answered a lot of that, but do people have to change? Are the DC funds okay? Sorry, the default funds, are they okay? Well, they are like looked at all the time by the regulators now. So there's a big spotlight on them. I think it's mainly this issue around de-risking and that's really going to be dependent on what the listener's individual circumstances are. I think people don't know it's a problem. I think the regulator should take a view on that.

52:08And because I don't think your average person knows if they should be de-risking or not. And if you frame it as de-risk, everyone's going to be like, well, I don't want any risk. I take no risk. So I mean, and like, you know, the idea of when you hit 67, whatever, that you've got a big pot of cash and there you go. I think that fits most people's idea of what retirement is. Whereas what they actually need to think about is, no, no. Imagine you're 20 at 67 and you're about to embark on a 40 year journey. What would you do? You would be invested because, you know, you need to maintain the pot, don't you?

52:42I don't know. I think the regulator, I think it's like, if we just go to everyone. It's up to you. People will just be like, well, I've only just realised I've got a pension. Yeah, yeah, yeah. The regulator should go, like, stop de-risking everyone. What are you doing? Yeah. Yeah, I think the regulator are always erring on the side of caution, aren't they? And that's, you know, maybe that's part of the issue. Yeah, but the biggest, like, the mad thing is by erring on the side of caution, you're going to bankrupt the country because no one's going to have a decent-sized pension. So how about we caution against that?

53:14Do you know what I mean? because like we can sit here and go oh let's all pay more into our pensions when really the biggest levers that we could do is get people decent returns and reduce their fees if we do those two things no one needs to pay anything more in we stop people getting rinsed on fees and we get them a decent return you make an extra four percent a year there and you might compound that over 30 years you double the size of the pot treble it no one needed to pay anything more in so you know i would like to see the regulator tackle that i'd be reluctant to say people shouldn't pay more in or don't need to pay more in because i think it's not the only answer and i think that's where everyone tends to focus yeah and and i and you know like everyone needs to pitch in and the industry could reduce its fees superannuation is much cheaper you know a couple of basis points where we're saying oh we'll only charge you 0.7 0.7 in the modern world of indexes is is high like you can get indexes at 0.2 you know and i know they do other stuff they're buying their wind farms and all of this but i think to be fair to the workplace pension 0.7 is an outlet i mean look at your fees because if you there are legacy funds where you're paying 0.75 which is the cap or higher but to be fair to the workplace pension funds a lot of them are way lower than that um but even 0.2 of a billion is a shitload of cash 0.2 of 30 billion 100 billion these things are going to be big right they're going to be like 100 billion by the time i retire these default schemes.

54:40Yeah. Like, Nest will have 100 billion in it. So point two of that is, like, what are they buying? Whose fees are they paying? Where does the amount, I don't know, it just seems like a lot of money. A couple hundred million a year to run it. It's healthy. I mean, like I said, the Nest guy sat there and goes, well, we've got to pay for all the payments, we've got to administer it all and we've got to do that. Yeah. Yeah, but when you say that people should, the government have to err on the side of caution. I didn't say they have to, I said they do. they do they do they regulate the regulars probably employ to be cautious right but that reminds me of um my partner because she was like about a year ago she's like i don't want to invest i just want to have my money in my bank it's safer that way then obviously she watches the podcast she's like oh yeah inflation's eroding my money so it's not actually safe in the bank it's less safe if i need to invest because it's not safe for me to keep in the bank so i'm losing money so in the same way we're in a cost of living crisis telling people you need to contribute more it's i only can contribute more because i've got two jobs yeah but like so it's not easy to say contribute more when you could just try and improve the returns and then obviously contribute as much as you can but if you improve the returns it kind of helps in the long run rather than just be like get more money and it's like i'm barely paying my rent right now so yeah we've encouraged you to pay and we've also halved our fees like and that's going to earn you an extra x amount but potentially i think it's a better message isn't it because you're just telling people to constantly pay more tax pay more this pay more that and they pay more into your pension when there's never like you should you should spend a bit less on that well i'm going to defend the workplace schemes here because they i think their performance on average isn't too bad okay that's good but i i think it's where it pays to look at your individual pension because there are some real turkeys in there but on average i think they are focusing on it more and like say with nest um you know They're in a difficult position because they mop up all the really tiny employers and they have a lot of costs doing that.

56:36They're actually a not-for-profit. So I don't think it's necessarily the industry taking advantage. It is an expensive thing running a workplace pension with all the regulations involved. But in terms of you as an individual, I completely agree that for a lot of younger people, you really need to look and think, Should I be de-risking? And maybe there's a wider conversation around like, is de-risking the right thing for the average person? I think the regulator maybe needs to sort of like actually research that and shine a spotlight on that and say, what should the default be doing? But also like we are getting as a country, I feel like young people are getting more excited about investing, but they don't see pension as part of that.

57:23Like a lot of people don't even realise they're invested in their pension. And actually, pensions are like investments, but better because you get the tax relief, you get the employer contributions. So, you know, that can make a huge difference in terms of building your wealth. And the added bonus, if you're like me, is, you know, you can't touch it. So it's there like building up and building up. Swin King says, Swin King 1977, the king of swing. He said, what kind of funds should you change to when you get to retirement age? Or should you just keep it 100 % equity until someone comes to put you in a home?

58:02That's what Dave was going to do. He's going there to swing, mate. He'll be swinging in the caro. King of the swingers, mate. The jungle VIP. You know. Yeah, so coming back to the regulator, they are actually looking at having this issue that people are coming up to retirement. What do you do? And they're trying to start talking about what do you do when someone's approaching retirement? And they're trying to like default people into retirement solutions, which hopefully, you know, hopefully they'll get right. But as an individual, I'm assuming that he's managing his own portfolio. But as an individual, I think you've got a few different choices.

58:44So I'm going to talk from the point of view of managing my own pension because I've got a SIP and I'm self-employed. so there's a few different ways you can do it you can a lot of people will invest in income producing funds so they'll deliberately invest in a fund that has like dividends and they'll try and like live off that dividend income so you like leave the capital invested you draw down your dividends and then you live off those you might have to draw a bit of capital but that's one way And obviously, dividend producing companies often tend to be your kind of bread and butter, like well-established companies, rather than your sort of big growth companies like your apples and stuff.

59:29So that's one option. Another option is to sort of target and have like some rule in your mind about how much you withdraw each year and like target growth. But another option would be to say, well, what I'm going to do is I'm going to say I aim to have like, you know, like when you're you've got pound cost averaging when you're building up your pension. You could almost do that in reverse. You're like, right, this is how much cash I need for the next five years. You'd have to use some sort of tool to kind of work out. and then I'm going to gradually like pop that amount into um you know gilts or or some or like a money market fund something like that and then what you can do is you can like think of like that as your buffer for the next five years so what happens then is the risk is with retiring you you withdraw funds at a low point and then you know it's called sequencing risk where then potentially that as a knock on ripple effect because you've withdrawn at that low point you don't want that to happen so you like pull the money you're going to need for the next five years I mean ultimately if you've got a decent sized pension I always say get advice to help you because they can then like do a cash flow model and help you with that what is that essentially you're almost having to be your own actuary it's quite complicated that whole process of working out what you can afford to withdraw and how to invest.

1:00:56There's also like various tools coming on the market. And I think that's going to get more and more to like help you plan your retirement. And I think those more and more be integrated into products that are kind of shaped around people's retirement needs. Another option, sorry, I'm swamping in with options, is to, what you can do is like, so a lot of people don't want to buy an annuity because they're like right get to 65 buy an annuity oops i've died next year but um basically um it's it's such a big thing handing over that amount of money isn't it and it's like it goes against the grain when you've been building it up what you can do is you can it's much much cheaper to get in what the main reason to buy an annuity is actually if you are one of the ones that lives till you're 100 and you end up running out of money.

1:01:49So they call it longevity risk in the sort of buzzword. So you're kind of insuring against that longevity risk by buying an annuity. And that's the main thing you're doing. What you can do is you can set aside a portion of your pension and like not touch that. And you can earmark that to get an annuity, say when you're 80, when they're much cheaper. And you can then know, right, I'm 65. I've got to only make that pot last 15 years. And then you've got annuity to ride out into the sunset. And then you've got that pot set aside. So there's loads of different options. And which one's right for you is going to just be, again, like boring, but dependent on your financial circumstances and all that.

1:02:30But it really is. And, you know, you might have a partner with a final salary so you can afford to take more investing risks. There's just so many different factors that come into play. and um yeah and i think as it gets nearer assuming this this person's like not quite there yet there's going to be more and more tools to help people which is really positive fingers crossed what about the um we spoke about before pots everywhere the consolidation of those a few people have asked questions robin hi robin um they've asked about you know what factors should i consider if i'm looking to consolidate all of my workplace pensions into one yeah so um yeah a lot of people do this as they approach retirement because again as you say you've got different pots you might even have like hopefully you find a lost pension pot somewhere and get a bit extra um and it's just a bit of a nightmare making investment decisions with six seven different pots so that's i mean the main reason i think is just bring everything under one roof make it easier um like plan out where you want to invest and like be able to have like a decent size amount rather than loads of bitty amounts um to administer so i think that's like just the ease of the hassle factor i think is the main reason people consolidate and you don't necessarily have to do it all in one go if you can't face it you could like consolidate your main two and then you know mop up all the little annoying ones that have only not got much in them and do it like that but yeah um it's just it just removes another headache and makes it easy to manage and make decisions i think is there anything that people should look out for when they're doing that though like from previous pensions or anything yeah so if you've got the like if you've got a gold dust like final salary average salary pension I say be really cautious if you're thinking about cashing that in first of all because um the the guarantees of like the guaranteed income is just like worth so much especially if you've got a bit of each I'd say that's a really nice balance then because you've got your flexibility with your DC and you've got your final salary pot.

1:04:33And I know people who've like cashed in the final salary. And I don't know, I personally wouldn't because I think that guarantee is really nice to have. If you've got these legacy schemes that we mentioned, some of them have like hidden benefits, hidden guarantees, you might be paying more fees, but you might have some hidden benefits. Some of them have got like a guaranteed element to them. Some of them have got even like a lower age, you can start drawing them and stuff like that. So just make sure that you're not losing out on anything valuable when you transfer. Do you have anything else that you'd like to say to people to finish on with the pension conversation?

1:05:13I mean, I know there's a million things that you could say. There are a million things. I just, in terms of, I've written a lot about the gender pension gap. So it's something that I've talked about a lot and on other podcasts as well. and just in terms of something to watch out for with workplace if you're going on maternity leave and that's coming up there's a lot of people have missed out through not knowing this but the rules are that your employer has to carry on paying at your full pay even when your pay is reduced so that's really important to know because apparently a lot of employers probably just not realising they pay it on your lower contributions so you think say you have three kids and take a year out each time you're you're missing out on three years of employer contributions because they're paying in at your like say you're only getting statutory maternity pay which i can't remember it's like a few hundred a week it's not much is it um they're paying in your pension on that amount not your full pay it's a massive difference massive difference and then you can't compound it over 30 years exactly tens of thousands of pounds potentially yeah yeah get your money I assume you can't go back and be like, you owe me this money.

1:06:23I don't know. Well, I don't think they have to do it. Yeah, but you miss out on the compounding though, right? Yeah, you miss out on that. You miss out on the investment returns. But like, if they have to do it, you could probably go back 20 years and go, Trust me, as soon as I get home, I'm like, call you one. How many babies you had, mate? Make sure they can, trust me. So say how many babies you had. You're going to be calling up all your old employers and be like, remember that time I had a kid? You owe me some money for that. Let me borrow your kid for a bit. Yeah, yeah. Yeah, but it's not much, but it's like everything in pensions.

1:06:53It's like, make sure you get everything you're entitled to, do your salary sacrifice, make sure you, another little nuance is ask to join straight away because they can wait three months. You know, all these little things that you can, the more you can know, like it all adds up over time and you can end up making a big difference to your wealth in the long run. so how's your campaign going t to get self-employed people auto-enrollment employer contributions from people that don't employ them one episode at a time man i'm just going to stand on my book brick by brick what do we want contributions where do we want it from we don't know anyone but me your answer is just go get a job mate yeah well get another job well you're self-employed and you're saying that you want the employer contributions but you don't want to pay them so go get a job if you want that benefit look i'm standing up for the entrepreneurs they're like visionaries the self-employed people the creators i'm not sure that you're self-employed either like i'm just dipping out of both you throw it around so loosely i'm definitely you're just some like illegitimate contractor aren't you but i love that episode a lot of good tips for uh workplace pensions little tips about maternity leave and pensions, all these things.

1:08:10It was really cool. Yeah. And if you, we talked about analyzing funds on pensions, um, we've put together a cheat sheet that goes over a lot of the different work-based schemes. You can sign up for that below and we'll just send it to you in an email for free. It just looks at some of the major funds and gives you a little bit of an overview of what they do. If they do that lifestyling or, you know, de-risking thing so that you can figure it out, just a little bit of help. please 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 i'm damo and t this was an episode of making money from our company most it was filmed and edited by the team at Flow Spire, Jack and Ben.

1:09:01It was produced by Ruth Edwards and brought together by Will Stollerman. What about Ruth and Toothless a Dog? Yeah, shout out them too.