QA58 - Listener Questions, Episode 58

0:00Foy. Foy. What did I say? Foy. Sorry, Foy. Foy. He's not a local. I'm a Yorkshireman. He's not a local.

0:06Pete Matthew: No, it's true. Yeah, I've always struggled with that one. Foy. Foy, yeah. As if it's spelled F-O-Y. Foy. Foy. Hi, and welcome to another Meaningful Money Q &A with me, Pete Matthew. And me, Roger Weeks. All right, Rog. Okay. Yeah. Really good to hear. Now, we've, we must have mentioned, I can't remember when we did this, but we must have mentioned at some point, or somebody asked us. Somebody asked a question. Oh, was it a specific question? So this is what our favourite tipple was. And you said? I said St. Ives Brewery Zenner Stout. That's like the most Cornish thing you've ever said. Yeah. St.

0:36Pete Matthew: Ives Brewery Zenner Stout. Zenner Stout, which is, yeah. And for me, it was Verdant Brewery in Penryn. It was their light bulb IPA. And since then, three different lots of listeners have been very kind and sent us. It's been really lovely. Yeah. they've sent us, you know, like a half a dozen light bulbs or whatever. And, you know, yeah, it's just very, very kind. So I'm hesitant to put names out because we haven't got sort of permission to do that. But if you have sent us some beers in the post, massive thank you. Very, very kind. Yeah, it's really lovely of you. Thank you very much. And we're not saying it to generate anymore.

1:19No, no.

1:20Pete Matthew: And we just want to say thank you because we've had a little bit now. Yes. It's been really, really lovely. Yeah, Roger, there's more coming in the post today. So yeah, very cool. Thank you. Right. So on to some questions. Where do people send them, Roger? If they want to send us some questions, they go to hello at meaningfulmoney.tv with the subject line podcast question and our really great Nick will drop it into the line in some future episodes. Yes. And we are still answering questions from April 2026. And this episode will certainly be going out in August 2026. So we are behind, but if it's really urgent or time sensitive, then mark it as such and we'll do our best to get to it sooner.

1:56Pete Matthew: All right. But we do generally record quite a few weeks ahead because we're efficient like that. But any notes and links that we talk about in this episode, they will be at the show notes, meaningfulmoney.tv slash QA58 and in the description under the video on YouTube. And if you are watching on YouTube, help us out. Like the video, subscribe to the channel if you're not already. Thank you so much. Big thumbs up. All right. Okay. First of all, Rog. First one. This is from Michael. It says, hi, team. Team. Team. Big team. Been listening for ages and having a psychological meltdown over this. Oh, dear.

2:29Oh, my goodness. Let's try to sort you out then, Michael. I have approximately£20 ,000 in my stocks and shares ISA and£20 ,000 left on my mortgage. Hmm. Wonder what the question is going to be. How can I justify the decision to pull the trigger and pay it off? note that I also have£30 ,000 approximately in a cash ISA and£5 ,000 float for easy access I also overpay the mortgage by about£800 to£1 ,000 per month but that's eased off over the last few months with the money diverted to an early year getaway I'm aware there isn't any perfect result or conclusion but I'm struggling to get past how to make the decision that's the point, how to make the decision how to make it, yes in context, I do have a big holiday coming up later in the year around five to nine thousand pounds expected to spend but i'm itching to pay this off and get regular investing it might be that writing this email i'm working it out for myself but i'd be keen to hear your thoughts not advice on how i can think about the situation or other angles

3:25Pete Matthew: maybe i'm not thinking about great question really good question michael in the interest people's language is fascinating how can i justify the decision so i would just define it too you know Is it to yourself? Is anybody watching you? It's just interesting language around justification. I mean, ultimately, you're responsible to yourself and that's it. So the only one you have to answer to is yourself, and you need to go easy on yourself. You rightly say that there's no perfect time. I'm just wondering sort of what the hesitation is. Yeah, and I suppose as well, you're thinking, well, if I tell my friends I've paid my mortgage off, they'll say you should have kept it invested because you'll make more money.

4:06but actually if you were looking at the close end now you're saying you were overpaying by 800 to thousand pounds a month so you're close to the end anyway so any investment growth over the next couple of years isn't going to make that much difference to you and this all comes down at the end of the day to psychology how it's not about just necessarily numbers it's how will i feel if i pay the mortgage off and a lot of people go actually that makes you feel really good and i It was the same with Jen and my wife. We had about£25 ,000 left on a mortgage. I had some money put aside. I said, let's just get rid of it.

4:39And it's that sudden weightlifting of it because it's the biggest bill you ever have, isn't it? The mortgage payment every month is like, oh my goodness. Imagine not having that. Well, you could imagine that now.

4:49Pete Matthew: Yeah, exactly. And the fact that you are, quote, itching to pay this off really is all you need to listen to. Just do it. and I realized that, you know, you're asking for help making the decision and we're telling you to just get on with it. That's not really help making the decision. That's kind of making the decision for you. But honestly, I think tying yourself in knots and, you know, having a psychological meltdown, it is worth it. And if you sort of take the thought experiment to its logical conclusion, let's say you paid off your mortgage, it's relatively easy, if you particularly had to, to reborrow the money.

5:27you can undo what you're proposing to do.

5:31Pete Matthew: So if you cancel your, surrender your store to JSIS and use the money to pay the mortgage off, if you particularly needed to get your hands on that£20 ,000 again, you could. You know, it'd be a bit of a faff and you'd have to go through a mortgage application process and all that. But you're not going to do that because freeing up the money every month that you're paying towards a mortgage, you'll very quickly be aggressively building investment wealth anyway. Right. And if I can jump on to what we often say here, it's not necessarily binary. You were saying I've got£20 ,000 in my stocks and shares ISA and£20 on my mortgage, but you've also got£30 ,000 in a cash ISA.

6:08Yeah, right. So let's play the devil's advocate. Take 10 out of your stocks and shares ISA, 10 out of your cash ISA, it's gone. Yeah. Because your cash ISA is probably not earning much interest-wise anyway, and then start throwing money that you were paying on your mortgage back into your stocks and shares ISA and the cash ISA if you want to, to build them back up again. And you'll find that money will be built up really, really quickly.

6:28Pete Matthew: Yeah, I mean, probably the cash ISA is earning less interest than he's paying on the mortgage. In which case, you could pay it all from the cash ISA and leave your stocks and shares ISA invested. You know, you'd only, in inverted commas, have 10 ,000 quid left in your cash ISA then, but you'd still have the 20 grand in your stocks and shares ISA, and that's a better weight for most people. You know, your 10 grand is your buffer. You know, it's safe in the cash ISA. Your stocks and shares ISA is where you build, and you've already got 20 grand in it. So, you know, it's not, I don't really believe it's a question of whether you should pay your mortgage off or not.

6:59Pete Matthew: I absolutely would. If you're itching to do it, then do it. It's more the question of where from. And given the choice, mathematically, it would be the cash isa for me. But as Rog says, split the difference. You know, if it eases the decision making for you, then take half from cash isa and half from stocks and shares. It isn't worth the mental energy, I don't think. It's easy for me to say when you're in the middle of it. right? So try to go easy on yourself, Michael, and you've probably done it by now anyway. But if you haven't, I hope that was helpful. Okay. This is a nice long question from the Rushome Ruffian.

7:36Pete Matthew: That's a new precedent, people using nicknames. But anyway, hi, Pete, Roger, and Nick. Many thanks for your podcasts. Listening to you has been part of my weekly habits for several years, and I feel like you've been a gateway, which has helped me to get a better a grip on my future. Thanks a lot. You are welcome. Rosham Ruffian. My question is how much to put aside for care fees when compared with potential inheritance tax liability, specifically whether to advise my mom to gift her future surplus income instead of investing in her ISA. Mom is 88 and in reasonably good health, just 330 ,000 in a stocks and shares ISA, 50 grand premium bonds, and owns her property worth 600 ,000.

8:18Pete Matthew: Mom's monthly spending is 500 quid. Sounds about right. Her monthly income from pensions is 2 ,000, leaving mom with a surplus of 1 ,500 pounds per month. Mom already makes gifts of 100 pounds per month to her two grandchildren from a surplus income and uses her annual gift allowance of 3 ,000 per year. I have lasting power of attorney, both kinds, for mom. It is important to me that I treat mom and her finances with respect and stay focused on mom's needs rather than that of me and my immediate family. As such, I've been transferring mom's surplus income into her stocks and shares ISA each quarter so that mom has enough money to do whatever she wants to do.

8:56Pete Matthew: I'm wondering, what is the point in continuing to put more money into mom's ISA when she has more money than she needs already? Mom is widowed. She has no desire to travel abroad, make any changes to the house, buy a new car or anything like that. Mom's immediate financial needs are met via a pension income. Therefore, aside from potential care, therefore, aside from potential care home fees, I wonder what is the point in continuing to boost mom's investments via the ISA? Assuming the care home fees of two grand a week, that's 104 ,000 per year. It seems to me that mom has over three years of fees covered before she would need to sell a house.

9:33Pete Matthew: I am an only child and executive for mom's will. Currently, mom has left her estate to me in her will. Mom says she doesn't want her hard-earned money going to the tax man my concern is that if mom stocks and shares isa continues to grow then her estate will be subject to inheritance tax when she dies unless of course the money is eaten up with care fees with this in mind i wonder whether to advise mom that her future surplus income should be gifted rather than invested what are your thoughts many thanks for your excellent work well yeah this um yeah this is this is one of those questions that relates to I'm worried about care fees when we've said so much in the past that care fees are a specter that a lot of people don't end up paying.

10:18Yeah. And that's my concern in inverted commas for you is that your mum's healthy at 88. Hopefully she carries on being healthy and that doesn't cause her a problem because not everybody has a problem with care fees.

10:32Pete Matthew: No, most don't. It's worth mentioning that you are limited when it comes to gifting. Your powers under the LPA, you can't gift money except for fairly nominal stuff at Christmas and birthdays that mom would expect to give anyway. But it doesn't sound like mom's lost capacity. It sounds like you're operating under the LPA because you can do that. Somebody can trigger the LPA while they still have capacity just because they don't want to do it anymore. If mom still has capacity, she could be making gifts from her surplus income. But you couldn't trigger that. she would need to do that and you'd need something in, really, to cover your own back, I would have something in writing.

11:14Pete Matthew: It is my intention to make regular gifts of X amount per month to my son or daughter, Rusholm Ruffian. I wonder if that's your actual name. And, you know, just so that there's clear precedent and expectation of what she's intending to do. And I think the care fees thing is potentially, you're right there's three years worth of fees before the house is going to be sold so the IHT is potentially the bigger issue I'm assuming that she inherited both no right bands in full from her late husband yeah so she's now on the cusp of IHT because 330 380 980 so you've got to hardly any leeway anyway but I've got to say to myself is that okay say the investment continues to grow and it takes her £100 ,000 over the top.

12:09Pete Matthew: It's only£40 ,000. It's only£40 ,000 worth of tax on an estate worth £1.1 million. Yeah. Still a lot after tax coming to you. Yeah. So is it better to have the extra growth which might then pay for more care fees? Yeah. To give your mum a year and a half, three and a half years worth of fees or four years worth of fees put aside. Yeah, but if mum doesn't want her hard-earned money going to the tax... No, it's a real It's easy for us to say we're still that much tax, and it isn't. But the fact is, you're going to be limited as to what inheritance tax options you use under a power of attorney if mum loses capacity.

12:45Pete Matthew: So you want to kind of address it sooner rather than later. So she absolutely could make regular gifts. There's no way she's going to fall foul of the sort of, you know, deliberate deprivation of assets thing, because she's going to be paying for her own care indefinitely if she needs it at all. and if not, then she's already got plenty of money she can dip into should she ever need to, which she won't. So, I mean, there is an argument. While mum has capacity for making larger gifts, I think, you know, she's going to be paying for her own care fees no matter what. So she could say, well, actually, I'm going to give you my dearest son slash daughter, Roshone Ruffian, you know, 100 ,000 quid out of my eyes.

13:28Pete Matthew: So, you know, it's not going to, she has to live seven years. Deliberate deprivation isn't going to be an issue because she's still got plenty of assets after that. Going to be paying for her own care fees anyway. So just a thought, you know, I can kind of sort of sense the tension, but I would crack on with gifts from income and even consider if mum has capacity, a larger gift than that. Yeah. And ultimately down the line, you could buy an immediate needs annuity. If the occasion comes and then that money's gone out of the estate straight away anyway, that removes the IHT worry for you. But yeah, mum's in a very good position to better pay for herself to have some really good care if needs be.

14:12But yeah, some gifting now while she still has capacity makes huge sense really.

14:16Pete Matthew: The price is incredible now, isn't it? Two grand. Oh, yeah. We used to say, you know, I don't know, a thousand pound a month or two thousand pounds a month. Yeah, you'd win planning somewhere, yeah, maybe 500 quid a week. Yeah. No, 2 ,000 quid a week. You'd burn through a state pretty quick. Yeah. Yeah. For sure. Okay, question three. Question three. This is from Adam. It says, hello, Pete and Roger. No D. Great podcast. I hope all the good karma you give out comes back to you. Thanks very much. Thank you. Quick and short question. Lovely. Makes a change. Yeah, lovely. I'm aware some physical gold holdings are subject to CGT, but some such as gold sovereigns and Royal Mint bullion are exempt.

14:57So are there CGT exempt gold holdings that one can buy and keep in a GIA to sell later CGT free? Many thanks and keep going, Adam. Nope. Nope. Sorry, Adam, it's not that easy. No.

15:12Pete Matthew: No. So, you know, well, there's only one specific, you look this up. Yeah, there's only one specific thing you can do and that is actually bullion coins from the Royal Mint made of gold are the only ones you can have that are CGT free. Any other coins issued by anybody else that's gold? I don't know whether South African crew grounds account for that because they are an actual currency, I don't know. But if you buy physical gold bars, that doesn't count either. Even from the Mint? Even from the Mint, yes, because you can't spend them. Right. So it's only coins issued by the Royal Mint in gold that you technically can spend, which you'd be stupid to do so if you did it, that are CGT-free.

15:57Anything else is CGT-able. So even physical gold in a GIA, it's a holding like any other investment. Physical gold coin, physical gold bars that you hide under the bed, you know. Yeah, CGT-able. All subject to declaring it, obviously, but you've got to do it. Yeah.

16:16Pete Matthew: we kind of have to assume people are going to tell the truth on their tax return but so if that's your if that's your thing then buy some physical gold coins issued by Royal Mint only the Royal Mint and shove them in a safe somewhere so buy yourself a safe I'd love to try and spend like a gold sovereign issued by the Royal Mint yeah imagine going to the Tesco's oh I've got my shop in here can I give you this yeah exactly how much is that well that's yeah 10 grand can I have change please 10 pound notes so yeah good yeah good answer Nice quick question, quick answer. And now the opposite. Actually, they're not too bad.

16:51Pete Matthew: So this is question four. This is from Mark. Hi, Pete. Hi, Rog. Hi, Mark. Hi, Mark. My son put me onto your podcast some time ago, and I've been working through the back catalogue from 2019, and I'm currently up to 2023. We have done a lot of these. I have also bought the retirement guidebook. Thank you. And plan to rejoin the academy later this year. Thank you. Thank you. Like everyone else, I wish I found this years ago, but hey-ho, we are where we are. I'm 57 and I plan to retire next year. My wife gave up work to look after our children. And so apart from the state pension, all our pension funds are those that I've been able to accumulate through my various jobs.

17:24Pete Matthew: I've got four pensions, 1DB and 3DC. One of the DCs is in drawdown because I had to withdraw the tax-free element a couple of years ago for reasons I won't go into, but I was careful not to trigger the money purchase annual allowance. Well done. I now work in financial services and you won't believe the compliance hoops I would have to get through to change out of the default pension funds and likewise consolidation of the DC pensions. They will have to wait until I actually retire. That's mad, isn't it? Can't see the point of that, but we don't understand. I don't know exactly what the role is.

17:57Changing out of default pension funds for your own personal pension. Yeah, it seems a bit dumb.

18:02Pete Matthew: I mean, it's not exactly insider trading, is it? Do you know what I mean? It seems fairly benign and innocuous. Okay, having listened to so many episodes, I have loads of questions. but the ones spinning through my head the most are number one, can I consolidate a DC pension in drawdown with my virgin untouched DCs and does it matter if I wait until I retire to do so if yes, how would that be presented to me by the provider should we answer that one first you can't add a you can't add a crystallized pot to an un-crystallized pot but you can put it with the same provider if they accept it and it'll just have to be a separate pot effectively.

18:42Pete Matthew: Yeah, a separate account. Really important, crystallized and un-crystallized always will be separate accounts. Otherwise, like, how do you even keep track of cash and things like that? So, yes, you can consolidate with the one provider, but not into one account. Number two. Well, I was just saying, you don't have to wait to retire until you do so. Well, unless you're compliance. Unless you're compliance to stop you doing it. Yeah. But you're retiring in 12 months' time. So that's probably a bit of a moot point, really. Yeah, true. Okay, number two. With investments all in one person's name, is there any way that imbalance can be addressed?

19:17Pete Matthew: For example, what options are there to make use of tax allowances, which my wife may have, to minimise tax? Is it possible to transfer some of my pension to my wife? I suspect not. Do we need separate cash pots in case of the death of one of us? A couple of questions in there. No, you can't transfer your pension to your wife. No. Unless you die. No. Or get divorced and then just don't tell anyone. Yeah. What you could do, what some people do, is they draw their tax-free cash from the pensions and pass the tax-free cash onto the wife, which some could go into a pension partner in her own name or an ISA or whatever.

19:48Pete Matthew: Yeah, not a lot, probably if she's not got earnings. No. But yes, you know, then she at least gets the interest on it. Yeah. You know, if it's in the bank in her name or if it earns dividends, be in her name, so you're using some of her tax allowance. And then question three. In the home straight season, of course, going back a bit, and in the book, you list a number of questions to ask DC providers. Are there any questions I should be asking my DB provider, even if they adjust the practicalities? That's a good point. I'm not sure why I didn't put that in the book. It's like a glaring omission in hindsight.

20:20Pete Matthew: So some questions. We thought of some. So how much are you going to be paid and when? So basically, how much income are you going to get and when will it pay out? And then how will it escalate? At what rate? And are there any caps to that escalation? Is it limited to a certain amount? Yeah, because sometimes you get it. It's like it'll grow by CPI, but maxed at 5%. So it won't grow any quicker than that. Spouse's benefit, particularly if you die first, obviously, because that's important then. Because she hasn't got her own provision, like the new career average revalued earnings schemes in local government and things like that, it's like a third goes to the spouse.

20:58Pete Matthew: It's not a very big spouse's benefit. So you need to do some planning. If you die early, God forbid, Mark, will your wife be okay on a much lower pension? You know, is there other assets that she could draw from? So, I mean, costs would go down a bit, but she would still have to pay all the bills on the house. So just make sure that she'd be okay and find out what the spouse's benefit would be and make sure that there's a proper nomination of beneficiaries for completed. Less the case in the DB, but still important that they know. Are there any early or late retirement implications? So if you decide to, because you haven't told us when you're due to take your DB pension on here, whether it's 60, 65 or whatever.

21:39So if you were to take your DB pension early, what's the implication of that? Or if you decided to defer that and leave it to later, what would be the positive implication of that possibly? Yeah, exactly.

21:49Pete Matthew: Does the scheme have a guarantee period? Do you want to explain what you mean by that? Yeah, this is something that applies to a lot of pensions, some to DBs and some not to DBs. It's saying, okay, if I retire today and I turned my toes up next week, is there a guarantee period of the amount that I would have been receiving for a short period to protect me for dying early? Because the spouse's pension will kick in at some point. It might even kick in straight away. But it says, okay, we appreciate the fact that you've saved in this pension plan for X number of years. If you die very early on, does it pay out for the next five years what you would have received to your estate?

22:30and then your spouse also get her spouse's pension.

22:34Pete Matthew: Yeah, yeah, okay. So that might make a really, really big difference. So just check what the guarantee period might be. Ask if the scheme applies, we call it kind of clawback here, at the state pension age. Some schemes will pay you more to start and then they will drop the payment at state pension age, not necessarily by the amount of the state pension, although I've seen schemes that do that. So basically you get a thousand quid less a month because that's been made up by the state pension. So just check if there's any difference at state pension age in the income. That was the ones that sort of leapt to mind.

23:08Yeah, nothing else really that jumps out really to me. And as I say, it depends on your retirement age, the scheme as to when you're going to get that information. So it might be worth, you should get an annual benefit statement anyway, showing you what your DB pension will pay you at expected retirement age.

23:24Pete Matthew: Yeah. You round off your question, Mark. thanks again for the podcast and guidance. Say hello to Cornwall for me. I'll do that in a minute. I'm sure we'll be visiting... How do you say it gets around? Fowey, isn't it? Fowey? Fowey. Fowey. Fowey. What did I say? Fowey. Sorry, Fowey. Fowey. He's not a local... I'm a Yorkshireman. He's not a local. He's not... No, it's true, yeah. I've always struggled with that one. Fowey. Fowey, yeah. As if it's spelled F-O-Y. Fowey. Fowey. Oh, there you go. We'll be visiting Fowey. More often. when we do retire. Don't suppose you or Roger can recommend a book on the history of Cornwall?

24:03Probably no. There's too many books. It depends on what you want. Is it agriculture or fishing or the history or, you know. Yeah, language. No, there's too many to talk about really. So, yeah. And it depends on which parts of the Cornwall as well because the west of Cornwall are different to the east of Cornwall and the north of Cornwall.

24:20Pete Matthew: Exactly, yeah. Is it really Cornwall? East of Truro? Okay, anyway. I think there is. Yeah, okay. Right, question five, Roger. Question five. This is from Lottie. It says, hi, Pete and Roger. I'm in my early 50s and only now feel like I'm reaching a stage where I have some financial breathing space. But it has also triggered panic that I may be behind and need to make the most of the next eight to ten years. The common thread, common thread. Yeah, yeah, I hear that a lot. For context, I was a single mother for 24 years. That's a heck of a job. A hell of a achievement, yeah, yeah. During much of that time, I worked part-time on a relatively low salary while contributing to the LGPS, Local Government Pension Scheme.

24:58My children have now left home and over the last eight years, I returned to full-time work and progressed professionally. I'm now earning just above the higher rate tax threshold at£62 ,000. Over the last eight years, I've aggressively focused on becoming debt-free and paid off my mortgage last year. And I currently contribute 8.5 % to a Local Government Pension Scheme, part final salary, part career average retirement revalued earnings. Yep. Just opened an AVC at£550 per month cost to me. Just opened a stocks and shares investment platform where I can comfortably afford up to£250 a month. I save£600 a month into a cash ISA for flexibility and emergency funds.

25:36And I currently hold around£20 ,000 in cash ISA savings. I would ideally like the option to retire around 60, perhaps gradually, rather than stopping work completely overnight. So my question is, given my relatively late start to focusing financial planning and lack of understanding. Am I broadly approaching this in the right way? And what else should someone in my position be considering over the next decade to build a secure but flexible retirement? I'd also be interested in your thoughts on balancing AVCs versus ISAs at this stage of life and whether people like me should focus more on flexibility or maximum pension accumulation.

26:11Thank you. I've just found your podcast. I will be listening. Help reduce some of the fear around pensions investments I have. Regards, Lottie.

26:19Pete Matthew: Right. I always worry when people say it's triggered panic. And then in your last sentence, you say fear. Money really does bring out emotions, doesn't it? Panic, fear, these are strong things, right? And so, I mean, it looks to me, Lossie, you're doing a lot of things right here. I mean, more than most, okay? $5.50 a month into an AVC, 8.5 % into the main scheme, $2.50 a month into stocks and shares, $600 a month into cash ISA. you know this is a decent savings rate so it's not like you know you the kids are off the books you've got a great job now and you are blowing it on crap you don't need it's very much you are focused on your need and you want to retire at 60 ideally at least in part which is only you know half a dozen years away uh seven or eight depending you say your early 50s so you know it's um you're doing the right things and you just need to keep going.

27:20Pete Matthew: You need to invest fairly aggressively, I would say. So don't be too cautious with your investments. That partly comes with understanding. So keep listening, keep watching the YouTube channel, uh, learn from, uh, you know, great content creators, read some great books and learn how investing works and how wealth building works because you don't want to be too cautious. You're in early fifties, but some of this money is going to be invested for four years. So you need to, you know, push it fairly hard and invest accordingly. So that's the first thing I would do. It's not for us to say whether your balance between AVCs and ICAs is right.

27:53Pete Matthew: I don't agree with that. Same way we don't like the word should, we don't like the word best or optimal because there rarely is such a thing. It's very subjective, very individual. Anything else? Yeah, I would think what level of emergency cash holdings do you need in your cash ICA? That's one thing that jumps out at me is that you've got a nice amount in there and you're still adding to it at£600 a month. So I would say to you, we're not optimizing here, just saying to you is that how much do you need that cash ISA savings to be? If you're saying I want to retire early and have as much money as I can, then is there a thought process that actually could you flip the cash ISA and the stocks and shares ISAs the other way around and say, I now need to start building up my investment portfolio better than my cash ISA because my cash ISA is at the level I need it to be.

28:45Or by all means, carry on until you've got that to that level. But I think if you're saying six, seven, eight years time, I want to retire, you'll be better off having a larger amount in your stocks and shares ISA than your cash one, really.

28:59Pete Matthew: Yeah, I think also it depends in terms of balancing AVCs and ISAs. I think it does somewhat depend on what the form of the AVCs is. So we've got another question on that in a minute. Yes. Yeah, there is. And that is our local government. Anyway, so because AVC is very often linked to the main scheme, and you may have options as to what you do with that. And AVC fundamentally is just a defined contribution pension, but with some schemes where the AVC is linked to a main DB scheme, there may be other options like enhancing tax-free cash or whatever. So ultimately, I think, Lottie, the fear and panic will be removed to no small measure with some planning.

29:49Pete Matthew: Okay, so a couple of ways you can do that. You can obviously speak to a proper financial planner, somebody who is fee-based. It's not about sort of grabbing your assets. It's about working through your planning. and they'll get to a point where you need to do this next. You need to do that next. So you can get in touch with us at Jackson's. Go to jacksons.life. We'll put a link in the notes. Read the sort of how we help pages and get in touch, right? See if we can help you. You can also continue to improve your understanding and do a lot of this yourself. And Meaningful Academy, probably retirement planning, actually thinking about it, will help you in that run up to retirement now, positioning the pieces making sure you've got the right money in the right places to you know retire well make sure you've got what you need to draw from when the time comes to press the button and actually retire even if you phase into it by going down to two or three days a week or whatever um meaningful academy will do that and it gives you access to the sort of software tools for planning that might not be your bag not everybody wants to sort of start wrangling software but failing that you could always pay somebody to do it um also check out meaningfulcoaching.co.uk because my great friend Alistair there will do a brilliant job at building a plan for you you've got the kind of pieces but that's kind of unregulated that's not about you should do this iso you should do this pension it's very sort of high level um and I'm sure Alistair will confirm you're doing much of the right things but maybe I'll just say you possibly switch your balance between AVCs and ISAs a little bit.

31:26Pete Matthew: So a few options for you, right from sort of self-directed stuff through the academy, through full regulated advice with a good financial planner or with us at Jackson's, or meaningful coaching sort of sitting somewhere in the middle. And that will go a long way to removing your fear. Yeah, and I think we come across this so many times people have had different starts to life. They've not come to planning for their finances until later on. And it's like, it's too late. It's not too late. You were actually doing really, really well. You've got some really good things on the go and you're funding them at a really high level as well.

32:02Pete Matthew: Yes, it's great work. Keep going. It is really good going. Keep going to be fine. And, you know, single parent 24 years is a hell of an achievement. Yeah. Right, this last one is from Andrew. Hi, Pete and Roger. I'm loving the podcast and it has really helped focus my mind and be more intentional about my finances. having not really saved or invested for the first 40 years of my life. There you go. See, I'd say it's more off. It's the rule rather than the exception. Yeah, it is. More people start later than perhaps they could have, but that's just life. And when I first got my first job, I fell into a pension because they provided one, you know, and I spent a bit of money when I was very, very young.

32:42And then I started saving stuff. So you do end up not coming to this until perhaps a little bit mature.

32:49Pete Matthew: Well, yeah. Yeah, mature, nicely put. I am a relatively low earner with a salary of 30 ,000, which means I can only afford to commit around 200 pounds a month for savings and investments. But I do save anything left over at the end of the month too. I could look for a higher paid role, but my current job gives me a lot of flexibility, including mostly homeworking. And because I've worked in local government for 20 years, I get really good sickness and redundancy benefits, as well as a defined benefit pension, which I've been paying into from the start of my employment. That'll serve you well. this will guarantee me my final salary on retirement oh alarm bells there no it won't um we'll get to that although that assumes i work until 68 which is longer than i want to ideally um i've built up an emergency fund of a month's salary and we'll try and get that to two months but with my sickness and redundancy benefits i don't feel i necessarily need the three to six months which is recommended by many i've also stocks and shares iso which i'm hoping to build up and not spend until retirement with the plan of using it to bridge the gap before I draw on my pension.

33:50Pete Matthew: I'm now considering making additional contributions to my pension and have two options available to me. One is to make AVCs, additional voluntary contributions via the prudential, and the other is additional pension contributions, APCs, through the scheme itself. With AVCs, my employer will pay in with me, but they don't with APCs. With my employer paying in with me that makes me wonder if avc's maybe a better option alternatively as i don't have much money to put in i may keep my pension contributions as they are and focus on my stocks and shares isa i know you can't tell me which route to take but i am interested in your thoughts and perhaps there are some questions i should be putting to my pension provider to give me more clarity sounds like you've been the local government for 20 years well as we record this in 2026 so it goes back to 2006.

34:41Pete Matthew: Yeah. Yeah, it is the newer schemes, isn't it? It is, by the sound of it. But I think this may be just semantics in the way you've heard it. You said that this will guarantee me my final salary on retirement. Unfortunately, you won't get your final salary on retirement. You'll get a percentage of it. Yeah. And you may be probably on career average some of it as well, wouldn't you? I think probably almost all of it will be. If it's a 68 finish, and that would suggest that Andrew's fairly young, perhaps early 40s, something like that. And so his state pension is likely to be 68. You can't remember what the cutoff is.

35:15Pete Matthew: But even if he's 67, if that's longer than he wants to work. But yes, the career average thing, we used to call them final salary pensions because they were based on your final salary, but that doesn't mean you would get your final salary throughout retirement. That would be great. That'd be lovely. Yeah, usually it was capped at sort of two thirds, but the income you got was a function of that final salary number essentially so be wary of that um you know there will be a like a calculator on your scheme website which will give you some idea of what you are likely to get if you remain a member for the rest of your working life all right so and you get annual statements as well yeah and and whether it's an avc or apc you say because the avc might be handy because your employer pays in the way the apcs work it's not based upon how much you pay in ultimately.

36:05Yours is because it'll give you, it'll buy you additional pension income effectively. And your employer doesn't have to pay into that because the scheme will provide it for you. So you're still getting the benefit even if they're not putting some money in. So it's just a case of working out, is it worth me getting that extra benefit? And you're going to say, well, actually I'm going to retire early. I'm not going to go to 68.

36:23Pete Matthew: Yeah. Whereas an AVC you could access earlier than the main scheme age. Or actually if you did the APCs, it might build up your benefit quicker and if you took it earlier, it'll negate some of the actuarial reduction in the pension because you're going early. For taking it early, yeah, right. I mean, you should be able to approach the scheme. You do ask what questions can I ask the pension provider. I would definitely ask, you know, for a given level of extra income in retirement from 68, what will that cost you a month? Yeah. So they might be able to say, right, okay, you're 40-something now.

36:58Pete Matthew: If you want an extra 1 ,000 quid a month, 1 ,000 quid a year in retirement, that's going to cost you call it say 200 quid a month now from now until 68 right and then at least you've got something to kind of compare with, well if I put 200 quid a month into an ABC how might that grow, not guaranteed of course, which is the main difference how might that grow, certainly it's more flexible and so then it becomes a bit of a comparison you've got unknown but likely growth in an ABC flexibility to draw earlier than the main scheme age, whereas you've got guarantees on the other side with the APC because you're buying guaranteed future benefits.

37:42Pete Matthew: Can't get at them until 68 unless you draw early, but then you've got reductions. So there is some maths to do for sure. But I would be wanting to know what the APCs cost. Yes. That's the question I would ask. So at least you can try a comparison. And the difference between that and doing some ICs instead of the AVC is like, well, okay, if you pay into an ISA, every pound you put in costs you a pound. Your employer doesn't add to that. It will grow roughly the same way as your pension would do. It's just that the AVC obviously comes with the benefit of the tax relief and your employer contributions.

38:17So I think the decision is not between that and the ISA. I think that's between that and an APC. See what the benefits are on those. And once you know what they are, you might go, well, actually, shall I do the ISA instead? I think you tend to lean towards the pension. that's what we would tend to do, but there's no right or best way of doing this.

38:36Pete Matthew: No, I don't think so. Nice problem to have, nice question to have. I think you're going to have to do some kind of comparison and for that you'll need the numbers on the APCs, really. I think the nice thing is that you've got someone that's content, you say you don't earn a very high salary,£30 ,000, but actually you've got some other benefits with it. So many people drive for the best income they can. And it's like, well, there actually is more to this than life. You know, I'm very relaxed at work. How many people are in jobs that pay a lot of money, but they hate it? Yeah, exactly. You know, so you've got some benefits on that side as well, Andrew.

39:16Pete Matthew: Good, good. 40 minutes in, six questions done. Oh, done. Well, well, hope those answers are helpful. Hope so. It was helpful having not so many long questions, which is lovely. So please do keep them coming. We don't mind the long ones. as long as we don't get six of them in an episode. Yeah, we try not to. Yeah, so please keep the questions coming in to hello at meaningfulmoney.tv with a sub-delivered podcast question. And as Pete said earlier on, if it's urgent, if it's something that's time critical, then shove urgent in on it and Nick will actually pull this out quicker. What's the bet that every single question that comes in will be marked urgent from now?

39:47Pete Matthew: Yeah, don't ruin it for everybody else. So just a very quick heads up. We are going to take a little summer break. Just a couple of weeks. We're going to take the next couple of weeks off. You're retired. Yeah, sorry, sorry. Yeah, take a couple of weeks off. We'll be back, raring to go on, I think the second or third of September, the first Wednesday in September. So enjoy the two weeks. Without listening to us, we'll be back before you know it. But that's it for this week of Q &A. For the notes and the links, go to meaningfulmoney.tv slash QA58. We'll see you there. Hope you enjoyed it. Thank you so much for listening.

40:21Pete Matthew: Thank you, Mr. Roger Weeks. Cheers, Pete. We will see you in three weeks.

40:32Gotta go!