Is the weaker US dollar bad for investors and why is Vanguard reducing UK bias?

0:02Welcome to This Is Money podcast sponsored by Charles Stanley Direct. I'm Georgie Frost and joining me and Simon Lambert today is Lee Boyce. And coming up, a certain US president has been hijacking all of the headlines in recent weeks. But what do Donald Trump's antics mean for UK investors? Meanwhile, one of the UK's biggest investment firms, Vanguard, has spurned the Chancellor's efforts to drive up investment in the UK as it plans to cut its life strategy exposure to the UK. why and what should you do also stay nationwide bumps up what it'll lend on mortgages to six times salary how much you need to have saved in your pension at every age for a stellar retirement and would you spend five thousand pounds on a smartphone don't begin to stay up to date with all the latest breaking money news just go to thisismoney.co.uk or download the app but first a message from our sponsors do you love talking about money as much as listening to it then you'll Love this.

0:55Charles Stanley Direct's financial coaching service gives you a real human, yes, an actual expert to help you make sense of your finances. No jargon, no pressure, just clear answers to your money questions. Book your free 50-minute call today at charles-stanley.co.uk forward slash financial coaching. Go on your future self or thank you. Remember, investment involves risk. Now back to the show. This is, as we always say, a financial, not a political podcast. So we will leave that part of this discussion to the experts on other pods. But the antics of Donald Trump over recent weeks aren't restricted to Venezuela or Greenland or the US.

1:34The tanking dollar is bad news for UK investors with money tied up in US and global funds, which will be many of us. So what should we do? Welcome to you, Lee. Welcome to you, Simon. And then Simon, firstly, what is happening to the dollar markets in general at the moment? This is a big question. I appreciate there's a there's a lot going on as a result of the president's latest pronouncements.

2:01Simon Lambert: Well, the overall picture and you need to zoom out to look at the overall picture is that the dollar has fallen substantially against the pound over the last year. The reason why the dollar has fallen substantially against the pound in the last year is the dollar has given up some of its strength. The bigger picture, if you zoom out, is that the dollar was particularly strong before this happened. Donald Trump has come in as president. And one of the things that he has identified as a problem for America on his long list of things that he has identified as a problem for America is that the dollar is too strong.

2:33Simon Lambert: Now, he hasn't explicitly said that he is indulging in policies to weaken the dollar, but his policies are weakening the dollar. And some of those involve a slight lack of faith over the interest rate policy of the Federal Reserve and how independent it is. Donald Trump has launched a number of attacks on the Fed and Jerome Powell, who is the chair of the Fed, saying that it should have cut interest rates by more. So you're seeing a lot of political pressure on the Fed to cut rates. Jerome Powell is due to leave his role at the Fed soon. And there is a suspicion that Donald Trump is going to put someone in charge of the Fed who is more of a yes man.

3:20Simon Lambert: on top of that you've seen uh recently since the start of the year jeroen powell a criminal investigation into him due to an overrun on spending on improving the federal reserve buildings the cost of which uh i can't remember the exact figure but it's absolutely astonishing however i find that the cost of many things is absolutely astonishing nowadays so i find it very difficult to ascertain whether this is a fair cost or not added to this we've seen you know the saber rattling over greenland the abduction and arrest of maduro in venezuela and various other things and you're also seeing governments around the world shift some of their reserves away from the dollar and into other things such as gold which is up substantially because effectively the u.s government in a sense can control what happens with dollars whereas it can't control what happens with gold or reserves held in other currencies.

4:19Simon Lambert: Now, this isn't to say that the dollar is dead. The dollar is not going to suddenly stop being, you know, the world's number one currency and the one that people go to for reserves. But because so much money gets parked in dollars and so much money gets parked in US treasuries, it doesn't take a colossal shift away from it to start making a big difference elsewhere. And effectively, what we've seen over the last year is just less demand for dollar denominated assets, which means that the price of the dollar against other currencies has fallen. Just briefly, because we've heard this not just with the US, but with other countries as well.

4:59What's the problem with a strong currency?

5:03Simon Lambert: Well, the problem with a strong currency is that effectively, it makes your exports more expensive for other countries to buy and it makes your imports cheaper. Donald Trump has done something to try to make imports more expensive with the addition of tariffs. The tariffs, you know, effectively raise tax for the US. So we're actually boosting the US's income. The end result is that if you are a consumer in the US or a business in the US, then you are going to end up paying more for those imports. And Donald Trump feels that the strength of the dollar means that there is not a level playing field between the US and other countries.

5:43Simon Lambert: And it means that the US is too prone to buy from overseas rather than buying from, you know, American made. And where this, to come full circle, impacts on UK investors is we're a lot more exposed to the u.s then probably a lot of people realize as individuals the greatest example is if you hold a track a global tracker fund if you hold a global tracker fund that's based on the msci world index then more than 70 percent of that is going to be in u.s shares this is down to the outperformance of very large u.s companies particularly the tech giants over the last you know five years or more and this has led to an increasing level of concentration within that global index and also within the US index itself the S &P 500 for example is more dependent on those kinds of stocks.

6:35Simon Lambert: Now all things being equal this has been great news for those investors because they have made lots and lots of money. However there's quite a stark figure in Tanya's story here which illustrates the effect of the dollar's decline. The S &P 500 rose by 16.4 % last year That's just share price rise. It doesn't include dividends. And that's in US dollars. But once currency losses were factored in, UK investors received a much lower return of 8.4%. The MSCI World Index was up 19.5 % in US dollars. But UK investors got a return of 11.3 % in pounds. Now, if you compare that to the 21.5 % return from the FTSE 100, that's just the share price return, UK investors would have got all of that because it's in their own currency.

7:26Simon Lambert: Now that's you know if you've got an S &P 500 tracker the first one if you've got a global tracker the second one versus if you're holding a fund that just has UK shares in it. But many people will also hold you know large global funds and we talked about this last week for example when we were talking about Fundsmith and if you've got Fundsmith although that doesn't track the index, it's still got a very large amount of its assets in US stocks. The thing is, in most years, this won't make a big difference to you, because currencies don't tend to move around by that much. But at the moment, you know, this year, although those returns are very, very respectable, it does mean that investors, you know, in those funds have received a much return than they thought they would.

8:15How can we avoid the fallout? Is there anything we can do?

8:20Simon Lambert: Well, I mean, you could only invest in UK assets. But then what you're doing is you are being extremely heavily reliant on the UK, you are moving very, very far away from, you know, the kind of the balance that is the global market. And what you probably would have suffered over the last five years is massive underperformance compared to the um compared to the global index or compared to the s &p 500 um so that's probably not the right thing to do you could put some more of your assets into uk assets i'm going to talk about this in a minute when we talk about vanguard and its life strategy funds uh alternatively you can opt for hedging which is something that seeks to remove the effect of currency movements and you can buy hedged funds for example these are different to hedge funds but a currency hedged fund will basically try to remove that effect from it but what you might find is that yes you solve the problem in a year like this year and you don't underperform by as much you're still underperformed by a bit due to the cost of the hedging and things like that but then in the years when it goes in the opposite direction so you've got to remember that in the years before the dollar was weakening there were years in which the dollar was strengthening and in those years when the dollar was strengthening it was helping out UK investors and then the other alternative is to potentially look to other markets as well so you might not want to go all in on the UK but you might decide that actually you think that the weighting to the the US is far too high in your portfolio.

10:02Simon Lambert: And you want to stray from that, you know, totally passive weighting in your portfolio. And you might go, okay, well, I'm going to put a bit more of my money into something like Europe or Japan or emerging markets. But then what you're doing is you're making an active decision that you know better than the market. And you are risking the fact that you are wrong. Yeah, Japan's having a few issues as well. I understand at the minute, But are you seeing that? Are we seeing that people move away from America or is it just kind of holding tight? We are already we're seeing a shift away from it anyway.

10:41Simon Lambert: You can see that in the rise in the FTSE 100 over the last year, how much it outperformed the US market. Because if you look at the makeup of global stock markets, NVIDIA, the world's largest company, is the same size as the entire UK stock market. So, you know, it doesn't take much of a shift away from some of those big companies to other markets to push those other markets up. It doesn't mean that nobody's going to buy NVIDIA shares anymore. It doesn't mean nobody's going to buy Microsoft shares anymore. It doesn't mean nobody's going to buy the S &P 500 anymore. more but even just a small shift away from that and the amount of money that flows into US stocks and into European stocks into UK stocks into Japanese stocks or into other assets into gold for example even into government bonds only a small shift away from that can actually make quite a big difference and there was some really interesting figures out last week actually talking about UK gilts and the fact that actually the interest from ordinary investors in UK gilts has been to such an extent over the last year or so that they think it's actually slightly reducing UK borrowing costs, which is really quite unusual.

12:01Well, there you go. Right, Lee, Simon spoke about Vanguard and UK investing and that we'd talk about it a bit more because in a blow to the Chancellor's efforts to get us to invest more in the UK, one of the world's biggest fund managers has cut exposure to homegrown stocks of some of its popular funds. So Vanguard is ditching UK equities worth around£1.85 billion from the life strategy range to reflect what it calls the more global focus of UK investors. It will also cut the fees on the range from 0.22 to 0.2%. percent uh lee what is the significance of this firstly i mean vanguard is very famous name but

12:42Georgie Frost: just remind us who they yeah vanguard's a big uh us company it's kind of uh shaken up a little bit the investing market in the uk with its low cost uh kind of funds and things it kind of makes it quite easy to get involved it's a very like good place for novices to start uh investing life strategy is one of its sort of flagship products or really solonymous with vanguard there's five of different life strategy funds there's 180 60 40 20 life strategy 100 is 100 equities life strategy 80 is 80 equities 20 bonds so on and so forth it's pretty big news this because there's a lot of money that is in the life strategy funds more than 50 billion pounds of invest uk investors money is in these life strategy funds the most popular being life strategy 60 but 80 and 100 also vastly popular largely because of the fees that you just mentioned going down from 0.22 to 0.2 percent it's a pretty good place to make a start and it's a real mix of companies across the world but what it is doing and what it has announced this week is a slight reduction in the home bias of the UK from these life strategy funds from 25 so currently 25 percent uk exposure uh down to 20 and then when it comes to bonds and government debt and all that kind of thing that's in the other part of the yin and yang of this uh it's going down from 35 to 20 as well so both going to be at 20 now i am a vanguard customer i do say even vanguard so i have an active interest this and kind of i helped tanya crunch the numbers uh on this because i was kind of interested in how much you know this would kind of fly in the face of the chancellor who of course has been saying let's invest in the uk uh it's been encouraging people to potentially invest more with the cut in the cash allowance from 2027 for under 65 and then this whole drive towards us investing more into britain and then things like this happen and you you kind of it's a chance of the muscle head in their hands um it's not a huge amount in the grand scheme of things though if you think about it 1.85 billion pounds coming out of um uk equities but it's just it's the kind of symbol of what that means and i had a look in the in the comment section in there largely people are seeing that as a positive move that actually is overweight uh in uk um investments um and it's been a long time coming that this has been rebalanced and someone pointed out that uh 25 uk exposure in life strategy funds is very high indeed i'd argue that 20 is too high in and all world funds uk exposure is only three to four percent so it is still quite heavily uk focused uh 20 is quite a quite a large amount um but if you are a vanguard customer or whatever funds you have you should go and have a look and see how the blend of and the makeup of your investments is the other thing i should point out vanguard it did make some changes at the start of last year charging a four pound monthly admin fee to investments worth up to 32 grand um and 0.15 percent uh up to maximum 30 375 pounds a year it was a little bit upsetting for people and i just would like sing with praises for you know being a great place to start out but

15:58Simon Lambert: unfortunately that being a kick in the teeth i think it's very interesting and one of the reasons why i think it's very interesting is i think that there'll be lots of our listeners who hold the life strategy funds um there's a huge number of people who hold the life strategy funds they're very very popular they're popular for a reason because they're dead simple and you know you can spread your risk everywhere and so on but i think there's lots of people and i'm not saying our listeners will think this but i'm saying there's lots of people out there who didn't even realize that their life strategy fund was majorly skewed towards the uk i think there's a lot of people out there who think that it is effectively a global tracker fund and it isn't it does have this you know large weightings of the uk and that does mean that in years gone by uh the performance hasn't been as good as a global tracker fund even if you held the 100 equities version but obviously now this has been cut but just at a point when the uk stock market is doing really well so there might be some investors sitting there scratching their heads and wondering about all

17:02Georgie Frost: of this i was gonna say the other the other interesting part of this quickly georgie is that is launching a new set of life strategy funds as well of life strategy global and it's going to be a very similar concept that there's a 20 40 60 80 and 100 version of this with a 0.2 percent fee this is designed for investors who want to be fully invested across global markets and with no extra weight given to the uk that again is actually interesting because people you might find people taking some of the money out of their current life strategy funds and putting it into this more global one that there's you know given that there's been a spotlight shone on the fact that there is quite a uk bias on this life strategy fund as cyber says that people might not have even realized so it'll be well well worth going investigating where these global funds are going it started from yesterday so the details should be on its website the other thing to say is that

17:50Simon Lambert: if you are interested in this type of investment as well that then it's also worth looking at blackrock's my map range because it does have it does a very similar thing it's much less well known than life strategy um i'm not saying either one of them is better but it is worth looking at the blackrock my map range and these can be a very very very cheap way of investing um you know for example you don't have to hold them through the vanguard platform you can hold them through another platform and that other platform might charge you no fees at all that's it for part one

18:29Simon Lambert: I am joined now for our weekly investing explained feature by Blerem Gashi of Charles Stanley Direct. Blerem, we've got a question here from a listener. I want to build an investment portfolio and would like to hold individual shares in it. How many different shares do I need to diversify? The first thing I like to do is give a bit of research and context, you know, talking about diversification and individual shares. This goes back to kind of modern portfolio theory. A model portfolio theory shows that you don't need hundreds of holdings. In fact, you know, the kind of nice number is around 20 to 30 shares.

19:03And that is essentially the amount you need to kind of essentially reduce company specific risk. Beyond that point, any additional shares tends to make a very, very small difference in overall volatility. But I will say just because you have 20 to 30 shares doesn't mean that that diversification is kind of complete. There are other factors you need to think about as well as just as hitting a number. It's about variety, you know, mixing companies from different industries and sectors, and you know, exposure beyond just one region or market theme. Historically speaking, and speaking to people in coaching calls, researching 20 to 30 companies can be a lot outside of, you know, working hours and kind of family life in general, which is why many people kind of do a core satellite approach, where the core is essentially the funds, where the kind of diversification is already embedded into it by choosing the stock selection and things like that.

19:57And then, you know, the 20 to 30 holdings is something that they feel like they are interested in and they'd like to fill any gaps if the stock or fund that they have is there.

20:07Simon Lambert: Laram, great advice. Thank you very much. Thank you. Welcome back. Britain's biggest building society has made a major change to its mortgage lending, meaning some customers could borrow£50 ,000 more. Nationwide will allow new and existing customers to borrow six times their annual earnings, up from 5.5 times previously. Now, generally, most banks limit most customers to 4.5 times their salary, so the change could open the door to buying a bigger or more expensive home. A step in the right direction or the path to trouble, Lee? Give us the details.

20:40Georgie Frost: I don't know if it's the path to trouble, Georgie. I think anything that encourages and helps for our side buyers get back on, get onto the property ladder is a good thing. Obviously, you have to factor in all of the kind of costs and everything involved. And, you know, just for even second buyers as well that want to get up the ladder. It's a relatively positive step as long as you're not, like everything in life, as long as you're not overstretching what you're doing and you can afford the monthly payments and you can do it. Now, I think this 4.5 times salary, as a rule of thumb, has been what we've used in stress tests in the last sort of 15 years or so, maybe even 20 years.

21:16Georgie Frost: There has been a nudge up in the last kind of year with lots of the major lenders now going above that and allowing people to borrow more money in order to buy a home. So it means a couple earning 100 grand between them could now borrow 50 ,000 pounds more, as you just said, up from 550 grand to 600 ,000 pounds. A single borrower on 75 grand would see their maximum loan rise from 412 ,500 pounds to 450 grand. So 37 ,500 pound uplift. You know, if this helps the wheels in motion of the property market and get people buying and, you know, unlocking some of the market where people perhaps getting stuck or, you know, perhaps don't feel like they can quite stretch it.

21:55Georgie Frost: You know, it's fine. As I say, but within reason, lots of brokers, of course, have said that this is a positive step. um but you know they kind of got for instance an interest uh in this um and it's kind of you think if these major lenders are doing it my first thought process is well is it out of the goodness of their heart or is it you know because they're going to make more money and of course you know money makes the world go around and there is more money to be made by lenders who you know people are stretching potentially again a rule of thumb i would say 15 years ago was a 25 year mortgage that slowly went up to a 30 year mortgage which seems to have slowly gone up to a 35 mortgage 35 year mortgage some people are taking up 40 year mortgages you have to you know like all of the information and the financial information that we have now in terms of calculators and and figuring out how much interest you're going to be paying over the course of a home loan is vitally important as are things like product fees when you go to buy a property factory and all of that in but my gut instinct georgie my gut instinct is that this does feel like a positive step people should know their finances we've lived through the financial crisis we saw a lot of that was involved in bad mortgages people falling into negative equity and i like to think that people have learned lessons and if you haven't learned the lesson your parents learned the lesson or your grandparents learned the lesson and you're not going to do silly things and completely over overstretch what you can afford but that's what these stress tests are for This is what banks, they don't really want you to fall into trouble.

23:32Georgie Frost: They want you to be a nice customer, pay your monthly mortgage amount and hopefully stay with them for life. That's their goal. I do love your optimism though, Lee. To think that we learn from the past. Please. Yeah, I mean, yeah, okay. All right, maybe I stretched it a bit too far. But I enjoy that nonetheless. Now, Simon had this look on his face that either, Simon, you've seen the latest breaking news about Donald Trump. I don't think there is any, but there might be. Or there's something that Lee said there that shocked you.

24:03Simon Lambert: Were I to speak about the latest breaking news about Donald Trump on the podcast, it would be a mistake because by the time you listen to the podcast, we get this out pretty quickly after we've recorded it. Probably going to have changed. No, it was the 450 grand bit. That is a big, big, big mortgage to be taking out on your own. 75 000 pound income 450 grand mortgage now the thing is though it's not just about this income multiple you're going to have to pass the affordability tests um and what you will find is that you know nationwide is a is a responsible lender and so nationwide is going to do the incomings and outgoings calculations to make sure that anybody uh who was on that 75 grand for example um and getting that 450 grand mortgage that they believe that is affordable for them um but i just did some quick calculations that is the equivalent uh post-tax of about four and a half thousand pounds a month but that obviously wouldn't take into account if someone was repaying their student loan and then they would be getting less money um for example knock off obviously the fact that you need to be making some pension payments as well for example the mortgage if you had that 450 grand mortgage over 35 years so over reasonably long term at 4.25 percent which is a you know reasonably respectable rate you might get a bit lower it's going to be two grand a month two grand a month on four and a half grand of post-tax income is a really big chunk of your post-tax income but there will be people who are looking that number and going well it's less than i'm paying on rent yeah quite quite all right um lee just before we move on do you think that this is the trajectory now we're just going to see more

25:56Georgie Frost: and more of these yeah and it's been a kind of requirement i think it's been very much encouraged by the chancellor uh via the fca to make sure that lenders are doing more to kind of loosen criteria restrictions and get more people on the ladder and i think that's simon hitting the nail on the head really there because you know a lot of people do feel like they're tracked in a rent cycle and if they can afford rent they can afford mortgage payments it's getting that deposit and it's getting through those affordability checks and those lending checks and you know if you can afford rent the argument is you can afford a mortgage that's the thing but a mortgage is obviously for a lot longer period and you are tied in and it's a big commitment so that's why i'm saying you really do have to crunch the figures and that's where you know potentially a broker might help you and might be worth it's worth he or she's weight in gold absolutely all right if you have no idea whether you're saving enough to just scrape by or you'll enjoy a prosperous retirement then you are far from alone many of us will be automatically opted into a string of work pensions but have no clue when these funds will actually deliver a decent income in old age so this is money asked experts to crunch the numbers so you can see if you're on track for the retirement of your dreams at each decade of your life so in your 20s your 30s your 40s 50s how much should we

27:14Simon Lambert: have this is a question that people absolutely love to ask uh and it depends is the answer really okay but firstly what you need to look at is what are you going to need in retirement so if you look at the pensions uk figures uh the artist formerly known as the pension lifetime time savings association a single person needs an income of 31 700 pound a year for a decent retirement this is a moderate lifestyle covers some essentials plus a bit of splashing out on food and entertainment trips abroad and running a car couples would need a joint income of 43 900 pounds the very minimum you need is less 13 000 for an individual and 21 600 for a couple while you need more for a more affluent lifestyle um they don't take into account income tax and housing costs if you still have a mortgage now if you work um from these numbers you can work out on the moderate income uh what sort of pension pot you would need and you would need a pension pot at the moment of around 325 000 pounds by age 66 to be able to afford a moderate standard of living according to standard life so if you take this and you work back to your target amount in your pension in your 20s right now bear in mind your 20s start obviously when you're 20 and end when you're 29 there's quite a big gap there's quite a big gap between those just to state the bleeding obvious right okay you you could be lower at the start but you want to be higher at the end okay right 20s target 11 000 pounds uh now this might seem a very modest amount but retirement might also feel a very long way off when you're in your 20s but the point is that you have started saving into your pension you have begun the act of investing into a pension and taking advantage of compounding your ultimate goal is to save hundreds of thousands of pounds you have to start somewhere starting in your 20s is a massive benefit if you save for 40 years instead of 30 years there is a wonderful trick involving compounding that means that you double your money at the end of it and it's not due to the extra money you put in it's due to the gains that you earn on gains the snowball effect so there you go in your 30s okay i'm not going to do this for every decade stating the bleeding obvious so work it out for yourself how all right yeah for some people their 30s last much longer than nine years i was gonna say simon i've been 38 for ages okay well i mean chances are that you might have managed to get ahead of target then the target is 55 000 pounds right your salary's going up your savings into your pension are going up you're benefiting from compounding hopefully you are not stopping your pension payments or reducing them due to life getting more expensive as you might have a family or try to buy a home try to avoid try to afford your 450 000 pound mortgage keep going make sure that you're not just putting in the auto enrollment basic minimum okay take maximum advantage if you're employed of what your employer will pay in if they'll match what you pay in pay in as much as you can to get the most that is possibly matched if they'll do more than match it you know do that as well if you are a public sector worker and you benefit from a defined benefit pension this is where your employer says that it will guarantee to pay you a certain amount in retirement for every year that you have worked for them and it is infinitely better than the defined contribution pensions that most people in the private sector have but a lot of people in the public sector don't fully appreciate how good their pension is they are required usually to put in more money okay but their employer puts in way way way more than private sector employers do and also it's made a prompt a binding promise that it can only be broken if it goes bust and even then your pension is protected so if you are a public sector worker you must take advantage of that pension and pay as much into that pension as is required to make the maximum use of it um so anyway keep going 55 000 pounds in your 30s in your 40s this might be a decade that lasts longer than nine years for me uh your target is 117 000 pounds okay you're chipping away here you're on track for your 325 ground in your 50s your target is 201 000 pounds this is your mid 50s okay this is where you're trying to get to and then finally uh obviously by the time you'll get to 66 hopefully you're going to hit that£325 ,000 number.

32:02Simon Lambert: Obviously, what you need to bear in mind is that depending on how old you are, by the time you're 66,£325 ,000 is not going to be worth£325 ,000 as it is now. It's probably going to have been eroded by inflation and you're going to need a larger pot than that. Don't sit back on your laurels. Keep going. Make sure that you get that retirement that you want. Absolutely right. And I will say that in my 20s, I'm afraid I didn't hit that it my 20s felt like forever uh i didn't hit that target but you can make it up uh lee but what

32:35Georgie Frost: should you do if you are off target as it were well first of all don't panic uh don't think that it's impossible sums of money that you know we're talking about here and actually yeah but it's a bit similar to you georgie i didn't really start seriously paying and savings my pension until my my late 20s i would say i had a pension and i was paying the bare minimum into it uh but as i'm pointed out you know you're potentially saving for a house house deposit you know rent was expensive um everything you know everything was expensive life is expensive um and you kind of in your 20s retirement it just feels so far away um but i have made it up and i've made it up with gusto i would say now racing i'm still in my 30s i'm in my late 30s yeah the last 10 years of taking it a seriously and i would say you know if you are lucky enough to get a pay increase for example i always think it's worth bumping up your pension contribution by a percent because you're probably not really going to notice it um and checking out what your employer offers are they matching your contributions or are they doubling your contributions or offering something else but get on with it and go for it and on this podcast i quite often say you know quite i quite often big up regular savings accounts as a starting point for people uh who aren't in the savings habit in a similar way for a pension habit even if he starts small and you and you're not putting in huge amounts of money it soon starts to build up over the years um and you want to be in control of your retirement and again as we say in this podcast quite a lot of your self-employed the importance of having a sip and making sure that you are you're not missing out i would say how much do you need for a comfortable retirement i think these figures are actually under cooking it a little bit i actually think you should probably aim for a bit higher than this if i'm being quite frank um of course we've got uh hopefully we'll have a state pension uh to fall back on um but you know the age of that has been pushed back and pushed back and could potentially be pushed back further so if you're a listener in their 20s 30s especially you know what what age is going to be estate uh pension age have you you're going to have gaps in your uh national insurance record all of that kind of thing it is important to give it some thought and again like the mortgage um story we were just speaking about crunch the sums a lot of your pension providers will give you forecasts of where you're at and if you make a little tinker of a percent how much more that might mean in retirement compounding is your friend you want to make sure that you're in control of your retirement you do not want to be trying to make it up in your 50s onwards i think it starts to become very difficult um to to catch up so earlier the better if in it even if it starts small start growing it seeing that get into four figures then five figures and then hopefully eventually six figures it becomes a bit addictive i would say yeah no i agree kicking in on your pension every sort of three to six months going oh do you know what yeah no this is this is looking all right um stay optimistic oh no i agree with you i think it's motivational isn't it lee and i'll say to anyone who thinks you know oh that's years away we've been doing this podcast for 12 years wow where did that time go and it does as every old person will tell you time goes so quickly but it does and you'll be so grateful at 12 years time when you look back and go wow that went like a flash but look how much i've got in my pension two very

35:59Simon Lambert: quick things on the pensions is firstly if you are auto enrolled check and you're an employee check that you've been auto enrolled into the best pension scheme that your company would offer you sometimes you get auto enrolled into the basic auto enrollment amounts rather than the more generous scheme that your company may offer you and you might be passing up free money there so check which pension scheme you're in and then secondly obviously unfortunately we've been talking lots about people who are employed here but the self-employed people unfortunately this is all on you um i'm sorry but it is you you've got to do this there's some debate as to how you should do it whether because obviously income is is lumpy my suggestion would be open a self-invested personal pension and then set up a certain amount every month to go into it okay by direct debit so you're doing it regularly so it's a habit amount now that might not be the full amount that you put into your pension but at least it means you've got a base level amount going in every month right and then when you do have the good months rather than the bad months we have some extra money left over or perhaps for example this is something my wife does who's self-employed she puts money into another account to cover a tax bill at the end of the year but she's cautious on that so she probably she puts in more than the tax bill is going to be if you end up with the bit left left in that tax account at the end of the year shove it into your pension but i do think it's worth doing that regular monthly amount just so there's a base level going in and then maybe you then top it up yourself good advice there simon and i say that as someone who's self-employed finally the phone for billionaires virtue virtue who knows uh because i'm not going to be spending five thousand pounds on a phone but apparently it has an ai concierge which can book you a private yacht does it pay for the private yacht as well.

37:50But is it worth it? The team went to find out. Lee, there is no story too random that you won't look at. Is it Virtue?

38:00Georgie Frost: I think it's Virtue. And I think that, yeah, random. We like a bit of random. We like to mix it up. You know, we like to get out there and see what's happening in the world. And, you know, sometimes these things sort of land on us as editors. We're like, you've done what? So Harvey Dorsett, one of our reporters, Got his hands on a Virtu Agent Q phone that starts from£4 ,930. It has a leather back and I held it in my hand and it was the weight of a brick. It was incredibly heavy. Very, very, very unusual looking phone. So far you're not selling this to me because I don't really need a brick in my handbag.

38:42I've got enough rubbish in my handbag. And a leather back, can I get scratched?

38:46Georgie Frost: yeah it's it's a it's a heavy piece it's a heavy piece uh georgia i would say to be carrying around um so virtu traces its uh origins uh in england in 1998 and it became the it phone of the noughties so it was reportedly owned by gwyneth paltrow david beckham colleen rooney we we weren't able to ask david beckham this week if he actually did have one of these phones he'd been a bit dizzy apparently um it it went out of business since 2017 and its factory in hampshire closed down and then in 2018 it's launched under a new ownership it's now hq's in hong kong and it says there's a big demand for these phones in asia in the middle east now what it is the kind of two big selling points of this is there's something called agent q on this phone which is a built-in ai concierge so that i guess the idea is if you are uber wealthy instead of keep pestering your pa to go and book your flights and do this and do that the phone can just do it for you now harvey says that he asked um to for it to book a restaurant for him um the restaurant he knew was fully booked to see if you know having this phone might help him jump the queue um it didn't he didn't manage to um and as you say you can book your things like yachts and helicopters and but you still got to pay the bill for that so unfortunately harvey didn't get to test that bit um to see if he could book a yacht sailing around canvey island or wherever you'd sell other than england i'm not sure where uh the other thing that it uh has is this kind of like encryption vaults they liken it to an impenetrable fortress so basically just keeping all of your messages um and everything secure um would i pay five grand for a phone well georgie i'm going to be honest my next phone might very well be a dumb phone i think i'm done with smartphones i think i'm I'm kind of hankering back to just a phone that you can make telephone calls with and send text messages.

40:49Georgie Frost: And I'm going to end it with this. The other night, my daughter's become very, my seven-year-old has become very interested in news round, which I really like that. It's very wholesome sometimes, but sometimes some of the news is like, I was going to say, what news do they put on there? Yeah. Well, this week, it obviously very Donald Trump heavy. so she asked me the other night is donald trump a good guy or a bad guy i mean that is a that's a loaded one isn't this then it went on to greet why why are they trying to get greenland and then oh the conversation went on to the empire and all sorts of stuff um you can't imagine but the other the other big story that they've been talking about news around this week that my daughter's picked up on is the social media ban potentially for under 16s um obviously it's happened in australia there's talks about it happening here uh and i said well you know she said i think it's a good thing not that she really knows what social media is gonna say yeah and not that she uses the phone and i i kind of agreed and i said yeah i might i might get a dumb phone now what got me with this is that she knew what a dumb phone was because they'd been talking about it at school and teachers saying that dumb phones are kind of like the preferred option if you are going to pack your child i'm not talking my daughter's age group but probably like year five year six you know dumb phones i actually think that that is more likely where people are going to head next rather than spending you know giant amounts of money on a phone i get the impression that there's a bit of a kind of people getting fed up uh of their smartphones but maybe i'm wrong and finally before we get simon's stat of the week lee has been hobnobbing with his celeb friends again Lee who have you been talking to this time?

42:29Georgie Frost: I interviewed Joanna Page otherwise known as Stacey out of Gavin and Stacey and she was an incredibly open book when it comes to her finances you can read the interview on This Is Money you'll find it on there it was published over the weekend be very well read this week we bonded very much actually do you know what we bonded actually quite a bit over mobile phones because she was refusing to give her children mobile phones There you go. And also, I mentioned that my wife is from just outside of Bilariki. And when I first met her, because obviously that's where a large part of Gavin and Stacey is filmed.

43:05Georgie Frost: And when I first met her, she actually drove a blue Saxo, just like Gavin in Gavin and Stacey. So she absolutely loved that. You can listen to a little snippet of our interview coming up. As I say, she was great value. She was very, very open on her finances and it was thoroughly enjoyable. Well, it was my mum and my nan who really taught me about money and talked about it and made it seem not such a scary subject. My nan didn't have any money at all, but she was very much spend a little, save a little. She had to save quite a lot. And so I was brought up knowing that, well, yeah, make sure that you save, make sure that you, you know, you're stable and you look after yourself and you're secure because it's just going to be you looking after yourself.

43:48and then growing up mum straight away said you know even when I was about seven or eight years old and we opened a little post office account and any birthday money I had it would always be like right okay you can go and buy yourself a little toy and then the rest then we're going to put into a little savings account for you if you don't have the money for it you don't buy it that's really informed the way that I am now because I don't have a lot of credit cards so I very much am of the mindset of if you don't have the money to buy it you don't buy it save up and then you can buy it. When I was younger and I first got married and we didn't have any children, all of our spare sort of money that we had then, we would definitely invest in things.

44:26We invested in property, little different flats in London and down in Wales. Me and my husband have then had very much the same mindset of just make sure that you're safe because I think he's from Bradford, I'm from Swansea and moving from those areas, moving all the way to London, you don't have any family around you. There's no safety net. Obviously, my parents would always be there for me. But the reality is, you know, I'm 21 years old, living in London. I'm earning my own money. And if you don't save it or invest it and put it into a mortgage or buying your first property, well, you're not going to be able to look after yourself, are you?

44:59And you're not going to be safe. So I've been brought up like that from a very early age. When I first left drama school, there were lots of different people who were helping to pay for me to go through RADA. We He wrote loads of letters and I was sponsored by lots of different people and companies. So we were very lucky there. But when I left RADA and I was 21, I remember my first ever job was at the Royal National Theatre and I was earning£250 a week. And that was the first time ever that I was properly earning my own money. And it was so exciting. But then as an actress, it's unpredictable.

45:33You know, you're self-employed, it's unpredictable. You don't know what job's coming next. I remember when I was out of work for about a year I was I was thinking right okay start spending your savings what you've got the stuff that you've kept there you know to make sure that you're going to be safe and after a while I thought oh this is ridiculous and it's really bad for my mind as well I need to get out there I went straight away to go and work in a shoe shop did an interview straight away they hired me straight away and that's where I started working I mean as an actress so you don't know what's going to happen from one minute to the next James and I were doing incredibly well the year that we were going to get married.

46:07I was doing The Cazalettes, which was a BBC costume drama, and I was signed up to do a second series on that. We had four TV shows that we were all set to go for second series. We bought our house, and that's been our main, you know, it was our main investment that we did together, and all of our money went into buying a house in Dulwich in London. And we thought, right, OK, we've got some security. We've got four shows. We moved it, I think, in this September. by the next year, all four shows had been axed. So suddenly, it was just absolutely terrifying, thinking, right, okay, we've got to scrape through, what are we going to do?

46:42I went out and got myself a job straight away in a shop. He then started doing voiceovers, which he'd never ever done before. And he now does so many voiceovers, he's fantastic at them. But we knew straight away that, okay, the main thing, which is our career, that's not working at the moment. We've got to start thinking, what are our side hustles? What are our passion projects? We've got to start thinking about other things aside from the main thing that we're doing now and so you know I went out started working in the shop he started going into doing his voiceovers you know that's what we had to do and we managed to make it work bringing enough money to tide us over and then luckily then we started getting acting jobs again then there you go that was Lee speaking to Joanna Page from Gavin and Stacey you can read the full interview on the This Is Money website time and now for your stat of the week uh 0.16 that is the rate that you could be earning on econo bank's easy saver

47:35Simon Lambert: account uh which was number one in our 100 worst savings account article this week by our savings expert sylvia morris it goes without saying that if you have one of these accounts and you have any money in it you should move it somewhere else and you can find the best place to move it to by going to thisismoney.co.uk forward slash save where there will be a host of easy access accounts paying more than four percent that you can swap your money into wow just why bother do you know what i mean why bother with the admin of account like that anyway that is it thank you very much simon thank you very much lee thank you for listening you can keep up to date with all the latest breaking money news just go to thisismoney.co.uk or download the app and if you have any comments or questions for the team or anything you'd like them to look into Simon email us at podcast at thisismoney.co.uk or you can come to thisismoney.co.uk forward slash podcast to join in the debate and read the comments and if you like our podcast why not rate us wherever you found us it helps other people find us too