Switch onto saving

/in /by

You might think this is a repeat of all of the information out there already, but understanding the importance of saving is something to learn sooner, rather than later.

The difference between starting paying in from age 25 or waiting until you are 35 could have a notable impact on your pension savings.

Yes, there are always going to be things you’d prefer to spend your money on, but starting as early as you can and staying in your workplace pension should have a significant impact on the type of retirement you’ll be able to enjoy in the future.

Bottom line, the longer you wait to contribute to your retirement savings, the more expensive it’ll be to catch up. The difference between starting paying in from age 25 or waiting until you’re 35 could have a notable impact on your pension savings.

Here are some things you could miss out on if you delay in saving:

  • Tax relief – you’ll miss out on tax relief on your pension contributions, which basically equates to ‘free money’ from the Government (depending on what your tax rate is).
  • A helping hand from your employer – however much you pay in from your own pocket, your employer will make monthly payments into your pension savings too.
  • Seeing your money grow (or not!) – your overall contribution is invested in a fund with a provider or investment company and it is designed to work for you, so it can make its own money. Remember that with any investments, your money could go down as well as up and is not always guaranteed, so take this into consideration.

You should also think about . . .

  • The money might run out sooner than you predicted (but not if you buy a guaranteed income for life!) – if you retire with a small pension pot and expect to live on a high income, or you live to a ripe old age, your money might not last.
  • The State Pension might not be enough to rely on – you will only get this if you have made the qualifying amount of National Insurance contributions. Even so, by the time you retire, it might not be enough to live on alone, so you’ll need your own pension savings to help bridge the gap.
  • You may have to retire earlier than planned – hopefully this won’t happen, but you may fall ill, or have to leave your job to care for a loved one. So it’s really important that you have enough money to survive on if this happens.

It’s a tough message to take in, but saving a little bit each month counts. Good luck!

The do’s to beat the January blues

/in , /by

The excesses of the festive season may have taken their toll, and you might be feeling the need to implement a whole host of austerity measures to see you through to payday, but January doesn’t have to be gloomy!

Try our top tips to avoid the annual blues and ease your way comfortably into the New Year.

    • Don’t deny yourself a small treat. With money so tight in January, your regular trip to the local barista might seem like a luxury too far, but cutting it out altogether is likely to make you more miserable. Try exercising a little bit of self-discipline and indulging in that fave treat just once a week – maybe on a Friday so it feels like you’re another week closer to that first payday of 2019!
    • Plan ahead. Making plans for the rest of the year is one of the most effective ways to pull you through the seemingly dismal days of January. If you’ve got the budget, book a day trip out or a weekend away, or if you can’t commit to splash out right now, then book some time off work anyway. It will make you feel better knowing you have some dates in the diary – even if you change them later on!
    • Try some free fun. When money (and maybe your waistband) is too tight to mention why not venture outside and kill two birds with one stone? Parkrun organise free, 5km runs every week which are open to absolutely everyone and take place in your local community – you just need to register online first.
    • Look after yourself. It might sound simple, but being kind to yourself will lift your mood and make those dark winter nights fly by. Indulge in a home movie night rather than the cinema, or tuck up with a good read and a hot choc for a dose of immersive wellbeing.
    • Learn something new. The brand new year can provide just the right amount of encouragement to make you branch out and add some skills to your repertoire. If you’ve always fancied learning to play the ukulele, knit, bake or paint, now’s the time! You could even use the impetus to add a new level of expertise to your professional skillset. Head over to YouTube for every possible tutorial on everything – ever!

‘Twas the night before Christmas

/in /by

‘Twas the night before Christmas, and a time to reflect

On a year of big spending, but savings neglect.
The stockings were stuffed with all kinds of treats
From trinkets and baubles to delectable sweets.
The fam would be happy for Christmas Day present
But what of the future, and what of retirement?

With so much expense in everyday living
It’s tough to make plans for my future wellbeing –
With bills and my kids and a new loft extension
There isn’t much left to save more in my pension.
But just one percent could make some difference
And ease my reliance on State Pension assistance.

This year my bonus dissolved in a flash
On a weekend away and a cartload of trash.
Maybe next year I should stash it away
Into a pension for my future ‘one day’.
My Company pays in and so can I
Government tax relief will also apply.

It’s never too late to invest in yourself,
And start looking after your financial health.
Think not of the now and money misspent
Instead try to find that elusive percent.
You might suffer now a little resentment
But you’ll gift the ‘old you’ the best kind of present.

People like you: 18-29

/in /by

Meet Laura, a 25 year old personal assistant working in Reading. She currently lives with her boyfriend in a rented flat on the outskirts of the city, but they are saving hard to buy their own place. We take a peek at what a day in her life is like as she manages her job, home-life and money, while trying to maintain a healthy lifestyle.

My alarm went off at 6am this morning, as I decided last night to get my week off to a good start and head to the gym before work. I do a weights workout and then walk the rest of the way to work (the gym is about a brisk ten minute walk from my office – a bit more exercise and I’ll save money on the bus fare too!).

I usually have breakfast at home but with my early morning workout I’ll need to eat afterwards. I pick up a banana (28p) and a big bag of oats (£1.10) to make a quick porridge to eat at my desk. I also buy some protein bars (£2.87 for a pack of four) as I know I’ll get hungry later. I leave the oats and the remainder of the protein bars at work to make myself a quick, cheap breakfast in case I decide to do another early morning gym session this week.

The sun is shining and although it’s cold, it looks like a lovely day outside! My office is in the city centre so I decide to pop out at lunchtime to stretch my legs and have a wander around the shops. My boyfriend and I are currently saving up to buy our own place so it’s just window shopping for me today!

I head back to work and eat my lunch which is homemade vegetable soup (£1.01 a serving) with a bread roll (11p a roll) today. My boyfriend’s mum bought me a bread maker for my birthday and I’m enjoying making my own bread – it’s pretty economical too. I also grab a coffee from the machine at work. It’s much cheaper than my shop-bought lunch last week which ended up costing me about £6 for soup and a roll (£3.45) and a cappuccino (£2.45).

Before I know it, it’s time to head home. I usually alternate between taking the bus and walking home to save money, but I’m tired out from my gym session this morning so I decide to take the bus. My boyfriend is already home by the time I get in and we decide to cook together – it’s easy as I’ve already planned our meals for the week. Today it’s a comforting Spaghetti Bolognese, a classic from our student days. As usual, we make far too much so I put some in the freezer for another day.

After dinner we watch some TV on my parents streaming account (sharing this means we use it for free!). I plan our meals for next week at the same time and order our food shop online, which helps us to eat a variety of healthy, home cooked meals. My employer offers a discounts portal, so I use this to save money on the food shop every week. I also spot a code for free delivery so I make use of that!

I get my lunch ready for work the next day and head off to bed about 10:30.

*Prices accurate at the time of writing.

Make a list, check it twice – is your Christmas food shop naughty or nice?

/in /by

With less than eight weeks to go until Christmas (sorry we just HAD to mention it!) many of us are already thinking about what we need to buy ahead of the big day. Food shopping for the festive season can be a headache, but we’ve provided some useful tips to help you avoid a last minute trolley-dash, whilst making your hard-earned cash go further.

Compare

Let’s face it, the Christmas food shop can be the most expensive of the year and more often than not, we end up with a list longer than we’d like. Try a handy comparison website like MySupermarket to see where the best deals are for maximising your food budget. Simply type in your shopping list and the website will compare your shopping basket against the major supermarkets before telling you where your total overall shop will be cheapest. It also alerts you if you could save money by swapping to another item.

Stock up

Don’t be afraid to stockpile the non-perishable items well ahead of the big day. Spread the cost over a number of weeks to take advantage of any pre-Christmas offers and avoid that last minute panic the week before Christmas at the same time! Items such as crackers, cranberry sauce, and the all-important Christmas pudding can be bought well in advance – just try not to eat them too soon! 

Get a discount

There are many discount codes and vouchers available both online and in store, although it may take a bit of time to look for them. Check the free magazines you find in store, and cashback websites which can also be a great place to get money back from even your normal spending. It’s also worth asking your employer if they offer an employee benefits portal. You may be able to get a discount on your supermarket shop, but if not, there are plenty of other websites you can choose from – maybe for buying Christmas gifts. You could even consider putting the money you save towards your Christmas budget for next year!

Start saving for next year

Once the festive food has been bought (and if you’ve got the stomach for it!), start thinking about your Christmas budget for next year. If you can set aside a small monthly amount to save, even £25 a month from January – October could give you a £250 boost. Save as much as you can afford and it will take some of the strain off your pockets when Christmas rolls around next year!

Your own free will

/in /by

We all want to make sure that our wishes are respected once we’re gone, right? But, worryingly, almost two thirds of adults in the UK haven’t got a will.

Age UK and other well-known charities, including the British Heart Foundation and Marie Curie, have come together to help tackle this problem by offering free wills in October. Solicitors across England, Wales, and Northern Ireland have signed-up to Free Wills Month to offer people aged 55 or over a free ‘simple’ will writing service, which can include updating an existing will or drawing up a new one.

A will can explain what you want to happen when you’re no longer here, reduce the tax you pay, and make it easier for family and friends to deal with your estate. As well as allowing you to make sure that your estate goes to the people who matter most, you can also state any gifts or donations you want to make to charity.

Sorting out your will can be a difficult topic to talk about, let alone actively organise. But it can be one of the most important things you do for yourself and your family. And once it’s done, it will likely give you peace of mind too. It makes sense to check your Expression of Wish form while you’re organising your will to ensure that your pension provider knows who you’d like your pension to be left to should anything happen. Get in touch with your pension provider to find out more.

Head over to https://freewillsmonth.org.uk/ for details on how to find a participating solicitor in your area. But remember, appointments may be limited and it only runs during October!

Taking care of the grandkids and your State Pension

/in , /by

The school term is well underway, those new uniforms are starting to fit a bit better and everyone is getting settled into a routine. Working parents will also be weaving together a complicated web of formal childcare combined with help from friends and family to cover the school run and after-school care. Pension planning falls off everyone’s priority list, as school costs and practicalities need immediate attention. However, there is a little-known National Insurance provision that could offer a bit of help to some of the unpaid army of grandparents, aunties and uncles helping out with childcare at any time of the year. And what better time to look into it than today, National Grandparents’ Day.

Entitlement to the State Pension is linked to an individual’s National Insurance record over their working-age lifetime. Employees and self-employed workers pay National Insurance contributions from their earnings. But for people claiming benefits due to illness or unemployment, National Insurance credits are instead available to maintain entitlement to the State Pension.

Many people have an incomplete National Insurance record for myriad reasons: gaps in paid employment, periods of earning below National Insurance thresholds, time spent living abroad, or early retirement or redundancy. An individual with an incomplete National Insurance record can pay voluntary National Insurance contributions in cash, buying their entitlement to a full State Pension with top-up payments before they reach State Pension age.

However, for some grandparents (and other family members who provide childcare) there may be another option. Formally known as the Specified Adult Childcare Credit, these National Insurance credits are transferrable from a main parent or carer to a grandparent or other family member who provides some childcare for a child under 12.

Child Benefit is available to anyone responsible for a child under 16 (or 20 if in education or training) and includes National Insurance credits for the parent or carer. It is these credits that may be available to transfer, as long as the original recipient doesn’t need them. In practice, childcare is often necessary because a main parent or carer is at work, and so is already making National Insurance contributions from their own earnings. This means that the main carer does not actually need the National Insurance credit that comes with Child Benefit, and so it can be transferred to someone else who does need it.

The National Insurance credit can be claimed by a wide variety of family members or their partners. It’s available for any week or part week of childcare, and for any number of weeks in a year. Applications can be back-dated to 2011, plugging a sizeable gap that might otherwise cost hundreds or even thousands of pounds in up-front voluntary contributions.

For anyone considering voluntary cash payments to plug gaps in an incomplete National Insurance record, completing a very simple form might provide a no-cost option to build a full State Pension entitlement.

The factsheet and form are available from the Department for Work and Pensions website, which also details the helpline number for questions about your own circumstances.

Save up to £2,000 a year on your childcare

/in /by

Are you a parent? Did you know that you might be able to save up to £2,000 a year on childcare if your child is under 12 (or under 17 if disabled)?¹

The Government’s Tax-Free Childcare scheme offers families support towards childcare costs of up to £2,000 per child (up to £4,000 if your child is disabled). The scheme adds 20p for every 80p you put in, effectively giving you back the 20% basic-rate tax on what you pay.

You can use the scheme to pay for childcare including nurseries, childminders, playgroups and after-school clubs. And you don’t need to use the money straight away either. You can build up credit to use when you need it most, like during school holidays.

To qualify, you, and your partner if you have one, must both be working, earning a minimum of £125.28 per week if you’re over 25 (the equivalent of 16 hours per week at the national living or minimum wage currently), and each earning less than £100,000 a year.

To find out more, take a look at the Childcare and parenting section of the Government’s website.

The Tax-Free Childcare scheme replaces the Childcare Vouchers system that closes to new applications on Thursday, 4 October 2018. For more information about childcare options visit https://www.gov.uk/browse/childcare-parenting/childcare.

¹www.moneyadviceservice.org.uk/en/articles/help-with-childcare-costs

Looking after your heart and your pension

/in , /by

With the State Pension Age increasing from 66 to 67 between 2026 and 2028, there is more need than ever to consider how we care for our hearts as well as our pensions.

According to Heart UK (A UK based charity, giving expert support and education in high cholesterol and heart decease) Coronary Heart Disease (CHD) is the single most common cause of death before age 65, accounting for 16% of male and 10% of female deaths. Statistics suggest that, on average, someone in the UK will have a heart attack every seven minutes.

Advances in modern medicine and greater access to information around health, has seen a steady rise in our life expectancy, but this places a greater responsibility on us to make sure we are looking after ourselves.  So, how can we look after our hearts to keep them ticking long into retirement?

Eat healthy

Eating a varied diet of healthy foods can help you maintain your weight, blood pressure and cholesterol as stated by the British Heart Foundation, and will contribute to your overall heart health. Reducing salt, eating unsaturated fats (such as avocados, nuts and olive oil) and limiting your alcohol intake, are also some of the ways you can adopt a more heart health conscious lifestyle.

Get active

Regular, moderate physical activity is another key way to help keep your heart happy.  Maintaining your weight and leading a more active lifestyle can improve not only your physical wellbeing, but your mental wellbeing too. Try going for a short walk at lunch to break up your day. Statistics (from the NHS) show that regular gentle exercise can reduce your risk of major illnesses, such as heart disease, stroke, type 2 diabetes and cancer by up to 50% and lower your risk of early death by up to 30%.

Stop Smoking

If you’re a smoker, the single best thing you can do for your heart health is to quit. Not only will this impact your overall health, but it could also have a positive impact on your bank balance too! You could invest any money you save on cigarettes into your pension and may even have a few more years to enjoy that longed-for retirement . . .

Manage stress

Easier said than done. When work pressures are mounting and family life seems overwhelming, stress can build up unconsciously and cause your blood pressure to soar. There is plenty of help to be found, from professional medical advice to wellbeing apps, but managing stress can sometimes be as simple as taking a break in the middle of your day to relax or talking your problems through with a friend. Good nutrition and exercise can also impact your stress levels, so getting a good balance between the two can decrease stress and contribute to a healthy, happy heart.

These are just some of the ways you can be more mindful of your heart health before you retire. It’s never too late, and it’s certainly never too early, to start taking your health and your pension seriously.

Gathering your pensions in

/in /by

If you’ve worked at different places in the past, it’s likely that you’ve built up some workplace pension entitlement while you were there. Have you remembered them all and do you look after them? Or would it be easier and better for you to pull them all together and put them all in the same place?

Of course, as with most things, there are some pros and cons of doing this:

The possible benefits:

Ease of access: having all of your pensions in one place can make it easier to keep track of your retirement savings and cuts down on the paperwork and log on details.

Easier to plan: a combined view should make the picture of your retirement savings clearer and make it easier to plan how you’ll use your retirement account when you come to retire.

Save money: it may be that you can take advantage of lower fees, as some older policies may have high fees in comparison to today’s plans.

More investment choice: you might want to invest in a wider range of funds than you have with your older plans; ones that offer you more variety or suit your approach to risk better.

Potential for better investment returns: we all want to boost our retirement savings and maybe you feel you can get better investment returns elsewhere or that your savings would be better managed by moving them. Remember though, returns are never guaranteed, and past performance isn’t necessarily indicative of future results.

Potentially more options: your previous plans might not give you access to all of the current retirement options, such as flexible withdrawals. So moving these into a current retirement account would open up your choices.

What to look out for:

All ‘eggs in one basket’: with all of the money in the same place, you may not have the same spread of risk or variety as keeping them all separate. This might be an issue if the funds don’t perform well, or something happens to the provider itself.

Exit fees: be careful, as some providers may impose an exit penalty. So make sure you find out if there is one and how much it will cost you to move the money.

Loss of guarantees: some old plans have built-in guarantees around annuity rates, which might be important to you if you plan to buy an annuity when you retire. These will be lost if you transfer them to another plan.

Higher fees: the plan you move to might actually have higher charges, but you may be happy to accept these based on other factors, such as hope of a better return or more choice and flexibility on offer.

Time it may take to transfer: your money will be dis-invested when you decide to transfer, and may not reach the new plan to be re-invested for a while. This means that there is the potential you could lose out on any investment gains in this interim period

If you’re not sure what to do, it’s a good idea to get financial advice (there will be a cost for this). You’ll need to do this anyway if you’re thinking of moving from a defined benefit (final salary) scheme with a transfer value over £30,000, as there are then even more things to think about, such as giving up a guaranteed income and future increases, as well as certain death and dependant benefits.

Conquer the back to school chaos

/in /by

September is in touching distance, the kids are getting bored and you are rushing around the house rounding up the uniforms and buying the entire stationary aisle in your local newsagent. Yes, it’s that last minute attempt to prepare for the start of the school term!

Well fear not, we have some great tips to help you save the pennies and get the kids back to school with minimum dramas.

  1. Make a list – we all love a list, don’t we? It really helps to keep you on track, so why not try making a list for your back to school shopping too? Do your research online, see where the best deals are and make yourself a ‘non-negotiable’ list (if possible!).
  2. Leave it a little closer to term time to start your shopping – last minute shopping can often provide the best value for money, especially on uniforms and stationery.
  3. Don’t be a stranger to the ‘pound shop’ – we might not like to admit it, but we’ve all been in there! After all, pencils are pencils, right? Pound shops are also great for notepads, math sets, plastic containers and drinks bottles.
  4. Plan your travel arrangements – check if there’s a school bus which would help you out or perhaps a neighbour who you could share the school runs with.
  5. Buy some good quality shoes – this may cost you a little more upfront, but if you can afford it, a good pair of shoes can make it through the whole term, whereas fabric plimsolls or pumps may not even make it to half term.
  6. Check on study materials – do the kids need any specific study textbooks? If you’ve got relatives or friends with kids in the year above, you may be able to recycle some of the relevant books. If not, it would be worth checking out some online, secondhand booksellers.

People like you: 50+

/in /by

Making sure you’re prepared for when you stop working doesn’t have to be a chore and you’re not on your own! There are people just like you out there and we’re sharing their stories so you can benefit from their experiences.

Meet 64 year old Brian…

What type of retirement are you hoping for Brian?

With so many decisions to make around retirement I have had to think long and hard about what I want to do. Luckily my health is good, I’m 64 and the time feels right to give up work and spend more time with the family and looking after our first grandchild who is growing up fast. After all, life is for living.

How do you plan to access your pension savings – a cash lump sum, a guaranteed income for life, or as a series of cash withdrawals?

I might even delay taking my State Pension straight away, so that I can benefit from the increase later on.

Whilst guaranteed incomes have had their fair share of bad press, I want to secure an income for life, so we have enough to pay our monthly bills. I know there are various options around the type of income for life I can buy, so I’ll do my research and choose carefully because I won’t be able to change it later on. I will definitely shop around for quotes from a number of providers too and go this route. I have worked hard all my life and don’t want to go into retirement worrying about money. With my wife thinking along these lines too, we should be able to enjoy a reasonable lifestyle.

Will you also rely on the State Pension to help with your living costs?

No, I’m hoping to save some of my State Pension for a rainy day or a holiday so that we can enjoy the retirement we always dreamed of! I might even delay taking my State Pension straight away, so that I can benefit from the increase later on.

4me has a library of information, short videos and tools to help you with your savings and retirement planning – find out more.