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People like you: 50+

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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 55 year old Catherine…

Have you started making plans for when you stop working yet?

Having just celebrated my birthday, at 55 I am now thinking about how and when to take my pension. It’s a modest amount as I have had time away from work bringing up the family and then working part-time when I returned to work. I am pleased that I did pay in to a pension and will have something to add towards my State Pension.

How has the introduction of more flexibility around taking your pension affected you?

As the pension rules have changed, I know I am able to take some cash as a lump sum now and still continue to pay in to my pension. This cash lump sum could pay off some of our mortgage which will save money overall. If possible I want to avoid paying any additional tax, my husband believes we can take the cash in stages but is unsure of the details.

Did you know you can get free and impartial help from Pension Wise from age 55?

Yes, and before I make any decisions, I’ve made an appointment to speak to an adviser from Pension Wise to help me understand what I can do with my pension savings. I will then feel more confident in my choices.

In any event, I will probably work for a couple more years, as it will allow me to continue paying into my pension and I will still be under 60 when I retire, which will coincide with my husband’s retirement plans too.

Head over to Pension Wise if you’re 55 and over and need some help with making decisions about your retirement.

People like you: 30-49

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You’re not on your own if it feels like planning and saving for the future is a bit of a challenge! There are people just like you out there and we’re sharing their stories so you can benefit from their experiences.

Meet 41 year old Marcus…

We’re sorry to hear you’ve separated from your wife…how have you been?

After the divorce from Tracey my life was a bit of a mess. I’ve had to review all my finances again, including my pension, as I had to agree to a pension sharing order. To be honest I have many worries about the future and I need to concentrate on starting over and buying a flat in the next five years or so.

I can add an extra lump sum into my pension through the bonus sacrifice arrangement and I won’t lose any of this money to the taxman.

How has starting over affected saving into your pension?

Inevitably my priorities have changed and I’ve looked at my pension details and discovered my company match whatever I pay in up to 10% – this feels like ‘a gift’ that I’m going to take advantage of. I only need to cut back a little each month on other spending in order to maximise what is on offer, and this will help to build up more savings in my pension.

Did you know that you can pay your bonus into your pension too?

Yes, I know will get a bonus in a few months as my employer is doing well, and they’ve been very good at letting us know about the benefits of bonus sacrifice. I can add an extra lump sum into my pension through the bonus sacrifice arrangement and I won’t lose any of this money to the taxman – it seems like a good idea! If I can do this every year, I won’t be overcommitting myself each month but can still keep my pension topped up.

To find out more about pension sharing, visit: www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/when-relationships-end/pension-sharing.

What is 4me?

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We all have diverse needs when it comes to our physical, mental and financial wellbeing, and research shows that many of us would like help from our employers in these areas.

And that’s where 4me can help.

4me is an online tool that can help you to think more about your overall happiness and how you can get the best out of your job, your cash, your workplace benefits and more. Whatever your age, and wherever you are on your savings journey, 4me will point you in the right direction.

In 4me, we don’t use confusing jargon, and you’ll only see the information most relevant to you. There are topics tailored to your age group and it takes account of what savings you already have. Even your paperwork and terms and conditions are stored on the bookshelf so you won’t have to go searching through your ‘filing’! There’s also a library of short videos and interactive tools, all designed to guide you through the decisions you might face at any stage in your life.

  • 18-29? Stay in! – this is where your retirement journey begins
  • 30-49? Pay more in – start to build up your savings and plan  how much you need to save for the future
  • 50+? Shape and access – consider if you’re on track for the retirement you really want and think about how you might want to spend your money

The aim of 4me is to fully equip you with the tools you need to plan and make well informed decisions about your future. Speak to your employer today about the benefits of 4me, or head over to the website to find out more.

Saving money on your childcare

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If you are a parent, did you know that you could save over £1,000 a year on childcare for your little ones aged up to 15 (or 16 if disabled)?¹

That is because the cost is taken you out of your gross pay meaning you save money, as you do not pay any tax or National Insurance on it.

In order to get the vouchers, you just need to ask your employer and join their childcare voucher scheme.  You can use the vouchers to pay for childcare including, nurseries, childminders, holiday and after-school clubs.

There is a time limit though to join as these schemes are going to close to new members in the next six months. The vouchers are being replaced by a new system called ‘Tax-free Childcare’, which will give eligible parents an extra 20% towards childcare costs, up to a maximum of £2,000 per child, per year.

In the meantime, it’s worth knowing the difference between the two:

Tax-free childcare

 Childcare vouchers
Anyone can apply Only available if your company offers them
£120 per week minimum (if in a couple, both parents must work) One parent needs to work (no minimum earnings)
Child’s maximum age 11 (16 if disabled) Child’s maximum age -15 (16 if disabled)
Maximum income limit – less than £100,000 per parent No income limit
Buy up to £243 per month Tax and NI free (based on tax band)

To help you make a decision about your options, visit www.gov.uk/childcare-vouchers-better-off-calculator for more information.

¹ www.moneyadviceservice.org.uk/en/articles/help-with-childcare-costs – based on basic rate tax payer with £243 of vouchers each month

Ten ways to save money during wedding season

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There comes a time in your life where people all around you are getting married and starting a family.

If you’re like me, and have three weddings and hen parties all very close to each other in the same year, you may start to panic about how you are going to afford it all!

Take a look at our top tips, and don’t say ‘yes’ to the stress of being a wedding guest . . .

  1. Book accommodation early – try and get a group deal or look for alternative options such as Airbnb. It can work out a lot cheaper than getting a hotel room. You’ll also beat others to it who leave it to the last minute.
  2. How are you getting there? – depending on the location of the wedding, it’s worth checking how you will get there. If you book trains early enough, you can usually get a good deal or you can car share and split the cost of petrol which can work out a lot cheaper than sets of train tickets.
  3. Buy the wedding gift early – if there is a gift list, take a look early and see if you can snap up something in your budget.
  4. Split the cost of a gift with friends – thinking of something more extravagant? Then club together with your friends.
  5. Can’t afford a gift? – offer to help with something on the day or make a gift yourself? Pinterest has some great ideas for crafty people.
  6. Upcycle an outfit – if you can’t get a new dress/suit for the big day, buy a new accessory or shoes to make you feel special instead.
  7. Borrow an outfit – it sounds simple but take a look in your friends’ wardrobes and you might be surprised! Just make sure you return the clothes nice and clean!
  8. Rent an outfit – easy peasy – you can pay to rent your dress or suit and then you can give it back after the wedding is over. Ladies can go to girlmeetsdress and the boys can go to mossbroshire. Job done!
  9. Set yourself a budget – if you can afford to attend all of the weddings, then great! But decide on a budget beforehand so you don’t overspend.
  10. Don’t be afraid to say no – if you are invited to several weddings but can’t afford to go to them all, then be realistic.

Raising a family in 2018: can you afford it?

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With the birth of Will and Kate’s third baby hitting the headlines, what better time to take a look at what raising children means to an average UK family in 2018. How many children do we have on average, at what age and importantly, how much is it going to cost us?

One, two or three?

It might not surprise you to know that The Duke and Duchess of Cambridge are going against the trends of the day by having their third child. Whilst it’s by no means uncommon, stats from the ONS last year highlighted that the average number of children for a British family is now 1.9, down from the 2.2 their mother’s generation had.

Estimates suggest that costs for raising a family will have risen by 12% between 2012 and 2019.

Career or baby first?

The reasons for this dramatic drop in birth rate are perhaps not so surprising either. Women are choosing to have children later on, often because they are focusing on their career first. Ideas about having large families to ensure the survival of at least some children, or to look after the elderly (which were still prevalent even in the years following the Second World War) are now out-dated, and there continues to be a general downward trend in teenage motherhood.

Affording a family

But, perhaps the most telling reason of all is the cost. The Cost of a Child in 2017 report by CPAG highlights the rising costs of childcare, the impact of inflation and reduced child support from the Government, all contributing to a shortfall in affordability.

Expensive for two parents . . .

The report states that the cost of bringing up a child to the age of 18 for a two-parent family, is £75,436 but this figure doesn’t include housing, childcare and council tax which would see that price increase further if factored in. It’s also interesting to note that calculations on Moneysupermarket suggest raising a girl is more expensive than raising a boy.

. . . but lone parents are even worse off!

The costs are even higher for single parent families who are often at the mercy of paying for the additional childcare another parent could provide, with basic costs amounting to £102,627.

There is help for working families in the form of childcare vouchers (changing to the new ‘Tax-free childcare’ system in the next six months or so). You can read more about it in our recent blog.

Although a third child for the royals is not likely to present any additional financial pressure, estimates suggest that costs for raising a family will have risen by 12% between 2012 and 2019 so the future for the average UK family looks increasingly expensive! There is lots of online financial planning support available, but www.moneysupermarket.com has some of the best tips around to help your money go further.

Six ways to set personal goals

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With the New Year celebrations now behind us, lots of us are now looking forward to the year ahead!

And if your resolutions didn’t get past the first hurdle, then maybe now is a better time to reassert your will on personal improvement and goals.

Why not go for that dream promotion, or train for a muddy race? If you want to eat better you could sign up for a cookery class and you’ll even meet some new people in the process. The choice is yours, but the real question is: how do you stick to it?

Here are six ways to make an effective plan:

  1. Make your goal specific – when you have a clear goal in mind, you have a better focus on what needs to happen. For example, if you want to save more money, then set a realistic target amount and visualise what that money is going to be spent on… eventually.
  2. Measure it – it’s great when you can see your progress as it is a clear indication that you’re on the right track. If you want to lose weight, set yourself a goal weight and date to achieve it by, and use a fitness app to track your weight loss – it can help to motivate you.
  3. The goal should be achievable – when setting targets, you should be realistic about them, otherwise you will be disappointed if you don’t get there. Large-scale goals might be motivational in the beginning, but if the effort required to achieve them is unsustainable, you’ll feel worse than when you started out. Try breaking down big goals into bite-sized pieces and celebrate your small achievements!
  4. Be realistic – think about the timeframe of your goal. You may want to set long and short-term targets such as fitting into your old jeans or being race ready for a marathon which is six months away.
  5. It should be exciting – setting a goal that you’re not really bothered about will demotivate you, so make sure you don’t lose interest. Remember to visualise the end result often to keep up those levels of motivation.
  6. Record it – keep a diary of certain milestones during your journey, or log your progress on an app. You will be able to look at how far you have come and it will serve as a reminder for why you set those goals in the first place.

Long live the Queen!

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The Queen will turn 92 this year and although living longer is a good news story, it does raise the question of how the cost of us living longer will be funded.

When you take into account that due to advances in modern medicine, the life expectancy of a British baby born today could be 104 years old, it is clear there is a real need to address this now.

65 year old men are currently predicted to live for another 21 years, with women a further 24 years.

Many people actually want to live longer and this presents a financial challenge, but who will be responsible for providing the money required to look after our ageing population? The employer? The State? Or the individual? It is important to consider now that you may live longer than you expect, and plan your long-term saving so that you are prepared.

Getting an estimate of your life expectancy using an online calculator might feel like a strange thing to do at this stage in your life, but it will give you an idea of how long you can expect to live on average. The Office for National Statistics (ONS) research shows that older people in England are living longer than ever before. 65-year-old men are currently predicted to live for another 21 years, with women a further 24 years, so you can see that preparing to fund your later life savings to last for 20+ years in retirement when you no longer have a salary is a realistic target. What’s more, life expectancy may increase further.

As a result of us all living longer, the Government has also introduced a gradual increase in the State Pension Age (SPA) which will begin from 2018. A recent study shows that funds to pay for the State Pension could run out by the early 2030s.

The State Pension Age is increasing gradually from 2018 as follows:

Funding the cost of an aging population is by no means clear-cut at this point, but if you foster good saving habits from an early age, you will hopefully benefit in the long run!

Women and pensions: the State Pension

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Until I started working in the pensions industry, I had assumed (rather arrogantly it turns out) that I will be entitled to a full State Pension when I reach the grand old age of 60.

Of course, I now realise I can’t assume I will be entitled to anything at all!  A combination of the government increasing the State Pension Age (SPA), tinkering with legislation and my own need to juggle working with raising my family means I will only be able to receive my State Pension if:

  1. I have actually worked for more than ten years and made my National Insurance Contributions (NICs)
  2. Worked for 35 years and made my NICs to be entitled to the full State Pension
  3. Within current estimates, I make it to the age of 68, due to predicted increases in the SPA

Predicting the future

I was auto-enrolled into my company pension when I started working full-time and this has, at the very least, ensured I’m saving for my future.

I thought it would be a good idea to find out just exactly what I will be entitled to, so I recently tried the State Pension Calculator.  It’s a useful way of finding out if you are on track to receive the full State Pension when you reach retirement age (whatever that may turn out to be!), and it also provides you with a breakdown of your NICs during your working lifetime.

It was interesting to see that for me, a 47 year old single mum who has worked alongside bringing my children up, there were only two years out of 32 I hadn’t managed to make my full quota of NICs. This is partly due to NI credits continuing to be made even when you have your children as long as you are registered for Child Benefit and your youngest child is under 12. So as long as I continue working for the next five years I’ll be eligible to receive the full State Pension (£159.55 per week).  I’d like to say that knowing that gave me some sense of relief . . .

Affordability

Now I’m not planning on a luxury holiday when I retire, but even I can see that trying to manage on this amount is going to be challenging. Unfortunately, due to the reasons already stated, my other pension saving has also been rather sporadic over the years – it’s tough to think of your own future with the immediate financial needs of your family so painfully pressing.

For me, starting out late on the career ladder and with significantly less time to pay into my pension, the future looks frighteningly close and not particularly comfortable.  I was auto-enrolled into my company pension when I started working full-time and this has, at the very least, ensured I’m saving for my future. I’m benefitting from contributions from my employer, tax relief from the government and I now have a strong sense that I’m making a practical effort to avoid poverty in my later life.

Stay in, pay in and pay in some more

All doom and gloom aside, I know that my aim right now is to pay in, manage my pension savings and try to find some extra money to contribute when I can.  Increasing my contributions by just one percent every year, perhaps when I get my annual pay increase when I won’t notice it quite so much, could have a positive impact on my long-term prospects.

With 4me you can try modelling the effect that paying in just one percent more will have on your predicted savings – you might be pleasantly surprised!

Embrace some Danish wellbeing to see you through the Christmas chaos

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As the festive season ramps up to fever pitch and we’re all frantically trying to organise our family, holiday, work and home, there doesn’t seem to be much time left to do anything much else apart from sleep.

But it’s exactly at this point when the stresses and pressures of life are at their highest, that the Danes focus on finding moments of ‘hygge’ (pronounced hoo-gah) to ensure that they enjoy some calm comfort amidst the tumult.

A sense of wellbeing

Hygge: wellbeing, comfort, cosiness and enjoying the simple pleasures in life.

The exact meaning of hygge is almost impossible to determine, but is generally described as wellbeing, comfort, cosiness and enjoying the simple pleasures in life. Enjoying a hygge moment could be indulging in a quiet night in with hot chocolate and a good book, but it could equally be enjoying a cycle ride outside in the fresh air. Although the activities are seemingly unconnected, they both feed into a holistic sense of wellbeing – nourishing the mind and body with goodness.

Work life balance

This idea of general wellness also has a solid focus on maintaining a strong work life balance which sees the majority of Danes starting work at 8am and finishing at 4pm, Monday to Friday. The Danes begin and end their working day early to make the most of the daylight hours, especially in winter, and simply don’t stay late after work, placing great value on time spent at home with their family at the end of the day. The OECD Better Life Index states that ‘only 2% of employees work very long hours’ which is significantly less than the OECD average of 13%.

Work related stress

This work ethic is the accepted norm in Denmark and goes some way to avoiding underlying expectations to work longer than contracted hours to ‘get the job done’ which are more prevalent in the UK. It’s clear to see the correlation between a poor work life balance and increased stress levels, and this is highlighted in our recent Why BWell survey with 25% of UK respondents saying that they struggle to manage workplace pressure. Alongside this a third of people surveyed said that they believe their job has a negative impact on their mental health, and 20% admit they don’t get regular exercise.

Clock off and check out

There’s definitely something to be said for making some time for a hygge moment or two in the face of such statistics, and to help with navigating the most overwrought time of the year. Perhaps adopting a strict rule of clocking off on time most evenings to ensure you make it home to eat dinner with your family, or being mindful about creating joy in life’s everyday moments will be just enough to help you keep your ‘balance’ right through to the New Year.

Why BWell? If you’re interested in reading more about the current state of workplace wellbeing in the UK, you can download a copy HERE. 

Work-life balance: achieving the happy medium

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If you frequently surface from looking deep into the eyes of your work laptop to find that 6pm silently slid past more than an hour ago, or if the first thing you think about when you wake up is the email you sent late the night before, it is likely that your work-life balance is looking rather unhealthy.

Research by the Mental Health Foundation has found that more than 40% of employees neglect other aspects of their life because of work, and nearly two thirds have experienced a negative effect on their personal life including mental health problems, physical health issues, relationship and home life problems as well as a general lack of personal development.

There are measures that we can all put in place to try and refocus on working to live, rather than living to work, but with self-discipline and taking a firm stance top of the agenda, be prepared to toughen up!

40% of employees neglect other aspects of their life because of work.

Speak up

If your workload is unreasonable, and increasing demands are resulting in more overtime than home-time then you will need to find a way to tell your employer. If they aren’t aware that work expectations are too much, then they can’t help you.

Protect yourself

Work-related stress can result in mental health issues, so make sure you have measures in place to combat it. Make time for your hobby, exercise and social life to help ease the pressures of the working day and don’t cancel because you ‘need’ to stay late at work!

Shut off

Easy to say but often difficult to do. As you leave the office (on time!) make sure you mentally acknowledge that you have ‘left the building’ so you have effective closure at the end of the working day. Don’t look at your work emails after your official ‘home time’ and if you absolutely MUST take work home, then confine working to only one area of the house so that you can close the door on it when you’re done.

Time out

Eating at your desk might seem like the ideal way to be more productive, but it’s actually better for you to take a proper break away from your desk. Taking a walk will also raise those endorphins and help raise your productivity for the afternoon.

Work smart

Not hard. You’ll need to be very self-disciplined with your workload and prioritise effectively, but efficiency means you should be able to finish on time . . .