I think the people that should be worried are those of us who are retiring with less than a million. I have only 650k in my Roth and I don't know how to grow it.
I was in this same position a couple years ago. I was always anxious. I decided to start working with a financial advisor, and I started making a lot of monthly dividends that my anxiety disappeared.
Exactly my solution too, even though I'm not retired. As a contractor with limited time to analyze investments, I've relied on a fiduciary for the past seven years to manage my portfolio. This strategy has helped me navigate market fluctuations effectively and also increased my porfolio by up to 300%. You might consider a similar approach.
*Izella Annette Anderson* is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
Retirement is now more difficult than it was in the past. I've been saving for a long time instead of investing, and right now I only have about $516k. I'm not sure how to make it grow, considering all the inflation, into something substantial that I might use for retirement. I just here for ideas.
At a point like this, when the pressure is already on you to retire, it’s best recommended you seek the services of an advisor, as this allows you make smarter investing decisions.
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $30k passively by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Vivian Jean Wilhelm” for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
I retired with $250k, thinking it would be enough, but healthcare costs and inflation have made it challenging. Still, I wouldn't trade the freedom and joy I've found in retirement for anything. It's tough when each withdrawal reduces the potential for my savings to recover through compounding interest
I'm almost ready to retire, and having a financial advisor has been incredibly beneficial. Since I started investing later in life, I couldn't rely solely on compound interest from index funds. I've managed to earn more than some long-term investors. I'll be retiring with at least $4 million
Your financial advisor must be excellent. How can I get in touch with them? I'm worried about my retirement portfolio and could really use some guidance
I usually avoid making specific recommendations since everyone's situation is unique. However, having worked closely with Emily Ava Milligan for years, I've had amazing results. You might want to see if she meets your criteria
The concept of mini-retirement changed my life. I'm no longer waiting for some retirement paradise when I'm 65. It helps to know how to fund the lifestyle. You know, making money while you sip that piña colada by the beach does help. I wouldn't have been able to do it otherwise.
Yeah, people miss that part. You don't jet out to Puerto Rico with your life savings. Proper investing and a good business acumen are big pluses. Invest in the stock market, real estate, build businesses. That's just it.
Safe to say not everybody has the skill to pursue investing. But it's always easy to follow the advice of someone who knows how to i.e a financial advisor. You could anywhere between 10--40k with the right ones. Online businesses are a good bet too if you are savvy.
Carol Vivian Constable is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
Pete - great advice as always. I want to share a tip that turned my life around. I was living paycheck to paycheck, and deeply in debt. About 20 years ago I opened a second bank account, and had my wages paid into that. I then set up a standing order into my usual bank account and transferred the amount I needed to live on every month. Over the years I had pay-rises and the occasional bonus, but I tried to forget about the feeder account except when I needed some emergency funds. I found that on the occasions I checked the feeder account, I was always surprised how much had accumulated, and it made me want to avoid spending it on anything unimportant. I used the spare cash to pay off all 'bad debt' as mentioned in your video, and when they were gone, I made overpayments on my mortgage. Last year, I made the final payment on my mortgage! I hope some of your subscribers might find this useful.
Don’t we all wish we had started sooner! Unfortunately for me, and many others, the education and understanding of all things personal finance was not discovered till later in life. It needs to become a common subject for all so that the myths surrounding it can be dispelled. Pete is doing a cracking job at getting that information out there but I feel a huge cartoon style megaphone is needed to reach the majority of people.
Oh mate, any time I open my mouth about any of this, just about any relative I come across will lecture me on how saving anything is a waste of time since a combination of anything from inflation to ww3 will render is useless. Apparently buying a property and renting it out is the only way... At that point Im just doing the investing at my own accord without much noise being it can get frustrating. If someone isnt wired for this, they wont even bother with watching content for that.
I've stopped drinking alcohol and invest the money I would have spent (and a bit more) into my workplace pension. I have stopped buying too many clothes, and spend more wisely. I've been able to save an emergency fund and am investing in a S&S ISA. So not only am I a bit richer, I am healthier, and having less 'stuff' is great for my mental health too 😄
My fabulous mum and dad taught me personal finance.....from as early as 7 with pocket money choices.....then when i started work at 18 they told me to join pension scheme and also start investing (it was unit trusts in the early 80s) and deal was that I would increase my contributions as my salary increased......roll forward .... my mortgage was paid off at age 36, then for next 20 years I really upped my pensions and investments inputs. I now find myself at age 56 years being in the unbelievable fortunate position of being able to retire with nil money worries and receiving an unexpected redundancy as somewhat of a bonus. Im so grateful to my brilliant mum and dad who gave me such a brilliant start.
@@garybarnes9254 Hi, great question: No, I had an offset mortgage that I overpaid and reduced term, so didn't need to withdraw any investments. I was fortunate to have a very favourable and generous (non employee contribution) DB pension scheme for 22 years ie entire period of my 15 year mortgage plus extra 7 years to boot.....so I could focus on mortgage and tessas/peps/ss isa.....I have been very lucky as well as sensible
@@garybarnes9254 Hi, great question, no I left my investments, I was fortunate for the entire period of my mortgage (8 years) plus another 10 years I had an excellent and generous final salary pension scheme....so although I also had a SIPP, I did focus most of my spare income into overpaying mortgage......I wanted that peace of mind.
After 10 years of UK education, I remember when I was 18 asking my dad what "National Insurance" was after I started my first job, and I didn't know what the word "mortgage" meant until I was in my 20s.
I so wish I'd heard this advice when i was starting out in my first job. Luckily, i did wake up when i was early 40s and have had to save a lot more monthly to try and catch up. Now at 59, im in so much of a better position. Great advice Pete. Love your videos and advice.
I've done this for my son. I set up a JISA and a SIPP. Been paying escalating amounts into them each year. Started at £20 a month each. I started when he was 5 and now he's 11. He now has 9k combined. I read somewhere that every 10 years you delayed payment into a pension you have to double the amount you pay in when you finally start. That's how compounding works (or not if you delayed starting the investment) So £20 a month sounds naff but he was 5. Extrapolate that to 25 and hed have to pay £80 an month in just to match what I've started. So my gift to him is not only a pension (and an ISA) but also consistently lower payments into his pension over his life.
If I ever have children this is what I will do. It should be taught to everyone. £30 per month with 2% increase each year for 27 years @ 7% is £35,000 that's a deposit for a house in most parts of the country and 27 would be a great age to get on the ladder.
@@robgarner6615 My sums allow for inflation. Average long term return is 10%, I used 7% to allow for 3% inflation average per year. So that £35,000 is in today's money. You would actually have just over £58,000. As you said though that £58k is today's £35k roughly.
@@usefulrandom1855 I bought a house in 1996 for £50k. 27 years later, similar properties sell for over £200k. So, as I said, the deposit will no where near be enough.
Pete, we'll done on another great video, £25 a month is an achievable amount. It is a disarming figure for everyone. In general, thank you for producing informative information for the masses. Never before have 'normal' everyday people had such easy access to financial education. You are changing people's financial future, one video and podcast at a time. Keep up the great work. And thanks to Rodger, too 🎉
Good advice if you have 35 years left to work and actually work those 35 years ,i was lucky enough to have worked since i was 17 ,and now 59 just i'm unlucky enough to run out of time to be able to use this advice ,good luck everyone you'll need it 🤞
Pete - have you ever done a video on the net impact of changing salary sacrifice? I upped my pension contribution from 5% to 12% about a year ago and wish I had done it 10-15 years ago. My personal contributions doubled but my net salary only went down 50 quid. I’m kicking myself…
Love these videos Pete, my sons a financial advisor starting about 4 years ago so we have had various conversations on money as I’d already started saving heavily into my pension at work. The company maxed out at 7% but we were free to set our deductions So I was putting 30% away. Yours and other sites have helped me so much over the last 5-6 years, I am 64 next month and mortgage still has 10 1/2 years to go, and have just retired, but mortgage is budgeted for and at 1.29% we overpay by approx50% ( my wife wants to see mortgage down rather than invest it to repay) but this to bring the repayment down every 6 months and not the term, because when the fixed deal ends we will still have about £50K to pay and will need the theoretical 8 year term to keep payments in our budget plan. In our next deal our overpayments will reduce the term Of the mortgage and we should clear the balance over 5 years not 8, with money invested that more than covers the mortgage debt
It is possible because I did it. I changed career a couple of times so was never a stellar earner but I always had monthly standing orders to pensions and investments and compounding is a wonderful thing. Thanks for spreading the word, Pete.
I started a private pension back in 1988 at a fiver a week and increased it with inflation every year. Tell you what freaked me out this week. As I am retired, or rather stopped working, I check how my pension is doing on a regular basis and when I checked my funds with Reassure Now on Tuesday this week, almost 65% of my funds had disappeared. Suffice to say, it's been corrected as of today, but the incompetence of the people on the multiple calls I had to make, was astounding. Basically, it was an IT issue/error, but no one could tell me how long it would take to resolve, had me worried all week.
@@MeaningfulMoneythanks, your podcasts have been a massive influence in securing my financial future. I am hoping for my pensions & ISAs to hit 6 figures by the end of the year and that’s from £0 in 2020.
Thank you for the video Pete, big fan of the podcast and all that you put out for us. This is the exact model I've followed and glad to say I have no bad debt, biggest is my mortgage and that's it. My wife and I have created junior SIPP's for our 4 year old and 11 month old and JISA for both too with automations into both sets of accounts. I've also set up personal SIPP for myself and ISA'S etc. We've also been investing in property. The best word I discovered over the past year through yourself and others like Damian is compounding. It's been magical. Thank you for all that you do.
it is sound advice , I started my pension not long after I graduated , when opting out first became an option, I wasn't keen , but the company owner persuaded me that the free money he was offering and the tax saving was a deal too good to miss, and many years from then I would be happy I did. For the first 10 years or so I didn't really increase it, but from there as I got pay rises I increased the contributions , and in the last 5 years I've really jacked the contributions up as the glorious day approaches. One thing I didn't do was any kind of 'life styling' of my pension, so its still invested like an optimistic 25 year old., probably time to get some proper advice 🙂
A nice summation of things :) I am one of those unfortunate folk who grew up before financial information was freely available and so had the mindset that the State Pension was what we had to look forward to. Then auto enrolment company pensions came along and, because I had been brought up to not be financially curious, I just left everything at default thinking the company would pick the best thing for me! Now I am looking to retire and my pension pot is a pitiful £50k - that was quite a shock after several decades I can tell you! All of which preamble is to ask if there is a way to turn things around so as not to be destitute when I stop working?
Excellent advice as usual, Pete. I have a friend who is a self-employed high earner and higher rate tax payer but hasn't contributed to a pension since she left a salaried job. I finally convinced her to open a SIPP and set up a standing order for £50 per month, then make additional payments when her invoices are paid . It was the most I could convince her to go for as a regular payment. The tax relief calculation was what convinced her, and the promise of a nice tax refund each year 😂 Still working on her.
Thanks Pete - very well explained. Having had a father who was unfortunate enough to suffer from the Maxwell pension scandal I was cautious about pensions. I was always worried that I would need the money sooner than retirement or that the pension would fail in some way. Fortunately my trust has been restored but it has taken time and now I need to catch up but I have missed many years of compounding and tax savings which is a great shame.
Given the persisting global economic crisis, it's essential for individuals to focus on diversifying their income streams independent of governmental reliance. This involves exploring options such as stocks, gold, silver, and digital currencies. Despite the adversity in the economy, now is an opportune moment to contemplate these investment avenues.
Thanks for your videos, Pete x was in a good place financially, but since listening to your pension videos about two and a half years ago about DB pensions and DC pensions ,I now put about £30'000 a year in my DC pension using your easy to follow videos and the tax saving is mind blowing one happy 60 year old thank you xxx
I wish financial literacy was taught when people start working or even better school. I believe that this will bring financial stability to a lot of people. Unfortunately I’m one of those people, invested in my late 20s but sold all my investments after 5 years. I wasn’t well informed at the time and I wish I just left it. I’m a Nurse in my late 50s and about 5 years ago I suddenly realised I only have a NHS pension. At this point I started watching videos like yours and took the bold step and opened a Vanguard account with £100 monthly .I’m afraid to look at my investment portfolio has I don’t know what I should be looking at. Thank you so much for these videos you put out.
How generous of your employer. I don’t know any employer paying more than 10% apart from government! I pay 6 and they pay 5 but now with AVCs of 36% in addition to the 11%. Final years before retirement so need to pay as much as possible. I even tried paying 60% but it was too much!
@@porschecarreras992cabriole8 yes, I shovelled over 50 % into AVCs for the last couple of years to use the full AIA and LIA, which ironically was scrapped the week I gave notice. Even eating into savings slightly was worth it for the tax benefit.
Just wanted to say thank you. when i watch videos its always with the creator explaining these things while expecting people to be on 30k+ so to a certain degree you always end of feeling slightly alienated.
"The best time to plant a tree is 20 years ago. The second best time is now" - Chinese proverb (although why the second best time isn't 19 years ago, I don't know).
You have covered pretty mhch all fundamental steps and "science" behind saving and investing in 10 minutes clip! There is no other way to save and invest if we dont live on less than what we make and create detailed budget for all the spending and savings- less we make more details we need to go into to make more room in our budget for saving.Great channel, very good job!
I have just too many friends who haven't saved enough for their retirement...due to life choices, knocks, divorce...but also a basic misunderstanding of saving and the power of investing passively. Which to be honest wasn't so clear 20-30 years ago (not even sure passive funds existed then). It's really sad
Saving and investing require a lot of discipline, delayed gratification, and sacrifices. Building a financial future is hard work. Its not meant to be easy but with patience, determination, and discipline, it is achievable.
Saw this the other day but only just got around to commenting. On the part about debt, you mention car finance. My wife and I have both got cars on finance and while I know it's not ideal (we don't have any other forms of debt, other than a mortgage, and tend to try and avid credit cards etc for exactly the reasons you explained) and we'd prefer to own the cars outright, we simply can't afford to. I think that probably needs to be borne in mind as even used cars are expensive these days and unless I find several grand down the back of the sofa then getting that sort of capital, with everything else going on, would be extremely difficult. Before anyone posts "helpful" comments like "why don't you get rid of one of your cars then?" we need a car each because of personal circumstances and work patterns that I'm not going into on YT. I do like these videos though, Pete, and generally learn something from each of them so it's not meant as anything more. You did say you could take it, so that's my 5 pence worth...
I appreciate that, Martin. As a pragmatist, I do understand that there is sometimes a need to do what you say. Ages ago I did a video on how to buy a car without debt - ruclips.net/video/j7jJ3jhtv1g/видео.htmlsi=p0KAqFSHly1faqcu - it's not an easy process but it is possible. I'm aware that the world and conditions are rarely ideal. But as long as you do everything intentionally, then that's good enough for me! Sounds like you're approaching everything in a smart way - keep going!
I started 1 year ago with my own stocks and shares isa aside from my company pension. Seems to be going well so far and I've stuck with it. I try and suggest to people I know to start investing. As with most people, I wish I'd started earlier. Thanks for the helpful videos along the way!
Your final caveat is the most important aspect. Without the 2008 stock market crash I might have hit your 800k pot. But at age 55 having put into pensions for over 30 years I’m at about 350k. My last employer ‘matched’ a paltry 3%
Best advice I've ever read was pay yourself first , I've got a direct debit set up straight after payday . If I'm struggling with money I'm then driven to find it
Love your videos. Is this a good order of investing for retirement? 1. Pension (match) 2. Lifetime ISA (max) 3. Stocks and shares ISA (max) 4. Pension (max)
Great advice but this video is really most relevant for younger people. Unfortunately, although I started by investing almost exactly that amount into a private pension 27 years ago - £25 per month - I wasn’t clued up enough or motivated enough to increase my monthly payments. Now aged 56 I only have £26k in my pension pot which is a pitiful amount. For those that aren’t so young , I still feel property investment is a better than the stock market because with a pension, the amount of money needed to be invested each month to retire comfortably (over a shorter period of say 15 to 20 years) period is huge! For any younger folk watching this who don’t have much of a pension pot or who have yet to start investing I would say “Heed the advice of this video! You have time on your hands to achieve this!”
You put £25/month in to a pension and are surprised you only have £26k!? Pension contributions need to be measured in the hundreds to get anywhere near what can be considered a decent pension pot.
@@adambritain5774 No I am not surprised. I’ve known about this problem for several years now. I just didn’t understand the power of compounding until recently - I knew my pension would be pitiful but if I had even paid £100 instead of £25 it would have made a big difference. A 25-30 year old need only pay about £250 a month (plus increases of monthly payments each year in line with inflation) to reach about £850,000 over 40 years. Whereas someone aged 40-45 with only 25 years to retirement would have to contribute a huge £900 a month to reach the same figure. So I’m saying the amounts mentioned in this video only works for younger people who have plenty of time on their hands.
The only upside of this situation is that if you keep it until 67 and putting the 25 quid in you'll get it to around £55k. If you put £500 a month in now until 67 it'll be £165k. If you can stretch to £1000 you may get to £270k, this is assuming a 7% return (i.e., mostly equities 'adventurous' investment).
Interesting strategy with raising each year. My pension is percentage based and won't necessarily get pay increase each year. I also have additional savings but save at a fixed rate so progress is slow. Will give that a try. Thanks
The question is how sustainable it would be to adding £25 each year to the monthly savings total. As you said yourself that’s got you saving £125 a month in 5 years and it gets you to the better part of a grand a month at 35 years. With the best will in the world I don’t see someone doing that on the living wage or the median income. You can argue people’s pay will go up over that time so they can contribute more, but it’s not gonna be the case for everyone. Like you say, just putting a bit away each month will be better than not - and getting started is most important, but there is a bit of a disconnect between £25 a month and £875 a month.
I'm surprised how far I had to scroll to find this comment. I totally agree. This is great advice for people on moderate incomes, but when you've got less coming in than going out (and you've already cut your spending to the bone) if there isn't any left over to save, it's simply not possible to increase the amount you save year on year. What we really need is to vastly reduce the discrepancy in earnings between the richest and the poorest. Lockdown showed us how vital certain jobs are, and yet they still pay terribly. Simply telling people on minimum wage jobs to "budget better" is not good enough
To be fair, at 35 years you will be over 60 most likely, the mortgage will have been paid off, and there's inflation erosion and hopefully a few promotions behind you, so a grand a month should be viable. Obviously if things aren't going to plan (divorce could cost you five to ten years of progress and likely kills any early retirement option), you have to adapt, as food and shelter always comes first.
Love to know where these growth rates come from Just had a review of my change of P Plan at 0.47% this year with cost for transfer to new scheme to allow imminent drawdown at £6K for provider and IFA. Stopped putting in now and going all out on ISA's so I reduce cost and tax and improved accessibility. The only ones who benefited was provider and IFA.
As Pete says ensure that you have an emergency cash fund of £1000 for broken items. I also have 6 months bills in a fixed ISA which is only for if I lose my job. One lesson from me is to pay in the amount you can manage into your pension, as I was cash poor for longer term home repairs I had to reduce my pension from 22% to 6.65% to save for new floors over 9 months. I now pay 16% and save into a easy access for the larger unforeseen repairs.
Great video thanks. Would you recommend your own personal SIPP? And how many should we have? Just one we can manage or a few eg stocks and shares ISA also? Thanks.
From the age of 18 I have always paid myself 10% of what I earned. Whether that was weekly or monthly, I'm now 44 and continue to do the same. Pay yourself before your bills. Don't get to the end of the month and then think of saving. You'll just see extra cash and spend it on something pointless. And yes I do still treat myself, I don't just squirrel money away and never spend. I buy my cars with the best possible bank loan rate and pay it off within 36 months, so not to cost me more on interest. I run the car for a further 12 to 24 months then move on. Always worked for me. Saving is only hard if you make it hard, it's a piece of cake if you get it right.
Thanks Pete- great video. Its nice to see someone acknowledge that not everyone earns the 'average' wage of £35000. I get the living wage at the moment and have been for the last 10 years. Ive come to the realisation that im capable of earning more and need to so that i have a future that i want. Keep up the good work, look forward to the next one.
Would be good if you could explain how that £800k is broken down into monthly pension payments for the rest of your life and what should be the target for people at different ages etc. Thanks
Great advice Pete. But you also have to be invested in the right place .I have a pension for the last 28 years and the returns have been very, very poor . I invested with st james place . In the end I moved the pension to vanguard and its doing alot better. But I will not make back the return that I losted using st james place.
I put in 37.5%, employer 3%, sounds crap but still Get 100% increase on what my net figure equates to before this is grossed up and the 3% and 6.9% NI (half company save on my contribution) back....
Where do I put the money and make a start? You said Pension. Thanks so much for your inspirations. Yes I will watch the power of pensions in more details. I do require more detail.
Great video Pete as always. Thinking about the £25 a month, at todays prices, in a lot of places that only relates to 5 pints of beer a month or half a dozen fancy coffee's. Thats the way I look at it anyway. But the same as nearly everyone here, I wish I had started earlier. Just a thought, maybe all the banks that offer cash back on purchases should give you the option to put that money into a pension investment account, as most of them have an investment option.
I have a DC pension in work ,my employer puts in 3 x my contribution upto 6%, I am 57 now and this pension has been running 13 years ,changed from a DB pension, just wish now I did the yearly increases
“Spending creep” is real…. I know, I’ve been there. It took me about 5 years to realise that despite a series of good pay rises, I had less money at the end of every month. Duh… 😂
I was lucky to join a company with a DB pension scheme. Nonetheless I also decided to contribute AVCs too. Every time I got a pay rise I put a bit of it in my AVCs. 25years later the company has now closed the DB scheme but because of the saving I also have a DC pot now worth ca. £400k on top of the DB pension. For me ‘what you never had you never miss’ so the advice to increase annually is a really good one.
Great video as always Pete, keep up the good work! Your videos are invaluable to so many people. Just managed to hit 25% (incl 8% employer) this year in a salary sacrifice
Hi, Thank you for your video presentation; most interesting. Could you reply & paste in the actual equations / formulae so that I can calculate the savings returns myself using a personal calculator & paper please. I have very different savings amounts, interest rates & remaining periods (years of living). I'm sure that a few others that may read this would also benefit from the equations. PS. I don't just want a 'blackbox' online calculator; I want to both see & fully understand the figures & different financial scenarios. Thank you.
My council tax 148ba month now single person deducted 25 per cent So with that 50 to 55 discount 25 in a box/bank each month And 25 for my saving account
Thanks Pete. I do enjoy your videos but in this case, yes, it is too rose-tinted and therefore unrealistic. For a gross income of £22k,a normal employee is already obliged to contribute 5%of gross income, so that is more than £93 per month but the employer is only obliged to contribute 3%, so if they stick to that ceiling, then the benefit of matched contributions will not accrue, so the total will be far smaller than advertised. Whilst I think using specific examples is very helpful, you also need to follow through using more realistic parameters, based on the mandatory minimum contributions. Regarding the annual increase in contributions, this is unrealistic in the early years. If we assume that income increases with inflation and use 3%as an example, then a £22k salary will only increase by around £50 per month in year 2. If all other costs (housing, fuel, food etc.) have also increased by inflation, then a £25 increase (even if it only costs £20 in take-home pay) is unlikely to be achievable. It is also important to note that pensions, whilst benefiting from significant tax breaks, are not accessible savings - they have the specific purpose of supporting you during your retirement and this is why younger people are typically focused on other priorities. For this reason concentrating first on other savings, in addition to the "emergency fund" may be a higher priority.
Points all noted, though I think it is shortsighted to exclude pensions for young people (though I do t think that’s really what you’re saying) Please remember this is just an example and is designed to get people to think about what could be possible from small beginnings. Thanks for watching.
@@MeaningfulMoney Hi Pete, it was absolutely not my intention to exclude pensions for young people; they are very important. My primary point was to demonstrate a more realistic and achievable objective, which people on a low (below national average) income can afford to achieve. Unfortunately, using more limited input values considerably reduces the output value, for obvious reasons. My secondary point was that young people are more likely to be meeting the challenges of debt and limited surplus income, as described in the early minutes of your video. Their next priorities will be from a shorter-term perspective than pensions but there's no doubting that "little and often, for a long time" is the best way to save for a pension.
If you start work full time at 22-ish (as a graduate) around £25k and do the minimum 5+3% contributions, into a decent pension plan that's mostly equities, and never get promoted, then it will take you until 44yo to get £100k in your pension. By by 60 you'll have over £370k. You could have over £700k at state retirement age of 70 (i hope it's not later by then!). Slow and steady can mean you finish the race at least. This is a 7% return, achievable, but 5% will get you around £375k and is a reasonable conservative inflation-adjusted return over that time period. Starting early is the key. Bumping another couple of percent contributions helps speed things up (£100k by 40, £1m by 70, @7%) so I hope this is forced soon on employers (6+4 perhaps).
Pete, I’m a big fan, but the one thing I dislike about your vids is your assumptions, e.g. assuming a 6% return. Seven years ago, after being inspired by you, I started adding money into AVCs. When I started, it was with the Pru, then the company moved over to Aviva; both are as bad as each other. The growth I have achieved is 4%. That’s 4% in 7 years! If it wasn’t for the 20% tax relief, I’d have been better off putting that money in a savings account.
Hi John. I understand the frustration but I’d add a couple of things. If you’ve had a 4% return I would guess that you’re probably a balanced investor with something around 50-60% of your fund held in bonds. Also, the past seven years have been VERY difficult. I promise that over the longer term, someone with 80% or more in equities should comfortably achieve the 6% I tend to use as examples. And finally - investing should be done over DECADES. Seven years is the overture - there’s so much more to come. Hold your nerve!
You might want to look at your risk tolerances and fees? With returns like you've got I can only imagine it's pretty risk averse and a large weighting towards bonds, in an environment when rates were at all time lows and only an outlook of rates to go up (yields too so your bonds values would collapse).... Possibly look at a greater weighting towards equities if you have a long term outlook. You've been getting 4% in 7 years whilst those heavy in equities have been averaging double figure percentages a year.
I've started this month (January 2024) to putting a £1 a day away (£31 for january). It sounds like a lot £31, but if your paid monthly like most of us are nowadays, £31 isn't really a lot.
Firstly, I'd love to say thank you very much for this lesson. I wish I watch your video 5-10 years ago(( But, late better than never. So, could you tell me, what the tools could provide the 6% of compound interest of savings now in ££? TIA
I was in the 90s struggling, recently married, new mortgage, 2 children. We had SAYE accounts. I think it was £17pmth and the government topped it up to £20. Stock market investment, they could bring these back. I think we over 5yrs had enough to buy a new Vauxhall Zafrira . Small pots build, fill big pots.
Hi Pete, for the £878,407 figure is that assuming that we increase our pension contribution by £25 each year AND that the employer matches that for 35 years? So in year 35 we are contributing £875 per month which could be anywhere from 10% to 20% of gross salary and the employer is matching that (potentially) 20%? I've had a few jobs now and I haven't had an employer match more than 3% so far.
Yes, it’s a big assumption I admit. But there are employers out there who match up to larger amounts. The purpose was to discuss what’s possible and encourage people not to accept a ‘what’s the point’ mentality. Anything is better than nothing! 👍🏻
@@MeaningfulMoney Thanks for clarifying ☺️ I do hope that further in my career I am contributing more to my pension and my employer is matching it. I have some wasted time to make up for!
Great video and I agree with what you’re saying but do you have any videos on where to start with investing. I see many videos talking about the power of investing but few explaining clearly on how to invest. I hope you have an investment video as this one was great.
Another rule I've stuck to all my life is never pay anyone to do a job that you can do yourself. Examples are: making coffee, washing your car, cleaning the house, DIY (everyone can paint and learn to do what jobs you can't). When you are financially secure it's OK to treat yourself, but otherwise you need to knuckle down and graft
I like that, Mark. I also believe that if your time is more valuable than the cost of outsourcing you should consider it, but only if you have the means. For example, I never wash the car because my time (and these days, my energy levels) can be better used elsewhere. But for anyone struggling to find the money to save for the future, you’re dead right - out in the work and reap the rewards 👊🏻👍🏻
I have a DB pension. Which, on the one hand, if it’s as reliable as it should be, is great because it’s a lifetime income (tho at the moment with my time at my organisation it only adds up to circa £1500 a year…..). But on the other… (a) I don’t altogether trust it, and (b) the way it’ll be calculated & distributed means I can’t see how much is actually in there for me, because as far as I can tell it doesn’t work like that.
Hi. You don't actually have an amount in the pension, just a guaranteed yearly pension amount. This is usually based on the number of years you have paid in and your yearly wage. You should get a statement each year that tells you how much your yearly pension is currently worth and how much of would he worth at retirement age if you continue to contribute until then.
Lifetime Stocks & Shares ISA. For a basic rate taxpayer the 25% bonus is better than the 20% pension tax relief, ignoring employer contributions of course.
25% bonus isn't better than 20% relief, mathematically they work out exactly the same. Remember, when you decrease something by a given percentage, you need a higher percentage to get back up to where you started, because you're multiplying the percentage by a smaller starting amount. 20% of 100 does not equal 20% of 80. For example: £100 a month pre-tax = 100 x 0.8 = £80 (i.e. 20% of 100 is 20). So for every £80 of take-home pay you put into your pension you get an extra £20 in the form of tax relief. £80 a month post-tax plus the LISA bonus = £80 plus 25%, and 80 x 0.25 = 20. So taking your post-tax income and putting it into a LISA only gets you to where you started if you'd put it in a pension to begin with (assuming the £100 is being taxed at 20%). Not to say there aren't other benefits of a LISA (like being able to take it out early to buy a house!), but all it really amounts to is another kind of tax relief/deferred tax.
@@jamescottam9622 That's a valid point, I didn't consider that. The potential advantage then aside from the house buying part is that it isn't taxed on withdrawal after maturity unlike a pension and ignoring the lump sum allowance.
I left it way too late and find myself in my mid 40s saving £4000 a month. I'll still get there, but it'd have been easier if I started younger. Age discrimination is very real so I need to get all done before 60. I wouldn't count on getting work after that.
THIS! Yes to this! All I want is for people to start saving little and early. They have their whole lives to earn more and increase their contributions while also enjoying life. Thank you for watching and commenting! 👍🏻🙏🏻
I put in 6.1% and my employer puts in 14.5%, its a duel Defined Contribution / Defined Benefit scheme. Only based on a salary of £27k though, suppose it all adds up.
Could you do a video on ‘qualifying earnings’. I just did a check through on my pensions and my current pension is a lot less than I’d expected. I thought I was paying 5%/employer 3% on total earnings. But if you pay high rate tax I think qualifying caps at £44k, significantly limiting the ‘minimum automatic’ contribution. I’m just about to start topping up but this was a surprise
I'm already nearly 50, 10k in debt and my outgoings currently match my income 🤷🏻 I don't have time on my side. I'm also self employed so no employer to match any pension.
@MeaningfulMoney no not great at all, my workplace pension is even worse with current POT standing at 20,640.46 with my contributions, employer contributions and tax relief totaling 19,335,75! I'm maxed out on allowance of 5/3 as my income is higher than the 50k ish cap with work place pension providers, so I'm trying to put money away across both pensions and getting nothing in return in terms of growth in last 10 year! Hopefully your next video can assist me with this???
Well, majority of employers will only match you to the maximum % of your salary. So unfortunately you will not get matched contributions above certain amount.
I have been saving on a SIPP £20 per year without increasing it and today after 12 years is worth £12k almost. Not enough but certainly not missing such a small amount. Not to mention that I have been taking only 20% tax relief so trying to recover the other 20% from taxman
@@MeaningfulMoney agreed but this is my fifth pension pot so I focus on my current workplace one instead in addition to Stock ISAs. I still wish I could save the £60k new allowance but I am well over the old £40k
you mentioned in a previous video about a cashflow ladder. Do all pension/S&S ISA providers allow for different lumps of the investment amount to be allocated to different risk profiles? Or are there other ways to manage that? eg crystallise a portion and that part can remain invested at a different risk level?
I actually answered the average vs living wage point early in this video. Here’s a video on pensions generally: ruclips.net/video/E2RDvUiRRG8/видео.htmlsi=A1OqgMAd5vQ6vhr-
If you’re looking at Meaningful Academy, there are three phases. Financial Foundations is free, that’s for those starting out and need to understand the basics. The other two phases, Build Wealth and Retirement Planning are paid-for. You can use the coupon code RUclips for a discount and there’s a 30-day guarantee on there. None of the phases offer advice though - that happens through my financial planning practice, Jacksons. More info at meaningfulmoney.tv/work-with-pete
I like the topic about financial literacy. I have a question I was on Nest pension for around 10 years and now I work in NHS. And now my question... is it practical to transfer my Nest pension co tribution to NHS pension? Thank you
I doubt you’d be able to do that, as generally the NHS scheme doesn’t accept transfers in of DC benefits. I would look at transferring the Nest scheme to something better. I have videos on that - search the channel for ‘tidy my pensions’
Not interest, RETURN. The money needs investing - no-one builds wealth by leaving money in the bank. Stay tuned for the next video on exactly this subject.
Just found this channel you mention earning 6% on investments . Bank savings do not offer this level of saving. Government bonds do not offer this level either. It is said the passive saver of the FTSE 100 has not reached this level. There are some funds that romp away but how can you tell the future as other funds do worse than the passive. What skills do I need to choose funds that have a decent chance of growing. If I buy 10 funds all 10 have to make 6% and more if one or two or five funds don't make the 6 % marker. I have found it a useful channel thanks
I think the people that should be worried are those of us who are retiring with less than a million. I have only 650k in my Roth and I don't know how to grow it.
I was in this same position a couple years ago. I was always anxious. I decided to start working with a financial advisor, and I started making a lot of monthly dividends that my anxiety disappeared.
Exactly my solution too, even though I'm not retired. As a contractor with limited time to analyze investments, I've relied on a fiduciary for the past seven years to manage my portfolio. This strategy has helped me navigate market fluctuations effectively and also increased my porfolio by up to 300%. You might consider a similar approach.
@@ThomasChai05Mind if I ask you to point at how to reach this particular person assisting you? Seems you've figured it all out unlike the rest of us.
*Izella Annette Anderson* is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
Retirement is now more difficult than it was in the past. I've been saving for a long time instead of investing, and right now I only have about $516k. I'm not sure how to make it grow, considering all the inflation, into something substantial that I might use for retirement. I just here for ideas.
At a point like this, when the pressure is already on you to retire, it’s best recommended you seek the services of an advisor, as this allows you make smarter investing decisions.
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $30k passively by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
Your advisor must be really good. How I can get in touch? My retirement portfolio's decline is a concern, and I could use some guidance.
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Vivian Jean Wilhelm” for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
I retired with $250k, thinking it would be enough, but healthcare costs and inflation have made it challenging. Still, I wouldn't trade the freedom and joy I've found in retirement for anything. It's tough when each withdrawal reduces the potential for my savings to recover through compounding interest
I'm almost ready to retire, and having a financial advisor has been incredibly beneficial. Since I started investing later in life, I couldn't rely solely on compound interest from index funds. I've managed to earn more than some long-term investors. I'll be retiring with at least $4 million
Your financial advisor must be excellent. How can I get in touch with them? I'm worried about my retirement portfolio and could really use some guidance
I usually avoid making specific recommendations since everyone's situation is unique. However, having worked closely with Emily Ava Milligan for years, I've had amazing results. You might want to see if she meets your criteria
I looked up her name online and found her page. I emailed and made enquiries. Thanks for the help
The concept of mini-retirement changed my life. I'm no longer waiting for some retirement paradise when I'm 65. It helps to know how to fund the lifestyle. You know, making money while you sip that piña colada by the beach does help. I wouldn't have been able to do it otherwise.
Yeah, people miss that part. You don't jet out to Puerto Rico with your life savings. Proper investing and a good business acumen are big pluses. Invest in the stock market, real estate, build businesses. That's just it.
Safe to say not everybody has the skill to pursue investing. But it's always easy to follow the advice of someone who knows how to i.e a financial advisor. You could anywhere between 10--40k with the right ones. Online businesses are a good bet too if you are savvy.
Your advisor must be really good. How I can get in touch? My retirement portfolio's decline is a concern, and I could use some guidance.
Carol Vivian Constable is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
Pete - great advice as always. I want to share a tip that turned my life around. I was living paycheck to paycheck, and deeply in debt. About 20 years ago I opened a second bank account, and had my wages paid into that. I then set up a standing order into my usual bank account and transferred the amount I needed to live on every month. Over the years I had pay-rises and the occasional bonus, but I tried to forget about the feeder account except when I needed some emergency funds. I found that on the occasions I checked the feeder account, I was always surprised how much had accumulated, and it made me want to avoid spending it on anything unimportant. I used the spare cash to pay off all 'bad debt' as mentioned in your video, and when they were gone, I made overpayments on my mortgage. Last year, I made the final payment on my mortgage! I hope some of your subscribers might find this useful.
Absolutely brilliant advice, Dave - I love this! 👍🏻👊🏻
🎉Well done! Small , consistent habits can be life changing.
Congratulations, that's awesome!
This is exactly what I did 15 years ago. I ve now paid off my mortgage many years early. It was a game changer
One thing that is so important… that’s to start, just start, just do it with whatever you can because giving yourself any your money time is the key.
Amen to that. No better time than now.
Exactly what I’ve said to my kids. I now regret not saving earlier myself. As you say, time is your friend - start NOW 👍🏻
Don’t we all wish we had started sooner! Unfortunately for me, and many others, the education and understanding of all things personal finance was not discovered till later in life.
It needs to become a common subject for all so that the myths surrounding it can be dispelled. Pete is doing a cracking job at getting that information out there but I feel a huge cartoon style megaphone is needed to reach the majority of people.
@@philr8971Sadly many people don't and won't care until it's too late.
Oh mate, any time I open my mouth about any of this, just about any relative I come across will lecture me on how saving anything is a waste of time since a combination of anything from inflation to ww3 will render is useless. Apparently buying a property and renting it out is the only way... At that point Im just doing the investing at my own accord without much noise being it can get frustrating. If someone isnt wired for this, they wont even bother with watching content for that.
I've stopped drinking alcohol and invest the money I would have spent (and a bit more) into my workplace pension. I have stopped buying too many clothes, and spend more wisely. I've been able to save an emergency fund and am investing in a S&S ISA. So not only am I a bit richer, I am healthier, and having less 'stuff' is great for my mental health too 😄
Only to be taken by IHT taxes . 😂Enjoy your life. It’s not worth going overboard saving every last penny.
My fabulous mum and dad taught me personal finance.....from as early as 7 with pocket money choices.....then when i started work at 18 they told me to join pension scheme and also start investing (it was unit trusts in the early 80s) and deal was that I would increase my contributions as my salary increased......roll forward .... my mortgage was paid off at age 36, then for next 20 years I really upped my pensions and investments inputs. I now find myself at age 56 years being in the unbelievable fortunate position of being able to retire with nil money worries and receiving an unexpected redundancy as somewhat of a bonus. Im so grateful to my brilliant mum and dad who gave me such a brilliant start.
What a gift they gave you! A good financial education is such a blessing!
Great story… did you dip in to your investments to pay off your mortgage?
@@garybarnes9254 Hi, great question: No, I had an offset mortgage that I overpaid and reduced term, so didn't need to withdraw any investments. I was fortunate to have a very favourable and generous (non employee contribution) DB pension scheme for 22 years ie entire period of my 15 year mortgage plus extra 7 years to boot.....so I could focus on mortgage and tessas/peps/ss isa.....I have been very lucky as well as sensible
What a wonderful legacy they've left you ❤
@@garybarnes9254 Hi, great question, no I left my investments, I was fortunate for the entire period of my mortgage (8 years) plus another 10 years I had an excellent and generous final salary pension scheme....so although I also had a SIPP, I did focus most of my spare income into overpaying mortgage......I wanted that peace of mind.
One of the problems with this country (UK) is that we are not taught in schools anything about money, taxes, debt.
And why do you think that is…?
It isn’t by accident that’s for sure.
And another problem is nobody saves anything these days, credit society.
After 10 years of UK education, I remember when I was 18 asking my dad what "National Insurance" was after I started my first job, and I didn't know what the word "mortgage" meant until I was in my 20s.
You’re right there but I can’t help but think we aren’t taught this for a reason. Keeps the poor poor
I so wish I'd heard this advice when i was starting out in my first job. Luckily, i did wake up when i was early 40s and have had to save a lot more monthly to try and catch up. Now at 59, im in so much of a better position. Great advice Pete. Love your videos and advice.
Cheers Graham! 👊🏻👍🏻
I've done this for my son. I set up a JISA and a SIPP. Been paying escalating amounts into them each year. Started at £20 a month each. I started when he was 5 and now he's 11. He now has 9k combined. I read somewhere that every 10 years you delayed payment into a pension you have to double the amount you pay in when you finally start. That's how compounding works (or not if you delayed starting the investment) So £20 a month sounds naff but he was 5. Extrapolate that to 25 and hed have to pay £80 an month in just to match what I've started. So my gift to him is not only a pension (and an ISA) but also consistently lower payments into his pension over his life.
If I ever have children this is what I will do. It should be taught to everyone. £30 per month with 2% increase each year for 27 years @ 7% is £35,000 that's a deposit for a house in most parts of the country and 27 would be a great age to get on the ladder.
@@usefulrandom1855 But in 27 years, you will need 4 times as much for a deposit due to inflation.
Can you adopt me please? I'm 39 and easy to look after.
@@robgarner6615 My sums allow for inflation. Average long term return is 10%, I used 7% to allow for 3% inflation average per year. So that £35,000 is in today's money. You would actually have just over £58,000. As you said though that £58k is today's £35k roughly.
@@usefulrandom1855 I bought a house in 1996 for £50k. 27 years later, similar properties sell for over £200k. So, as I said, the deposit will no where near be enough.
Pete, we'll done on another great video, £25 a month is an achievable amount. It is a disarming figure for everyone.
In general, thank you for producing informative information for the masses. Never before have 'normal' everyday people had such easy access to financial education. You are changing people's financial future, one video and podcast at a time. Keep up the great work. And thanks to Rodger, too 🎉
Thank you so much- that’s very encouraging! We love doing it, so thanks for being part of the movement! 👊🏻👍🏻
Good advice if you have 35 years left to work and actually work those 35 years ,i was lucky enough to have worked since i was 17 ,and now 59 just i'm unlucky enough to run out of time to be able to use this advice ,good luck everyone you'll need it 🤞
Pete - have you ever done a video on the net impact of changing salary sacrifice? I upped my pension contribution from 5% to 12% about a year ago and wish I had done it 10-15 years ago. My personal contributions doubled but my net salary only went down 50 quid. I’m kicking myself…
Love these videos Pete, my sons a financial advisor starting about 4 years ago so we have had various conversations on money as I’d already started saving heavily into my pension at work. The company maxed out at 7% but we were free to set our deductions So I was putting 30% away.
Yours and other sites have helped me so much over the last 5-6 years, I am 64 next month and mortgage still has 10 1/2 years to go, and have just retired, but mortgage is budgeted for and at 1.29% we overpay by approx50% ( my wife wants to see mortgage down rather than invest it to repay) but this to bring the repayment down every 6 months and not the term, because when the fixed deal ends we will still have about £50K to pay and will need the theoretical 8 year term to keep payments in our budget plan. In our next deal our overpayments will reduce the term Of the mortgage and we should clear the balance over 5 years not 8, with money invested that more than covers the mortgage debt
It is possible because I did it. I changed career a couple of times so was never a stellar earner but I always had monthly standing orders to pensions and investments and compounding is a wonderful thing. Thanks for spreading the word, Pete.
I love this! Thanks Cathy!
I started a private pension back in 1988 at a fiver a week and increased it with inflation every year.
Tell you what freaked me out this week.
As I am retired, or rather stopped working, I check how my pension is doing on a regular basis and when I checked my funds with Reassure Now on Tuesday this week, almost 65% of my funds had disappeared.
Suffice to say, it's been corrected as of today, but the incompetence of the people on the multiple calls I had to make, was astounding.
Basically, it was an IT issue/error, but no one could tell me how long it would take to resolve, had me worried all week.
I can imagine. Glad you got it sorted. I wonder how many people would have just assumed that was the right value?
That's the sort of thing that would have me transferring elsewhere ASAP!
Great video, people pull the “whats the point card” to easily. I increase my pension and ISA contributions by 10% each year.
Brilliant. 10% increase a year is fantastic - keep going! 👍🏻
@@MeaningfulMoneythanks, your podcasts have been a massive influence in securing my financial future. I am hoping for my pensions & ISAs to hit 6 figures by the end of the year and that’s from £0 in 2020.
Thank you for the video Pete, big fan of the podcast and all that you put out for us. This is the exact model I've followed and glad to say I have no bad debt, biggest is my mortgage and that's it. My wife and I have created junior SIPP's for our 4 year old and 11 month old and JISA for both too with automations into both sets of accounts. I've also set up personal SIPP for myself and ISA'S etc. We've also been investing in property. The best word I discovered over the past year through yourself and others like Damian is compounding. It's been magical. Thank you for all that you do.
it is sound advice , I started my pension not long after I graduated , when opting out first became an option, I wasn't keen , but the company owner persuaded me that the free money he was offering and the tax saving was a deal too good to miss, and many years from then I would be happy I did. For the first 10 years or so I didn't really increase it, but from there as I got pay rises I increased the contributions , and in the last 5 years I've really jacked the contributions up as the glorious day approaches. One thing I didn't do was any kind of 'life styling' of my pension, so its still invested like an optimistic 25 year old., probably time to get some proper advice 🙂
A nice summation of things :)
I am one of those unfortunate folk who grew up before financial information was freely available and so had the mindset that the State Pension was what we had to look forward to.
Then auto enrolment company pensions came along and, because I had been brought up to not be financially curious, I just left everything at default thinking the company would pick the best thing for me!
Now I am looking to retire and my pension pot is a pitiful £50k - that was quite a shock after several decades I can tell you!
All of which preamble is to ask if there is a way to turn things around so as not to be destitute when I stop working?
This might help: ruclips.net/video/F3nHXTlMgs4/видео.htmlsi=v0bxMrNF-l8koxOy
Good luck 👊🏻
I am in a DC pension i pay 6.5% and my employer doubles this by 13% each month, very happy with that.
Fantastic! Serious money being put away each month - keep going!! 👍🏻
Excellent advice as usual, Pete. I have a friend who is a self-employed high earner and higher rate tax payer but hasn't contributed to a pension since she left a salaried job. I finally convinced her to open a SIPP and set up a standing order for £50 per month, then make additional payments when her invoices are paid . It was the most I could convince her to go for as a regular payment. The tax relief calculation was what convinced her, and the promise of a nice tax refund each year 😂 Still working on her.
She’ll thank you one day. Make sure she buys you something nice with the tax-free cash!
Thanks Pete - very well explained. Having had a father who was unfortunate enough to suffer from the Maxwell pension scandal I was cautious about pensions. I was always worried that I would need the money sooner than retirement or that the pension would fail in some way. Fortunately my trust has been restored but it has taken time and now I need to catch up but I have missed many years of compounding and tax savings which is a great shame.
Given the persisting global economic crisis, it's essential for individuals to focus on diversifying their income streams independent of governmental reliance. This involves exploring options such as stocks, gold, silver, and digital currencies. Despite the adversity in the economy, now is an opportune moment to contemplate these investment avenues.
Thanks for your videos, Pete x was in a good place financially, but since listening to your pension videos about two and a half years ago about DB pensions and DC pensions ,I now put about £30'000 a year in my DC pension using your easy to follow videos and the tax saving is mind blowing one happy 60 year old thank you xxx
Amazing work, David - well done for taking radical action!
I wish financial literacy was taught when people start working or even better school. I believe that this will bring financial stability to a lot of people. Unfortunately I’m one of those people, invested in my late 20s but sold all my investments after 5 years. I wasn’t well informed at the time and I wish I just left it. I’m a Nurse in my late 50s and about 5 years ago I suddenly realised I only have a NHS pension. At this point I started watching videos like yours and took the bold step and opened a Vanguard account with £100 monthly .I’m afraid to look at my investment portfolio has I don’t know what I should be looking at.
Thank you so much for these videos you put out.
Don't spend what you haven't got is a pretty good starting point.
I pay 8%, my employer adds 12%. £1,405 a month going in, costing around £560 salary.
How generous of your employer. I don’t know any employer paying more than 10% apart from government! I pay 6 and they pay 5 but now with AVCs of 36% in addition to the 11%. Final years before retirement so need to pay as much as possible. I even tried paying 60% but it was too much!
Ok big balls
Yeah, but that must be with a Salary of like £84k... Try it with £35k
Thats nothing, mine is putting in 18% and i'm putting in 30% via AVC's. Total 48%.
@@porschecarreras992cabriole8 yes, I shovelled over 50 % into AVCs for the last couple of years to use the full AIA and LIA, which ironically was scrapped the week I gave notice. Even eating into savings slightly was worth it for the tax benefit.
Stepchange are incredible, I will guarantee you feel better after talking to them.
Thanks for that - a brilliant outfit
Just wanted to say thank you. when i watch videos its always with the creator explaining these things while expecting people to be on 30k+ so to a certain degree you always end of feeling slightly alienated.
Ok Pete. I'm in. Thank you for inspiring me to take action!
Do it, James! Learn about investing and stay the course. Your future self will thank you!
"The best time to plant a tree is 20 years ago. The second best time is now" - Chinese proverb (although why the second best time isn't 19 years ago, I don't know).
I've often wondered that!
The most important financial thing that is yet to be taught in schools!
You have covered pretty mhch all fundamental steps and "science" behind saving and investing in 10 minutes clip! There is no other way to save and invest if we dont live on less than what we make and create detailed budget for all the spending and savings- less we make more details we need to go into to make more room in our budget for saving.Great channel, very good job!
I wish I saw this when I was 30 😊
Me too, Steve!
I have just too many friends who haven't saved enough for their retirement...due to life choices, knocks, divorce...but also a basic misunderstanding of saving and the power of investing passively. Which to be honest wasn't so clear 20-30 years ago (not even sure passive funds existed then). It's really sad
Yep - many people will fall into this, though there’s less excuse now than there was. Ultimately it’s about being intentional.
Saving and investing require a lot of discipline, delayed gratification, and sacrifices. Building a financial future is hard work. Its not meant to be easy but with patience, determination, and discipline, it is achievable.
Preach!
Saw this the other day but only just got around to commenting. On the part about debt, you mention car finance. My wife and I have both got cars on finance and while I know it's not ideal (we don't have any other forms of debt, other than a mortgage, and tend to try and avid credit cards etc for exactly the reasons you explained) and we'd prefer to own the cars outright, we simply can't afford to. I think that probably needs to be borne in mind as even used cars are expensive these days and unless I find several grand down the back of the sofa then getting that sort of capital, with everything else going on, would be extremely difficult.
Before anyone posts "helpful" comments like "why don't you get rid of one of your cars then?" we need a car each because of personal circumstances and work patterns that I'm not going into on YT.
I do like these videos though, Pete, and generally learn something from each of them so it's not meant as anything more. You did say you could take it, so that's my 5 pence worth...
I appreciate that, Martin. As a pragmatist, I do understand that there is sometimes a need to do what you say. Ages ago I did a video on how to buy a car without debt - ruclips.net/video/j7jJ3jhtv1g/видео.htmlsi=p0KAqFSHly1faqcu - it's not an easy process but it is possible. I'm aware that the world and conditions are rarely ideal. But as long as you do everything intentionally, then that's good enough for me! Sounds like you're approaching everything in a smart way - keep going!
I started 1 year ago with my own stocks and shares isa aside from my company pension. Seems to be going well so far and I've stuck with it. I try and suggest to people I know to start investing. As with most people, I wish I'd started earlier. Thanks for the helpful videos along the way!
You’re welcome - keep going!
Your final caveat is the most important aspect. Without the 2008 stock market crash I might have hit your 800k pot. But at age 55 having put into pensions for over 30 years I’m at about 350k. My last employer ‘matched’ a paltry 3%
I retired at 49,,made some good choices,,life's all about good+bad choices..
Best advice I've ever read was pay yourself first , I've got a direct debit set up straight after payday . If I'm struggling with money I'm then driven to find it
Couldn’t agree more👍🏻
Love your videos.
Is this a good order of investing for retirement?
1. Pension (match)
2. Lifetime ISA (max)
3. Stocks and shares ISA (max)
4. Pension (max)
Great advice but this video is really most relevant for younger people. Unfortunately, although I started by investing almost exactly that amount into a private pension 27 years ago - £25 per month - I wasn’t clued up enough or motivated enough to increase my monthly payments. Now aged 56 I only have £26k in my pension pot which is a pitiful amount. For those that aren’t so young , I still feel property investment is a better than the stock market because with a pension, the amount of money needed to be invested each month to retire comfortably (over a shorter period of say 15 to 20 years) period is huge!
For any younger folk watching this who don’t have much of a pension pot or who have yet to start investing I would say “Heed the advice of this video! You have time on your hands to achieve this!”
You put £25/month in to a pension and are surprised you only have £26k!?
Pension contributions need to be measured in the hundreds to get anywhere near what can be considered a decent pension pot.
@@adambritain5774 No I am not surprised. I’ve known about this problem for several years now. I just didn’t understand the power of compounding until recently - I knew my pension would be pitiful but if I had even paid £100 instead of £25 it would have made a big difference. A 25-30 year old need only pay about £250 a month (plus increases of monthly payments each year in line with inflation) to reach about £850,000 over 40 years. Whereas someone aged 40-45 with only 25 years to retirement would have to contribute a huge £900 a month to reach the same figure. So I’m saying the amounts mentioned in this video only works for younger people who have plenty of time on their hands.
The only upside of this situation is that if you keep it until 67 and putting the 25 quid in you'll get it to around £55k. If you put £500 a month in now until 67 it'll be £165k. If you can stretch to £1000 you may get to £270k, this is assuming a 7% return (i.e., mostly equities 'adventurous' investment).
Interesting strategy with raising each year. My pension is percentage based and won't necessarily get pay increase each year.
I also have additional savings but save at a fixed rate so progress is slow. Will give that a try.
Thanks
Good luck!
Thank you so much for these videos. They are so helpful!
The question is how sustainable it would be to adding £25 each year to the monthly savings total. As you said yourself that’s got you saving £125 a month in 5 years and it gets you to the better part of a grand a month at 35 years.
With the best will in the world I don’t see someone doing that on the living wage or the median income.
You can argue people’s pay will go up over that time so they can contribute more, but it’s not gonna be the case for everyone.
Like you say, just putting a bit away each month will be better than not - and getting started is most important, but there is a bit of a disconnect between £25 a month and £875 a month.
Exactly 😂
I'm surprised how far I had to scroll to find this comment. I totally agree. This is great advice for people on moderate incomes, but when you've got less coming in than going out (and you've already cut your spending to the bone) if there isn't any left over to save, it's simply not possible to increase the amount you save year on year.
What we really need is to vastly reduce the discrepancy in earnings between the richest and the poorest. Lockdown showed us how vital certain jobs are, and yet they still pay terribly. Simply telling people on minimum wage jobs to "budget better" is not good enough
To be fair, at 35 years you will be over 60 most likely, the mortgage will have been paid off, and there's inflation erosion and hopefully a few promotions behind you, so a grand a month should be viable. Obviously if things aren't going to plan (divorce could cost you five to ten years of progress and likely kills any early retirement option), you have to adapt, as food and shelter always comes first.
Love to know where these growth rates come from Just had a review of my change of P Plan at 0.47% this year with cost for transfer to new scheme to allow imminent drawdown at £6K for provider and IFA. Stopped putting in now and going all out on ISA's so I reduce cost and tax and improved accessibility. The only ones who benefited was provider and IFA.
Poor returns and "hidden" charges are a major problem with many (but not all) pensions
As Pete says ensure that you have an emergency cash fund of £1000 for broken items. I also have 6 months bills in a fixed ISA which is only for if I lose my job.
One lesson from me is to pay in the amount you can manage into your pension, as I was cash poor for longer term home repairs I had to reduce my pension from 22% to 6.65% to save for new floors over 9 months. I now pay 16% and save into a easy access for the larger unforeseen repairs.
We’ve all been there! 👍🏻
Great video thanks. Would you recommend your own personal SIPP? And how many should we have? Just one we can manage or a few eg stocks and shares ISA also? Thanks.
No real need to have more than one pension/SIPP and one ISA per person.
@@MeaningfulMoney brilliant, thanks!
From the age of 18 I have always paid myself 10% of what I earned. Whether that was weekly or monthly, I'm now 44 and continue to do the same.
Pay yourself before your bills. Don't get to the end of the month and then think of saving. You'll just see extra cash and spend it on something pointless.
And yes I do still treat myself, I don't just squirrel money away and never spend.
I buy my cars with the best possible bank loan rate and pay it off within 36 months, so not to cost me more on interest. I run the car for a further 12 to 24 months then move on. Always worked for me.
Saving is only hard if you make it hard, it's a piece of cake if you get it right.
This is such good advice, and in a world of financial overwhelm, seems do-able. Thankyou...
That’s was the hope - glad it was useful 👍🏻
Thanks Pete- great video. Its nice to see someone acknowledge that not everyone earns the 'average' wage of £35000. I get the living wage at the moment and have been for the last 10 years. Ive come to the realisation that im capable of earning more and need to so that i have a future that i want.
Keep up the good work, look forward to the next one.
More power to you! I wish you well for the future - thanks for watching 👍🏻
Cheers Pete for another vid. gets the message across very well.
Thank you! 🙏🏻
By year 35 you need to be putting £875 pm?? Or did he stop at a certain year...
Would be good if you could explain how that £800k is broken down into monthly pension payments for the rest of your life and what should be the target for people at different ages etc. Thanks
Been saving £25PM into a few different index tracker funds and it's been a life changer and compounding away. This is more than doable!
Love to hear this - well done! 👍🏻 👊🏻
Which did you choose to put in to any why?
Great advice Pete. But you also have to be invested in the right place .I have a pension for the last 28 years and the returns have been very, very poor .
I invested with st james place .
In the end I moved the pension to vanguard and its doing alot better. But I will not make back the return that I losted using st james place.
Great Video as ever bud, keep up the great work
Thank you, sir! 👍🏻🙏🏻
I put in 37.5%, employer 3%, sounds crap but still Get 100% increase on what my net figure equates to before this is grossed up and the 3% and 6.9% NI (half company save on my contribution) back....
Where do I put the money and make a start? You said Pension. Thanks so much for your inspirations. Yes I will watch the power of pensions in more details. I do require more detail.
Plenty more videos here - just search. Or take a look at MeaningfulAcademy.com
Great video, I am trying to get my son who is 22 into planning his future 😮
Great job on your video 😊
I compound save now have done for years very good advice
Great video Pete as always. Thinking about the £25 a month, at todays prices, in a lot of places that only relates to 5 pints of beer a month or half a dozen fancy coffee's. Thats the way I look at it anyway. But the same as nearly everyone here, I wish I had started earlier. Just a thought, maybe all the banks that offer cash back on purchases should give you the option to put that money into a pension investment account, as most of them have an investment option.
That would be a great nudge towards helping people establish better habits. Thanks for watching! 👍🏻👊🏻🙏🏻
Been thinking about this today.. spooky! 😂
Spooky indeed - hope it was helpful
I have a DC pension in work ,my employer puts in 3 x my contribution upto 6%, I am 57 now and this pension has been running 13 years ,changed from a DB pension, just wish now I did the yearly increases
“Spending creep” is real…. I know, I’ve been there. It took me about 5 years to realise that despite a series of good pay rises, I had less money at the end of every month. Duh… 😂
I was lucky to join a company with a DB pension scheme. Nonetheless I also decided to contribute AVCs too. Every time I got a pay rise I put a bit of it in my AVCs. 25years later the company has now closed the DB scheme but because of the saving I also have a DC pot now worth ca. £400k on top of the DB pension. For me ‘what you never had you never miss’ so the advice to increase annually is a really good one.
Nice work Richard! 👊🏻
Great video as always Pete, keep up the good work! Your videos are invaluable to so many people. Just managed to hit 25% (incl 8% employer) this year in a salary sacrifice
Great work! Keep going…
Hi, Thank you for your video presentation; most interesting.
Could you reply & paste in the actual equations / formulae so that I can calculate the savings returns myself using a personal calculator & paper please. I have very different savings amounts, interest rates & remaining periods (years of living).
I'm sure that a few others that may read this would also benefit from the equations. PS. I don't just want a 'blackbox' online calculator; I want to both see & fully understand the figures & different financial scenarios.
Thank you.
My council tax 148ba month now single person deducted 25 per cent
So with that 50 to 55 discount
25 in a box/bank each month
And 25 for my saving account
Thanks Pete. I do enjoy your videos but in this case, yes, it is too rose-tinted and therefore unrealistic.
For a gross income of £22k,a normal employee is already obliged to contribute 5%of gross income, so that is more than £93 per month but the employer is only obliged to contribute 3%, so if they stick to that ceiling, then the benefit of matched contributions will not accrue, so the total will be far smaller than advertised.
Whilst I think using specific examples is very helpful, you also need to follow through using more realistic parameters, based on the mandatory minimum contributions.
Regarding the annual increase in contributions, this is unrealistic in the early years. If we assume that income increases with inflation and use 3%as an example, then a £22k salary will only increase by around £50 per month in year 2. If all other costs (housing, fuel, food etc.) have also increased by inflation, then a £25 increase (even if it only costs £20 in take-home pay) is unlikely to be achievable.
It is also important to note that pensions, whilst benefiting from significant tax breaks, are not accessible savings - they have the specific purpose of supporting you during your retirement and this is why younger people are typically focused on other priorities. For this reason concentrating first on other savings, in addition to the "emergency fund" may be a higher priority.
Points all noted, though I think it is shortsighted to exclude pensions for young people (though I do t think that’s really what you’re saying)
Please remember this is just an example and is designed to get people to think about what could be possible from small beginnings. Thanks for watching.
@@MeaningfulMoney Hi Pete, it was absolutely not my intention to exclude pensions for young people; they are very important. My primary point was to demonstrate a more realistic and achievable objective, which people on a low (below national average) income can afford to achieve. Unfortunately, using more limited input values considerably reduces the output value, for obvious reasons.
My secondary point was that young people are more likely to be meeting the challenges of debt and limited surplus income, as described in the early minutes of your video. Their next priorities will be from a shorter-term perspective than pensions but there's no doubting that "little and often, for a long time" is the best way to save for a pension.
If you start work full time at 22-ish (as a graduate) around £25k and do the minimum 5+3% contributions, into a decent pension plan that's mostly equities, and never get promoted, then it will take you until 44yo to get £100k in your pension. By by 60 you'll have over £370k. You could have over £700k at state retirement age of 70 (i hope it's not later by then!). Slow and steady can mean you finish the race at least. This is a 7% return, achievable, but 5% will get you around £375k and is a reasonable conservative inflation-adjusted return over that time period. Starting early is the key. Bumping another couple of percent contributions helps speed things up (£100k by 40, £1m by 70, @7%) so I hope this is forced soon on employers (6+4 perhaps).
Pete, I’m a big fan, but the one thing I dislike about your vids is your assumptions, e.g. assuming a 6% return. Seven years ago, after being inspired by you, I started adding money into AVCs. When I started, it was with the Pru, then the company moved over to Aviva; both are as bad as each other. The growth I have achieved is 4%. That’s 4% in 7 years! If it wasn’t for the 20% tax relief, I’d have been better off putting that money in a savings account.
Hi John. I understand the frustration but I’d add a couple of things. If you’ve had a 4% return I would guess that you’re probably a balanced investor with something around 50-60% of your fund held in bonds.
Also, the past seven years have been VERY difficult. I promise that over the longer term, someone with 80% or more in equities should comfortably achieve the 6% I tend to use as examples.
And finally - investing should be done over DECADES. Seven years is the overture - there’s so much more to come. Hold your nerve!
You might want to look at your risk tolerances and fees? With returns like you've got I can only imagine it's pretty risk averse and a large weighting towards bonds, in an environment when rates were at all time lows and only an outlook of rates to go up (yields too so your bonds values would collapse)....
Possibly look at a greater weighting towards equities if you have a long term outlook. You've been getting 4% in 7 years whilst those heavy in equities have been averaging double figure percentages a year.
Another great video Pete 👍
Boom! Thank YOU!
I've started this month (January 2024) to putting a £1 a day away (£31 for january). It sounds like a lot £31, but if your paid monthly like most of us are nowadays, £31 isn't really a lot.
Great work - keep going! 👍🏻👊🏻
Firstly, I'd love to say thank you very much for this lesson. I wish I watch your video 5-10 years ago(( But, late better than never.
So, could you tell me, what the tools could provide the 6% of compound interest of savings now in ££? TIA
I wish I knew about this when I was 20 rather than 40!
I was in the 90s struggling, recently married, new mortgage, 2 children. We had SAYE accounts. I think it was £17pmth and the government topped it up to £20. Stock market investment, they could bring these back. I think we over 5yrs had enough to buy a new Vauxhall Zafrira . Small pots build, fill big pots.
Hi Pete, for the £878,407 figure is that assuming that we increase our pension contribution by £25 each year AND that the employer matches that for 35 years? So in year 35 we are contributing £875 per month which could be anywhere from 10% to 20% of gross salary and the employer is matching that (potentially) 20%? I've had a few jobs now and I haven't had an employer match more than 3% so far.
Yes, it’s a big assumption I admit. But there are employers out there who match up to larger amounts. The purpose was to discuss what’s possible and encourage people not to accept a ‘what’s the point’ mentality. Anything is better than nothing! 👍🏻
@@MeaningfulMoney Thanks for clarifying ☺️ I do hope that further in my career I am contributing more to my pension and my employer is matching it. I have some wasted time to make up for!
Great video and I agree with what you’re saying but do you have any videos on where to start with investing. I see many videos talking about the power of investing but few explaining clearly on how to invest. I hope you have an investment video as this one was great.
Thank you. Start here: ruclips.net/video/hQhMzR4LJNk/видео.htmlsi=_B3NyRgW83o7gtl0
Another rule I've stuck to all my life is never pay anyone to do a job that you can do yourself. Examples are: making coffee, washing your car, cleaning the house, DIY (everyone can paint and learn to do what jobs you can't). When you are financially secure it's OK to treat yourself, but otherwise you need to knuckle down and graft
I like that, Mark. I also believe that if your time is more valuable than the cost of outsourcing you should consider it, but only if you have the means. For example, I never wash the car because my time (and these days, my energy levels) can be better used elsewhere.
But for anyone struggling to find the money to save for the future, you’re dead right - out in the work and reap the rewards 👊🏻👍🏻
If you've no money you won't be paying anyone anyway 😂
Your 100% correct great channel
Thank you kindly!
I have a DB pension. Which, on the one hand, if it’s as reliable as it should be, is great because it’s a lifetime income (tho at the moment with my time at my organisation it only adds up to circa £1500 a year…..). But on the other… (a) I don’t altogether trust it, and (b) the way it’ll be calculated & distributed means I can’t see how much is actually in there for me, because as far as I can tell it doesn’t work like that.
Hi. You don't actually have an amount in the pension, just a guaranteed yearly pension amount. This is usually based on the number of years you have paid in and your yearly wage. You should get a statement each year that tells you how much your yearly pension is currently worth and how much of would he worth at retirement age if you continue to contribute until then.
Lifetime Stocks & Shares ISA. For a basic rate taxpayer the 25% bonus is better than the 20% pension tax relief, ignoring employer contributions of course.
25% bonus isn't better than 20% relief, mathematically they work out exactly the same. Remember, when you decrease something by a given percentage, you need a higher percentage to get back up to where you started, because you're multiplying the percentage by a smaller starting amount. 20% of 100 does not equal 20% of 80.
For example:
£100 a month pre-tax = 100 x 0.8 = £80 (i.e. 20% of 100 is 20). So for every £80 of take-home pay you put into your pension you get an extra £20 in the form of tax relief.
£80 a month post-tax plus the LISA bonus = £80 plus 25%, and 80 x 0.25 = 20. So taking your post-tax income and putting it into a LISA only gets you to where you started if you'd put it in a pension to begin with (assuming the £100 is being taxed at 20%).
Not to say there aren't other benefits of a LISA (like being able to take it out early to buy a house!), but all it really amounts to is another kind of tax relief/deferred tax.
@@jamescottam9622 That's a valid point, I didn't consider that.
The potential advantage then aside from the house buying part is that it isn't taxed on withdrawal after maturity unlike a pension and ignoring the lump sum allowance.
I left it way too late and find myself in my mid 40s saving £4000 a month. I'll still get there, but it'd have been easier if I started younger. Age discrimination is very real so I need to get all done before 60. I wouldn't count on getting work after that.
THIS! Yes to this! All I want is for people to start saving little and early. They have their whole lives to earn more and increase their contributions while also enjoying life. Thank you for watching and commenting! 👍🏻🙏🏻
If whatever you did got you to a position where you are able to save double what most people earn in a month it doesn’t sound too bad
I put in 6.1% and my employer puts in 14.5%, its a duel Defined Contribution / Defined Benefit scheme. Only based on a salary of £27k though, suppose it all adds up.
Thank you for a great tips.
You’re very welcome - thanks for watching! 👍🏻
Could you do a video on ‘qualifying earnings’. I just did a check through on my pensions and my current pension is a lot less than I’d expected. I thought I was paying 5%/employer 3% on total earnings. But if you pay high rate tax I think qualifying caps at £44k, significantly limiting the ‘minimum automatic’ contribution. I’m just about to start topping up but this was a surprise
I'm already nearly 50, 10k in debt and my outgoings currently match my income 🤷🏻 I don't have time on my side. I'm also self employed so no employer to match any pension.
Not easy for you, I admit. Anything is better than nothing, though. Clear the debt first…
My elephant in the room is, where can i get 6% growth each year? My personal pension has barely grown 6% OVERALL since 2014 let alone 6% each year!!
Wow, that’s not great. Stay tuned for the next video.
@MeaningfulMoney no not great at all, my workplace pension is even worse with current POT standing at 20,640.46 with my contributions, employer contributions and tax relief totaling 19,335,75! I'm maxed out on allowance of 5/3 as my income is higher than the 50k ish cap with work place pension providers, so I'm trying to put money away across both pensions and getting nothing in return in terms of growth in last 10 year! Hopefully your next video can assist me with this???
Well, majority of employers will only match you to the maximum % of your salary. So unfortunately you will not get matched contributions above certain amount.
I have been saving on a SIPP £20 per year without increasing it and today after 12 years is worth £12k almost. Not enough but certainly not missing such a small amount. Not to mention that I have been taking only 20% tax relief so trying to recover the other 20% from taxman
I reckon you could find more if you tried - your future self will thank you!
@@MeaningfulMoney agreed but this is my fifth pension pot so I focus on my current workplace one instead in addition to Stock ISAs. I still wish I could save the £60k new allowance but I am well over the old £40k
you mentioned in a previous video about a cashflow ladder. Do all pension/S&S ISA providers allow for different lumps of the investment amount to be allocated to different risk profiles? Or are there other ways to manage that? eg crystallise a portion and that part can remain invested at a different risk level?
Could you do a more in depth video on private pensions and maybe do some figures for people on a lower income rather than the UK average
I actually answered the average vs living wage point early in this video. Here’s a video on pensions generally: ruclips.net/video/E2RDvUiRRG8/видео.htmlsi=A1OqgMAd5vQ6vhr-
Just looked at the website and you’re asking me for £695 for pension advice .. I could be mistaken but I thought you said your seminars were free?
If you’re looking at Meaningful Academy, there are three phases. Financial Foundations is free, that’s for those starting out and need to understand the basics. The other two phases, Build Wealth and Retirement Planning are paid-for. You can use the coupon code RUclips for a discount and there’s a 30-day guarantee on there. None of the phases offer advice though - that happens through my financial planning practice, Jacksons. More info at meaningfulmoney.tv/work-with-pete
Great video - but of course some spending creep is the whole idea of earning more money!!!
Yes, just be intentional. I’m all for enjoying the fruits of your labour.
I like the topic about financial literacy. I have a question I was on Nest pension for around 10 years and now I work in NHS. And now my question... is it practical to transfer my Nest pension co tribution to NHS pension? Thank you
I doubt you’d be able to do that, as generally the NHS scheme doesn’t accept transfers in of DC benefits. I would look at transferring the Nest scheme to something better. I have videos on that - search the channel for ‘tidy my pensions’
You need to explain where the 6% interest on the £25 is coming from. I can’t think of any way that simply putting away £25 can generate 6% interest.
Not interest, RETURN. The money needs investing - no-one builds wealth by leaving money in the bank. Stay tuned for the next video on exactly this subject.
Just found this channel you mention earning 6% on investments . Bank savings do not offer this level of saving. Government bonds do not offer this level either. It is said the passive saver of the FTSE 100 has not reached this level. There are some funds that romp away but how can you tell the future as other funds do worse than the passive. What skills do I need to choose funds that have a decent chance of growing. If I buy 10 funds all 10 have to make 6% and more if one or two or five funds don't make the 6 % marker. I have found it a useful channel thanks
A decent diversified portfolio has achieved this historically and should do again, but over decades, not year-by-year.