E35: The cost of divorce with Lynn Beattie, Harry Gates and Lydia Hunt

Understand your options when it comes to divorce to help you build your post-divorce life on the best possible financial foundation.

The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 35, watch on YouTube or scroll on to read the conversation.

PHILIPPA: Hello! Happy New Year to you and a warm welcome to Series Four of The Pension Confident Podcast. Now new years, we know they often start with resolutions to change our lives for the better. For you, that might be taking up a new hobby, maybe even looking for a new job. For others, it might be about making a whole new start.

Every January, lawyers see a spike in inquiries about divorce. It’s such a big spike the first Monday of January is known in the profession as Divorce Day. Now, if you’ve been through it, you’ll know that one of the hardest parts of divorce is having to take lots of financial decisions at what can be obviously a really overwhelming time. But understanding all your options can make those decisions easier and better.

So we’re going to talk about that, and we’ve got three guests in the studio who are all here to help you build your post-divorce life on the best possible financial foundation.

Lynn Beattie, old friend of the podcast, she’s Author and Founder of the personal finance website Mrs Mummypenny. Harry Gates is Co-Founder at The Divorce Surgery and our PensionBee guest this time is Lydia Hunt who is Head of First Line Compliance. Hello, everyone.

Usual disclaimer before we start, please do remember anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice. And when investing, your capital is at risk.

I’m going to start by asking the obvious question around the table. Have you been through divorce? I have.

LYNN: I have.

PHILIPPA: Lynn, you have.

LYNN: 50% of us have.

PHILIPPA: How long ago?

LYNN: It was finalised in 2020.

The fundamentals of divorce

PHILIPPA: You’re a money person. Did you know what to expect? Or was there anything financial that really took you by surprise?

LYNN: I really didn’t know what to expect, and because divorce is so unique to your own situation, it was really difficult to find any information out there to actually work out - what are the stages I have to go through. So my first go-to place was - I had a friend who was a solicitor and I spoke to her about it.

PHILIPPA: OK.

LYNN: And also it’s a subject that people don’t generally talk about.

PHILIPPA: Yeah, it’s true. I mean, Harry, you see a lot of people getting divorced?

HARRY: I do. I’m a Barrister, so the day job is very often spent representing a husband or a wife in the Family Court. So although I haven’t been divorced myself, I’ve certainly seen a few, so to speak. And I completely agree with what Lynn was just saying. Lots of couples find it very hard to know where to start, and there really is a problem there, I think, that we need to address in terms of getting the right information to people when they need it.

PHILIPPA: Lydia, I mean, obviously, I’m really hoping you’re going to be able to give us the nitty gritty on dividing assets and that sort of thing when we get to that point in the podcast. I think it would be good to get a few of the basics out of the way with Harry first, though. So we’re going to hear quite a lot of legal stuff here. But let’s crack on with, can you get divorced straight away, or do you have to wait a set period of time after you’ve got married?

HARRY: If you think you’ve made a terrible mistake, I’m afraid the bad news is that you have to wait at least a year, which in practise means a year and one day before you can lodge your application for a divorce. So yes, there’s a minimum time limit, I’m afraid.

PHILIPPA: I think it was until 2022, wasn’t it? To get a divorce, you had to provide specific grounds, didn’t you, to show that the marriage had broken down. But that’s gone now?

HARRY: That’s absolutely right. In April 2022, the last government brought in what we now call ‘no fault divorce‘. So previously, you had to prove your entitlement to a divorce, and you had to plead one of the grounds on which a divorce could be granted. But now we’ve really moved to a system of essentially notification. So you can just tell your former spouse that you want to get divorced and there’s no effective defence to it.

PHILIPPA: OK. What if they don’t want to get divorced?

HARRY: Tough, in a word.

PHILIPPA: Really?

HARRY: Yes.

PHILIPPA: So you can just divorce them? No grounds? No nothing. That’s it?

HARRY: Yes. It takes a little while. So, for example, once you’ve issued your application for a divorce, you then are obliged to wait 20 weeks until the court will give you what’s called a conditional order of divorce, and you then have to, once that’s been granted, wait another six weeks until the divorce is made final. But that’s it. That’s that’s the process now.

PHILIPPA: OK. We’re here to talk about money. Does it cost you anything?

HARRY: Yes. I’m afraid to say that there’s quite a chunky fee to pay to the government for this. To HM Courts and Tribunals Service (HMCTS), to the court service, £593, which is a huge sum of money.

PHILIPPA: That’s a lot of money, isn’t it?

HARRY: It really is. And this is a controversial issue, as you’d imagine. I mean, why should, on the face of things, people have to spend £593 to change their marital status from married to divorced? Lots of people think that’s quite unfair.

PHILIPPA: Lynn, I mean, once you’ve told your spouse, you and I have both been through this, everyone talks about getting a lawyer. Did you get a lawyer?

LYNN: Yeah, because listening to what you just said there, I didn’t actually appreciate there was a sort of simple, just form-filling online solution. So I immediately went to a solicitor, and appointed him because I didn’t feel I was able to resolve my divorce without a solicitor. Where I did try to reduce some costs back, which my solicitor gave me really good advice on, was for us to use a mediator to start off with, which I’m sure we’ll go on to a little bit more detail about, but that was about half the price of the solicitor.

PHILIPPA: Let’s just clear this up. Do you have to have a solicitor in order to get divorced?

HARRY: No, you absolutely don’t. But we need to be clear what we’re talking about here. So the business of actually getting a divorce, the simple business of changing your status from married to divorced, is expensive because you have to pay the fee to the government that we’ve just been talking about. But it’s not generally where money gets spent. Where money gets spent in a divorce is when you’re sorting out the money and possibly in relation to the children if you have them.

PHILIPPA: OK, this sounds like a bit of a foolish question in some ways, but can you share a lawyer?

HARRY: You absolutely can, and this is a new thing that’s been around since about 2018, and it’s proved very, very popular. I think there’s a feeling out there that you can’t share solicitors or a barrister because you have a conflict of interest.

PHILIPPA: Yes, and you may be on very bad terms.

HARRY: You may be, and it’s right to say that it won’t be right for absolutely everybody. So if you’ve got an ex, for example, who’s trying to do the dirty, so to speak, and is trying to hide all the assets and you can’t cooperate at all, then absolutely, sharing a lawyer is unlikely to be right for you. But for everybody else, and this is the vast majority of people, the couples when they separate, simply want to know what’s fair. And for those couples, appointing a shared lawyer whose job is to tell you what a court would do in the event that you went to court to argue about your money or your children, is absolutely the right thing to do, because you’re only paying for one lawyer rather than one each.

PHILIPPA: Yeah, well, it sounds good to me because, as you say, it’s all about cutting costs, isn’t it? Every penny you spend on getting divorced disappears out of the joint pot, doesn’t it?

LYNN: The thing that was always sort of said to me was “the more you spend on the solicitors costs, it’s more money you’re taking away from your kids at the end of the day, so try to keep it as minimal as possible”.

PHILIPPA: And as Lynn said, and actually I did the same thing, we went to mediation to keep the costs down on lawyers. What’s your feeling about that?

HARRY: Mediation is a wonderful thing in lots of cases. Just be careful though, that mediators can’t give legal advice - that’s the important distinction. Whereas all a shared lawyer is doing is giving you legal advice. So if you don’t know what the answer is and you want to know, and you want to know how a judge would approach your case in the event you went to a court, then sharing a lawyer is the way to do it. And then you take the advice that you’re given and take it into mediation.

PHILIPPA: OK, so this sounds like a rational, minimal, expensive way of getting to the point where you can start talking about dividing your assets and of course, your liabilities, because we’re not just talking about dividing up what you’ve got, are we? We’re talking about dividing up any debts you might have.

HARRY: Very true.

Is it worth getting a prenup?

PHILIPPA: So assuming couples got to that point, let’s just get prenups out of the way. Everyone always talks about prenups. Do they mean anything, do they have any value?

HARRY: They very much do have value. Prenups aren’t formally binding, but they’re very likely to be persuasive. So they’ll be the starting point essentially, for anybody who’s looking at how to sort your finances out afterwards. There are certain things, however, that a prenup can’t do. It can’t prejudice the needs of any children that you’ve had, so their needs must be considered separately. If they’re not appropriately provided for in the prenup, then tough.

And likewise in relation to needs. So if the prenup provides for an outcome in which one party is left in, and the phrase is, ‘a predicament of real need’ then it’s absolutely right that the court would interfere and would make whatever additional top up provision is necessary.

PHILIPPA: Yeah, because we’ve talked about this on the podcast before and obviously if you sign a prenup and I think it’s only about one-in-five couples [who] have one. I mean, it’s obviously more than it used to be, isn’t it, Lynn? But I mean, I didn’t. Did you have one?

LYNN: No.

PHILIPPA: No, I never even thought of it.

LYNN: I do think though, if I got married again, that’s a very small ‘if’, I think I’d want something in place to give me a bit more safety and security.

PHILIPPA: I mean, if there isn’t that are you free to just negotiate between you about how things are divided?

HARRY: I mean, even if there is a prenup, you’re free to negotiate freely between you. Assuming there’s no prenup, then you’re starting from the ground up, as it were, as to what a fair outcome might be. Whereas if there is a prenup, you’re starting from the first floor, so you might have less to negotiate if there’s a prenup, but not nothing.

Divorce and pensions

PHILIPPA: So, Lydia, I’m sorry we haven’t heard from you yet because it’s all been about legal stuff. But this, I’m guessing, is the point at which maybe you hear from couples?

LYDIA: Yes, indeed. So when couples are going through divorce negotiations, they’ll often reach out to their pension provider, and indeed they should reach out to their pension provider, to obtain a valuation of any pension that they hold at that time.

That pension valuation will be incorporated with valuations of any other assets that you and your former spouse hold. Those assets could be a range of things, some people don’t understand what that would include. Some things are fairly obvious, such as properties that are co-owned, bank accounts, savings. But equally I think the best way to describe it is any asset with financial value attributed to it, so you might need to include high value items. So [say] you’ve got some artwork or jewellery that’s particularly high value that would be disclosed as well.

PHILIPPA: What would a high value item be?

LYDIA: For example, say you’ve got some collectables that are of a high value and you would be able to sell that on for a significant sum of money. There’s other things to bear in mind as well. So you might have assets that are based overseas. The best thing is to be as transparent as possible about everything that you have that has value. Otherwise it could just cause delays later on down the line. You don’t want to go back to the drawing board if you’ve forgotten something significant.

What’s included in negotiations?

PHILIPPA: I remember this, Lynn, do you? It’s this great long list of trying to work your way through everything.

LYNN: So painful and getting all the paperwork. It took so much time. When you say like, ‘significant value’, like a painting worth £10,000 or something, is that a significant value?

HARRY: I can answer that.

PHILIPPA: OK, there’s Harry.

HARRY: So the duty of full and frank disclosure extends to anything that you have, which is worth more than £500. When you fill in the document, which is called a Form E, which is what the court -

LYNN: Oh I hated that form!

HARRY: It’s 28 pages of agony for most people.

PHILIPPA: It’s tough.

LYNN: And I had to print out so much stuff, like all my bank accounts, like 12 months and all my accounts.

HARRY: Yes.

PHILIPPA: It’s a big job, you don’t do it in five minutes. It really is a big task.

HARRY: It’s a big job. It’s not just the assets that you have now that you have to disclose, it’s those that you anticipate having in the foreseeable future.

PHILIPPA: What’s ‘foreseeable future’?

HARRY: Good question. If you know it’s coming in, then you need to disclose it.

PHILIPPA: If you know about it, you have to say. And just to be clear, if you don’t say, this is hiding assets and that’s a very bad idea indeed.

HARRY: It’s a very bad idea and if you read the Form E, you’ll see that it comes complete with all kinds of terrifying warnings on the front page about offences under the Fraud Act. But in the family law context, it might provide a route to your former partner to undo the deal that you’ve done, if it turns out that you haven’t disclosed what you should’ve.

PHILIPPA: Have you come across people hiding assets?

HARRY: Very much so, yes, but only because I tend to work in the courts. And that’s where those difficult cases end up. For the vast majority of cases, people are playing with a fairly straight bat in my opinion.

PHILIPPA: How do they tend to come to light if they’ve been trying to hide them?

HARRY: Well, teams of lawyers pore over the disclosure that each has given, as Lynn was describing earlier, and what then happens is that you’re in a position to ask questions of the other side about aspects of their disclosure, which you don’t understand.

PHILIPPA: OK. So your husband or wife can say, “yeah, but what about this and what about that?”.

HARRY: Yes. “You haven’t explained where the Picasso above the fireplace has gone. I’d like to know that, please.” Those are very rare cases, though, and I wouldn’t want people to think that this is at all common.

Pension splitting

PHILIPPA: Yeah. So obviously honesty is absolutely the best policy here. But Lydia, pension splitting I wanted to ask you about I think a lot of people will have heard the phrase, what is it? How does it work?

LYDIA: So of course pensions can be a very valuable asset and indeed for some, their most valuable asset. Pension splitting, the most common method of doing that is a Pension Sharing Order. So effectively when you’re going through your marriage negotiations, you obtain a valuation of your pension, and it might be agreed to split a proportion of that pension with your former spouse. Effectively, what that means is the final settlement order will confirm that a Pension Sharing Order will be put in place, and there’s an annex attached to that confirming the terms. That’s submitted to the pension provider. The pension provider will then take steps to implement the split. That usually involves obtaining a transfer instruction from you. So you need to decide, if you’re the receiving party, you need to decide where you want that money to go. Effectively, the provider will value the plan as at the date of implementation and send that proportion over to your chosen pension.

PHILIPPA: OK, so in layman’s terms, they’re looking at the size of a pension pot. It might be yours, it might be your spouse’s. They’re saying what’s it worth right now, today. And splitting it according to whatever formula?

LYDIA: Exactly.

PHILIPPA: And then you get the cash [in your pension]?

LYDIA: Yes.

PHILIPPA: And that’s the end of it, you then have no call on that pension later?

LYDIA: For a Pension Sharing Order once it’s been implemented that’s what’s called a ‘clean break’. That money is yours.

PHILIPPA: And that’s the most common arrangement?

LYDIA: There are other ways of considering your pension. There’s Pension Offsetting effectively that’s looking at the value of the pension, looking at the value of other assets and then deciding to award a different asset to either side to balance out.

PHILIPPA: So you’re trading basically?

LYDIA: Basically trading.

What happens to assets from before the marriage?

PHILIPPA: One other question, Harry, on this, I think I do want to talk about what happens around children. But I’ve got a couple - one is about assets and before the marriage, if you had your Picasso before you got married, is it still yours?

HARRY: This is a really hot topic in family law at the moment. So what you’re talking about is what the lawyers would call non-matrimonial property. So that’s all property that you have when you divorce that you haven’t generated during the course of the marriage through your combined efforts, different as they may be.

PHILIPPA: I mean presumably this could be a house or a flat?

HARRY: Could be a house. It gets complicated where, for example, you bring a house into the marriage, one party brings a house into the marriage, it becomes the family home.

PHILIPPA: OK.

HARRY: On divorce, the party who didn’t contribute the house in the first place says, “well, this was the home, I think it ought to be divided equally”. And the person that contributed the house says, “well, hang on, I brought it into the marriage, don’t I get some credit for that?”.

There’s a case that’s about to go to the Supreme Court at the moment called Standish v Standish, which will be coming up shortly, which is looking at these principles. But the short point is you get to keep your non-matrimonial property unless the other spouse needs some of it - and by ‘needs’ I mean in order to house themselves properly or to put food on the table, as it were.

PHILIPPA: OK.

HARRY: That’s the basic principle.

PHILIPPA: That was your experience, Lynn?

LYNN: Yeah, I was in the situation where I brought a lot of assets into the relationship and everything was just split 50/50, so I felt a little bit hard done by. The biggest problem for me was I had some inheritance from my parents who’d died, and he’d never met my parents, and he got half of my parents inheritance, and I know a lot of people that have had that. That’s a really tough one to swallow.

PHILIPPA: This is just about negotiation. Yeah, Harry, this is how it is. You can argue one way or the other, but in the end you have to come to an agreement.

HARRY: You can argue one way or the other. I’d say, just to come back to my earlier point, this is a classic example of the situation where it makes sense actually to share a lawyer because you get a steer early doors from somebody who has no skin in the game, who is able to deal with essentially what is a legal question and say to you, “whatever you may feel about it, whatever the other side may feel about it, this is the approach that the Family Court judge will take”.

Are liabilities included in negotiations?

PHILIPPA: We haven’t talked much about liabilities, so this might be, I don’t know, bank loans or credit card debt or whatever. I mean, they presumably have to be divided up too?

HARRY: Very much so, yes. So assuming that these were liabilities that are, this is a bit of a pompous phrase, but ‘referable to the marriage’. So let’s say you exit the marriage with credit card debts, which are essentially in being because of the standard of living that you were enjoying during the marriage, then those would be regarded as joint debts, and they’ll need to be taken into account. If you separated five years ago, let’s say, and one of you has gone off on a jolly and spent recklessly in the period since then, you’ll have a tough job persuading a court that those ought to be taken into account.

PHILIPPA: OK. Suppose your spouse, the reason you’re divorcing them is their appalling gambling habit, and they’ve run up colossal debts that have got nothing to do with you. Do you still, you’re still liable for half of this?

HARRY: That’s such an interesting question. The answer is it depends.

PHILIPPA: OK.

HARRY: And again.

PHILIPPA: Classic lawyer’s answer.

HARRY: Exactly. But it depends - there was a very famous case a few years ago now, where a husband had spent lavishly in a big money case on gambling.

PHILIPPA: OK

HARRY: The wife said, “well, hold on, all of that money ought to be notionally added back onto the husband’s side of the ledger”. In other words, the court should treat him as still having those resources when it comes to working out what a fair outcome is.

PHILIPPA: What did the courts say?

HARRY: The court in that case, in a judgement that raised some eyebrows, it has to be said amongst the legal profession, said “I’m afraid you have to take your husband as you found him”.

PHILIPPA: Wow.

HARRY: And “I refuse to add those back in”.

PHILIPPA: But it does raise the point, doesn’t it, that the court isn’t there to punish your partner, however badly they’ve behaved towards you. So you may loathe them, you want to divorce them, but even if they’ve been very, very unpleasant to you, that’s not reflected in the court’s view, is it, when they come to financial settlements? It’s just about what’s equitable.

HARRY: I think it’s right to say that in the vast majority of cases, all the judges are doing is trying to divide what there is in order to meet needs on both sides so that you can both go off and live an independent life. There isn’t the luxury or the headroom in over 90% of cases, I’d suggest, to get into these more arcane arguments about whether someone has behaved in a certain way -

PHILIPPA: About blame.

HARRY: - to reflect and conduct, as it’s called in the Family Courts - blame - put another way, is a very hot issue at the moment, particularly, I should say, in the context of domestic abuse. So where somebody has been domestically abused over the course of a marriage, how should the court reflect that in the outcome when it comes to the finances? That’s not settled at the moment, and there’s a lot of discussion going on about it.

Children and divorce

PHILIPPA: That brings us to children, because you can agree pretty much what you like, can’t you, as a couple without children about the money you can negotiate. But children, if there are children involved, still living in the marital home, there are rules, aren’t there, around them?

HARRY: Money wise, yes, absolutely. You can’t contract out of providing for your children. So we have an organisation which we used to call the Child Support Agency (CSA), which everyone will have heard of, I should think, which was a byword for dissatisfaction, I think, amongst separating parents. It’s now called the Child Maintenance Service (CMS). I’m not sure people are any more satisfied because of that particularly. But essentially, if your income is under a certain threshold, the Child Maintenance Service and not the courts is the body responsible for sorting out your child maintenance.

Can an agreement be amended?

PHILIPPA: So we assume you’ve reached agreement about your assets and liabilities, and maybe any support that’s going to be given for children. My next thought is how binding is all this? Can anything change the agreement?

LYNN: The agreement you come to with your children often then links to the agreement you end up with your finances. So we split our children 50/50 back in 2020, so the finances were split 50/50. Five years on, that situation has changed where they mostly live with me. Where do I stand?

PHILIPPA: OK, so that’s interesting.

LYNN: It just feels like it’s very complicated to go back and change it, so where I stand is, we did a clean break, so I’ve got no right to any money. But with children, things change.

PHILIPPA: People’s lives move on, don’t they? We divorce, people get remarried, they have more children, children grow up and leave home, life goes on. Can you change your divorce settlement to reflect any of those changes later or not, Harry?

HARRY: It depends how you’ve recorded your divorce settlement. So if you’ve just agreed between you and you haven’t taken the final stage of getting it into what’s called a ‘consent order‘ and submitted to a court and signed off by a judge, then yes, absolutely you can change things. If it’s been approved by a judge, it’s binding. And as far as it goes to the capital elements of the deal - so that’s to say what you’ve done with your houses, what you’ve done with your pensions - you’re very, very unlikely to be able to do anything about that after the event. When it comes to maintenance, though, if there are ongoing links, for example, there’s what’s called spousal maintenance - that’s money paid between spouses for the spouse rather than for the children - that’s always variable.

PHILIPPA: So you’d have to go back to court to change that, would you?

HARRY: Only if you couldn’t agree, that would be the last resort, you should try very hard not to go back to court, but you might have to.

Thinking long term when negotiating

PHILIPPA: Ultimately, what should you be thinking about long term in those negotiations? Because presumably the best thing to do is to imagine your future life, isn’t it? And think, “what might crop up, what might I need?” and try and build that into the talks you have?

HARRY: Very much so, I think the thing that people under think about are pensions.

LYNN: Yeah.

HARRY: There was an interesting statistic I heard on a podcast the other day that there were 110,000 divorces, roughly in 2023, in England and Wales, and only about 40,000 of those had a financial order from a court, which means that all the rest of them, the 70,000 odd, did not have a financial order, and that means they can’t, as a matter of law, have had any pension sharing. So that tends to suggest, crudely, that about two thirds of people aren’t getting the Pension Sharing Orders that they might be.

PHILIPPA: I mean, Lydia, that’s really a very important point to make, isn’t it? Because I’m guessing, given that men tend to earn higher and have bigger pension pots, we know there’s a big gender divide on pension pots, that it’s women who aren’t doing so well because of that.

LYDIA: Yes, exactly, and I’m always surprised working within PensionBee that we don’t see more Pension Sharing Orders. We get a lot of inquiries from customers asking us for the value of their pensions. But I’d say a significant proportion of those then don’t transpire -

PHILIPPA: Really?

LYDIA: - to a Pension Sharing Order and the value of pensions can be underestimated as well. It may be worth a certain amount now, but they’re designed to be invested long term. They’ll grow -

PHILIPPA: So if you’re young -

LYDIA: - if you then continue to contribute to it, they’ll grow. And ultimately they’re there to ensure that you can lead a happier life later on.

PHILIPPA: I think we’ve landed on something here, haven’t we, Harry? Because I hadn’t understood just what a gap this was in divorce settlements, but the numbers you gave us are really significant. Lots and lots of people aren’t splitting their pensions.

HARRY: You’re absolutely right. And you’re also absolutely right that this is disproportionately affecting women. I can’t remember the statistics off the top of my head, but there was a report by the University of Manchester which came out with some, and I’m going to slightly make this up now, but it was something like 90% of pension wealth was held by men. So if people aren’t doing enough about pensions, that’s disproportionately affecting women in a huge way.

PHILIPPA: Well, PensionBee’s done a lot of work around this, haven’t you? Over the gender gap on pension pots and how women are under pensioned even before you get divorced.

LYDIA: Yeah, that’s right. So the Pension Landscape data indicates that women tend to retire with 38% less than men on average.

PHILIPPA: 38% is a huge gap.

LYDIA: Yeah, it’s a big gap.

PHILIPPA: It’s a big issue. So certainly a big one to think about if you’re contemplating divorce, think about pensions, even if you don’t have one, think about your husband or wives.

HARRY: Absolutely right.

Life after divorce

PHILIPPA: More positively, shall we move on to what happens after. I was thinking about this, and obviously your agreement is finalised, you’re divorced, it did seem to me that when you start out on your own again, there’s quite a shift to make. Lynn will understand what I’m talking about here, about your financial mindset. Because before you thought as a couple and you thought long term as a couple, and obviously you didn’t visualise yourself not being a couple. When you divorce, you go back to being a single person - you might have kids, you kids, you might not - but you do need to shift your financial mindset, don’t you? To being one person, not just about how much money you have to spend, but how you spend it. Did you find that?

LYNN: Yeah, but it’s actually a really positive thing because you have sole ownership and control over everything. So something as simple as, I’ll quote something petty, but the electricity bill, if your ex wanted to always have the electricity on, I obviously don’t because I’m a personal finance expert.

PHILIPPA: Frugal person.

LYNN: I’m a frugal person with my electric blanket! But I then had control over that. So immediately the electricity bill pretty much halved as soon as he left. I love the sort of independence of that. I can reflect now five years down the line, and I put something out on social media recently, my net worth has increased significantly since I got divorced because of the equity in the house that’s now just sole ownership rather than double ownership. My pension value has gone up loads because that wasn’t actually split in the divorce, because it was quite small when I got divorced. So in the short term, when it’s slightly stressful, very stressful, you can sort of think that everything’s really difficult and I can’t see when it’s going to end. But I can really assure people down the line, when you have that whole ownership, it feels amazing.

PHILIPPA: There’s two ways to look at it aren’t there, because obviously when you’re first on your own, if you’ve perhaps not been the person who’s dealt with financial stuff, then I’m guessing it feels pretty daunting to a lot of people. But you can just set yourself up, educate yourself and then be in charge of everything again.

LYNN: It’s ultimate, sort of, empowerment that you’re then in control of your future.

PHILIPPA: So more practically, I’m going to come to some downsides, I’m sorry. I did think about things that you have to factor into your financial planning because money can be very tight after a divorce. If you have children, things like factoring in [that] you used to get effectively another person helping out with childcare and now you don’t - so it’s after school clubs or breakfast clubs.

LYNN: Something that I’m thinking about a lot at the moment, which is stressing me out a little bit, is university costs. I have a 17 year old, 17, 15 and 12. So if my eldest goes off to university, who’s paying for that?

PHILIPPA: Yes, you do have to do a bit of future gazing, don’t you? You have to kind of imagine your life and how it might turn out.

HARRY: You do and it’s quite difficult to look forward to a time when your children might be at university, when you’re just enrolling them in their first school. It can be quite hard to persuade Family Court Judges to make orders if they’re not agreed, for example.

PHILIPPA: Really?

HARRY: In relation to university education, because it’s just so distant.

LYNN: Yeah.

PHILIPPA: So to sum it all up, it’s all about planning, isn’t it? It’s a tough ask because it’s a really emotional time. It’s a very difficult time. But it’s a time when you need to be at your most - I’m going to use that word again - rational and plan ahead. Presumably a good lawyer or a good mediator should be sitting down with you and telling you all this stuff.

HARRY: Well, I think unless you’ve got so little money that it doesn’t matter, or so much money that it doesn’t matter, then you’re going to need some legal advice at some point, because these are life long decisions with real consequences for the next decades and possibly, the rest of your life. So you do need to get this right. Just do it in a way that doesn’t inflame the tensions, doesn’t bankrupt you, and puts you on your own two feet, ready to look forward to the future with confidence.

PHILIPPA: I’m going to wrap it up there. It was such a good conversation. Thank you all very much indeed. Really, I find it all pretty empowering. If you’re going through this, I think that’s a good conversation to hear.

I hope we have made some of those financial negotiations and decisions maybe feel a bit clearer, a bit less overwhelming if this is what you’re going through right now. We always talk on the podcast about how vital it is to understand what’s going on with your money and of course, understanding where you’re at financially, if you do divorce, well, that can play a big part in helping you feel really ready, as Harry said, for a happier future.

Thanks for being with us. If you found this episode helpful, please rate and review us, we really appreciate it when you do. Before we go, the usual disclaimer again, please remember anything discussed on the podcast shouldn’t be regarded as financial or legal advice and when investing, your capital is at risk.

Thanks very much for listening. See you next time.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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The Pension Confident Podcast Series Four trailer

The Pension Confident Podcast’s back for Series Four. From how much you’ll need to save to retire early, to if your hard-earned pension contributions are actually funding climate change.

E34: Unpacking 10 years of pension changes with Damien Fahy, Sam Brodbeck, and Romi Savova

Find out all about the biggest pension changes over the past decade and how you can plan for a happy retirement in an everchanging world.

The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 34 or scroll on to read the conversation.

PHILIPPA: Welcome to the last Pension Confident Podcast of 2024. As we wrap up the year, what better time to zoom out and take a look at where the whole pensions industry is at right now - and where it might be going?

The past decade has seen a lot of change in British pensions with Auto-Enrolment at work, new tech and more flexible rules making it easier for all of us to plan and use our savings. And no sooner did the new government take office than the Chancellor made more alterations to pensions in the Autumn Budget. So, what might happen next?

To help us unpack all this change, I’m delighted to say we have three experts in the studio. Damien Fahy is Founder of Money to the Masses, Sam Brodbeck is Money Advice Editor at The Telegraph, and Romi Savova is PensionBee‘s own Founder and CEO. Hello, everyone.

DAMIEN, SAM, AND ROMI: Hello.

PHILIPPA: Here’s the usual disclaimer before we start. Please remember, anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice, and when investing, your capital is at risk.

PensionBee’s origin story

So, Romi, as I said, there’s been a lot of change. There’s going to be more to come. You got into this industry, it’s 10 years ago now? I know you wanted to shake things up, but I’m wondering why it was pensions that grabbed your attention?

ROMI: Well, I had a personal problem when it came to pensions. I tried to move my account to anyone who’d take it and I discovered that the whole system just doesn’t work well for consumers. It inspired me to do something about it and to solve that very particular problem of people wanting to have transparency and visibility over their retirement savings.

PHILIPPA: It was a fresh idea, wasn’t it? Did people get it straight away?

ROMI: Well, a lot of people said, “I didn’t really know that I could transfer my money, that I could even move my pension. I thought it just had to stay where it was”.

PHILIPPA: Which really proved there was a problem.

ROMI: Absolutely. The pensions industry back then, and even now, loved paper. Paper would just arrive in people’s mailboxes, and they’d put it in a drawer.

PHILIPPA: What did the industry say to you? Were they largely: “it’s not broken, why are we trying to fix it?”.

ROMI: Well, some providers have always been fairly responsive and fairly easy to work with. Others have been completely obscure and opaque and deliberately obstructive in relation to their own customers.

SAM: Name names!

ROMI: Name names? Sam, I think you’ve done the naming in the past. There definitely are good companies out there who recognise that their responsibility is to the customer. But I’d say that there are equally many who’ll happily [and] deliberately obstruct consumers from being in control of their own money. We think that a pension is your money, and you should be fully in control of it. [Our] government’s job is to help support you to achieve that.

PHILIPPA: What’s it going to take to make that happen?

ROMI: Well, a ‘Pension Switch Guarantee‘, I think, is the obvious reform that we’ve been asking for many years.

PHILIPPA: How would that work?

ROMI: Well, the same way that if you want to move any other financial asset that you have. You tell one company that you’re joining, and another company that you’re leaving, and they have 10 days to move the money from one place to another.

PHILIPPA: Like swapping your utility provider?

ROMI: Just like that.

PHILIPPA: Yeah, it sounds great.

Billions of pounds lost

PHILIPPA: Your idea was around, as you say, moving pensions. It was also around this idea of gathering up fragmented or lost pensions. Is that a big thing?

ROMI: Oh, it’s absolutely enormous! I mean, the average person switches jobs around 11 times. Every time you switch jobs, you get a new pension. You really have to be quite on top of it to keep your money together.

PHILIPPA: So, you think people do lose track of them?

ROMI: Absolutely. They lose track of them. They pile up the paperwork. Some of them get lost entirely. We estimate there’s around £50 billion of lost pensions.

DAMIEN: And just to add to that point, before I came to this podcast, I was asking some of the people who work with me. One of the guys said, he’s 28, he’s had six jobs and moved house five times. He said, that’s the biggest problem: lost pension. So even he finds it difficult to keep track. And he works in the industry! So, it’s a big problem.

SAM: I was just going to say, I think that employers have quite a big role here. Most people are building up pensions through their companies. I feel like I’ve never got something from my company saying, “do you know you might have these other pensions? Why don’t you bring them all here? Here’s an app.” And I think that’s the touch point people mainly have with these things, but I don’t think I’ve ever received anything, any help that way.

PHILIPPA: Oh, no. I think people say this all the time, don’t they? Because people get their pensions through their I think that adds to the sense that you’re detached from it. You don’t have to think about it because your company is thinking about it for you.

DAMIEN: I think you’ve just hit upon something that’s a problem in this country because historically, we had ‘final salary pensions‘. People thought that as long as I work, then I’ll get what I’m owed, and they’d have a pension that was based upon their time in employment and their final salary. We’ve transitioned to a world where it’s actually based upon your own pot, most people are paying in, and final salaries largely have disappeared. So, I think the mentality hasn’t moved on.

Why do people disengage?

PHILIPPA: People engage with other sorts of financial issues and questions. But pensions... You say pensions, and you can see people shutting down, can’t you? Why is that?

SAM: Is it just that they’re locked away. Everyone knows you can’t touch them? Maybe. I think in a way that an ISA, you know that you can take out and people do put bits of money in and out. I mean, in other countries, I think in New Zealand, you can take money out maybe for a first property from your pension.

PHILIPPA: OK.

SAM: So, it engages people a bit more. When it gets to a decent size, they can think, “well, I could actually do something with that now”. Whereas, OK, you get a statement that says, “when you’re 65, your pension is going to be £500,000” and you’re 25 [now]. It’s slightly irrelevant.

PHILIPPA: This sheer complexity around the language as well, the language of pensions – it’s not transparent, is it? There’s some terrible terminology in pensions.

ROMI: Absolutely. I do think these things are changing, though. I was at a birthday party this weekend, and maybe this is specific to me, but people do come and want to speak about their pensions and ask about their pensions.

PHILIPPA: I think it’s you, Romi.

SAM: Was it a child’s birthday party?

ROMI: It was a children’s birthday party! It wasn’t a child, I can promise. It was a parent.

PHILIPPA: That’d be quite unsettling.

ROMI: It was a parent. They were quite interested. They’d received a letter, and of course, the letter was impenetrable, but that did encourage a bit of conversation. I do think that things are changing. Sam, to your point, as the value in the account grows, people will pay more attention to it because it’s just a bigger sum of money.

SAM: Yeah, I wonder as well. Maybe this is a depressing way to think about things. To date, pensioners have been sort of OK. Largely, they’ve had final salary, they’ve had the State Pension. There’s probably going to be a generation, Gen X or something, that has none of that - and actually retires quite poor and they only have the State Pension. Maybe then we’ll get a bit more of, “actually, I should probably find out”, because like you say, why would you bother engaging if it’s been OK? Maybe we’ll have this period where they need a lot more help than pensioners today.

PHILIPPA: There’s an education piece here, isn’t there? So, should we be seeing this in the curriculum?

ROMI: Oh, absolutely. I think that there’ve been some initiatives to introduce money into the curriculum. But even when you look at those initiatives, pensions tend to be quite missing.

PHILIPPA: Yes.

ROMI: Even amongst money experts, sometimes there’s a tendency to shy away from pensions because they feel a little bit more complicated.

PHILIPPA: Do they need to be as complicated as they are?

ROMI: Absolutely not. A [workplace] pension’s a pot of money. You put money into it, the employer puts money into it, the government puts free money into it through tax relief. So, you get extra brownie points. Then it grows because it’s invested in some of the world’s biggest companies. When it comes to retirement, you can spend it. No more complex than that.

The revolving door of policy changes

PHILIPPA: So, how did we get here then? Why is it so strong about process and rules and regulations and complexity and so off-putting?

DAMIEN: I think it’s because the rules are changed too frequently. It’s a game they’re playing, but the rules [are] always changing. The age at which you can access it has changed since they first put money in.

PHILIPPA: Yes.

DAMIEN: The speculation about how much they could get in terms of tax-free cash has always been said it could change. I think people, therefore, think “well, this game is I put in, I can’t access it, but it could be completely different”. That needs to, I think, change. That’s through education, but I think a lack of... I think we need to have a period of calm around pensions.

PHILIPPA: Certainty?

DAMIEN: Yeah.

PHILIPPA: Because as you say, they change the rules. Why do Chancellors focus on pensions?

ROMI: Because it’s a really attractive and tempting pot to raid.

PHILIPPA: OK.

ROMI: If you’re in the Treasury’s position and you look at the tools that you have in your toolbox, pensions are usually one of them. But I tend to come back to the fundamentals of retirement provision. What is fundamentally true is that the State Pension is generally not enough to sustain your retirement, and therefore, you must have private savings. Even if taxation does change, as long as you continue to get free money from the government for putting contributions into your pension, it tends to be a good idea.

SAM: No government’s ever going to agree to not change them. I think Romi’s right. There are going to be lots of little changes. Hopefully, that can mainly be ignored by lots of people. As long as the fundamentals stay, free money for your retirement, then...

PHILIPPA: Yeah, it’s obviously a good idea, isn’t it?

Big pension changes that have shaped the past decade

PHILIPPA: Thinking about the changes we have seen over the last 10 years - not the small stuff, but the big stuff - what would we pull out as the really significant stuff?

ROMI: Auto-Enrolment, for sure. I think Auto-Enrolment has put a new generation on a better footing for the future. If you’re in your early 20s and you’re auto enrolled and you’re saving throughout your life, come the age of 65, you’re probably going to be doing quite all right. Yes, you still probably need to top-up [your pension]. But generally, you’re going to be on a much sounder footing. I do think that’s been absolutely transformational.

DAMIEN: I agree. I think Auto-Enrolment is one of the best things that’s happened. We just need to, I think, shift it slightly, start to increase some of the levels of contribution. But I do think that was a fundamental [change] that’s been one of the best changes that we’ve had in the UK.

PHILIPPA: Yeah, I know in the recent Budget, Romi, I know you were disappointed not to see it expanded to younger workers.

ROMI: Yeah, not expanded to younger workers. I think not extending the rate of contributions that should be paid in. Because a lot of people do just do what the norm is, also known as the ‘default’ in pensions, because we have to have very special words for simple things.

PHILIPPA: An impenetrable word for it.

ROMI: Impenetrable words for simple things. Yes, that was disappointing. I think given the National Insurance (NI) raid on businesses, it’s unlikely that those reforms will come through over the next couple of years. And so more than ever, that sense of personal responsibility is something we need to keep pushing forward as an industry. Because people do need to recognise that they’re on a decent footing, but it’s not yet quite enough, and you can make that difference.

PHILIPPA: Yeah, and particularly since work patterns are changing so much and life expectancy is changing so much. I mean, should we get into that a bit? How do pensions need to respond to those changes? Because they’re here already, it’s going to be more. Our kids are going to live longer than us all being well, and their work patterns are going to be completely different, even to ours. What needs to change with pensions to reflect - to work well for consumers in that way?

ROMI: Well, I think maintaining consistent contributions is probably the number one thing that you can do to ensure that you can create that pension wealth for yourself in the future. I think also being quite interested in where your money actually is, which is becoming a greater subject of conversation, certainly in the UK, can help you visualise what that money’s doing at any given point.

It’s not locked away. It’s actually invested in some of the world’s biggest companies or should be invested in some of the world’s biggest companies. I think that that can give you a sense of tangibility, even if it’s going to be a long time before you ultimately access it. Then I think the third thing that we really need to prepare for is probably longer working lives. That’s just how these things are going to go because the State Pension is unlikely to keep growing in the way that it’s been growing.

PHILIPPA: You’ll get it later and later?

ROMI: You’ll get it later and later. We’re healthier, and therefore, it’s quite likely that we’re going to end up working longer. Perhaps preparing yourself for that 100-year life is the direction of travel.

PHILIPPA: We made a podcast about that - it was episode 26. It was really interesting because that 100-year life isn’t just the way we work now for longer. I think the conversation we had, it was really interesting, was how that life would look when there might be periods when you’re not working. Maybe you’re raising kids, but maybe it’s more complicated than that. You’re educating yourself into a different line of work or whatever it might be. The continuous contributing into a pension, I do wonder how easy that’ll be for everyone and whether there’ll need to be products where it’s not so much about that, that there need to be times when you can take quite extended pension holidays, maybe potentially. I don’t know. What do you think?

ROMI: I think it’s now possible to take those pretty extended pension holidays. I think the problem is that if you’re not paying in, the government’s not paying in, the employer’s not paying in - and so you’ll then need to look for ways to make up for the holiday. It’s important if you eventually want to retire.

Pension Freedoms reforms

SAM: I hope we all want to retire. What I was just going to say, maybe it’s a point we should have made earlier, but the other big change being the ‘Pension Freedoms reforms’. Which I think basically summarises the problem we have. On the one hand, we need people to actually engage quite a lot. But we also tell them, “don’t engage them, your employees sorting it out”, and also, “don’t worry about the money. It’s growing in the background, and you don’t want to obsess about it too much”. But you’ve got these conflicting reforms that mean, “don’t engage, don’t engage, just let it build up”. Then suddenly it’s like, “right, you need to turn that into an income now”. Suddenly, you’ve got to learn about all these terms when you’re 55 (rising to 57 in 2028).

PHILIPPA: Yeah, that’s a huge issue, isn’t it? They’re understanding all of a sudden there’s this money: what should you do with it?

SAM: Exactly, yeah. How does that need to be done? I think you have to suddenly have a gear shift, that no one’s really prepared you for suddenly potentially managing your own money and starting to invest it. A company might say, “well, we don’t do the bit after you’re retired, so here’s the money. Off you go. You can turn it into an income“.

PHILIPPA: Yeah. Is that an opportunity for the industry, Romi, to do more for people at that stage?

ROMI: Yes. I firmly believe that you should be engaging early on because I don’t think that mental shift can just occur at the age of 55. If you’ve never engaged and you’ve lost the opportunity to learn about your pension as you go along, coming in at 55 and suddenly being faced with a lot of daunting decisions.

PHILIPPA: Very significant.

ROMI: Significant, daunting decisions. I think that opens up a lot of scope for people to turn in the wrong direction. The best thing is definitely to look at it early on. I think the pensions industry tells you, “don’t worry about it” because inertia is in their commercial interest. I think, do look at it, do ask what it’s invested in, and do decide if that’s right for you - those are actually important concepts. If someone told you, “don’t look at your bank account, we’ve got it sorted out”. Would you listen to that?

PHILIPPA: You’d be dubious.

Where your money is, exactly

ROMI: We’ve worked very hard to try and make things simpler. For us, I think, even for us, it still feels like the work isn’t done. I think the next focus is really about where your money is, exactly. I think this is becoming a greater topic of national conversation in general. There’s so much talk about the government directing your pension investments. Until we pay attention to where our money is today, we won’t really be able to say whether we think that’s a good idea or not. At the moment, your money’s probably invested in some of the world’s biggest companies. I’d love for everyone to be able to say, “my pension’s in Amazon, it’s in Glaxo, it’s in Tesla, it’s in NVIDIA, it’s in Marks & Spencer”. It’s in companies that we recognise. I think really the next phase is to understand: ‘what is this pension?’ Yes, it’s my pot for the future, but what is it right now? I think getting there combined with the technology is what’s actually going to take us to a place where people feel ownership.

SAM: I think it’s an interesting point because I think personally, I actually find it quite stressful to think about the companies.

PHILIPPA: Oh, do you?

SAM: Yeah, because then you start thinking, I’ve got to follow the news on... “Oh, NVIDIA has missed its earnings report. What does that mean?” I feel like most people now invest through trackers, which just buy everything, buy the market. Yes, you’re investing in those companies, but I’ve started to actually slightly disengage from the individual stocks because I feel like I’m not equipped to know what things mean. I’m not like a day trader. In a way, I quite like the idea that there’s an algorithm somewhere that’s buying and selling things on my behalf. I do understand compound interest, but I don’t understand how individual companies work across the world. It’s slightly overwhelming to me.

ROMI: No. If you look under the hood of most of these products, you’ll find that they’re generally invested in very similar kinds of investments, very similar types of companies. But to your point, at the same time, I don’t know if you can just take for granted that everything is fine under the hood. It’s probably fine, but I think you probably want to pay a little bit of attention to that and make sure that you know what it’s actually in, because there are some government proposals out there at the moment that are suggesting that the government should direct some of your money. Obviously, we’ll never do that at PensionBee. But I think if most people understood that, I do think they’d pay more attention to what the pension is doing right now.

DAMIEN: That point, I have to say, I’m trying to go through a phase of engaging my eldest daughter, who’s 14, into investing. It’s all linked to pensions and everything. Because as somebody who’s called a ‘Money Expert’, I seem to be good at teaching the rest of the UK - but I’m not really teaching my children! We suddenly thought about this idea of, “well, how do I do it?” One way we’re starting to try and engage with it is, it’s a fun exercise - and I’ll let you guys know how it gets on - is by saying to them, all those companies that Romi mentioned, funnily enough, saying to them, you go out and pick a dozen companies out there that you know and then we’ll see what happens to their share price.

Even if now you can do small investments these days, to engage them with the idea to start to understand why shares go up and down and why the companies don’t do so well. It’s not about making money, it’s about educating. She likes the idea and I think she’s going to engage with it, but we’ll see how it pans out. It could be something she grows very bored of very quickly, and it’s just me being an enthusiastic dad. When you get to Christmas and you give them a toy or something and you say, “look at that!” and it’s just you playing with it, and they’ve walked off. I’ve got a feeling we could go down that route!

PHILIPPA: Got to say, it doesn’t sound like the most exciting present ever.

Understanding market ups and downs

DAMIEN: I think it’s important to have an idea where your money’s invested because whether it’s a pension or even something like an ISA. If people are invested in trackers, if the market crashes, what tends to happen is people panic and then they might sell out. And by understanding what’s really going on, what’s driving the ups and downs, it actually encourages people to stay in the long term and invest in the long term because they’re understanding this is the natural flow. It’s a bit like you’re trying to surf and getting wet. You never realise that’s what’s going to happen. You’re going to fall off the board every now and then. It’s what’s going on in your pension is the natural cycle.

PHILIPPA: Yeah. I mean, as you said, that’s the other side of handheld technology for knowing where your pension is right now this minute, isn’t it? I mean, Romi, you must see this. People, if they want to, they can look every day on the app.

ROMI: Some people look more than once a day, even though the balance only updates on a daily basis.

PHILIPPA: Is that a good thing? Because obviously -

ROMI: - I think it’s alright.

PHILIPPA: You do?

ROMI: It’s alright. I do. I truly believe that if you give people enough time to learn these things that, Damien, you’re speaking about, that markets do go up and down, your pension will go up and down. It’s supposed to go down because that’s a good investment opportunity, and it’s supposed to go up as well because that’s what long-term growth looks like. We’ve had a couple of market downturns since PensionBee came into the financial landscape. I remember all of them really well.

PHILIPPA: Yeah, I’ll bet.

ROMI: I remember 2018. I remember 2022. 2022 was substantially more severe than 2018. But what we did see is that people who had been with us, customers who had been with us in 2018, had seen a dip, had seen a recovery. They looked at 2022 differently to the customers that had recently joined us because they’d always been kept in the dark by their pension provider before us.

PHILIPPA: Ah ha!

ROMI: So, they hadn’t had the benefit of that transparency over the past 10 years. But now we know that when the next downturn eventually does come, and it’ll come because that’s how markets work. We feel very confident that the customers who’ve been with us, who’ve experienced what a pension is supposed to do, go up and down, we feel very confident that those customers might see it as an investment opportunity, which is what a market downturn really is. It’s a great time to put money into your pension.

How does the UK compare internationally?

PHILIPPA: We need to be wrapping this up, really. But I do want to ask you, Romi, because you’ve expanded the company into the US this year. Do they do things differently there? Is there stuff we can learn from there?

ROMI: Well, I think that there’s a lot of stuff they can learn from the UK, actually.

PHILIPPA: OK.

ROMI: One of the things that we found in the US is that the level of coverage that you as a worker get is substantially inferior to what we have in the UK. If you work part-time, if you leave a company within a couple of years - which, as we’ve spoken about, many people do. You might get nothing in the pension. For us in the UK, Auto-Enrolment changed that. There’s this opportunity, I think, to change what I think is an enormous financial system and works well for many people. There’s an opportunity to change it and make it work better for everybody. That’s actually really exciting because that’s something we’ve learned in the UK. We’ve learned the power of how much better the system can be for everybody and so I’m quite excited to take that to the US.

PHILIPPA: I think we do need to wrap this up. There’s so much more I’d like to ask you all about, but I’m going to do that festive thing. I’m going to ask you about New Year’s resolutions because we’re recording this right at the end of 2024. So come on, around the table, what’s it going to be? It should be financial, given this is a money podcast, but it doesn’t have to be.

SAM: My financial New Year’s resolution is to start saving in January for Christmas.

PHILIPPA: For next Christmas?

SAM: For next Christmas, because I think every year, I don’t have anything set aside for it, and then I’m paying it back. But I think I’m going to do one of those challenges where you save a decreasing amount every day for a year.

PHILIPPA: OK.

SAM: So, you start with, I think it’s £5 a day on day one, then £4, £3, do it until it’s like 1p or something right at the end. Then you’ve got a little pot to buy the presents with rather than what I do, which is put it on the credit card.

PHILIPPA: Romi?

ROMI: My financial resolution is actually to read more books because I think that the world really is changing, and I want to have a reset around thinking and how we think about the financial system, what the financial system can do more generally. There have been a number of publications recently that I’ve scanned the titles and thought, “you know what? I think I might need to read a couple of chapters of this book.”

PHILIPPA: Have you got a particular one in mind?

ROMI: Yeah, I’m thinking of one that I can’t recall the name of right now, but it’s definitely sitting on my desk somewhere. I’m pretty sure it’s called ‘Billions’ or ‘Trillions‘. I can’t remember which one it is.

PHILIPPA: I think that’s a really interesting idea, the future-gazing, what’s the world going to look like and how does finance and pensions need to respond? Come on, Damien, what have you got?

DAMIEN: Well, I think Romi has inspired me to actually commit and complete the challenge with my daughter to try and teach her about investing. I think that I’ve got to. I think that’s my resolution for the new year.

PHILIPPA: It’s a resolution for all parents, I think. Thank you very much indeed, everyone. Really interesting discussion. Thanks to everyone listening for being with us this year. We’ve loved covering the money and pension stories that we know you wanted to know more about.

We’ll be back with more tips about managing your money and saving for the future in our fourth series next year. Look out for January, the first episode of the year. If you missed any episodes - no problem. You can go back and listen on your favourite podcast app, you can listen on YouTube, or indeed, the PensionBee app, too. If you enjoyed this one, we would love it if you would rate and review us. We know you’re busy, and your feedback does mean a lot to us.

The final reminder for 2024 is that anything discussed in this podcast shouldn’t be regarded as financial or legal advice. When investing, your capital’s at risk. Enjoy the holiday. We’ll see you in 2025.

Risk warning

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Bonus episode: Financial mistakes part one

Read the transcript from our bonus podcast episode on financial mistakes with credit.

The following is a transcript of a bonus episode of The Pension Confident Podcast - financial mistakes part one. You can listen to this bonus episode or scroll on to read the conversation.

PHILIPPA: Welcome to another bonus episode of The Pension Confident Podcast. And this time we’re bringing you part one of our myth-busting series on common financial mistakes and when to avoid them! Well, listen up, because we’re covering everything from why people become reliant on credit cards to how credit scores actually work.

Before we start, just a reminder that anything discussed on the podcast shouldn’t be regarded as financial or legal advice, and when investing your capital’s at risk.

Let’s kick things off with the first big debt for many people - university tuition fees. In episode 23, Ola Majekodunmi, who founded the financial literacy platform, All Things Money, talked to us about the pressures of borrowing money to go to university.

But there are these big decisions that people make when they’re quite young. I’m thinking about university here actually, that’s a big investment, isn’t it? You don’t necessarily think about it that way when you go, take the loans and rack up all that debt. But that’s something to think about, isn’t it? Because there’s so many other routes of entry now, into all sorts of careers.

OLA: I agree. I honestly wouldn’t have gone to university had I felt well equipped to take another route.

PHILIPPA: Really?

OLA: Yeah. I really wanted to do something like an internship or an apprenticeship. But my school really did put a big emphasis on supporting people going to university rather than those going down the apprenticeship route. So if I wanted to do an apprenticeship, I had to find it myself. I had to actually understand what that was and I didn’t know.

PHILIPPA: That’s a big ask at that age.

OLA: Massive, especially now that I look at my sister who’s that age. I think, “wow, that’s so young”. At the time, the only apprenticeships I came across were in finance. It’s funny, I definitely didn’t want to go down the route of finance at the time. I don’t have regrets about university now, but I am in £65,000 worth of debt, plus interest.

PHILIPPA: It’s a big debt, isn’t it?

OLA: A lot!

PHILIPPA: Pressure to spend can come from loved ones too. Here’s Brooke Day, PensionBee’s Head of Brand and Communications, with Co-Founder of Millennial Money UK, Niaz Azad in episode 27. They talked about feeling the pressure of keeping up with better off friends and their lifestyles.

There’s that pressure to keep up, isn’t there? It’s fear of missing out, whether it’s you or your kids, if you have kids. Or, almost worse, appearing mean.

BROOKE: Yeah, it could be that you’re saving for a house or investing your money, all those other things that people don’t realise that you’re doing with money. Outwardly, they may think, “but you’ve got the money to do that. Why don’t you want to do it?”. And you’re like, “I just don’t want to”. But I don’t want to feel like I have to explain ‘the why’.

PHILIPPA: Yeah, because another survey, Credit Karma survey, nearly half of millennials say they overspend to keep up with their friends. 80% of them who went into debt, kept their debt a secret from their friends. Because there’s a lot of shame around that, isn’t there? But it’s easy to get into debt if you’re trying to keep up, isn’t it?

NIAZ: I think a lot of people don’t realise that they’re doing it. You know you earn a decent salary or you have a regular income and you might not have the cash now, but you’ve got a credit card, which gives you this line of financing and you’re spending money, you’re going out with the forethought that “I’m going to just pay this off at the end of the month”, not realising you’re in a cycle of just financing your lifestyle by doing so. A lot of people don’t actually realise it until they overstretch just that little bit one month, and then it goes into [debt], and that’s how they get you in the consumer credit industry, right?

PHILIPPA: But you don’t see the jeopardy?

NIAZ: Exactly.

PHILIPPA: If you’re in a job, you’re thinking, “it’s fine, I can manage this”.

Sometimes of course it’s just keeping up with the necessities that can land us in debt - especially when you’re starting a family. Mumsnet CEO, Justine Roberts CBE, knows all about that. Here she is in episode 19 highlighting something parents are very familiar with - the astronomical cost of childcare. And the impact that expense can have on family finances.

Now, we’ve all read and heard about how extraordinarily expensive childcare can be. Is it actually true that the average full-time care in the UK for a child under two costs over £14,000 per year?

JUSTINE: Yep. I think that’s right. The UK has one of the highest childcare costs in the OECD.

PHILIPPA: OECD?

JUSTINE: That’s the Organisation for Economic Co-operation and Development. Otherwise known as the club for rich countries!

PHILIPPA: OK, £14,000.

JUSTINE: It’s a huge number, yeah. And actually around 40% of our users say they can’t afford childcare without going into debt or family help. It’s so prevalent now. This isn’t just affecting the poorest, it’s affecting pretty much everyone. We talked already about gender pay gaps and pension pay gaps. That has so many knock on effects on people because they can’t afford to go back to work.

PHILIPPA: Now, let’s talk about something crucial that’s often overlooked: high charges around debt. In episode 29, Holly Mackay, who’s Founder and CEO of Boring Money and PensionBee’s VP Product, Martin Parzonka, discussed the first steps to getting your finances back on track if you’ve got into debt.

Is that the first thing you should be saving for, actually, your emergency cash jam jar?

HOLLY: Absolutely. That for me, is the... I think we all have steps on our financial journey, and there’s an order we should do things in. The first, actually, even before that, would be to pay off any expensive debt. So once that’s done, then absolutely, I think people’s first goal is to get to that three months of outgoings.

PHILIPPA: And just to spell out the reasons for that, if you’ve got debt like that, you’re paying far more in interest, then you’ll gain wherever you put it in savings.

HOLLY: Absolutely. In savings, in an ISA, in whatever it might be, is getting rid of that debt is the very first starting point.

MARTIN: Actually, with the base rate increasing, I think credit cards now are like 30%. It’s insane!

PHILIPPA: Insane. So, if you’re not paying that off every month, that’s a huge bill, isn’t it?

So, let’s rewind a second. If you’ve got debt, and most of us have, what does that mean for your credit score? We covered that in episode 31, when John Webb, the Consumer Affairs Manager at credit rating company Experian, ran us through his list of ‘need to knows’ about credit scores.

PHILIPPA: OK. Let’s start with the basics. John, what’s a credit score?

JOHN: Yeah, great question. So I’ll try and keep this as simple as I can.

PHILIPPA: Sure.

JOHN: Because the credit score is a number that we, ‘we’ being a credit reference agency like Experian, will give you. That number just represents the information that’s on your credit report. So it’s how well you have managed credit in the past, usually for the last six years, and how well you’re currently managing credit, so you know your current outstanding debt and things like that, so that when you apply for credit, although the lender won’t see that exact number, generally, it’s a good indicator of how they’ll view the information on your credit report.

PHILIPPA: What about if you divorce that person or you separate from that person? How do you sever that in your credit record?

JOHN: Yeah, so it’s a really good point. Actually, it’s not, it’s not being married that does it. So actually, it’s kind of, it’s slightly a myth, but it’s not being married, it’s not living with someone, it’s not someone in your family or just that you’re in a relationship with someone. As Clare said, it’s just - the process actually is applying for joint credit together, and it creates what’s called a ‘financial association’ and links you two together. It means when you go and apply for credit, the lender can check that person’s information as well. So if they’ve not been good at managing their credit, it means you could be refused or you could pay more. If you shouldn’t be connected, so you have no open joint accounts together, you could do what’s called a ‘financial disassociation’. You break that link, you have to do it with all three credit reference agencies to do it. It’s a fairly simple process online. But you do that, you break the link, and that way your report is then stand-alone or that person is at least not connected to you anymore.

PHILIPPA: OK. So thinking about other ways of being associated with people, what about people who are all renting a place together. They’re not involved with each other, they’re just flatmates, but they’re all on the lease or they’re all on the rental agreement.

JOHN: That won’t financially connect you. No. The only way it happens is if, like I said, you open a joint account. So something like a joint bank account, a joint loan, obviously a mortgage, joint mortgage as well. Credit cards aren’t a linking account because you add someone as an additional card holder. You’re still the main card holder.

PHILIPPA: Oh, OK, that’s an important point.

JOHN: You have to be careful if you add someone as an additional card holder because the onus is on you, and that’s your account, to be in charge of that.

PHILIPPA: And finally, here’s Brooke again talking about how setting up a simple joint bank account could cast a long shadow on your credit report - if you’re not careful.

If you’re working from home and your flatmate isn’t, are we still splitting the bills down the middle, or...? That’s a conversation, isn’t it?

BROOKE: I think often it’s about social contract. Before you get into these things, having the conversation about it, so whether that’s lending money or how bills are going to be split. I think from my experience, when I was at university, it was the first time I’ve ever rented and moved away from home and we got this house and I definitely had the subpar room, and we just split the cost of the house and the rental amongst [us all]. And now I think, “why did I?”. I think of two friends, they had double bedrooms with ensuites and I lived next to the kitchen by the dishwasher.

PHILIPPA: And paid the same?

BROOKE: And paid the same. And now I think, I wish I’d had the courage to say, “hey, maybe that’s not fair and we should split it a different way because you’re getting a far better deal from this than me”. But I think because I was a bit of a people pleaser, I just said, “oh, it’s fine”. That’s just what you do. But I guess [I’ll] live and learn. And second to that, we set up joint bank accounts to split bills, and I didn’t quite realise then that that could impact my credit score moving forward. And I wish I’d learnt that sooner, that actually, had I lived with people that racked up loads of debt, that would then be impacting me in the future. So I guess that’s something to consider.

PHILIPPA: That’s really worth thinking about. And that wraps up part one of our myth-busting series on common financial mistakes! If you’d like to hear those discussions in full you can listen back to all those episodes wherever you get your podcasts.

A final reminder before we go, that anything discussed on the podcast shouldn’t be regarded as financial or legal advice, and when investing your capital’s at risk.

You can subscribe to the series right now on any podcast app. And all The Pension Confident Podcast episodes are on YouTube or the PensionBee app if that works better for you. In the meantime, keep an eye on our feed - our next episode will be live at the end of the month.

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Bonus episode: What does the Autumn Budget 2024 mean for your pension?

Read the transcript from our bonus podcast episode on the government's Autumn Budget.

PHILIPPA: Hi, I’m Philippa Lamb and welcome to a bonus episode all about the Autumn Budget and what it could mean for you and your finances. Now, as always with the Budget, it’s about the detail behind the headline announcements that often reveals what they could actually mean in practice. So the PensionBee team has been busy ever since last week, reading the fine print and analysing the implications. And former Times Journalist Annabelle Williams is here, she’s going to run us through the most important changes. She’s brand new to her Spokesperson role at PensionBee and this is her first time on the podcast. Hi, Annabelle.

ANNABELLE: Hi, Philippa.

PHILIPPA: I’m really sorry to throw you in the deep end with a whole Budget episode!

ANNABELLE: No problem.

PHILIPPA: The usual disclaimer before we start, please remember anything discussed on the podcast should not be regarded as financial advice or legal advice. And when investing, your capital is at risk.

Annabelle, I thought it was great to see a Budget delivered by our first ever female Chancellor.

ANNABELLE: Same! To think that it’s been 300 years since the first Budget and this is the first time it was delivered by a female.

PHILIPPA: Yeah, it was a historic moment. What was your first thought when she sat down, when she’d said it all? What was your first thought about the whole thing?

ANNABELLE: I mean, honestly, it was how long it was. So we’d placed bets in the office beforehand on how long we thought that she was going to be speaking for, and most people thought it’d be quite a lot shorter. In the end, her speech was an hour and 15 minutes, which actually is quite long compared to what we’ve been used to in recent years.

PHILIPPA: And it was a packed chamber, wasn’t it? So many MPs.

ANNABELLE: Yeah, yeah. And so many changes, so many little changes to all sorts of areas that we’re all going to have to digest.

PHILIPPA: We’ve had, well, nearly a week now to see what the response to the Budget has been. And obviously, different sections of society have different ideas. We’ve got the financial markets, we’ve got business, we’ve got the rest of us, working people and consumers. Have you got a general sense of how it’s gone down with working people?

ANNABELLE: Yeah. So PensionBee ran a survey and I thought the responses were quite interesting. We found that 29% of Brits feel less confident about their finances following the budget.

PHILIPPA: That’s a big number.

ANNABELLE: It is, that’s a third of people. And the other stat that jumped out is 47% of Brits feel negative about the upcoming changes to Inheritance Tax on pensions.

PHILIPPA: Yeah, we’ll get into the details on Inheritance Tax in a little bit. But I see that nearly again, nearly 30% - 29% are now thinking they’re going to use alternative ways to pass on their wealth, things like gifts and trusts.

ANNABELLE: And then 32% think that the changes to employers’ National Insurance contributions (NICs) will have a knock on effect on their wage increases in future.

PHILIPPA: Yeah, that’s the big one. So let’s get into that one. Employers National Insurance contributions - I know it doesn’t sound necessarily like it’s got much to do with our personal finance because, you know, ordinary workers don’t directly pay it themselves out of their pay packets. But as you say, there are implications here, aren’t there for pay and indeed for job prospects?

Employers National Insurance contributions

ANNABELLE: Yeah. So what they’ve done is they’ve increased the rate of National Insurance that employers have to pay per worker and they’ve also lowered the threshold at which employers have to start paying it. This is ultimately an extra cost for businesses. It’ll depend on the business, of course, how well they’re able to absorb that, but in the long run that could mean that it’s going to be passed on to workers, potentially in the form of not having as big pay rises or possibly even employer pension contributions not being as generous.

PHILIPPA: Yeah. There’s been a lot of press coverage about this, hasn’t there? This suggestion that if employers have this extra cost, they could think harder about putting people’s pay up. And even the staff they have now, they might think about reducing the hours for people, if they’re paying by the hour, because it’s all cost or indeed not hiring as many people as perhaps they might’ve thought they were going to.

ANNABELLE: Yeah, I mean, with any kind of tax on businesses, it often falls more heavily on smaller enterprises that only employ a couple of people. And those businesses are all over the country and they’re the real backbone of the economy.

Inheritance Tax and pensions

PHILIPPA: Turning onto Inheritance Tax, the Chancellor made changes there. She’s frozen the threshold at which it kicks in until 2030.

ANNABELLE: That’s right. So with Inheritance Tax, the two big assets that most people have are their family home and their pension. And rising property prices have pushed more estates into Inheritance Tax thresholds.

PHILIPPA: Just because prices go up?

ANNABELLE: Yeah. And the issue with this is that people who’re passing away now, may have bought those properties back when they were far more affordable and they may not have lived a particularly lavish life and don’t feel particularly well-off, but then when they die, they know that their property is above the threshold. So it’s £325,000 per person (2024/25), but then there’s an extra allowance for property that brings it up to half a million. But, you know, people are dying and then they know that that property is going to have to be sold to pay an Inheritance Tax bill. So it’s a really emotive issue.

PHILIPPA: It sounds like a big number, doesn’t it? But actually, I mean, obviously it’s a geographic distribution, isn’t it? It depends where you are in the country. In some places, property prices, you know, £500,000, amazingly, doesn’t buy you that much?

ANNABELLE: Yeah, that’s right. So, I mean, for all the ‘hubbub’ over Inheritance Tax , we need to remember that it’s actually only a tiny proportion of estates that actually end up paying this. So the Chancellor reckons that this year, only 6% of estates will actually be due Inheritance Tax.

PHILIPPA: Yeah, yeah. As you say, that’s well worth remembering.

The other change she made on IHT - Inheritance Tax - this issue about unused pension and death benefits getting wrapped into Inheritance Tax now too (from April 2027). That’s a big change, isn’t it?

ANNABELLE: Yeah. So with pensions, you’ve got defined contribution pensions, which is where you retire with a pot of money and you have to make it last.

PHILIPPA: I mean, this is most people nowadays, isn’t it?

ANNABELLE: Yeah, exactly. And previously, if you passed away before the age of 75, you were able to pass that on to your descendants without paying Inheritance Tax. There were different rules for people who died over the age of 75. Now, let’s not get into that, because pensions are really complicated.

PHILIPPA: Absolutely.

ANNABELLE: But what the Chancellor has done now has brought pensions into the remit of Inheritance Tax, so they’d be added to a person’s estate alongside their other assets.

PHILIPPA: I mean, this could be really significant, couldn’t it?

ANNABELLE: It potentially could. And one of the things that has been happening in the past few years is wealthier people who’ve already saved up enough in their pensions to see them through retirement, have been opening defined contribution pensions and they’ve been putting away extra money in there for their heirs. So they know that they’re not going to use them and they’re going to be passed on. And that’s been, I think, really quite useful for families, because, as we all know, most people today aren’t saving enough money and it’s really hard for the younger generation too, what with property prices. So, you know, trying to give your children a leg up with a pension was something that a lot of people wanted to do.

PHILIPPA: And also, worst case, it just meant that you were saving as much as you could into your pension, which is always going to be a good idea, isn’t it? Because who knows what’s going to happen in future, who knows how much money you might end up needing for elder care costs, whatever it might be. And now if they don’t spend that money, as you say, when they pass it onto their kids or whoever it is, then that’s going to be taxable?

ANNABELLE: Yeah, I mean, I think with this you’re again going to see people looking at the gifting allowances that there are with Inheritance Tax and trying to find ways to pass on money to loved ones now rather than waiting until after they die.

PHILIPPA: I mean, as you say, everything to do with pensions tends to be a little bit nuanced and complicated. So I’d say if anyone wants to know the details on this, we’re going to put some links in the show notes, I think, aren’t we? So that they can dig into it. And of course the PensionBee website and app have got a lot of information about it, hasn’t it? Just fresh off the back of the Budget. It’s all there. And I think it’s worth saying also that pensions, they’re still very attractive tax-wise, aren’t they? You still get the tax relief.

ANNABELLE: Yeah, absolutely. So this change [to Inheritance Tax] isn’t coming in until April 2027 and the detail of how it’s actually going to work hasn’t been laid out. Now, the Chancellor didn’t say that there would be any measures to protect people who’ve already planned their affairs around the existing rules. So we can’t guarantee that that’s going to happen. But in the past when there have been changes to pensions rules, they often do put in place some type of ‘protections’ - that’s the word that’s used in the industry - to help people before the rule comes in. So, you know, no need to panic just now.

PHILIPPA: Yeah, absolutely not. Don’t panic!

Capital gains tax (CGT)

PHILIPPA: Capital gains tax. Just remind us who has to pay this now because the rates did change in the Budget?

ANNABELLE: So capital gains tax is a tax on the profit made when you sell valuable assets. That includes second homes, stakes in a business, things like art, jewellery and also the big one for investors is shares that you hold outside of a pension or an ISA. What it doesn’t include is caravans, boats, cars or your main home.

PHILIPPA: OK.

ANNABELLE: In reality, very few people pay capital gains tax, because you get quite a big annual allowance before you have to pay it?

PHILIPPA: That’s right. So everybody’s got this tax-free amount, which is £3,000 each year. So if you sold some shares or some jewellery and your profit was less than £3,000, you wouldn’t then pay capital gains tax, right. But what they’ve done is for people who are selling things and they make a profit above £3,000, then the capital gains tax rates have risen.

PHILIPPA: You mentioned shares there. So do you think the changes to capital gains tax will impact investors directly then?

ANNABELLE: Well, it depends. So pensions and ISAs are known technically as ‘tax wrappers’ because if you invest through one of them, you’re shielded from taxes like capital gains tax. What sometimes happens is that people decide that they want to start investing, they go to a website and then they open a general investing account and they don’t realise that that isn’t an ISA or a pension, i.e. it’s not a ‘tax wrapper’. And eventually when they sell shares, they’ll be hit with tax. So I think it’s really about education and people understanding a bit more about how the system works so they can protect themselves from these taxes.

PHILIPPA: Yeah, and it really does reinforce the benefits, that clear tax benefit of saving into an ISA or a pension.

Stamp Duty

PHILIPPA: Stamp Duty was a bit of a surprise, wasn’t it? Thinking about people buying their own home or even buying a second home. It changed on the day? Was it on the day or on the next day after the Budget, a new rate kicked in for second homes?

ANNABELLE: Yeah, it kicked in the day after. Now, I wasn’t expecting this at all. So in the past few years, the government - the previous government and now this one - they’ve made it less advantageous in terms of tax to have a second home. And what they’ve done is they’ve basically bumped up the rate of Stamp Duty that people have to pay when they’re buying an additional home. There’s been this belief that landlords and people buying up second homes has been a big competition in the market that’s really prevented first-time buyers and home movers from getting the properties that they want. So I think the government’s aim here is by making it more expensive to buy second homes, it should limit demand there.

PHILIPPA: Yeah, I guess the other argument to that - the counter argument would be - that there aren’t enough rental properties are there? Which is why rents are so high?

ANNABELLE: Yeah, I mean, look, if people sell up buy-to-let property, that property doesn’t burn down, you know, it’s still there. Maybe somebody else will buy that property and rent it out. Maybe a first-time buyer could move into it. So I think this is just one measure and it needs to be part of a much broader set of measures aimed at, you know, improving the property situation in the country.

PHILIPPA: Yeah. Which is something the Chancellor is very keen to do.

The impact on working people

PHILIPPA: Thinking across the whole Budget, I mean, how do you see the impact on the average person? Would you say they’re better off or worse off?

ANNABELLE: I think we’re going to have to give it a bit of time before coming up with that answer.

PHILIPPA: Yes. We don’t have all the details, do we?

ANNABELLE: No, we need to see how employers respond to this increase in National Insurance, for example. But you know, I think it’s worth mentioning that the reason these tax increases have come in is because people want better public services which need to be funded in some way.

What are ‘stealth taxes’?

PHILIPPA: We often hear about ‘stealth taxes‘, don’t we? This idea of something that isn’t exactly labelled as a tax, but in the end, you know, it costs people money regardless. Do you see any of the measures really as ‘stealth taxes’?

ANNABELLE: So I guess they’re ‘stealth taxes’ in the sense that they aren’t the big taxes that everybody thinks about, you know, income tax, National Insurance or VAT. But on the other hand, these are so well-discussed, they’re not really tax measures that are flying below the radar, are they?

PHILIPPA: We’re going to see the [National] Minimum Wage go up though, aren’t we? I mean, that’s good news. It’s going to take the edge off, at least for some people?

ANNABELLE: Yeah, absolutely. I mean, the cost of living is absolutely astronomical and it’s far harder for people who are on the lowest incomes to get by. So this is definitely something that should help.

PHILIPPA: Yeah. Though it is, I suppose worth saying that employers have, you know, rolled their eyes about that as well because obviously that’s an additional cost for them?

ANNABELLE: Yeah, I mean, I think, you know, the Chancellor wanted this to be a Budget whereby the tax burden didn’t fall on the individual, but did fall more on businesses. Now, as to the overall effect that that’s going to have on the economy, we’re just going to have to wait and see.

PHILIPPA: So we talked a lot about what was actually in the Budget but what didn’t you see that you would’ve quite liked to see?

ANNABELLE: We would’ve liked to have seen Auto-Enrolment - which is being enrolled into a pension through the workplace - extended to younger workers. So legislation for this was passed a year ago, but it still hasn’t come into effect. At the moment, Auto-Enrolment only applies to workers who are aged 22 or over, but there’s plenty of people in the workplace from the age of 16 or 18 who could also benefit from starting to save for retirement.

PHILIPPA: Annabelle, thank you so much. It was really great to hear everything explained so clearly.

ANNABELLE: A lot to digest, but I hope that was useful.

PHILIPPA: How was your first podcast experience?

ANNABELLE: Yeah, it was great!

PHILIPPA: You can’t really say anything else at this stage, can you!

If you found this useful, check out the latest episode of the podcast, which is all about how to understand your pension balance and what it actually means for your retirement planning.

You can stay on top of all your personal finance questions by subscribing to The Pension Confident Podcast on any podcast app or on YouTube and in the PensionBee app too. Give us a rating and a review when you’re there, we’d love to know what you think about the series.

Here’s a final reminder that anything discussed on the podcast should not be regarded as financial advice or legal advice and when investing your capital is at risk. Thanks for listening.

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Bonus episode: How to avoid financial scams

Read the transcript from our bonus podcast episode on how to avoid financial scams.

The following is a transcript of a bonus episode of The Pension Confident Podcast - How to avoid financial scams. You can listen to this bonus episode or scroll on to read the conversation.

PHILIPPA: Hello, and welcome to another bonus episode of The Pension Confident Podcast. This week, Citizens Advice are running a Scams Awareness Campaign. So what better time to revisit one of our most important episodes full of top tips and need-to-know tips to help you steer well clear of financial scams.

According to research by UK Finance, £1.17 billion was stolen through fraud last year. A strong reminder that we always need to be on our guard. But what are the red flags we all need to watch for when it comes to our finances?

Well, back in episode seven, I chatted with Michelle Cracknell CBE. She’s the Former Chief Executive of The Pensions Advisory Service and an Independent Non-Executive Director at PensionBee. Lisa Markey was with us, too. She’s the Former Head of Security and Counter Fraud at Open Banking. And so was PensionBee’s CTO, Jonathan Lister Parsons.

We talked about everything from the huge variety of financial scams to the warning signs to look out for, and importantly, what you should do if you think you’ve been scammed. Today, we’re sharing the best bits, so listen up and find out how to keep your money safe and sound.

Before we start, just a reminder that anything discussed on the podcast shouldn’t be regarded as financial or legal advice, and when investing, your capital is at risk.

OK, let’s get into it. I’m guessing chances are we have all, sitting around this table, been targeted by fraudsters at some point. Have any of you ever actually fallen victim to a financial scam?

MICHELLE: I was a victim to one of those people that hang around on the street and say they’ve got one last offer and they’re just about to go home for the day and they’re doing this amazing discount from £150 to £75 if I just gave them my credit card details. I did fall for that.

PHILIPPA: Did you?

MICHELLE: To this day, I’m embarrassed that I did fall for it. I did eventually unwind it, but it took a lot of perseverance. But it was just that moment he got me with a product that I was quite interested in at the right time, and I was slightly time-pushed, and I didn’t give it enough thought.

PHILIPPA: That’s often the way, isn’t it? They grab you just at the moment when you’re jumping on a train or in a rush, and before you know it, you’ve fallen for it.

MICHELLE: Exactly right. You think, yes, maybe they’re right. Maybe this is an offer that I can’t refuse.

PHILIPPA: Lisa, you’re a security expert. Have you ever fallen victim?

LISA: I actually haven’t, but these things are so clever that sometimes I’ll see something and I’ll literally send it to my tech guys to unravel and tell me, “is this one OK?”.

PHILIPPA: Yeah. Jonathan?

JONATHAN: Well, I can’t pass up the opportunity to talk to you about an experience that my brother had recently. He crossed the Dartford Crossing.

PHILIPPA: The bridge?

JONATHAN: The bridge. Where you have to pay a small toll. He got a text message saying, “you’ve crossed the Dartford Crossing, please pay this £4” - or £6, whatever it was. He’d done that, and it was to his phone, so he clicked on the link and went through the process paying no attention to what the website looked like.

PHILIPPA: Sure. Well, you’d, wouldn’t you?

JONATHAN: Why would you think it was anything other than real? Then within 24 hours, he got a phone call from the real Dartford Crossing people saying, “you haven’t paid your toll. Can you pay your toll now, please?”. That really amazes me because to have somebody’s telephone number and know that they’d crossed the bridge, that’s a strange combination. You’ve really got to have done a lot of work.

PHILIPPA: Before we can identify a scam and work out what to do, obviously, we need to have some sense of what a financial scam might be. So Lisa, give us an idea of what thing we’re talking about when we talk about financial scam?

LISA: It’s very broad-based, but at the end of the day, at some point, there’s a money transfer. I think what you experienced, Jonathan, might have been a drive-by, somebody sitting close by with something scanning. I’d like to know how that works. That’s a new one for me. The fact that it’s a new one for me just shows they’re so numerous.

PHILIPPA: I think we’re all familiar with the idea of maybe being scammed by a text or an SMS or an email. But there’s purchase scams, too, aren’t there? Where you buy something online…

LISA: When you’re buying something online, I think it’s not necessarily the item that you’re buying, but the methods. Always look for ‘HTTPS’, which is the secure version, to make sure that your data is encrypted. There are a lot of accreditation schemes out there, like Trustpilot, that [sort of] thing. If you see a blank, bare website, then that’s a cause for concern. I’m always wary - I know people use it all the time - but I’m wary of eBay. And, you know, tickets. I’d be very, very wary of buying tickets online. I’d say that clicking on links versus just writing in the web address you want to go to. Let you be in charge. Don’t reply if somebody sends you an email, don’t expect that that’s a real email address. Give the person a call.

PHILIPPA: It’s an impersonation scam, isn’t it? Because they can be online. Old-fashioned scams, someone on your doorstep, it still happens, doesn’t it?

LISA: It does. It absolutely still happens, and especially with vulnerable people.

PHILIPPA: Well, yeah, exactly. I was going to ask you about that, Michelle, because are there some sorts of people who’re more likely to become victims than others? Can you profile ‘likely victims’?

MICHELLE: Well, I think there’s quite a common myth that scams affect vulnerable people. And certainly, there are some terrible stories of people that are lonely and therefore are pulled into certain scams. But in the pensions area, certainly the experience that I’ve had is that, actually, level of knowledge and financial expertise isn’t a barrier. In fact, in a way, because the individual is always looking to improve on the investment performance or some other angle of their pension scheme, then they’re prime people to be targeted.

In fact, just an anecdote from me is that when I was Head of the Pensions Advisory Service, I was blogging about pensions all of the time. I was getting scams about three or four times a day because my social media profile was picking up that I was talking about pensions. They were thinking, ‘she must have pensions, and she must be obsessed with pensions’, which I am!

JONATHAN: The other thing that really scares me about these reviews is if you’re trusting the person who’s giving that review to you, you’re going to disclose who knows how much personal information and financial information. That particular experience doesn’t need to directly lead to a pension scam because they’re going to find out all about your assets, they might find out about your accounts. If somebody you thought was a financial adviser gave you a form and said, “please fill in your account details”, people will.

PHILIPPA: You might do, mightn’t you?

MICHELLE: A lot of the people that are phoning up and contacting you over the pension’s review are the same people that were contacting you over PPI (payment protection insurance) reviews, easyJet, plain refunds. It’s the same people that are doing that.

JONATHAN: Also, just from the pension side, I think something which is sad and tragic - but true - is that a lot of fraud comes from within the family. That’s something that we see. People who’re trying to act on an impulse to maybe access the money that they think that they’re due, that situation where maybe the family relationship has broken down, and they have all of the personal information of the legitimate customer. I think that’s a real problem, and that’s very, very hard to put walls in front of.

PHILIPPA: That’s a very depressing thought, isn’t it? Michelle, as we said earlier, pensions, it’s a particularly vulnerable area because the numbers are so big. It’s a huge pot of cash for most people. Presumably, that is why it’s particularly attractive to fraudsters. But are there any specific pension-related scams that we should be looking out for?

MICHELLE: Yes, I think there are. It’s a large pot of money, and it’s also an asset that you, in most instances, didn’t set up yourself. It was set up for you by your employer. So your level of understanding of what you’ve got and how it works is incredibly low in a lot of instances. And that makes it a very, very attractive target - big pot of money, low levels of understanding. And the scams that I’ve certainly seen in my career have mainly been associated with investments. I think, again, people don’t really understand that their pension is invested. And if they do know it’s invested, they don’t really know how you pick a good fund to be in and where to go.

So when somebody makes an offer such as “you can invest your pension fund in a truffle farm in France, shares in a hotel or in a car park” for an individual on the street, that seems like a very legitimate investment because it’s bricks and mortar. Some of the red flags in the pension scams are where they’re promising, and quite often they use the word ‘guaranteeing’ investment returns of in excess of 8%, 9%, 10%.

PHILIPPA: Completely unrealistic, in reality, but tempting. Pension release, pension liberation. Jonathan, you mentioned that it’s 55. You should be aware of any scheme that says, “oh, you can have that money before 55“.

JONATHAN: Absolutely. That’s a big no-no. There’s a lot of tax to pay if you accidentally take money out of your pension.

PHILIPPA: But people don’t know this, do they?

MICHELLE: Absolutely. Yes, we all know that because we work in the pensions industry or the financial industry. I’ve seen less of that at the moment, and quite often now, a lot of people are saying, “take your money out at the age of 55 from this pension fund that you don’t really understand and invest it in some other vehicle”. Quite often offshore or quite often unprotected, so that you’ve got no compensation if it goes wrong, so that if the shares and the company goes bust, you get nothing back. And actually, if you went to court, they’re not illegal, they’re just very bad for you.

PHILIPPA: It’s a terrible thought. So that’s pension liberation, pension release. We’ve talked about pension reviews, people phoning you up, contacting you, saying, “you could have a better pension than this”. Annuity scams, how do they work?

MICHELLE: The scams I’ve seen related to annuity have been playing on people’s thoughts that annuities are of poor value, and “what happens if I die, I’ll get nothing back”. Most people say, “well, how can I avoid having an annuity?”. People will then try and say, “well, here’s an alternative where if you give me all your money, we’ll pay you an income which is better and higher, and therefore you’re not trapped in, and we’ll also, if you did die, we’ll give your money back”. So they’re touching on all of the issues that people don’t like about annuities. But the one thing that they’re doing that is exactly the same as annuity is they’re getting all of your money in one go.

PHILIPPA: Up front?

MICHELLE: Up front, yes.

PHILIPPA: Make me feel better! Tell me, how do I spot these things? Are there particular red flags I should be watching out for?

JONATHAN: I don’t know if I can make you feel better, but for me, scams are one of three things. They’re either too good to be true, too quick, or too weird. So returns that are ‘too good to be true’ - they ‘solve all your money problems’. Something about it just seems wrong. There’s a lot of those sorts of scams.

Then with the speed, you’ve got either the pressure to “act now or this deal will be off the table”, or like you said, the world will come crashing down, or they don’t do enough due diligence. So they’re being really, really fast about things. They’re not bothered about whether you submit scans of your passports. They just want your account details. They want you to send them the money.

Then ‘too weird’ is those esoteric investments that we were talking about, or maybe there’s something about it, like you have to pay the funds over through a strange payment channel or move it into crypto, for example.

MICHELLE: One of the signals that we used to hear from people who phoned us at The Pensions Advisory Service (now the Money and Pensions Service), the individuals used to come round to pick up - you know, “you don’t have to worry about photocopying your passport, we’ll come and pick it up and we can take the photograph for you”. There was this one gentleman, I remember vividly, who phoned us up and said, “I’m phoning from the kitchen because he’s still in the living room”.

PHILIPPA: The checklist of things we’re thinking about is don’t be rushed or pressured into making a decision, reject unexpected offers, cold calling, any of those things. Shall we take a quick look at what to do if the worst happens and you do fall victim to a scam? What can you do?

MICHELLE: If you’re still in the process of the transaction - stop. Just to stop what you’re doing. Also, notify, for example, if you’re transferring from one pension fund to another pension fund, notify the original pension scheme. The second thing is to phone Action Fraud, and they’ll ask for the details. They’ve got specific details relative to pensions, which they’ll ask you for.

PHILIPPA: And they’re the national reporting organisation?

MICHELLE: They are. I’m afraid to say that definitely in the case of pension scams, the probability… They’ll give you a crime number, but the probability of you getting your money back is incredibly slow.

PHILIPPA: Lisa, what do you reckon?

LISA: Moving on further towards the rest of the financial services industry, it depends on the nature of what’s happened. But with other transactions, you can get the money back sometimes, as long as you do contact the organisation quickly enough. That’s absolutely of the essence.

PHILIPPA: Good tips, weren’t they? All really valuable things to know to help you keep yourself safe from fraud. And talking about staying safe, stay tuned because next time we’ll be talking about financial abuse. How to spot the warning signs, and what to do if you or someone close to you is in that situation.

Just before we go, a last reminder - anything discussed on the podcast shouldn’t be regarded as financial or legal advice and when investing your capital is at risk.

Stay on top of all your personal finance questions by subscribing to The Pension Confident Podcast on any podcast app or on YouTube, and in the PensionBe app too. Give us a rate and a review while you’re there. We’d love to know what you think about our series and to hear your suggestions for topics you’d like us to cover. Thanks for listening.

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Bonus episode: Personal finance tips for parents part two

Read part two of personal finance tips for parents from our expert podcast guests.

The following is a transcript of a bonus episode of The Pension Confident Podcast - personal finance tips for parents part two. You can listen to this bonus episode or scroll on to read the conversation.

PHILIPPA: Hello and welcome to another bonus episode of The Pension Confident Podcast and this time we’re bringing you part two of our crash course for parents! Want to teach your kids about money? Well listen up because we’re covering everything from pocket money economics to talking them through how debt works.

If you haven’t heard part one yet don’t worry, you can find it right now on our podcast feed so have a listen, wherever you get your podcasts.

And before we get into part two, just a reminder that anything discussed on the podcast shouldn’t be regarded as financial or legal advice, and when investing your capital is at risk.

OK, let’s go and we’re starting with the basics. Back in episode eight, we heard from Personal Finance Journalist; Laura Miller, Co-Founder and CEO of NatWest Rooster Money; Will Carmichael, and Emma Maslin, who’s a Certified Money Coach, a Mentor, and Founder of The Money Whisperer website. She’s also a PensionBee customer. We asked them what they wished they’d known about money when they were kids - and here’s what they told us.

EMMA: Oh, I think compound interest has to be the thing that if we were teaching our young people this, we’d be in a situation where lots more people would be able to enjoy their later life.

LAURA: Just explain what compound interest is.

EMMA: Compound interest is where your interest earns interest on itself. So, if we leave our money in the bank and allow it to grow with the power of interest, leave the money that’s there to continue to grow. It acts sort of like a snowball effect. Now, we live in a society where we’re encouraged to consume, consume, consume. So we end up not leaving our money in the bank to do this. If we could encourage and educate children to do this, and certainly if I’d have learnt that when I was younger and not spent so much on going out, and on handbags, and shoes, I think I’d be in a better position now.

LAURA: Will?

WILL: Well, I’d say Emma’s definitely taken my top one, which is compound interest. I think actually, the fundamental one is talking about money. It’s the biggest lesson of all. A lot of people’s first conversation is a negative one. And I think that, that journey of actually starting early and talking about it is the best place. It’s where everything starts.

PHILIPPA: But who’s job is it to actually open up those conversations? And how do you do it? Here’s Laura and Emma again.

EMMA: Children are like little sponges and are building those habits, and those behaviours, and those attitudes towards money in those really early formative years, before they’re about seven years old. So, if you think, “who are the primary caregivers at that time?” It’s the parents. So, whether we like it or not, as parents, we have a primary role in this period of our children’s life to really make a difference.

LAURA: So this is the pocket money conversation, surely? That’s the first time that most children will interact with money, or maybe they’ll get £20 in a birthday card sent to them. How does that conversation go with your children?

EMMA: In my family? I have two children, two girls, eight and 10. And they’re very, very different already. So I find the whole psychology of money really, really interesting because outwardly we’ve taught them the same. We give them the same opportunities and yet I have a real saver, and I’ve one who’s a lot more balanced. She’s happy to save some and spend some. So it needs to be tailored to the individual child as well. But certainly in our house, we encourage the girls to have different pots for different things that they might want. So we have some money saved for things that they want in the future. So we’re teaching them that really important concept of delayed gratification, but also balancing that with the healthiness of understanding that, you know, there are things that they might want and need right now. And it’s perfectly OK to go out and spend the money.

PHILIPPA: Of course it’s not just saving that kids need to know about, it’s debt too. So how can you teach children about both sides of that coin? Here’s Will and Laura again with their parenting pro tips!

WILL: My two children are a little bit younger, so five, and three. So, we’re sort of coming out of star charts and going into early pocket money. We’re at the point where when it’s gone, it’s gone and if you want it, you’ve got to save up for it. I think that that debt piece, what we see through customers on Rooster is that particularly with our tracking tool, which is, you don’t make actual deposits, we act as a kind of I.O.U basically for them to go out and get something, and then some of those parents go, “OK, you need to pay me back for that”. Now, they don’t apply a reverse interest rate on that. But you know, it’s that opportunity to have a conversation going, “OK, if you really want to get that upfront, I’ll cover that, but you’re going to pay me back for it”.

LAURA: At £1 a week, or whatever it is? My five year old niece has an iPad, and knows how to use it. So, I’m sure she’d be a prime candidate for a money app as soon as my brother gets one for her. Because they already know how to use the tools, they just need the direction.

PHILIPPA: If you have kids, you already know how hard it can be to juggle a family and your finances. Lynn Beattie, Personal Finance Expert and Founder of the Mrs MummyPenny website; knows all about that having taken a tough but inspiring road back to financial stability after she got into major debt.

PHILIPPA: I need to ask Lynn, how did you pay that debt off?

LYNN: I basically stopped my life for like two years, which was really, really hard.

PHILIPPA: So what sort of things are we talking about?

LYNN: I didn’t buy any clothes, I didn’t buy any makeup, and I love makeup! I had to have the conversation with my children, which was really, really hard, which I know a lot of people shy away from.

PHILIPPA: How old were they at this point?

LYNN: 11, nine and six.

PHILIPPA: Kind of old enough to understand?

LYNN: Old enough, and I’ve always been open and honest with my children about money. I said something like, “at the moment, Mummy has some debt and I have to work on paying it off. So it’s going to mean that we’re not going to be able to go on holidays”. I had things like ‘no spend months’ which were really quite difficult. It was short-term pain for long-term gain.

PHILIPPA: How long did it take?

LYNN: It took two years to pay it off. I’ll never get into that position again.

PHILIPPA: A good lesson for your kids too?

LYNN: Exactly. Good lesson, yeah.

PHILIPPA: If you’re listening to this and feeling you really want to set your own kids on the right road financially, what can you do today? Here are Laura, Emma and Will again with their top ‘do it now’ tips.

LAURA: OK, so what should caregivers take away from this and put into action with their children?

EMMA: One of my big things is differentiating between being rich and being wealthy. You know, we should be encouraging children to understand how money works. I think our children are growing up in a world where being rich is aspirational to them. They see social media influencers, they see particularly recently, you know, these people peddling crypto, “Come follow me, give me your money, and I’ll make you rich”. They’re growing up in a world where home ownership is going to be tricky for a lot of them. They’re living in a different world to the world that we grew up in, and their grandparent’s generation grew up in. We need to help them understand that, you know, there are no real ‘get-rich-quick’ schemes, and help them build the habits, build the behaviours to enable them to build wealth slowly, which is how it should be done. Build it slowly and why? Why do we want to do that? You know, it’s all about goals. What do we want out of life? Ultimately, money is an enabler. So going back to basics, you know, what is the life that would make you happy? Because personal finance is very personal, you know, we’ve all got different goals. So being aware of that’s so, so important.

WILL: So true. Mine’s a very simple one which is, talk about money and start early.

PHILIPPA: As any parent knows, our kids can teach us too. Here’s Lynn again with a really touching story about how one of her kids helped her resist an expensive impulse purchase when she was really finding it tough to stick to her money-saving plan.

PHILIPPA: It’s hard, isn’t it? Because there’s that social pressure, particularly with friends. You feel like you’re being really mean if you don’t spend the money. I’m thinking about things like children’s birthdays as well. If you have kids, like I do, you feel that pressure to spend. And when you see other people are spending big on their kids’ parties, you think maybe you should be doing this too.

LYNN: Yeah, I think the comparison of what other people do is really tough when you’re a parent. I’ve got three boys and they’re getting a bit older, and presents seem to get more expensive as they get older. What I find is, I might buy a couple of things and say, “oh, I’m going to buy another thing and then another thing”, and then suddenly you’ve blown the budget - if there was even a budget.

PHILIPPA: And did they really need that much stuff? I’m thinking about shopping more generally and it seems to me that half the trouble is that it’s so easy to shop now. There’s a real danger of stacking up debt with over-shopping, isn’t there?

LYNN: I spent an uncomfortable amount of money on a designer handbag last year. It was an emotional, impulse purchase. It’s a really difficult thing to get in control of. I’ll open up - it’s something I struggle with. So, I bought this handbag, I took it home, I showed my kids and my eldest son said to me, “that’s like a third of a holiday”. And just that one sentence made me take that bag back and I got my money back.

PHILIPPA: And that’s it for part two of our crash course for parents! Most important takeaway? Starting early with open conversations about money with your kids can really make a world of difference. If you’d like to hear those discussions in full, you can always go back to our podcast feed and the episodes you need are number eight and number 23. All The Pension Confident Podcast episodes are on YouTube or the PensionBee app if you’d rather find them that way. You can subscribe to the series right now on any podcast app. Meantime, keep an eye on our feed - our next episode will be live at the end of the month.

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Bonus episode: How to prepare for a happy retirement

This special bonus episode is all about how to plan for a happy retirement. Read the transcript here.

The following is a transcript of a bonus episode of The Pension Confident Podcast - Personal finance tips for parents part one. You can listen to this bonus episode or scroll on to read the conversation.

PHILIPPA: Welcome back to The Pension Confident Podcast. This special bonus episode is all about how to plan for a happy retirement. Last year, the team at PensionBee and a panel of expert guests toured the country answering your pension questions - and today, we’re sharing some of the best bits. Here’s Founder of Much More With Less; Faith Archer with fellow Founders Peter Komolafe from Conversation of Money; Kia Commodore from Pennies to Pounds; Rotimi Merriman-Johnson aka Mr MoneyJar and PensionBee’s own CMO; Jasper Martens at the PensionBee Roadshow in Manchester. The conversation was packed full of pension knowhow, helpful insights and doable tips.

The usual disclaimer before we start please remember anything discussed on this podcast shouldn’t be regarded as financial advice or legal advice. And when investing your capital is at risk.

So first up, let’s hear from Rotimi talking about how to start visualising your retirement savings.

ROTIMI: You can use pension calculators, which take your current amount of savings, the amount of money that you’re putting in every month, and your projected retirement date. You can use those calculators online to basically estimate, based on things like annuity rate and so on, how much income that you’d make. PensionBee has its own Pension Calculator, If you’d like to use that one. As Pete said, you can use it now to start planning for where you’d like to be in a few decades time.

PHILIPPA: Now if you find workplace pensions confusing (and trust me, you’re not alone there!) this one’s for you. Here’s Rotimi explaining Auto-Enrolment and the benefits of paying into your company pension scheme.

ROTIMI: The benefit of signing up to a workplace pension scheme is, firstly, due to Auto-Enrolment, if you earn over £10,000 a year, if you’re 22 or older and you join an employer, they automatically have to open one up for you. The minimums are that you pay in 5% - 4% of that 5% is your contribution, 1% is tax relief, if you’re a basic great taxpayer. And then your employer has to pay in 3% as well. But that’s just the minimum. There are many employers which, if you increase your contributions, will match your contributions upwards. Quick tip, if you do an internet search for ‘Pension Quality Mark‘, that actually lists the employers with the most generous DC - defined contribution pension schemes as well. A workplace pension is this vehicle that you’re saving into. Yes, you can’t access the money, but over the course of your career, you’re saving into it, you’re getting the tax relief, your employer’s paying in. By the time you come to retire, you have the aggregate of all that money in the pension.

PHILIPPA: If you’re finding it hard to save for the future, Kia had a smart tip about using automation to help you stick to your saving goals.

KIA: On your payday, you sit down and you work out your budget or you work out what you’re spending on. But I have the set amount that I’m going to put into my savings, so for my emergency funds or anything I’m saving for, for my investments and for my pensions. By doing that, that can help you to set it up. If you know you’re going to contribute X amount, X percentage of your income, you can say, “Right, I know, I don’t know, 5% of my income I’m going to put towards my pension”. You can automate that to go out. So when you know your money is going to come in on the 28th, maybe on the 30th that goes straight out into your pension pot. That way you don’t have to think about it, you don’t have to sit down and worry about it. I like to try and bring everything to a similar date. Some people have bills coming out all throughout the month, and then you don’t know where you’re at financially. If you do it all within a couple of days of your payday, you know what money you’ve got to play with.

PHILIPPA: Here’s Rotimi again with three ways to boost your pension savings you might not have thought about before!

ROTIMI: Three ways that you can potentially increase your amount of pension savings. If you get a bonus at work, that bonus will be taxed. But if you put the bonus as a one-off payment into a pension, then the tax you’d have paid on it gets added back in the form of tax relief. So that’s one thing.

The second potentially good time to save more into a pension is when you get a pay rise. Now, the cost of living is quite high at the moment, and so if you get a pay rise, that’ll probably go on your essentials and so on. But hopefully, in more normal times, if you get a pay rise, you’re already happy with the amount that you’re spending on your lifestyle. And so you can just increase your contributions and keep your take-home pay the same.

The third way is the tax relief that we were just speaking about, you get automatically back if you’re a basic rate taxpayer. If you’re a higher or additional rate taxpayer, you’re actually entitled to more tax relief back. What you can do is you can fill in a Self-Assessment form and you can get the tax that you would’ve paid on those higher and additional portions of your salary that goes back into your pension as a government contribution as well.

PHILIPPA: Moving on, Jasper covered what to do if you’re struggling to keep up with rising costs and you’re tempted to trim your pension contributions.

JASPER: People are still contributing [to their pension], but we’ve definitely seen a decrease, and that’s not surprising. I think times have been tough for many of us. But what we haven’t seen is complete cancellations. This is something that I think is really important. Once you stop switching something off, it becomes increasingly harder to switch it back on. What we see is that a lot of our customers just dial it down until times, hopefully, get better. If you’ve increased mortgage payments because your deal comes soon and you have to renew, then a couple of hundred pounds a month extra to your mortgage. Then rather than completely switching off [your pension payments], just dial it down because it’s easier to dial it back up.

PHILIPPA: Is it ever too late to start learning about pensions and investing? Of course not - here’s Rotimi and Peter…

ROTIMI: I think we’re talking a lot about numbers and stuff here, and we should do that, but also on the emotional side. Just be kind to yourself as well. It’s really great that PensionBee has put on this event for us to all come here and learn, but most of us weren’t taught this at school. We may not have had the opportunity to learn this at home. If the reality doesn’t match up to your expectations, it’s like, that’s fine, but then you can take action going forward. It’s nothing to be guilty about.

PETER: But, I literally, I first learned about investments and pensions when I was 32 years old. The only reason why I understood, “now, hang on a second, that’s a pension” was because I saw my dad at age 59 panic that he didn’t have a pension. At the time, I was about 16, 17 years old. So 16 years later, I’m working in Canary Wharf, and then something called a pension comes along. The only connection, the thing that I remembered the most was my dad, at 32 years old. We don’t get taught any of this in school. A lot of us aren’t privy to any of these conversations earlier in life. So again, be really, really kind to yourself. Don’t be too freaked out. Most important thing I’ve already mentioned is action, contributions, doing something about it now whilst there’s still time.

PHILIPPA: More from Peter - this time on why it’s so important to know exactly where your pension is invested.

PETER: If you’re in an Auto-Enrolment workplace pension scheme and you’ve not selected how your money is invested, the chances are you’re 99% going to be in a default pension allocation. What that basically means is you get half of it in equities, which is where you really get growth, half will be in bonds. When Rotimi mentioned that if you’re early in the cycle, your 20s or maybe your 30s, you want to be in that equity part, you really need to ask the question from your providers at work, because if you don’t select anything but the default, you’re going to stay there. That doesn’t necessarily mean that your money’s going to be working as hard as it should be for you in the run up to your retirement. If you take away one thing, definitely go and find that out in the morning. How’s your workplace pension invested? Are you in the default fund? And ask them what other options you have.

PHILIPPA: Have you heard of Pension Wise? It’s a brilliant resource for people aged over 50 who’re starting to think about retirement options. Here’s Faith.

FAITH: I should say, as the oldest person on the panel, I’ve done a Pension Wise appointment, and I genuinely would recommend it. I did find it helpful. It does set out your options. Also, some really good tips about avoiding pension scams.

PHILIPPA: If you aren’t sure what happens with your pension money when you reach retirement, here’s Faith again explaining one of the options - drawdown.

FAITH: If you do opt for drawdown and the balance of your pension stays invested, it’s then at the mercy of the stock market. You do it in the hope of higher returns, but you have to be realistic about the fact that the stock market goes up and down. Over the long term, the trend is upwards, but it varies a lot. So one very practical tip as you’re going into retirement is to make sure you’ve got a cash buffer, a really decent chunk in savings, even one to two years income, so that if the world goes into a recession, the value of your pension pot falls, that’s actually a really bad time to be making major withdrawals from investments. If you’ve got the cash, if you can rely on that, wait for your pension pot to come back up again.

PHILIPPA: Here’s something you might not know - your pension isn’t technically part of your legal estate. So, if you want to leave it to a loved one, you need to take steps to make that happen. Here’s Rotimi with how to do it.

ROTIMI: Pensions don’t actually form part of your estate for Inheritance Tax (IHT) purposes. If you want to pass your pension on to whatever beneficiary, you need to fill out which beneficiary you’d like it to go to with the pension platform. You have stories about people that are married, they get divorced, the ex is still their beneficiary, and the pension goes to them so that’s something to check annually, or whenever you have a major life milestone. Where’s this money going to go? Because it’s not part of your estate.

PHILIPPA: And that’s it for this bonus episode. Watch all the best bits from the PensionBee roadshows over on YouTube. If you enjoyed this episode, don’t forget to give us a rate and review, we always love to hear what you think. See you next time.

Risk warning

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The Pension Confident Podcast Series Three summer trailer

The Pension Confident Podcast is taking a short break over the summer, but don't worry, we have some great bonus content lined up to share with you.

E30: Can money buy happiness? With Ken Okoroafor, Kim Stephenson and Emily Tribe

Find out whether money can buy happiness.

The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 30, watch on YouTube or scroll on to read the conversation.

PHILIPPA: Hello. Welcome back to The Pension Confident Podcast. I’m Philippa Lamb, and this time we’re going to be talking about how money plays into your happiness. More money must equal more happiness, right? But does it? Can money really buy you happiness? Not necessarily. According to research from two top American universities, they found that happiness usually rises until people have about $100,000. After that, the magic can stop working. So, if the relationship between cash and contentment is actually quite complex - how much money do you think it’d take to make you happy?

Ken Okoroafor is a Sunday Times Best-Selling Author of Financial Joy. He’s also Co-Founder of The Humble Penny and The Financial Joy Academy. He’s all about helping others achieve financial independence. Welcome back to the podcast, Ken.

KEN: Hey, thank you.

PHILIPPA: Kim Stephenson is a psychologist. He’s a chartered member of the British Psychological Society. Welcome, Kim.

KIM: Good morning.

PHILIPPA: Now, you’re working on research about this right now, aren’t you?

KIM: I am, yes. We’re developing a website and a book. It’s basically about the science of prosperity.

PHILIPPA: Nice. Joining us from PensionBee this month, Emily Tribe. Now, she’s their Head of Culture, Inclusion, and Wellbeing. Nice to have you with us.

EMILY: Thank you for having me.

PHILIPPA: The usual disclaimer before we start, please remember, anything discussed on this podcast shouldn’t be regarded as financial advice or legal advice, and when investing, your capital is at risk.

The first question I have for all of you is quite a brain stretch, I think. I want you to imagine a money and happiness sliding scale, where one is where you’re just not bothered about cash. You’re happy to live like a Buddhist monk; it doesn’t matter to you. 10 is where your money and your happiness are totally bound up in each other; they’re one and the same thing. I’d like to know where all of you are on this scale. So come on, Kim, what’s the number?

KIM: I’d have to say exactly five and a half because the important bit’s happiness.

PHILIPPA: OK. Emily?

EMILY: You’ve stolen my answer! I was worried I was going to be really boring, but I think I’m also a five, in the middle.

PHILIPPA: Yeah. OK, to make life easier for Ken, I’m going to say I think I’m a bit more on the money end of it myself. What do you think, Ken?

KEN: I’m probably a seven to seven and a half. Mainly because, for me, money is very important. Particularly if you have a lot of changes in your life: children, careers, but relationships, health are very, very important.

PHILIPPA: So that’s an interesting point. Would you say then that where you are on that scale has changed over time?

KEN: Oh, yes! Absolutely. I’d say a lot of it has changed having children. Raising children, between my wife and I (Mary and I) and those children growing up - and children aren’t cheap.

PHILIPPA: No, we know this.

KEN: And also changing careers, because when you change careers and you don’t have your regular paycheck, and your regular perks, and all those things coming in as normal. I’m self-employed. And then as you get older, and I’ve hit 40 recently, something happens when you turn 40, you start to think: “hang on a sec, have I lived half my life already?” And then the question of retirement and all those things are not too far away, there’s always that question of, “is there enough?”.

PHILIPPA: It’s a safety net.

KEN: Yes.

PHILIPPA: Emily, you’ve got children, I know.

EMILY: I do.

PHILIPPA: Has your number changed, do you think, over time?

EMILY: I think I can see how I’ll feel the same as you when I’m slightly further along the parenting journey, because right now I feel like we’re quite lucky. I don’t feel like we need to worry about money too much on the day-to-day, but the cost of childcare is astronomical! I’ve got two -

PHILIPPA: Oh yes, we’ve talked about this on the podcast.

EMILY: Yeah, I’ve got two in nursery, so there’s not enough money to save for the future at the moment. So, I do worry about that sometimes. But in terms of the present moment, I feel like we have enough to do what we want.

PHILIPPA: Kim, were you always a five and a half?

KIM: No. The same as everybody else, it’s changed quite a lot because there was a time early on, I was self-employed. I got made redundant from jobs.

PHILIPPA: Money became more important?

KIM: Yeah. It was trouble to pay the mortgage and it was stressful. That was all I was bothered about.

PHILIPPA: Yeah, I know how that feels. Yeah, you don’t think about much else at that point, do you?

KIM: The sad point is that there, happiness goes.

PHILIPPA: Yeah.

KEN: Yes.

Does money equal happiness?

PHILIPPA: Is there a number, Kim, do you think that after you reach that, you just don’t get happy? What does the data say?

KIM: Well, they’ve reimagined the data because it was you get happier with money, which is understandable.

PHILIPPA: So just a direct link? The more you have, the happier you are.

KIM: Yeah. Up to, the research was done in the States, and it was about $100,000, so it’s about £75,000 a year in the UK, and it flattened off. But they re-examined it and they said it does actually carry on going up as you get more. I think (this is only my opinion) but I think the reason for that is because, of course, all these stats are done on averages. Who’s average? The point is, as we were saying earlier on, at different ages, different things matter. If you’re Bill Gates and you’re 22 and you’re a multi-billionaire, how much does the money matter to you? It’s all about -

PHILIPPA: Another billion.

KIM: Yeah, it’s to grow some more businesses and do some stuff. If you have kids and you know that you can provide for them, you know you can buy them into university, you can do all these things - that’s going to be really useful. But if you become like Scrooge McDuck, you’re just accumulating money and it doesn’t bring you anything, then you’re probably going to flatten off and you could have billions and billions and still be miserable as sin.

PHILIPPA: There was some research, wasn’t there? That talked about if you’re not very happy in the first place, more money doesn’t make you that much happier.

KEN: Yeah, I was just going to make this point, actually. You can be rich but be very miserable at the same time. So, there are people who have good amount of income or wealth, more generally, but suffer various things, clinical depression, bereavement. Their children might not be speaking to them anymore. It might be divorce; it might be health problems. They’re just different things that mean that even if you have a lot of money, you’re not necessarily going to always be happy, and more money wouldn’t necessarily bring you more happiness.

PHILIPPA: Does it matter how you get the money, do we think, in terms of the happiness it brings you? I mean, if you earn it or if you inherit it, it must be satisfaction in making it.

KEN: I come from a background where we had no money at all. For me, over time, having to improve my skill set, work on my mindset, really trying to really advance myself has really brought me joy on a personal level because I have a sense of progression and a sense of like, I’m actually seeing my money grow. For example, knowing that having my money invested back when I started in 2010 over time and seeing my portfolio grow has meant a lot actually because it’s meant that actually, you know what? I actually made good decisions about my money and that’s brought me happiness in a way seeing that happen.

PHILIPPA: So, it’s quite affirming?

KIM: Yeah. There’s a handy model: “PERMA+“ which stands for:

Positive emotions;
Engagement, which is doing stuff that you like doing;
Relationships, which can be spirituality;
Meaning, it’s believing that what you’re doing matters; and
the other one’s Accomplishments.

And that’s exactly it, which is why you get the stats that in general, millionaires who just inherit the money don’t have as much enjoyment of it.

PHILIPPA: Is that true? The data does say that?

KIM: If you earn it, you get that sense of accomplishment.

PHILIPPA: See, that’s quite nice for all of us who haven’t inherited millions of pounds, isn’t it?

EMILY: But I found something slightly conflicting. I was actually quite excited when I heard the topic for today because this was the topic of the first ever undergraduate essay I wrote.

PHILIPPA: No way!

EMILY: And when I wrote that, I was talking a bit about some high-profile cases of lottery winners, who winning huge amounts of money actually can make people unhappier because it can isolate them from their friends and family or change some of their core relationships. But then being invited on today, I’d relooked at the research, and actually there’s quite interesting studies from Germany and Sweden that did a long-term analysis of people over a period of years and people who won money on the lottery did get happier - and that happiness did last! And the more money they won, the happier they got.

KIM: That’s an unusual one. But everybody will react in a different way. But you do find, generally, that when you go out and earn it. And what they’ve generally found is there’s a happiness set point. So, if you have a lottery win, it’ll boost happiness for a while. Then it usually sinks back to pretty much... It might be slightly higher.

PHILIPPA: Because you get used to it?

KIM: Yeah, you adapt to it. And if you have a serious accident or you lose money, you tend to ping back. Part of the secret of it is learning how to maximise - push your set point up, so that whatever happens...

PHILIPPA: That’s really interesting! I was going to ask you about that because there’s this ‘loss aversion‘ thing, isn’t there? Would you be more sad at losing £1,000 than happy at gaining £1,000? Which is the strongest emotion, I suppose.

KEN: Well, naturally, people always want to avoid pain, right?

PHILIPPA: Yeah.

KEN: And that’s really interesting because the one that gives you the bigger benefit over time, really, is watching that grow instead. But we don’t tend to see the focus on

“how do I make my money grow?” It’s “how do I prevent losses? How do I leave my money in my current account so that no one takes it?” You see what I’m saying? Yeah, safety. Exactly that.

Understanding your appetite for risk

PHILIPPA: How universal is this data? I’m wondering about this. Is this the same for everyone? Because I’m thinking, are there cultural differences here? Does everyone in every country feel the same way about this?

KIM: The stats that I’ve seen suggests that everybody is... I mean, the average, again, nobody’s average, but the big numbers, people are affected about twice as much by a loss as they would be [by a gain]. And it makes sense because we evolved as hunter-gatherers. If you take a big risk, you get killed. End of the game. If you don’t take the risk, maybe you go a bit hungry, but you live another day. So, we’re basically evolved to be more worried about getting it wrong.

PHILIPPA: So, this is about appetite for risk, isn’t it? How safe you feel about risking money.

KEN: Yeah, and risk has a cultural perspective. In America, for example, they’re much more risk-loving. That’s the perception I get in my interactions with Americans. But in the UK, we’re much more protective of what we have. If you look at the cues from the media and look at the cues more generally on social media: “they’re coming for our money. They want to dip their hand in our pocket. So how do I keep what’s mine?” You know, that’s the messaging. When in actual fact, that mindset, this is where mindset is such an important thing because our money mindset is deep-rooted. It’s very personal and goes back to our parents and our grandparents and impacts our lives today and potentially might even impact our children. This is why this money thing isn’t just a numbers thing, it’s very emotional. It’s how do you shift that mindset such that you’re able to think: “actually, do you know what? I’m looking after my health now because I want to get to 60 and 70. If I’m going to arrive at that age, what do I need to start doing today for my money to help me so that I’m not panicking and worrying about running out of money?“

PHILIPPA: As you say, interrogating ourselves about what it is about having money that makes us feel good is really interesting, isn’t it? Because like you said, childhood experience, family circumstances. Are we trying to impress our parents? Is that what makes us happy? I mean, you laugh, but people do, don’t they? Is it acquiring stuff? Is it competing with other people? Is it doing better than other people? What is it about the money that individually makes us happy?

KEN: For me, personally, it’s not about the numbers. The amount you have in your bank account, it can give you a sense of: “I feel secure”. But personally, for me, I feel it’s the fact that it’s bought me back more time so that I have more power to make certain decisions. For example, we were talking about being parents, and if you want to raise your children well, you need to give them time. You need to actually be there and be present. I always think with parenting, it’s either you pay up front or you pay later. There’s always a cost. There’s always a monetary element connected to that. Because if you’re not working as many hours because you want to be with your children, you have to give up certain things, you have to adapt to a certain earnings level. So, the happiness that comes from money is knowing that I have flexibility, I have certain freedoms.

PHILIPPA: Autonomy.

EMILY: Yeah, the exact same words, freedom and independence for me. And I’m working part-time at the moment, and obviously there’s a financial hit with that. But I feel really grateful to be able to take that financial hit. And I think also what money has given me is the freedom to be able to walk away from things that aren’t working for me. And I like knowing that I can stand on my own two feet.

PHILIPPA: It’s interesting. This brings us to Maslow’s hierarchy. It’s a pyramid, isn’t it? Right down the bottom, there’s physical needs: things like food, sleep, breathing. And up at the top, there’s much more abstruse and complicated: things like creativity and morals and meaning in your life. But in between, there are all these other things around: safety, security, love, belonging, self-esteem. Because money doesn’t necessarily play into a lot of those. Not really, does it?

KIM: No. What I tend to do is simplify that for psychology and money. So, you have suffering, which is where it’s eating or heating - or something like that. Or you can’t give the kids decent shoes to go to school in, things like that.

PHILIPPA: You’re in need.

KIM: That’s whatever happens, you really need more. Now, the useful thing, if you can’t get more money, is if you can change, as Ken said, your mindset. If you can start to think about: “OK, what makes me happy?” If I haven’t got the hours of work, I’m on zero-hours contract or something, can I spend more time with the kids? Can I do something that does relationships? It gives me a sense of... Can I study? It gives me accomplishments. Above that, which is where, fortunately, most of the population are. Obviously we’ve got a cost of living crisis. Horrible. Above that, yeah, more money’s still good because it starts to give you that freedom. You’ve got your (I’ll put it politely) your ‘go away, keep your job’ money.

KEN: Yes.

PHILIPPA: Yes. And that’s a lot of money.

KIM: Which is, yes. But at that point, a lot of what you were saying earlier on, you can have very rich people and all they’re doing is surviving because they’re not enjoying it. They’re obsessed with making more money for no particular reason other than, quite often, to prove to their parents that they’re more successful than their siblings. And what I tend to do in coaching is to say to people: “remember, you can’t eat your cake and have it.” If you’re going out and buying, the bloke up the road bought a Porsche, so you buy a Ferrari and you have an £80,000 loan to buy it.

PHILIPPA: I can only imagine.

KEN: Yeah, it’s very relatable.

Avoiding lifestyle creep and finding joy

KEN: I’d say that for everybody, there’s a unique picture of what we call ‘financial joy’. What does that look like for them? The challenge with today is that we compare ourselves so naturally, not even actively, but passively. You watch a TikTok, or you see your sibling. I’m seeing a lot of people around me right now upgrading their houses. They’re going from: “I’m in a semi-detached [house], I now want a detached [house] with some land” and all this stuff. That means obviously taking on more mortgage - and more everything! But then I don’t ask myself, because Mary, my wife and I worked hard, and over seven years, we paid off our mortgage and became mortgage-free. Then I’m asking myself: “is what I’ve got enough now?” Because I’m seeing other people...

PHILIPPA: Are you really feeling that?

KEN: Yes! No, this is true. I’m being super transparent.

PHILIPPA: That’s interesting because you’ve thought about this stuff a lot and you’re still feeling it?

KEN: Because you can see your nearest and dearest doing certain things. So, my point is, I have to have such a strong image of what that life looks like for me and being able to stick to it. And say: “OK, this is my version of ‘financial joy’. I’m happy with it. We’re happy with what we’re building and where we’re at and what freedoms we want in our lives. What other people are doing doesn’t matter and shouldn’t change the decisions we make about - should we get a bigger house?” It’s very difficult because not everybody has that willpower or that discipline or that mindset to stick to their plan.

PHILIPPA: But it’s interesting, isn’t it? Because if you think about it, rents being what they are, mortgage rates being what they are, the idea of being mortgage-free is a dream for most people.

KEN: Yes.

PHILIPPA: The ultimate thing, the house - it’s mine! No one can take it from me. So, the idea of having got there, you’re going to think: “maybe I need a bigger house?” And that’s going to involve a mortgage.

KEN: Yeah.

PHILIPPA: Isn’t that like... I understand, who wouldn’t want a bigger house? A Ritzy house. But it takes you back to a place where you’ve still got some jeopardy in your life, doesn’t it?

KEN: Yeah, exactly. Which is why you need to have... this where the mindset comes in. You need to be really grounded in the right money mindset. To say: “actually no, shifting so I can get a house that then has more space, more land or more whatever, actually will cost me”. Because your earning potential doesn’t actually increase as you... When you pass a certain age, you may want to work less, actually, which means that you may not have the same earning potential as before. You need to really manage your lifestyle really well. Just make sure that you’re still able to meet your outgoings, your basic costs, travel - all those things you want to do. But it takes a particular mindset, you see. For me, it’s been interesting seeing it in and around my life and then choosing to stay put, because we know what that happiness and joy looks like for us.

The marshmallow test

PHILIPPA: Well, because also it’s contradictory needs, isn’t it? There’s only so much money. And if you’re thinking: “yeah, I want a bigger house”. What you’re not thinking about is the thing that isn’t handed to you, which is: “you know what? You should be saving more”. We always talk about pensions on this podcast. It’s what it’s all about. But it’s that, isn’t it? You talk about later life. Maybe you don’t want to work so hard, earn a little bit less, if you’re able to do that. So, saving, does that give you the same sort of boost? The idea that you’re stashing money away for later, as the immediate win of: “look at my new big house”. It’s quite tough, isn’t it?

KIM: The thing is there’s a lovely thing if you look up ‘the marshmallow test‘.

PHILIPPA: Tell us about the marshmallow test!

KIM: It’s basically done with kids. And you give a kid a sweet, and it was originally done with marshmallows.

PHILIPPA: You put them on the table, don’t you?

KIM: You put them on the table. And then the experimenter says: “well, you can eat it now, but I’ve got to nip off and do something. I’ll be back in 10 minutes. If it’s still there, if you haven’t eaten it when I come back, you get an extra one”. They did follow-up studies (like 15-20 years later) and the kids who could resist eating - it’s called deferred gratification, people who can put it off. And I’ve done this in lectures and seminars and things with audiences, and you get adults sitting there sniggering at silly little kids. And then you say: “So who has bought a car with a car loan?” And in 20 years’ time, you’re going to be saying, “I wish I’d saved more!”

PHILIPPA: That’s so interesting.

KIM: If you’re going to use your money now and buy all this stuff. And as you said, it’s very difficult. But I use examples like that with people to say: “Look, if you can try and get yourself into that mindset, the natural evolved thing of you compete to be a good mate, so you want better stuff than the other guy. You want better than your siblings. You want to impress people with my stuff. The trouble is you’ve got to buy that stuff and then you no longer have the money”.

PHILIPPA: Have you done this with your kid? I did this with my son when he was little, the marshmallow test. It was really interesting. And he did resist it. And he’s turned out to be quite a planner.

EMILY: My children are like me, they like to have a biscuit in both hands!

KIM: Again, my ‘pet hate’ with research is people say: “Oh well, those people who can do that, do better later on”. And it’s like “financial habits are set by the age of seven” and things. And yeah, the data does indicate that. But to me, that says nobody can change. You’re like that as a kid, you’ve inherited genes like that, you’ve got parents who support you. Great! But what if you don’t? It doesn’t mean you’re dead and buried. At any age, you can be 99, and still be learning.

PHILIPPA: I firmly believe that. And we talk about this a lot on the podcast - financial education being so poor in this country. As you say, not all parents are able to have the know-how to educate their kids. Schools don’t do it. So, they grow up and they don’t know anything different to what they knew when they were 10. But with education, you can absolutely change the way you think about it.

KEN: I think the things we learn from our parents; I almost think of it as a version 1.0. And over time, you can upgrade that to a 2.0.

PHILIPPA: Yeah, because it’s like all these self-help (I use that term, ‘self-help tools’), actually engaging with them can feel like doing the job, can’t it? Rather than actually taking the action afterwards, which is actually doing the job. So just reading them or going to the website, or whatever it might be, and then putting it into play. That’s another thing, isn’t it? And that brings us, I suppose, to the thought that if we’ve all done a bit of self-interrogation about what it’s we really think is important to us to do with our money, what you then do to actually make sure that that money is in place. I think that’s not necessarily about having loads of money, it’s about working with the money you’ve got, isn’t it? Thoughts on that? How do people... Once they’ve thought, yeah, I’m understanding myself better. I know where I want to be, and it’s not crazy, but it seems quite hard.

KEN: I think it all begins with that thing we said at the very beginning: “What is my unique picture of what I want? What are my financial goals? And what are the things that are the things we need?” So, the bits that give you a sense of happiness or joy or whatever. What are those things tangibly? Almost setting a picture. Then outside of setting that vision and picture, it’s: “What are the goals in numbers?”

PHILIPPA: Yeah, attaching numbers to it.

KEN: For example, I have 15 years until I want to retire or whatever, whatever retirement means to people. Does that mean I need £600k in an investment portfolio or £400k or whatever. What is it in numbers? And then from there working backwards to, OK, I’ve set the picture, I know all my goals are. How do I begin with the little I have today? So yes, that number is massive, but could I start with £50 a month? Could I start with £100 a month to start working towards it? I think it’s a series of steps. I think what often overwhelms people is thinking: “oh, gosh, there’s so much going on” and it paralyses them.

PHILIPPA: It’s unattainable.

KEN: Yeah, it’s unattainable. But I think starting small really helps.

PHILIPPA: How have you started this journey, Emily? Because I think about it myself, being on the journey, personally, I always found it added to my happiness. So even when I was right down at financial rock bottom, just having a plan, making a start, it adds to your happiness. It does seem like a long way to where you’re going, but it’s a good feeling.

EMILY: I don’t know if it’s going off on a bit of a tangent, but as you were talking about financial literacy, I was also thinking something I think is lacking a bit in this country (and also within myself) is ‘emotional literacy’. And that understanding of knowing what your goals are and what goals you’ve just absorbed without thinking and what is it that you actually want out of life. And then I was also thinking about the delayed gratification thing. I’ve had a lot of therapy over the last few years, which is a financial investment in itself because it’s quite expensive.

PHILIPPA: It is!

EMILY: But I think in terms of changing my mindset and my outlook and my ability to stick to my goals and take a calmer approach to life, that’s been a huge part of it for me. But at the moment, in terms of those long-term goals and financial steps, not a huge amount, to be honest, because I’m busy and the nursery bill is almost £2,000 a month. So, I’m just really looking forward to them - I don’t want to wish their infancy away - but I’m also really looking forward to them starting school and having a bit of cash back -

PHILIPPA: Yeah, because it’s a huge bill.

EMILY: - and then being able to think about: “what do we want to do with that money?”

PHILIPPA: I mean, that’s the other end of this, isn’t it, Kim? It’s all very well, we talk about having a plan. We talk about making a commitment, attaching numbers to the things we want, making a commitment, doing our best. But we don’t want to make ourselves miserable because life gets in the way, doesn’t it? As Emily says, she’s got huge bills to deal with right now because her kids are really small. She can’t really be thinking about long-term aspirations in a very meaningful way. So, we don’t want to undermine our happiness around money stuff, do we? By having too rigid a plan?

KIM: I’d agree with that. Yeah. I mean, what I’d do is start off by things like - if people look up things like the PERMA model, because there are free questionnaires you can do that are actually scientifically tested out about where do you get - what floats your boat? Are you a very ‘people person’? Are you quite introverted? I mean, nobody’s so introverted. That’s why solitary confinement is a punishment. People need people. That’s the point. So, you want some relationships, but some people are much more comfortable with loads and loads of people around them. Some people want a few very, very good friends. So, what do you actually want there? And then avoiding losing joy while you’re trying to do things. If, for example, you’re tied into a job, you’ve got to do that job, you don’t really enjoy it. Can you find hobbies that you can do that give you the stuff; say it has... you’re shelf filling or whatever. Can you do a hobby that has meaning? Can you do artistic stuff or something like that?

PHILIPPA: Volunteer?

KEN: Volunteer.

KIM: Yeah, volunteering is a great one because that gives you the benefit of helping others.

PHILIPPA: Nice feeling. So, this is your area, isn’t it? Wellbeing. We need to get ourselves in a good place to do whatever it is we’re doing. But particularly if we’re doing something demanding, like trying to save money, it’s that first, isn’t it?

EMILY: Well, I think about it in the context of workplace wellbeing, because that’s my role at PensionBee. And I was thinking, it’s not just a case that we give people a high salary, and then that’s the only thing that we think about and expect them to be happy. You’ve also got to give them a meaningful career, opportunities for development, progression, and nice people to work with.

KEN: On a really personal level, one thing I’ve found really helpful when it comes to wellbeing and joy and all those things is, practically speaking, is how can you find one thing every week that you commit a little bit of money or maybe even no money to that gives you joy every week and you diarise it? So, for me, it’s on Fridays. I have the day off on Fridays. I go out with my wife on a date. We go to the cinema; we do different little things. And it’s life-changing! Sometimes it costs money, sometimes it’s just: “hey, let’s go for a walk and maybe stop off and have a mocha” or something. But I get a sense of joy every week. If you do it once a week, that’s 52 times a year, you get a sense that I’m working hard, but you know what? I’m really experiencing joy every week. It’s planned, it’s intentional, it could be low cost, and it works, and everyone can attain that.

PHILIPPA: I’m going to wrap that up here because I think that’s a perfect note for us to end on. It’s low cost, high joy. Thank you very much, everyone. Fantastic. If you enjoyed this episode, please do rate and review us. We always love to hear what you think. You know that. We’ll be taking a short break in August but keep an eye on our feed because we’ll be sharing lots of bonus content over the summer to help you grow your financial confidence. Just before we go, a quick reminder, anything discussed on the podcast shouldn’t be regarded as financial or legal advice. When investing, your capital is at risk. Enjoy the rest of your summer. See you next time.

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Bonus episode: Personal finance tips for parents part one

Read part one of personal finance tips for parents from our expert podcast guests.

PHILIPPA: Hi, and welcome to another bonus episode of The Pension Confident Podcast. This time we have a crash course for new parents from the benefits you could be eligible for, to the impact parenthood could have on your pension! So, listen up and find out how you can financially plan for this exciting new chapter.

Before we get into it though, always remember, anything discussed on the podcast shouldn’t be regarded as financial or legal advice, and when investing your capital is at risk.

The reality of Shared Parental Leave

PHILIPPA: Let’s kick things off with parental leave. In episode three, we were joined by Sam Brodbeck, who’s Money Advice Editor at The Telegraph, as he shared his own experience of taking Shared Parental Leave with his wife.

SAM: Yes. So, I used Shared Parental Leave with my first child, where effectively, I nicked a little bit of my wife’s maternity leave. I took three months on top of what would have been normally just two weeks.

PHILIPPA: As a sole carer?

SAM: No. So I mean, I think that the idea is that I’d have stepped in and she would’ve gone back to work and that would help her career, and that’s the sort of theory behind it. We actually decided to take it at the same time, because we thought maybe the early stages would actually be harder. But it was a bit of a headache, I mean, even to get it set up, speaking to the HR department, I don’t know. Maybe I was the first man to ever use it in the company.

PHILIPPA: When was this?

SAM: This was in 2018. So, it’d been around, but I think 3% of men have used it.

PHILIPPA: Numbers are tiny.

SAM: I can’t think of I’ve ever seen an advert anywhere that tells you about it. People don’t talk about it, I don’t think. Even when I’d done it, I spoke to people in the company, and they just didn’t know it existed.

PHILIPPA: Yeah, it’s a problem. I think the government had high hopes. They were hoping for, I think, 20% take up in the first year. Well, that didn’t happen. I mean, even now. I mean, it’s hard to get a handle on the actual numbers, but it’s somewhere around 3 to 7%, something like that. It’s really, really low.

SAM: Yeah, that’s right. And it’s obviously a financial problem, because in general, women will get paid more while they’re off and men won’t. So, I wasn’t - I was unpaid for the bit above two weeks.

PHILIPPA: And that’s a huge problem, isn’t it? For men taking it up. I mean, most families just can’t afford to do that. And the Statutory Pay is really low isn’t it, that you actually get?

SAM: Yeah, it’s £100 a week or something.

PHILIPPA: I mean, that’s not going to pay the rent, is it?

SAM: But that’s the reason most people don’t take it, I think, probably. Apart from not knowing that it exists.

Statutory rights for adoption

PHILIPPA: And of course, families come in all shapes and sizes - so let’s hear from Senior Digital Editor at Money Week; Kalpana Fitzpatrick. In episode 19, she talked about adoption and she crunched the numbers on Statutory Parental Leave.

PHILIPPA: It’s important to remember, isn’t it? Not everyone goes through pregnancy. People adopt as well. What statutory rights do you have if you adopt?

KALPANA: There are different rules when it comes to adoption. So Statutory Adoption Leave’s 52 weeks. Only one person in a couple can take adoption leave.

PHILIPPA: OK.

KALPANA: That’s important to remember.

PHILIPPA: Yeah.

KALPANA: You get Statutory Adoption Pay for 39 weeks and it’s the same as Statutory Maternity Pay.

PHILIPPA: So, it’s the same but for only one parent?

KALPANA: Yeah and again, we don’t talk about it. So, ask the question. That’s important to know.

How to budget for a new baby

PHILIPPA: What about when your bundle of joy actually arrives? New dad and PensionBee CTO; Jonathan Lister Parsons, knows all about that. Here he is in episode 19 sharing how he budgeted for the arrival of his first baby.

PHILIPPA: Thinking about the start, Jonathan, the smart thing to do has to be to audit your finances and your expenses at that point? So you at least start from as good a place as you can.

JONATHAN: Yeah, I wouldn’t say that my wife and I were the most organised people in the world when it comes to doing that, but we did actually sit down and do a spreadsheet budget, and went through everything so we could look at just where we’re starting from.

PHILIPPA: So everything’s on there? Groceries, car payments, mortgage, rent?

JONATHAN: Everything. It’s extraordinary how much money we were spending on things that we didn’t expect to be big expenditures like holidays, how much you spend on gifting, how much money you spend on presents for your friends and family. It’s nice to find out we were reasonably generous.

PHILIPPA: So, looking ahead at the new expenses, you’re perfect for this. Your little girl’s six months old. In terms of kit, the sort of kit that Justine was talking about, you didn’t have to buy everything new. Did you buy everything new?

JONATHAN: No, no. Within a few months of my wife; Bonnie, being pregnant, we were being offered lots of useful things that people had from when they’d had children. Clothes obviously, but also, we were offered a buggy, a playpen - little things that we didn’t even know existed.

Anticipating early costs and childcare expenses

PHILIPPA: You’ll need a nest egg for all that nesting, surely? And who better to help us with all that than Mumsnet CEO; Justine Roberts CBE. In the same episode she unpacked all those early costs that parenthood can involve.

PHILIPPA: Let’s talk about the plan. Justine, what’s your thoughts? If, like rational people, you’re thinking about the money ahead of time, how early do you think you should start thinking about that?

JUSTINE: I suppose for many people it’s actually about their living situation as much as anything. Having said I didn’t think about it, it was important that we moved out of our one bedroom flat, into a house with a spare room. I think people do begin their nesting without necessarily thinking and planning every financial detail. What people say on Mumsnet is that people focus a lot on the early costs. Things like buying pushchairs and all the paraphernalia that goes with babies.

PHILIPPA: Kit?

JUSTINE: But actually, the real strain comes from childcare. That gap between the end of parental leave and when government support kicks in, which is usually when your child’s about three years old. It’s that and the fact they often then have to juggle their work choices, and don’t go back to work full-time as they perhaps anticipated. That puts a real strain on the finances. So, I do think you need to start thinking about it, because it’s quite big sums we’re talking about, reasonably early. You need to look ahead to that period, not just focus on the baby stuff.

Exploring Tax-Free Childcare Allowance and Child Benefit

PHILIPPA: As everybody knows, childcare is the big one! So what support is out there to help with that heavy financial burden? Let’s hear from Kalpana again, with all the need-to-know numbers.

PHILIPPA: There’s some help available on childcare costs. Kalpana, have you got those numbers in your head?

KALPANA: I do. So, it’s the Tax-Free Childcare Allowance. And actually, it surprises me, I speak to mums at the school gate who’ve no idea what the Tax-Free Childcare Allowance is. Basically, you have to be working for this and there’s a threshold. If you’re working, you can get up to £2,000 per year from the government. I’d say, go onto gov.uk and sign up to that and get some money. It’s not a lot, it doesn’t fix all your problems at all. There’s still an issue with childcare costs and I think that’s something the government really needs to address.

I also want to add, this is really important to me, and I remember when I wrote about this, so many mums text me. Mums that I hadn’t heard from for ages. When they read that this article was about Child Benefit. Now, I hate the complexity that comes with this. But, you should still register for it because it gives you National Insurance credits and that goes towards your State Pension.

PHILIPPA: Absolutely!

KALPANA: Women miss out on something like £20,000 in State Pensions because they feel, “oh, we’re not entitled to this benefit, because our income’s too high as a household”. I’ll always make a little bit of noise about that. If you’re not registered for Child Benefit, just register for it. Even if you’re above the income threshold because you still get the National Insurance contributions.

PHILIPPA: Yeah. So there’s a pension link there, in terms of State Pension entitlement at the end of your life.

Parenthood and the Gender Pension Gap

PHILIPPA: Speaking of pensions, have you heard of the Gender Pension Gap? Let’s hear from Romi Savova; CEO of PensionBee, and Emilie Bellet; Founder of the financial education company, Vestpod. Right back in episode three they discussed how taking career breaks for motherhood can have a major impact on women’s pension savings.

Emilie, what do you see as the key issues driving this gap?

EMILIE: So I mean, if I just take my personal example, I thought starting working I’d actually never stop working but when you look at women’s career we have some - we may have children. We’re still the primary carers for families. So, what happens during these times is that we don’t earn, we don’t save money and this money is not compounding over a longer period of time.

PHILIPPA: I mean, Romi, there’s good data on this, isn’t there? I was looking 2021 last year, Office for National Statistics, they said women with dependent children are seven times more likely to work part-time than men. It’s a big difference, isn’t it?

ROMI: It’s a big difference and it’s often socially imposed onto the women. We’ve done a lot of research into this topic and even when the woman is the higher earner. So let’s say that the gender pay gap doesn’t apply in your family, even then women are more likely to take time off to look after children.

PHILIPPA: Yeah, 15% of mums say they are totally economically inactive because of caring responsibilities.

Starting a conversation, before starting a family

PHILIPPA: And finally, here’s Emilie again talking about how important it is to have an honest conversation about money with your partner if you’re thinking about growing your family.

EMILIE: Maybe I can talk more about the conversation you can have with your partner. So I think when you’re planning for a family, it’s really important to have this conversation around, “OK, who’s going to take time off and when? Plan a bit for your finances, what’s going to happen? Because very often women do this on their own, and they’re going to look at, “OK, how much time am I going to be off work? How much will childcare cost?” and they will compare this to their own salary, and they will make a decision and say, “OK, I’m not going to go back”. So, I think it’s trying to look at joint incomes, and how much you can pay for childcare, and see childcare more as an investment rather than a cost. But I think it’s really important to have these difficult conversations beforehand.

PHILIPPA: And that’s a wrap, your crash course on the benefits - and financial realities - that new parents often face. If you’d like to hear those discussions in full you can listen back to all those episodes wherever you get your podcasts. The Pension Confident Podcast is on YouTube and the PensionBee app too. You can subscribe to the series right now and remember to keep an eye on our feed - our next episode will be live at the end of the month.

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Bonus episode: Personal finance tips part four

Read part four of personal finance tips from our expert podcast guests.

PHILIPPA: Welcome to another bonus episode of The Pension Confident Podcast. Today, we’re sharing more personal finance tips from our expert guests. This is part four, so if you haven’t heard them already, you can find parts one, two, and three on our podcast feed.

Before we start, just a reminder, anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice, and when investing, your capital is at risk.

OK, kicking off today’s bonus episode is PensionBee’s CMO, Jasper Martens, in episode 23 with a smart thought about switching current accounts.

JASPER: I mean, you do need to shop around. Do you have to change it every single month? No.

PHILIPPA: I was gonna say, how often?

JASPER: I’d say a few times a year. Like you said, it takes up about an hour of your time.

OLA: If that! You log in to a comparison website, tell them what you’re looking for and within five seconds there’s already options. Then it’s as simple as making a transfer. It’s so easy these days.

JASPER: You’ve got to just invest that time, even if it’s an hour each quarter of the year. I know you like changing bank accounts, Lynn. You’ve told me about it in the past. There are some really great welcome bonuses available.

LYNN: I was always thinking, “oh, I don’t think this is going to work”. So, I’ve been trying this in the last year and I hate to admit it, but I’ve switched my main account three times now, but I’ve got £200 each time I’ve transferred! The cash bonuses now, for swapping your bank account, are really quite generous, and they do all the switching of the Direct Debits for you, and nothing’s ever gone wrong. So why would you not do it?

JASPER: It’s the seven day switch guarantee.

PHILIPPA: That’s solid, is it? Because I’ve got to say, that’s the thing that in my head stands in the way. I’m thinking, “do I believe them when they say that all my payments will be moved on? Will they all be there and will it all work?”. Does it work?

LYNN: It does work.

JASPER: It does.

PHILIPPA: Onto episode 21 with Founder and CEO of Propelle, Ayesha Ofori. Propelle is a financial education platform. It’s all about empowering women around money. In this clip, she’s talking to PensionBee’s Non-Executive Director, Lara Oyesanya. They shared some key issues you’ll want to weigh up when it comes to saving or investing your money.

AYESHA: If you can actually start investing - even if it’s a small amount, and get comfortable with it - as you start to get the documentations through, you can start to read them and become more familiar. Then eventually, you can start to invest more and more. It’s about dipping your toe in and experiencing it.

LARA: I agree.

AYESHA: With investing, you put money into an investment and you’re expecting it to grow over time, but equally it could fall. So you’re not necessarily going to get back what you put in. I think it’s the comfort levels around that, which is what potentially skews women more towards savings than investments. It’s knowing that it’s still going to be here. Yes, it may be less than if I’d invested, but it’s still going to be here, and that’s what we need to work on.

LARA: I think that’s absolutely right, but there’s also what I’ll put in the category of value proposition. Because when you think, “I don’t know whether I’m going to make the money, I might lose it. Is that of value to me? Should I be risking it? Yes, I’ve got the money, but why would I want to lose that?”.

PHILIPPA: So we’re more worried about losing it than we are excited about growing it?

LARA: Yeah, I think it’s still part of this responsibility idea. That you look at yourself and think, “is that actually a responsible decision to make when I might lose it?”.Compared to, “OK, it’s not earning a lot of interest”. But to your point, it’s there, I can see it.

PHILIPPA: OK. Here’s another question for you - is there a sense that investing is just for the rich? Do you think people don’t understand you can start really small?

AYESHA: I often say, “Do you have a pound?”, “Well yes, obviously”, “Well, then you can invest” and then they, sort of, give me blank stares. But, start small, it doesn’t matter if you don’t have a lot of money to invest. The beauty of investing is compounding. And what that means is that over a long period, you’re getting returns on your returns and it adds up quite substantially.

PHILIPPA: And if you’re interested in getting started with investing, here are Ayesha and Lara again with things to watch out for.

AYESHA: So, fees are absolutely one of the key things to look out for. Now, companies should be making their fees very transparent. But if it’s something that you can’t find or you’re not able to easily calculate what you’re being charged, then you absolutely have to ask. Because the numbers might not seem like big differences, but again, over time it matters.

PHILIPPA: Well, they work on percentages, don’t they? So this stuff ramps up. These are significant sums of money.

LARA: To add to what you’ve just said, is the fact that if you’re selecting your own investments, the fees are cheaper compared to if somebody else is making the selection or managing it for you.

PHILIPPA: It feels quite daunting.

AYESHA: It can, but it really doesn’t have to be. There are, absolutely, some funds out there that are actively managed by fund managers and therefore will have higher fees because there’s a team of people somewhere actually making decisions. But there are funds out there such as exchange traded funds (ETFs) that have significantly lower fees because they’re passive funds. So, you can still get a wide range of diversification through funds like that, but the fees tend to be quite low. Again, a great place to dip your toe in.

PHILIPPA: Moving on. In episode 19, PensionBee’s Chief Technology Officer, Jonathan Lister-Parson, shared some valuable thoughts on balancing taking time off work to look after your kids if you’re in a couple. It’s a big issue for all parents, but in this particular clip, he talks about how sharing childcare early on can help reduce that pension gap we’ve often talked about between men and women.

I guess what you can also do is get your partner to pay your pension contributions for you while you’re taking time out to raise kids?

JONATHAN: Yeah you can do, but the magic in the system is that if you get, say your male partner, to take more time off work and look after the child so that you’re reducing their hours and you’re increasing the amount of hours that the woman can work. So you get to parity where the man’s working fewer hours but the woman’s working significantly more hours. Then you get to a point where even though the man’s working fewer hours, actually net, as a family, you’re better off because the woman’s not affected by this long-term trend of much reduced pay over the duration of their career. Missing out on promotions and opportunities. And so, by just introducing a little bit more support from the man earlier on, you can then both have a much healthier long-term career and that’s how you can end up with much better long-term savings as a family.

PHILIPPA: Now, if you’re self-employed, freelance, or you run your own company, this one’s for you. In episode 24, we talked to Emilie Bellet, who founded Vestpod, a financial community for women to start breaking the taboo around money. She shared what she’s learned about how to keep a dividing line between your personal finances and your business finances.

EMILIE: I think you should definitely have an accountant. It’s probably a cost, but I’d say it’s an investment for you. When you set up and have that first conversation with an accountant, especially in small businesses, to understand the tax relief. Especially if you’re a limited company and you have a lot more responsibility and you have to publish your yearly accounts and potentially register for VAT at some stage. So they’ll be really really helpful.

EMILIE: But it was also about separating my personal finances versus the businesses finances. And I know when you’re a sole trader, you should definitely have separate business accounts because it can be very confusing sometimes when you start paying from your own account for the business and for yourself, your mortgages, it all comes from the same pocket. So even if you’re a sole trader, make sure you have separate, at least, bank accounts for you and your business.

PHILIPPA: OK. So if you’re setting up a little retail business online or something, just for yourself, at the kitchen table, you should have a business account and keep everything separate?

EMILIE: It’ll make your life easier because you’ll also have to pay taxes and there’s expenses that you could deduct. So you’re going to have to work with your accountant and having things separate will help a lot. And if you make investments in your business that come from your personal bank account to your business bank account then you should document everything that you’re doing.

PHILIPPA: Finally, here are two great money website founders: Mrs. Mummypenny, aka Lynn Beattie and Ola Majekodunmi, Founder of All Things Money. They talked about the importance of discussing money with your loved ones. If you’d like to hear more from them, you’ll find the rest of that conversation in episode 23.

LYNN: I think from the moment you know that, particularly a relationship, is getting serious, you have to have that financial conversation. And almost ‘marry up’ your money mindsets. I was married to a spender and I was a spender - that’s a really dangerous combination. Don’t be afraid to do it because marrying the wrong person is a really expensive mistake. Not just because of all the assets that have to be split, but getting divorced costs a lot of money.

OLA: Which people don’t talk about either, do they? I think, going back to the early stages of dating, a lot of people don’t ask about money spending habits. They may think it’s weird they were asked that on the date, but I think it’s really important to know. I think it’s a really important question.

JASPER: Would you ask that on the first date though?

OLA: First date? Maybe not. But third or fourth!

PHILIPPA: Thanks for listening. You can catch up on all those episodes and more wherever you like to get your podcast. We’re also in the PensionBee app and on YouTube. Make sure you click subscribe so you never miss an episode, and we’ll be back on your feed with another episode at the end of this month.

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Bonus episode: How to manage your money and mental health

Read the transcript of our latest podcast episode - How to manage your money and mental health.

The following is a transcript of a bonus episode of The Pension Confident Podcast - Tips for managing your money and mental health. You can listen to this bonus episode or scroll on to read the conversation.

PHILIPPA: Hello. Welcome to another bonus episode of The Pension Confident Podcast - how to manage your money and your mental health. We talked about this back in episode nine, so today we’re sharing some of the best bits. You’ll hear expert insights from psychologist; Dennis Relojo-Howell, some eye-opening stories from Lila Pleban; she’s Chief Communications Officer at the Financial Services Compensation Scheme (FSCS). And there’s more on managing your day-to-day money from PensionBee’s own COO; Tess Nicholson, who’s also a Mental Health First Aider. So it was a great discussion where they shared their own experiences about money anxiety, as well as top tips for finding support and coping.

Before we get into it, remember, anything discussed on the podcast shouldn’t be regarded as financial or legal advice. And when investing, your capital is at risk.

Dennis, before we get into more detail, I think, you know, it’s important to understand and recognise that money anxiety and related mental health - this can affect anyone. I think it’d be good to hear a bit about our own experiences. And Dennis, I know you’ve got a story to tell.

DENNIS: Yes. My formative experience actually taught me about the value of money. So just to offer some context, I grew up in a slum in the Philippines, where there was no running water, no electricity. At a young age, I realised I had to help my parents. So I did a lot of jobs. I was a street vendor in the Philippines before going to university. And also from a psychological standpoint, because I’m a Researcher in psychology, a lot of literature has taught us that if we don’t have money, it could significantly impact our mental health.

PHILIPPA: Yeah, I mean, I’ve never experienced anything like the struggles you had growing up, Dennis. But, I mean, I do remember a lot of sleepless nights myself, stressing about how I’d manage my finances when I got divorced and I had a small child. And that stuff, it stays with you, doesn’t it? I mean, it really does inform the way you think about your future life?

DENNIS: It’s kind of an egg and chicken scenario. You know, they’re intimately intertwined, but we don’t know whether it’s the mental health issues that trigger the financial worries, or if it’s the financial worries that trigger mental health issues. But what’s clear from the literature is that they’re intimately intertwined.

PHILIPPA: Yeah, absolutely. Tess, how about you?

TESS: I’ve experienced money worries and I think that the thing about money is that it’s so, kind of, linked to our sense of value, of ourselves. We talk about people as being worth money. Even the language we use suggests that we’re talking about our own personal value. Even if your money worries aren’t extreme, I think that they can still often feel quite overwhelming. And whenever I’ve had money worries, that’s always been the thing that’s the last thing on my mind when I’m trying to get to sleep at night.

PHILIPPA: Yeah, it’s the big one, isn’t it, Lila?

LILA: The big time in my life was when I got divorced, if I’m honest, and I quite quickly found myself without a roof over my head, without any bank account, because everything had been frozen.

PHILIPPA: Horrifying.

LILA: But I think it was the spiral that happened after that that really got me into quite a pickle, if I’m honest. I started to build up a credit card bill, trying to keep the visage of being in control and being successful. But I wasn’t. I was completely and utterly falling apart. And it really came down to a crunch, really, at one point, and I had to face into it. It took some time to pull myself out of the hole, but I totally relate. Even now, I really struggle to use my credit card. I fear that I’m going to build up another big debt. I pay my bill off every week because I’m so frightened of it getting any bigger than a little bit. And when it does, I do panic, even now, many, many years later.

PHILIPPA: Yeah. So there’s a bit of insight around the table, isn’t it, about how this stuff can feel? I mean, Lila, tell us a bit about the FSCS. What do you do there?

LILA: Basically, we protect people’s money and we can pay compensation if your firm goes bust.

PHILIPPA: So if the bank falls over, you’re the ones that people ring?

LILA: We protect you. You saw us really come into our own in the financial crisis in 2008. But we also protect lots of other things, such as pensions, investments, funeral plans, home finance advice, payment protection insurance (PPI), debt management plans.

PHILIPPA: Which is a comforting thought. I presume you must see a lot of people contacting you at a particularly vulnerable time for them, very stressed about their financial situation. Are you seeing a lot of that right now?

LILA: Well, because of the nature of the business we’re in, you know, pretty much every single person that comes to us has lost something, but every single person that comes to us has a story to tell. And there are some really common themes that we see. People are embarrassed, they feel ashamed, they’re worried, it’s keeping them up at night. We have seen people who’re suicidal. So it’s a really challenging time for us at the moment, and we have to be really on our toes.

PHILIPPA: OK, let’s think about practical steps. Tess, earliest signs for people, red flags that they might be starting to lose control of their finances.

TESS: I think I’d say that that would be things like if you find that you’re dipping into your overdraft a bit more than you might normally, or at all. You know, your savings, credit card, using your credit card when you don’t normally.

PHILIPPA: Or getting another credit card?

TESS: Well, yeah, and I think it’s also when you just have that sort of feeling of like, “I don’t know, actually where that money’s gone”. You know, sometimes at the end of the month, even if actually you’re getting to the end of the month and you’ve got money left over and you’re fine, sometimes you have that feeling of, like, “I’m not really sure where some of that money went”. And I think that even that can be a very early sign of, like, maybe you’re starting to lose control a little bit.

PHILIPPA: Dennis, what about red flags on early-stage poor mental health?

DENNIS: I’d categorise them into three. So we could have physical functioning. It could be affecting your emotional functioning and your cognitive functioning. So as an example for physical functioning, it might have impacted your sleeping pattern. So that’s a red flag. When it comes to emotional functioning, it might be that before that you see things in a more rational way, but because of money worries, you’ve become sort of illogical in the way you approach your problems. So those are the red flags for me.

PHILIPPA: Now, the cost of living crisis, obviously, it’s hitting people all over the country, all sorts of people. But households in the lowest 20% income bracket, they’re two-to-three times more likely to develop mental health problems than higher earners. So your level of wealth and your mental health, they’re intrinsically linked, aren’t they?

DENNIS: Yes, definitely. So if you’re within a lower socioeconomic status, it impacts your health. And a lot of psychological research actually demonstrates that. But the interesting thing here is what research shows is that it’s not actually the amount per se that actually impacts your mental health. But it’s actually how you frame that.

PHILIPPA: It’s your perception of it?

DENNIS: Your perception of it. For some people, if you have a debt of £2,000, that’s a lot. Yeah, whereas for some people, £20,000 isn’t a lot, but it’s actually your framing, how you see it. So these are the things that really impact your mental health.

PHILIPPA: I mean, Tess, you must be hearing a lot of concerns from PensionBee customers?

TESS: Yeah, we are, I think, predominantly right now, the concerns for them are around energy prices. That’s what we’re hearing. A lot of, you know, we’re seeing more people looking to withdraw money from their pension before retirement age. We’re seeing that from people, you know, as early as in their 20s who’re really struggling with money. And then we’re also seeing it with people at retirement who are worried about things like, if I draw down, is that going to impact on my eligibility for pension credit? We’ve obviously had a lot of market volatility this year and so people are watching their balances quite a lot and worrying about that.

PHILIPPA: And Lila, I mean, Tess mentioned retired people there. Obviously there are some groups we know are particularly vulnerable. The other group which we haven’t really talked about is all these people largely in the middle, people who’ve been comfortable, always been comfortable, you know, not really had to worry too much. And now, or looking ahead to next year, suddenly those people are thinking, “we could be in real trouble here, even though we’re still earning quite a lot of money, we’ve got a lot of outgoings”. That’s new, isn’t it?

LILA: Yeah, I think it’s an area that we’re looking at and I think you see that come through with problems around scams and fraud increasing. But also their behaviours, you know, some of the early signs we see of people being in quite a lot of distress are their behaviours. So how they speak to people on the phone when they call up, asking for an update, for example, on their claim, becoming increasingly agitated, starting to get very angry. You do see that starting, you know, coming through in the calls.

PHILIPPA: Look, let’s talk a bit about how to protect yourself. And Lila, coping strategies and things we need to know about managing this burden of money worry, because it’s not like it’s going away.

LILA: No.

PHILIPPA: What’s the first useful step you can take if you think stuff’s getting out of control, money’s getting out of control?

LILA: I think I’ll draw on my personal experience for this one and I think it’s about facing into it and looking at it and really being honest. I hid away from my money worries and they weren’t going anywhere but downwards.

PHILIPPA: Yeah.

LILA: So I think it’s about really facing into it and talking to somebody about it.

PHILIPPA: So taking stock and honestly assessing where you’re at?

LILA: Taking stock and just being really honest with yourself.

PHILIPPA: I mean, that brings us to the harsh reality of, if you just know you can’t pay a bill. Temptation is just to ignore it, stuff it in a drawer, or just not look at it on your laptop. But actually, reaching out to whoever has sent you the bill is the key thing to do, isn’t it?

LILA: I think reaching out, because many companies have procedures in place to help people who’re struggling. And then there are some great organisations who can help you. We’ve got the Money Advice and Pension Service (MAPS), we’ve got Money Saving Expert, Money and Mental Health. There are many organisations out there who, just, even if you don’t want to speak to anybody, just Google online and you can start to feel reassured that there’s help. For me, taking control really helped me. I wasn’t in control of my money, but taking those steps made me feel in control and gave me my confidence back.

PHILIPPA: You got there, didn’t you?

LILA: I did.

PHILIPPA: And I should say at this point, in the show notes attached to the app, you’re going to find links to some of the organisations that Lila has been talking about. I mean, then of course, there is, what are you entitled to from the government? That’s always worth talking about because, as we know, people don’t know and a lot of that stuff goes unclaimed, doesn’t it?

LILA: Yeah, and I think that’s where people like the Money Advice and Pensions Service can really help because they’re part of the government, so they’ll help to point you in the right direction of any benefits that you’re entitled to. And Citizens Advice, where you can also get really, really great advice from somebody who knows the system.

TESS: I also think that it’s about understanding your own situation as well, though. You know, I have a spreadsheet that I keep -

LILA: Me too!

TESS: - with all my regular outgoings.

PHILIPPA: I don’t know why I’m laughing because it’s a good idea!

TESS: I do. It has all my regular outgoings. I put in transactions for when things, you know, for everything that goes out in my bank account. And it does sound a bit over the top, but it does mean that I can always see, like, how much money is still going to come out of my account before payday and how much money i’ve got left now. And then I know how much money I’ve got left over to spend on the nice things.

PHILIPPA: And this is why you’re Chief Operating Officer at PensionBee.

TESS: I do love a spreadsheet!

PHILIPPA: But actually, I mean, it’s a good idea, isn’t it? That thing of really understanding what’s going on. And financial education, I mean, we made a podcast about that, episode eight, it’s still there, you can stream it. Have a listen to that.

But meantime, Dennis, what mental health support systems can people reach out to if they’re feeling overwhelmed?

DENNIS: If financial worries are already impacting your mental health, I think it’s really important that you stick with your routine. If you get up at the same time, it’ll help your mood. I think it’s also important that you stay active, exercise and you update your CV and you keep on looking for jobs. It’s really important.

PHILIPPA: It’s hard to do on your own, though, isn’t it?

DENNIS: It is but the internet is a fantastic tool and we’ve got lots of resources now. There’s, you know, the Royal College of Psychiatrists, they have useful articles about how to deal with your mental health issues and also the charities Mind and Shelter. They have excellent toolkits when it comes to managing your own mental health, specifically for financial worries.

PHILIPPA: Now, look, we’re almost out of time. Before we go, I’m going to ask you all for your best practical suggestion for anyone listening to this, who knows that their money worries are already putting their mental health at risk. I’ll start with Tess.

TESS: Aside from starting a spreadsheet, I think that the most important thing is to talk to somebody. And, you know, whether that’s company that sent you the bill, or whether that’s someone who can help with government support, or whether it’s just talking to somebody in your family, just so that, you know, I think when you carry the burden, it obviously does have a toll on your mental health. And also, that’s when you’re more likely to make bad decisions, you know, so it’s a cycle. So I think I’d say just make sure you’re not dealing with it on your own and talk to somebody.

PHILIPPA: Dennis?

DENNIS: Don’t drink too much alcohol.

PHILIPPA: Good one.

DENNIS: When we have financial worries, or even without financial worries, it’s easy to turn to alcohol as a way to manage your emotions and pass the time.

PHILIPPA: And expensive?

DENNIS: It’s expensive.

LILA: Yeah, I think, really face it, really look at your situation and talk to somebody because sometimes, it may not be quite as bad as you think it is. It may be, but at least then you know, and you can do something about it.

PHILIPPA: That’s all for this bonus episode. But remember, if you’re struggling right now and you need to talk to someone, you can call Samaritans. They’re open 24 hours a day, 365 days a year. And the number to ring is 116123. That’s 116123.

If you’d rather text, you can just text the word ‘SHOUT’ to 85258. That’s 85258. You can speak to a volunteer for mental health innovations there, and you can do it completely anonymously if that’s what you prefer, so don’t hesitate.

You can listen back to all our previous episodes in full wherever you get your podcasts. We’re on YouTube and the PensionBee app too if you’d like to subscribe. And keep an eye on our feed, because our next episode goes live at the end of this month.

Risk warning

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E27: The cost of friendship with Dr. Tara Quinn-Cirillo, Niaz Azad and Brooke Day

Find out how the cost of friendship can quickly add up.

The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 27, watch on YouTube, or scroll on to read the conversation.

PHILIPPA: Hello and welcome back to The Pension Confident Podcast. I’m Philippa Lamb, this month, we’re diving into the cost of friendship. Because friendship is priceless, right? But navigating social groups where some people are a lot better off than others can be a real minefield. Truth is, it’s not easy to talk about money, especially during social gatherings. We’ve all been there - you’re having a great night out with friends, then the bill arrives. Suddenly it’s that decision between saying “yes” to just going Dutch, or reminding everyone you didn’t have a starter. So here’s our question for today; how can you nurture your friendships and show up for your loved ones when your bank accounts don’t match? And what’s the best way to talk about money with friends?

Well, our guests are here to help with that. Dr. Tara Quinn-Cirillo, she’s a Psychologist and Associate Fellow of The British Psychological Society. She’s also Co-Director of the Conversation Starter Project - a grassroots project supporting people to manage their emotional health, loneliness and isolation. Hello Tara.

TARA: Hi. Thanks for having me.

PHILIPPA: Niaz Azad is Co-Founder of Millennial Money UK - an online platform that’s reshaping the conversation around money for young people. Welcome Niaz.

NIAZ: Hi. Thank you for having me.

PHILIPPA: And lastly, PensionBee’s own Head of Brand and Communications, Brooke Day. Welcome back to the podcast, Brooke.

BROOKE: Hello.

PHILIPPA: The usual disclaimer before we start, please remember that anything discussed on this podcast shouldn’t be regarded as financial advice or legal advice. And when investing, your capital is at risk.

How to discuss money fairly

PHILIPPA: Now look, everyone, I want to kick this off by asking you a question. What’s the most you have each spent celebrating friends? And did you regret it afterwards when you saw your bank statement?

BROOKE: For me, I was thinking about it, and I actually think it’s in the thousands. Which I know is...

PHILIPPA: No, really?

BROOKE: ...Yeah. But let me caveat that with it was a wedding abroad. There was a hen do. So I’m getting a holiday out of it, too. But actually, when you think the purpose of that trip and experience is for a friend, yeah it racks up. I had a great time and definitely no regrets.

PHILIPPA: Where was it?

BROOKE: In Ibiza.

PHILIPPA: OK, I can see how that can be really expensive! Tara, have you ever been there? Or are you too rational to overspend for friends?

TARA: No. Actually I have a really recent example as well. So I celebrated a friend’s birthday just a month ago, actually. And when you pay with your phone, it’s like Monopoly money. So the next day, after lots and lots of rounds of drinks, you kind of see the total and kind of go ‘ouch’. It’s a sting, but a nice sting.

PHILIPPA: That’s the thing. You do have the hangover as well, don’t you?

TARA: Yes, but I’m not admitting that!

PHILIPPA: Niaz?

NIAZ: I think mine’s the same as yours. It’s in the thousands and it’s destination weddings again. So I’ve had a couple of those. And we’re just, I think, starting out the season of weddings, so it’s very excitable. I don’t regret it, but - it was fun, it does get really expensive.

PHILIPPA: It’s a lot, and it’s always more than you think, isn’t it? These trips, you budget, you think, particularly if you’re going abroad, you think, “yeah, I know roughly what that’s going to be”. And weirdly, it’s never less, is it?

BROOKE: It goes out the window because not only is it a holiday where all expenses go out the window, it’s a wedding and a holiday. So you’re like, well, I want to do everything. I want to celebrate with everyone. I want to make sure it’s the best time for my friends and also for me. When you’re there, you sort of forget...

TARA: And you let go, don’t you?

BROOKE: Yeah.

TARA: And alcohol is this inhibitor. So we don’t think things through as clearly when we drink alcohol as well. So it’s almost the perfect storm.

PHILIPPA: Tara, what’s the psychology at play here? Why is it hard to talk about money with friends? Because we could all have said “I can’t afford to go on that trip. It’s too much for me right now” - but we don’t, do we?

TARA: It’s really hard. I was thinking about this on two levels to help people think through for themselves. So A, I think in British culture, we’re notoriously rubbish at having conversations, difficult conversations. But also when you think about friendship, there are so many values there. So you value that person, you value their wellbeing, their enjoyment. So you’re more likely to say “yes” to things and maybe put them first rather than yourself. And that’s maybe sometimes where we cause ourselves some issues.

PHILIPPA: Yeah, because we saw a survey that said most people would rather talk to their friends about sex than money.

TARA: So interesting. Yeah.

PHILIPPA: It’s fascinating, isn’t it? Because that’s supposed to be a bit of a taboo subject. But anything rather than talking about it “I can’t afford to do that”.

TARA: Sex doesn’t usually cause conflict, whereas money can cause conflict. It can fracture relationships. And innately human beings are social animals. We don’t like to be outside of the herd. So talking about money can mean that sometimes you might be excluded. So we’ll do whatever we can to avoid that, even if it means that we’re at risk with our bank balance.

PHILIPPA: It starts really early, doesn’t it, school? Even then, kids are aware of this stuff, aren’t they?

NIAZ: Yeah, definitely. I think it’s the status on the playground based on clothes and non-uniform days. And you’re like, OK, it starts quite early on and you have this sense of missing out.

PHILIPPA: There’s that pressure to keep up, isn’t there? It’s fear of missing out, whether it’s you or your kids, if you have kids. Or, almost worse, appearing mean.

PHILIPPA: Yeah, because another survey, Credit Karma survey, nearly half of millennials say they overspend to keep up with their friends. 80% of them who went into debt, kept their debt a secret from their friends, because there’s a lot of shame around that, isn’t there? But it’s easy to get into debt if you’re trying to keep up, isn’t it?

PHILIPPA: But you don’t see the jeopardy?

NIAZ: Exactly.

PHILIPPA: If you’re in a job, you’re thinking, “it’s fine, I can manage this”.

PHILIPPA: Hey, it’s me, Philippa, just interrupting briefly to remind you to click on that subscribe button so you never miss an episode of The Pension Confident Podcast. Remember to share, rate, and review, too. Now I’ll leave you to enjoy the rest of this month’s conversation. Happy listening.

Navigating a financial divide

PHILIPPA: Should we talk a bit about how to handle situations? Because it feels OK-ish to be ‘hard up’, maybe when you’re at school or are a student. Certainly there’s this acceptable thing around being ‘hard up’. But when you start working full-time, it just becomes a lot clearer, doesn’t it, about how much people have got different levels of income, whatever job you’re doing. You’re working in the city, you’re earning a lot more than if you’re in teacher training or whatever it might be. And then you get different attitudes to spending, don’t you? We talked about it a bit, either you’re not bothered, it’s fine, I’ll catch up sometime, or you’re a saver. So even if you’re earning quite well, excuse me, you don’t necessarily want to spend it all on your social life. So how do we navigate that? How do you meet in the middle with your friends?

BROOKE: A few things I’ve done. So whenever I’ve gone on big group trips, we’ll use an app called Splitwise, and I’m sure there’s many others.

PHILIPPA: Oh, yeah.

BROOKE: And so then it takes away the awkwardness of, I guess sometimes you feel like if you’re owed £10 by the end, you don’t really want to ask for it. When everyone’s putting all of the different expenses on there and who bought things or shared things with, it rounds it all up and at the end, it splits it. So everyone gets what they put in. So some of my friends will like to go away with no cash, but they know, “oh, it’ll all be figured out towards the end”. Whereas I think I’m a bit more like, I like to know what I’m going with. But then equally, I’m going to get some back later on. So win-win from the situation.

PHILIPPA: Yeah, I’ve used those apps. I really like them. I’m thinking about also picking venues because talking about normalisation again, if you’re in a high earning job in your late 20s, early 30s, whatever it is, where you go is where your colleagues and your mates from your work circle go. But there’s an awkwardness around suggesting somewhere that’s obviously cheaper sometimes, isn’t there, though?

TARA: I bring that in, status. It’s a thing, isn’t it? Depending on where you work and how you work, you can get sucked into new circles. So friendships change, you may have your friends from school, you may have friends you’ve met at other forums, and then you may have friends that are more related to your work. And then you might then have to balance that across all those groups. It could be hard. You can easily get caught up. I guess a good friend might also be able to ground you and help you have those conversations, what we call the “tricky, cringey”, you know, “sweaty hand conversations”.

BROOKE: It’s interesting, though. There’s still those nostalgic places where you like to go back to, like a Pizza Express or a Nando’s where actually, even though you know they’re cheaper than some other places and not as nice, if you suggest it or someone else suggests it, you’re like, “oh, yeah, that really takes me back to being a child doing these things”. The nostalgic feelings.

NIAZ: It’s so true. Some of the most high-profile dinners I’ve had recently have been in Nando’s.

BROOKE: Yeah.

NIAZ: Genuinely with exited founders, with multimillionaires. And they’ve suggested, “why don’t we just catch up at Nando’s?”.

TARA: I wonder what the psychology of that is. Is there something about just being able to let go of all of that stuff and kudos and all of that and just connecting with people? Because you made a really good point about values that I always think as human beings, we get really stuck on goals, these measurable, attainable things, and it’s a bit of a vicious cycle. And actually, if you can come to what I call the layer underneath, which is our values, the who, what, when, where that really matters. That actually for you and your friends, what do you value about them and their time? Is it about the venue or what you get from them?

PHILIPPA: So thinking about that lovely phrase you used, “the sweaty palm conversation”.

TARA: It’s my favourite line. I use it every day in clinic.

PHILIPPA: I want to ask all of you if you’ve had one of those?

TARA: Every day.

PHILIPPA: Really?

TARA: Probably every day. To me, I always - so as a psychologist it’s really important. Think about your own footprint, so how your body and your mind responds when you’re under stress. So that can be stress around money, gifting, going away for the weekend. If you recognise how it shows up, that will help you to know when there’s a problem and then help you think what you’re going to do about it. So for me, sweaty hands is my number one thing that I notice when I’m under stress. If my hands are sweating, if I get an invite to something or I’m worried about money, it’s a sign that I need to take some time and think it through. Take a moment. Is sweaty hands your guys’ thing? I don’t know. Or what is your footprint for...

BROOKE: That’s really interesting.

TARA: ...feeling awkward or stressed?

BROOKE: I used to feel like that a lot about saying “no” to my friends, interestingly. I feel like I’m naturally a bit of a people pleaser. I used to find that really, especially in my 20s, I’d feel like if I say “no” to this, I’m not going to be invited again. They’re never going to speak to me again. They’re going to think I’m the worst person.

PHILIPPA: I think everyone feels that when they’re really young.

BROOKE: Yeah, I had to really work on it. Sometimes I now find that especially, I guess, if I’m tired and stressed, I just want the conversation done. I have a tendency to just say “yes”. But I really tried to practise because otherwise, I know what you mean, I do notice that I start to experience the physical effects of not actually doing the thing that was true to me.

NIAZ: I’m the same. It’s actually a big development point for me to lean into more difficult conversations.

TARA: My favourite phrase, too.

NIAZ: Because I’m quite conflict avoiding as well. But I’ve tried to think about how to better communicate in those instances, which, again, I’m probably not the best at yet. But like you, I’ll probably just be like, “yeah, OK, fine, whatever”. I’ll just put myself through some pain.

BROOKE: Just to get it done.

NIAZ: Just to get it done.

TARA: That, for me, is such an important point that sometimes as human beings, we get stuck on those goals. “I need to be able to have this perfect conversation about money and put these perfect boundaries in”. It never works out that way. So even if you can get to the point to go, “I find this really hard”. What can I do even with this anxiety? Can I even just start to maybe draft a text about the money situation? I might not send it for a day. Can I think about what the conversation would look like even if I don’t do it? Just those little baby steps which help you make room for that stress or that anxiety, and then you get used to it and it’s less of a threat.

How friendship expenses can snowball

PHILIPPA: We should move on, but I want to ask for examples, really, because I’ll tell you right now I’ve got one. Probably the worst one I’ve ever had around money was a friend I lent money to.

TARA: Yeah, interesting.

PHILIPPA: We’ll talk about this more later. But yeah, I had to have that conversation where I had to ask for it back.

TARA: Yeah, that’s hard.

PHILIPPA: And yeah, that was a really sweaty palm conversation because it’s so hard. You really feel you shouldn’t. Yeah, it was grim. Yeah, has anyone else?

NIAZ: Again, it’s probably not the best way to approach it, but I approach lending money now, assuming it’s money that I could afford not to get back.

PHILIPPA: Yeah.

NIAZ: That’s probably self-preservation as well, because I don’t want to have that conversation.

PHILIPPA: No, is it avoidance?

NIAZ: Yeah.

PHILIPPA: Yeah, it probably is.

NIAZ: Yeah, because even when I think back to when I have had that conversation, I don’t really like how it went. I don’t even like how I communicated in that because I cringe [at] myself for having that conversation, but it’s an important one to have. So I guess my new philosophy with lending money is on the working assumption that I could afford not to have it back.

PHILIPPA: We talked a bit about weddings earlier. I’d quite like to get down to the nitty gritty of weddings. Because there’s quite a lot of detail around navigating wedding trips, isn’t there? I mean, we’ve all been on them, right? I don’t know. I mean, is it worse? There’s hen parties, of course, aren’t there? And stags as well.

TARA: I think they’ve really changed. So since I got married, 17 years ago, the whole culture around hens and stag dos has changed dramatically. To me, sometimes they’re almost more dominant than the wedding.

PHILIPPA: So if you’re going to go on one of these trips, ways to keep the cost down? Sharing accommodation is one that comes into my mind.

BROOKE: Yeah, I’ve done that on quite a few trips. I think, I’m single and lots of my friends are married or in long-term relationships, and I think they often forget that suddenly when you don’t have two incomes paying for these things, the costs spiral even more. So whilst it might be, “oh, it’s only £300 between two”, when that’s £300 on your own, plus the outfit, the cabs, the gift, that’s suddenly £600. It’s not that you don’t want to do it, but for them, that’s £300 each, and they could do 12 that summer. But when you want to go to all 12 and you’re like, “oh, wow, that’s £600 a time”, without even realising.

PHILIPPA: Gifting is a vexed subject, isn’t it? Because it’s the transparency, I think. If there’s lists, then everyone pretty much sees and they all know what you’re spending. And that can be a thing when you’ve got people who are saying, “OK, I’ll buy all the glassware”. And you’re thinking, “I’ll just buy a saucepan then”, or whatever it is. And the ones where you have to give cash. And obviously culturally, in some cultures, that’s a long tradition. It’s quite new, I’d say, to the white British tradition, giving cash at weddings.

BROOKE: I went to a Greek wedding the other summer and we pinned the money on the bride and that was a really fun experience. But you knew that was culturally what you should be doing.

PHILIPPA: In envelopes or in cash?

BROOKE: No, in cash. There’s the people that want the colours that are more expensive in rows and you see the rows and stuff. But also I think it’s fun. It made us feel a part of their culture on the day.

PHILIPPA: I’ve been to weddings where it’s much more of an envelope tradition.

NIAZ: Yeah, I’ve had both. I don’t know how it’s been for you, but there was one where between the group everyone had decided an amount and everyone was giving the same amount. But then there’s been others where it’s like, “OK, we’ll just give cash”. I’m like, “OK, how much? What are we meant to give, how do you calculate what you’re going to give?”.

PHILIPPA: Because the numbers can be really big. Really big.

BROOKE: Who initiates that conversation on deciding the how much?

NIAZ: Just one of the groomsmen, to be fair. Then I think everyone just fell in line.

PHILIPPA: What are you going to say at that point? “Actually, that’s a bit more than I had in mind”.

TARA: Yeah, I’ve had that from both perspectives. So my other half’s family are Italian, so we had that with the money pinned and some in envelopes. And I remember thinking at the time, that’s very new to me, it was a little bit cringe to be honest. Physically seeing tangible money. We’re not that used to it nowadays. But from the other perspective, I thought it may be awkward when you’re opening those envelopes after your wedding. And it really wasn’t, there genuinely was no “ooh, you’ve given this, you’ve given this”. It was just people have given us these gifts and we’re really lucky.

PHILIPPA: Just moving on, there’s one thing I don’t want to forget to ask you about, and that’s flat shares, because I think this, post-pandemic, has become even more of an issue with home working. That’s like just different incomes under the same roof. Tips for navigating this, because I’m thinking about utility bills, which have been crazy in the last year or two. If you’re working from home and your flatmate isn’t, are we still splitting the bills down the middle, or...? That’s a conversation, isn’t it?

PHILIPPA: And paid the same?

PHILIPPA: Yeah, that’s really worth thinking about.

Overcoming envy

PHILIPPA: Just looping back to difficult emotions - envy. Because we’re human, aren’t we? We find ourselves in situations where cash is nothing for some people. We’re struggling. Even though we love them, they’re our friends. It’s there, isn’t it?

TARA: I always say some emotions get a rough ride compared to others because they’re associated with behaviours that are more negative, but it doesn’t make the emotion invalid. And I always think anger and envy are two of those emotions. If someone’s sad, you don’t tend to judge them in the same way, or anxious. But we do get envious, we get jealous. And I always say, if you can try and split the emotion from the behaviour, look at how you respond. It’s OK to feel envy. It’s absolutely OK. But if that then means that perhaps you behave in ways that don’t fit with your values, is that OK with you? How does that sit?

PHILIPPA: Yeah. And it’s worth remembering, obviously, feeling envy ourselves - we’ve all been that. I’m sure [at] one stage or another in our lives. But it’s a toxic, horrible, horrible feeling eating you up. But on the other side of it, not great being the target of envy either. So if you’re the person who has worked really hard and maybe is still working really hard and is earning and succeeding, nothing wrong with that, is there?

TARA: Absolutely.

PHILIPPA: It’s tough to feel the target of envy.

NIAZ: That’s why I really try to challenge envy in myself, especially, but then in some of my friends as well. I try to challenge if any envious symptoms are showing up, because there’s a working assumption that you know how much someone has to spend on things without any understanding of their responsibilities. I think the negative symptoms of envy is when people just expect everyone else to be able to have money to spend because they’re earning more.

BROOKE: I’m with you, it’s perception. You might be earning a lot, or one may be earning a lot, but they could be also spending a lot. They may not have any savings for their retirement, for example, or investing. They could have racked up loads of debt. I guess to your point, you don’t know what people’s...

TARA: What’s hidden?

BROOKE: ...Yeah, it’s just how they’re presenting. But someone who’s earning a lot less could have far better financial wealth and wellbeing than someone who’s earning a lot more, but it’s perception.

TARA: That’s a really good point, actually. So I think something people may be able to take away from this then is that none of this is easy. There’s no formula, there’s no tick box for how we should navigate money, friendships. But we can learn and it takes time, and it takes practice. And sometimes it takes a bit of leaning into tricky stuff, but we can get there and it’s flexible, it’s mouldable.

As you and your friends get older

PHILIPPA: It’s a continuum, though, isn’t it? Because this isn’t a ‘job done’ situation. Because I was thinking as the decades tick by these financial gaps, they can get bigger, and more marked, can’t they? And the signifiers get really obvious, don’t they? Like better house, better car, kids at private schools, whatever it is that people spend their money on. And that, it seems to me, is a danger point for friendships that might have survived that far, because then it just gets to be a bridge too far. You’re living in different areas. You’re just living different lives. And friendships start to really fade because you don’t see each other, because you don’t see each other, because you’re living different lives. And then you can lose people, can’t you?

BROOKE: I think I keep seeing statistics around how millennials are about to experience the greatest transfer of wealth as their parents or relatives start to die. I think that it’ll be an interesting point to navigate when people are suddenly getting an inheritance.

NIAZ: Like you said as well, I think it’s $100 trillion that’s going to transfer between generations...

TARA: Wow!

NIAZ: ...which is the largest ever intergenerational wealth transfer. That’s going to drastically change things for people over the next 10 years, or 10-20 years definitely, and it’s going to be noticeable.

I’ve witnessed the positive side of our friendship group being quite competitive. We studied together, and I think it’s definitely helped everyone in our group progress in their careers to a certain extent. We’ve seen the competitive side and I think everyone’s doing quite well because they’ve been nudged by their friends. But it’s a double-edged sword, right? Because you can also see the forks in the road with drastically different wealth down the line.

TARA: Do you think it changes people? Does it change friends, how they are, their outlook?

NIAZ: I think it depends. Sorry.

BROOKE: No, go for it.

NIAZ: I was going to say, I think it depends on the friendship you have with people. One of the things that I found is, I’ve been reconnecting with friends from my childhood.

TARA: Wow.

NIAZ: That’s a pre-status, pre-wealth bond that you have and none of us care what we’re doing.

PHILIPPA: Is that right? You still feel connected?

NIAZ: It was actually in the last two years, I’ve connected with three or four friends I knew from more than 15 years ago. Immensely successful friends, actually, some of them public figures, and we spoke nothing about that. It was like, we just go back to our childhood. So I think it depends on the kind of friendships you have, whereas friendships you make at a certain stage in your life, which are, I don’t know, the context of those friendships are the wealth that you have, the status that you have. I think those are much more likely to change based on wealth because as you climb or descend, I don’t know.

TARA: That default conversation, isn’t it? Default conversation might be more around work if that’s the sphere that you’re...

PHILIPPA: It might be, but you know where they’re at, don’t you? Before you reconnect, because we live in a connected social media world. Would you feel, do you think, equally relaxed with early friends who are just living very, very ordinary lives, very different to your own?

NIAZ: I think so because of the nature of those friendships. We went back to a random café, for example, when we were in school that we used to go to, and it was the nostalgia, right? Then we’d laugh about certain things. I think there’s a craving. I think as humans, you know the science behind this better than me. There’s a craving for nostalgia and innocence and that, especially when you’re in careers which are quite demanding and...

TARA: Quite grounding sometimes, isn’t it?

NIAZ: ...Yeah, and as a society that’s so status-driven, I think there’s a yearning for something much simpler, which I found. I don’t know. That’s been my experience.

BROOKE: I agree. Those summers where you’re at school, you’ve got six weeks [off], you have no money, but you’re having the time of your life.

When life throws you curveballs

PHILIPPA: OK, I’ve got one that I’ve been interested in for a long time. What happens if your circumstances change radically? We can talk about planning, how we think our career and life trajectory is going to be. You get into these tribes effectively, don’t you? And whether you choose it or not, it happens. And then sometimes stuff happens. It might be a divorce, it might be illness, death, or it might be a massive inheritance if you’re really fortunate. Suddenly, everything is different for you. And I’m wondering how you fare in your tribe. Can you stay in a tribe where, for example, you can’t afford to do the stuff you used to do with those people, or the other way around? Suddenly, you’re just way better off. What do we feel? Have you ever experienced that? Has anyone?

BROOKE: I’ve had friends who have been married and already got divorced, and I guess they were much further ahead in their view, and then they came back to square one. But from our side, we didn’t treat them any differently because I think for me, the connection is beyond how much money we all have. It’s like, “I love and care for you, and I want you to be involved in the things that we’re doing”. So if that means that we’re funding a bit of that for a time. I’ve definitely been in occasions where we’ve really wanted some friends to come. One of my friends had a child much earlier than everyone else, and we wanted her to still be involved. I remember us making a group decision; “let’s just pay because we wanted her to come irrespective”.

PHILIPPA: How did that go? Was she OK with that?

BROOKE: Yeah, she was fine.

PHILIPPA: It wasn’t weird?

BROOKE: No, we asked her. It wasn’t like, “oh we’ve just paid for it. You’re coming”. We were like, “we’re all happy to”. She was like, “do you mean that?”. I think if you’re good enough friends with people, they’re not going to offer if they don’t truly mean it.

TARA: It comes down to values, really, doesn’t it? What are the core values of the group that you’re in? Or you can have different groups, but also you can have subgroups. You don’t have to - if there’s a group of you that do everything together all the time. Sometimes we can get a bit stuck in rules, rule-bound behaviour. But actually, it may be that “a few of you are going to do that thing, and I’ll join you later, or I’ll dip out of this and catch up with you another time”. Sometimes we lose that flexibility of thought, don’t we?

BROOKE: I guess to your point, Tara, about when you got married, you didn’t know how you’d feel receiving the money. I guess if you’re that person in that, you might be the one getting divorced or receiving an inheritance or experiencing grief. I guess that could be the challenge, where as friends...

PHILIPPA: Oh, yeah, because you’re already raw, aren’t you?

BROOKE: ...you feel like you’re supporting and you’re helping them navigate it, but they may have very different feelings showing up for them.

PHILIPPA: I think so, because I think if people are going through those really traumatic experiences, they’re already feeling raw all over. So they’re possibly inclined to be even oversensitive to the difficulty because you know it’s like “everything’s falling apart. And now I need to just absent myself from all the stuff I did before because everything is different for me”. So there’s the role there, isn’t there, for friendship in making them feel reassured. That’s just not happening, and it’s not about the money. But it’s delicate ground, isn’t it? That sort of conversation.

TARA: I always love to ask people that. Sometimes we avoid conversations because our brain is brilliant at trying to protect us and say, “don’t say this. This is what’s going to happen”. It’ll fast forward to the future at a rate of knots. But have you ever had a conversation with someone where you’ve opened up and you’ve been really raw and regretted it? Because most people don’t. And usually you might find people go, “oh, I’m so glad you said that because that’s me too”. And it begins to just lift that pressure.

Lending money to friends

PHILIPPA: I’ve got my eye on the clock, and I’m going to ask, actually, this is a good point to ask - lending money. We touched on it earlier. I’ve done it myself, twice. It went really, really badly on one occasion and has gone swimmingly on another. Just no impact on our friendship at all. I’m delighted I did it on both occasions, but it was hard. But of course, you don’t have to, do you?

NIAZ: No, no you don’t.

PHILIPPA: Just to throw that around, just because you can, doesn’t mean you have to, does it? That’s a difficult conversation.

TARA: It’s OK to say “no”.

PHILIPPA: Well, you say that? But how do you say it?

TARA: It’s the hardest thing in the world, isn’t it? I guess, coming back to, you might have a baseline as to if someone’s saying, “oh, I’d really love to come in this night out, could you lend me money?” That might not fit with your values. But if you have someone who’s in perhaps a more risky situation, “I’m going to lose my tenancy” or “I’ve got a bill I can’t pay”, you may feel differently about that. So there can be different levels of decision making... I think that’s quite nice...

PHILIPPA: How do you say “no”, Tara?

TARA: I just say “no”. Psychologists do it right every time. No, I don’t, I’m awful.

NIAZ: It seems so easy.

TARA: I always think it’s really refreshing when mental health professionals will say we’re humans and we can be really rubbish at it. Sometimes I’ll just ignore [it], bury my head in the sand.

PHILIPPA: Well, that’s the thing is, like Brooke mentioned earlier, just because you’re earning big doesn’t mean you necessarily have a lot of disposable cash.

TARA: Absolutely.

PHILIPPA: We’ve touched on it all around and maybe you’re saving, maybe you’re saving for your pension. We’re a pensions podcast, we like it when people save for their pensions. And that can be significant sums of money. You might have all sorts of stuff going on that no one knows about, caring responsibilities, whatever it is, putting siblings through college, whatever. They’re all valid reasons, aren’t they? For saying, “actually, no, I really don’t want to do that. I need that money. I’ve got a pot where that money is going”.

BROOKE: Yeah. And I think it’s assessing your own financial resilience before you do that, which may also change during the course of the lending. I guess we’ve all [been] living through this cost of living crisis, inflation rate has gone up, interest rate - you may think you have more money spare to lend before than you actually do in the reality, when people are dipping into their reserves. I think it’s assessing truly your financial resilience before lending, but also not feeling obligated to explain the “no”.

NIAZ: I think it’s the exploitation thing that you mentioned earlier. I think when you feel like you’re being exploited, that’s when you can start to have a sweaty palm conversation.

Knowing when to let go

PHILIPPA: There’s a thought in my mind as well that not all friendships have to last forever, do they? I don’t want to be negative about this.

TARA: Absolutely. 100% agree.

PHILIPPA: We all know people we used to know that have faded from our lives for one reason or another. And that’s kind of OK, isn’t it? If it’s for good reason.

TARA: I completely subscribe to that. So I’ve written about this quite a lot, actually, that during the pandemic, a lot of people realised who checked in, who were the ones to initiate contact when we couldn’t see each other. And I think [that] the most healthy thing you could do for yourself is to do a little refresh of your friendships. And sometimes we can get really caught up in, “but we’ve been friends for so long”. You can still have compassion for the past and the relationship as it was, but it’s OK if it doesn’t work for you now. It’s absolutely fine. But again, it’s a bit cringey. I think sometimes then we can get stuck with friends that perhaps are toxic and not good for us because we feel we should do, we must do.

PHILIPPA: Known them for years.

TARA: Yes. You can still have love and fondness for that history and that memory, but it doesn’t mean it has to work now.

PHILIPPA: And new friends.

BROOKE: Yeah!

PHILIPPA: Let’s not forget.

TARA: That’s OK, too.

PHILIPPA: There are always new friends. That seems a good place to wrap this up, I think, doesn’t it? Thank you all very much indeed.

TARA: You’re welcome.

PHILIPPA: Thank you all very much. It was so thought-provoking yet another way that money plays a central role in all our lives. If you enjoyed this episode, please do rate and review. We always love to hear what you think. Don’t forget, you can watch us on YouTube. And if you’re a PensionBee customer, you can listen to all the episodes in the PensionBee app. Just before we go, just a last reminder, anything discussed in the podcast shouldn’t be regarded as financial or legal advice. And when investing, your capital is at risk. Thank you for being with us.

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Bonus episode: Personal finance tips part three

Read part three of personal finance tips from our expert podcast guests.

The following is a transcript of a bonus episode of The Pension Confident Podcast - Personal finance tips part three. You can listen to this bonus episode or scroll on to read the conversation.

PHILIPPA: Welcome to another bonus episode of The Pension Confident Podcast full of expert tips from budgeting to getting started with investing. And by the way, this is part three - so if you haven’t heard the first two you can listen to this and then find them on our podcast feed.

Before we start, just remember that anything discussed on the podcast should not be regarded as financial advice or legal advice and that when investing your capital is at risk.

Now, April’s traditionally the month when you’re supposed to get your spring cleaning done. This year, how about spring cleaning your finances too?

Here’s Personal Finance Expert, Lynn Beattie - aka MrsMummyPenny - with a great tip to start us off from episode 23 when she revealed how we could all save money just by checking through our monthly subscriptions.

LYNN: So, say you’ve got maybe four or five subscriptions that you could do without, that you could cancel. So maybe that’s like £40 per month. That’s nearly £500 per year. So if you just spent half an hour going through your subscriptions and cancelling those four or five, I know it’s a hassle to do it, but it’s a few clicks. £500. When are you ever going to get paid £500 for half an hour’s worth of work?

PHILIPPA: Next up, a clip from episode 19 where Financial Journalist, Kalpana Fitpatrick talked about the importance of keeping your family savings going however small they are.

PHILIPPA: And I’m also thinking about the fun stuff you know, the holidays, the celebratory things, you know, this is part of having kids but I want suggestions for smart ways to make this a bit more affordable. I’m thinking about planning ahead here because there’s quite a lot of stuff you can get at discounted rates if you think ahead, right?

KALPANA: I’d say a healthy budget and I hate that word ‘budget’, and I’m sorry I’m using it. But it comes back to those early days of planning and knowing what your expenses are, your essential costs. Then, create some sort of ‘fun pot’ where you’re saving up for certain things - ‘this is our holiday fund’ etc. And just constantly keeping that going. Don’t let it be your credit card. Try and build that buffer and just keep building it throughout your life.

PHILIPPA: Little and often?

KALPANA: Start from even before they’re born and just keep going because you’ll always need to access that pot.

PHILIPPA: Here’s Kalpana again with a simple way to start saving for your kids’ future.

KALPANA: There’s loads of clever ways that you can save for your children now. It’s a very big thing in Indian culture to give cash gifts. So every time my children were given cash, and they were literally given it from the day they were born, I stuffed it all into an ISA.

PHILIPPA: You took it from them?

KALPANA: I took it and I put it into a Junior ISA (JISA), and it sits there for them to do what they want with it when they’re 18, hopefully something good!

PHILIPPA: And if you’re thinking about investing, here’s Ayesha Ofori, CEO of Propelle and PensionBee‘s Non-Executive Director, Lara Oyesanya in episode 21 with a few things to know before you start.

AYESHA: When I did first start investing, people were sort of like, ‘Oh, you’ve missed the boat’ or ‘The market has just gone up’, ‘Oh, it’s not the right time’, ‘You should wait, you should wait’. My view is that if you’re going to start investing, which means you should have a long-term time horizon, just start.

PHILIPPA: What do you mean by long-term time horizon?

AYESHA: For me, anything less than around three years is not an investment. And in some cases, people say it’s five. So you should have at least a three to five year time horizon in which you’re not expecting to have to use that money.

PHILIPPA: So, we’re not talking about quick wins here? That’s really clear.

AYESHA: Absolutely. This is about building long-term wealth and investing over a period of time. So, if you need that money within three to five years, then it’s probably not going into your investing pot.

LARA: You’ve got to prepare for the highs and lows because everything is subject to market movements, which you don’t have control over.

AYESHA: And you can’t predict.

PHILIPPA: On to a different type of investing now - property. Here’s PensionBee’s CMO Jasper Martens in episode 23 with some thoughts.

JASPER: A house is to live in and many people make the assumption that their house is going to be their pension, or it’s going to be ‘the’ investment they’re going to make. Like you said, Lynn, most people will have a really big mortgage attached to it, to actually purchase that property. It’s not actually yours, it’s the bank’s. I’d say with property, one of the biggest mistakes you can make is that you see it as ‘the’ investment. Well, actually there are other investments in life too, like an investment account or a pension. And then also very practically, with a house - I’m a homeowner - don’t invest in a very fancy bathroom or a very fancy kitchen that’ll go out of fashion in two or three years. Something that’s a bit more timeless - this is more practical.

LYNN: Have you done that Jasper?

JASPER: Yes, I have!

PHILIPPA: And finally a financial product you might not have thought about - life insurance. Here’s LifeSearch CMO, Justin Harper explaining why he thinks it makes good sense.

JUSTIN: The wonders and benefits of life insurance are simple. You pay a small amount of money every month and then at the end, either when you die or at the end of the term, you get some money back. The insurer pools all the different premiums from all the different policy holders, so they have that big money in case you die. So, you can take out a policy today and if you die tomorrow, as a result of an accident, it’ll pay out the full amount. Those are the sort of things you can’t save for, so insurance plays a valuable role.

PHILIPPA: That’s it for this bonus episode. Catch up on the rest of the series wherever you get your podcasts. You can also find us in the PensionBee app and on YouTube. If you click to subscribe you’ll never miss an episode and the next one will be out at the end of this month. Happy listening!

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Bonus episode: Socially responsible investing tips

Our expert guests share some of their best tips when it comes to socially responsible investing.

The following is a transcript of a bonus episode of The Pension Confident Podcast - socially responsible tips. You can listen to this bonus episode or scroll on to read the conversation.

PHILIPPA: Hello and welcome to another bonus episode of The Pension Confident Podcast. This time we’re taking a close look at responsible investments. You might be surprised to know there’s a big link between your pension and the planet. Small steps you take today could have a lasting impact. So, listen up to find out how your pension can be used as a powerful tool for good.

Before we get into it, remember, anything discussed on the podcast shouldn’t be regarded as financial or legal advice, and when investing your capital is at risk.

Now, socially responsible investing used to be a bit niche. Not any more - now global interest is surging. So what is it, and how does it work? Here’s Clare Reilly, she’s PensionBee’s Chief Engagement Officer, talking about this in episode one.

CLARE: Well, sustainable investing is about investing in progressive companies that are trying to take into account some, or all, of the problems this world’s facing. That’s companies that are going to help with the transition to a low-carbon economy, or it’s companies that are really embedded in the communities that they’re operating in, or values driven companies with a clear social purpose. So for some, that’s the right thing to do, but for more and more people, it’s because there’s this huge body of evidence that says, long-term, those companies are going to be more financially successful. What was that David Attenborough quote recently about how illogical it is for your pension to kind of seek short-term profit from companies that are simultaneously destroying the world you plan to retire into?

PHILIPPA: And there’s one acronym you might have come across already; ESG. Here’s Clare’s quick recap on [what an ESG rating is], and what it actually means if you’re looking at investing.

CLARE: Every company can have something called an ‘ESG rating‘. So, ‘ESG’ stands for ‘Environmental, Social and Governance’. And really, this is a measure of how well a company is operating. So, for an ‘E’ or environmental measure, you’d look at - does a company have a public commitment to net zero? Does the company have carbon emissions targets? Does the company have a waste reduction policy? That would be an ‘E’ score. An ‘S’ score is about workforce - do you have a gender pay gap or an ethnicity pay gap? Do you pay a living wage? Are your employees happy? Do you have a safe workplace? They’d be your ‘S’ scores. And then your ‘G’ scores are your governance scores. So, that’s the diversity of the [company’s] board, do you have protected voting rights and shareholder rights? Do you have the same Chair and CEO (Chief Executive Officer)? These factors are making sure that your company is properly run.

PHILIPPA: OK, so this is about how organisations operate. Whereas impact investing is about their intentions, the difference they’re making in the world. Is that right?

CLARE: Yes, that’s exactly right. And the important thing to note is that you can have a very high ESG score, but also have a very negative impact on society. So, a tobacco company can have a very high ESG score, or a mining company can have a high ESG score because they score well on those things. But ultimately, again, can have a negative impact on society, on [the] planet and people.

PHILIPPA: A lot of different investment styles are now clustering under the ‘responsible investing’ umbrella. In episode 16, I asked Clare about one you might have heard of; impact investing.

PHILIPPA: Clare, shall we kick off with a definition of impact investing? What exactly is it? What is the goal?

CLARE: What is the goal? So impact investing is investing with the aim of generating positive and measurable environmental and social outcomes, while at the same time generating financial returns. So really it’s about positive outcomes-based investing. It’s looking at companies, looking at the impact that they have on the world around them, on people and on [the] planet, and making a decision about whether or not you want to invest in those companies based on that information. It’s a little bit different to the type of investing that you’ll probably be doing through the workplace, for example. So, if you’re in a workplace pension, chances are you’re in the default fund. So that plan caters for the widest mix of people possible. It’ll have a range of different things in there, maybe adjusted for your age, and it’ll invest in global equities (company shares). It’ll invest in all of the world’s biggest publicly-listed companies. But what that doesn’t tell you is the negative impact that that oil producer or that company has had on the world around them. It’s just looking at their short-term profit. So, it’s a very different type of investing.

PHILIPPA: Of course, responsible investing can be about more than environmental issues. It can be based on religious principles too. In episode six, Ibrahim Khan Co-Founder of Islamic Finance Guru, joined us on the podcast and he explained one example of that; Shariah investing.

IBRAHIM: So Shariah investing is really just looking at the two words. It’s Shariah-compliant, so it’s compliant with Islamic law. What that actually means is you look at the Quran and the sayings of the Prophet Muhammad, peace be upon him. And then investing, is just investing in line with those rules and regulations. So in a nutshell, that looks like not investing in things that generate interest, or gambling, or investing in alcohol or pork. These will be like the really obvious ones, and then there’s some others that are under the surface and a bit more technical.

PHILIPPA: OK. So Shariah-compliant investments, they have different criteria, completely different criteria from, say, fossil fuel free investments, but you’d still class them as socially responsible?

IBRAHIM: I think there’s a really strong overlap between the two. But there’s still a difference.

PHILIPPA: So yeah, so the crossover is, I mean, it’s directly excluding certain sorts of companies, and also its business practices as well, isn’t it?

IBRAHIM: Yeah, absolutely. So if, you know, a company is involved in, let’s say, the war in supporting Russia in some way, shape or form. That could be a clear question mark.

PHILIPPA: So there’s judgments involved?

IBRAHIM: 100%.

PHILIPPA: Do you want to fill us in on some of the terminology?

IBRAHIM: Yeah, for sure. So ‘Riba’ is interest essentially, and that’s not allowed. And then you’ve got ‘Gharar’, which is uncertainty or doubt and that would rule out certain areas such as, as I said, derivatives or lots of types of insurance wouldn’t be allowed. And then you’ve got ‘Maysir’, which is gambling. So you know, Bet365 can’t be in a Shariah-compliant portfolio. And then you’ve got a few other technical things as well.

PHILIPPA: OK. So they’ll be described as ‘haram’?

IBRAHIM: They’ll be haram.

PHILIPPA: Prohibited.

IBRAHIM: That’s the one.

PHILIPPA: Now you might be listening to this and thinking, ‘responsible investing - it’s all well and good, but what about investment returns? Is there a trade-off here?’. I asked PensionBee’s VP Product; Martin Parzonka, about just that in episode six.

PHILIPPA: Martin, what about investment returns? Because, there’s big money to be made from haram industries, like tobacco, isn’t there, realistically? So does that mean Shariah returns are bound to be lower than conventional investments?

MARTIN: Like all investments, it’s a bit of a cop-out answer, but ‘it depends’. There can be money to be made with haram investments. I’m using tobacco as an example. I think the reality is that whilst those companies might pivot into something that’s not tobacco, necessarily, the general community will look at those companies and say, ‘you know what? I know what you’re all about, and I’m just not going to invest in you’. And so, you know, those companies by virtue of that, their market cap [short for market capitalisation, meaning the value of all their shares] will decrease.

PHILIPPA: So your argument is they’re not actually sustainable?

MARTIN: I don’t think they are. That’s my personal view. And I don’t think they’re sustainable and I think money will go elsewhere, to more sustainable investments. The other comment about returns, though. It’s fair to say that the Shariah investments, certainly the ones that we have at PensionBee, it’s 100% equity. Which means stocks in companies, therefore, it’s subject to market turmoil. And that fund doesn’t invest in things like bonds, because of the Riba component, right? It can’t earn interest. So there’s a consequence that bonds are usually used to offset the volatility of stocks, because it can’t invest in bonds, it’s going to, as a consequence, have a volatile risk-reward profile in Shariah-compliant investments, certainly the one we have.

PHILIPPA: So you’d say this is [over the] long term, as you said, and that’s maybe the point to really stress. We’re not talking about immediate wins here.

MARTIN: No, not at all.

PHILIPPA: So who might want to put their money into these Shariah plans? Are they only suitable for Muslim investors?

IBRAHIM: The majority or a very significant number of people who use the Nest Shariah workplace pension, were actually non-Muslims, just because they were attracted to the tech stocks aspect of it and the high growth.

MARTIN: Shariah Islamic finance is based on religious principles. But so what? Right you can be non-religious and still be interested [in], like you say, tech stocks, right? People that want to take on that risk, high growth kind of fund at the start of their career - they look at it and go ‘100% equity? Cool, that’s for me, why not be invested in this?’. And then also, you know, that it’s got that sort of moral aspect of excluding ‘bad’ industries. And so, it sort of ticks a couple of boxes for a lot of people.

PHILIPPA: Yeah.

PHILIPPA: Interesting thought that, isn’t it? And if hearing that’s making you wonder where your pension is actually invested right now, you’re not alone. So let’s hear from David Hayman from Make My Money Matter - he joined us in episode 16 and he talked about the power of knowing where your hard-earned money is invested.

DAVID: I think what we’ve seen over recent years is a real increase in individuals thinking about the impact they’re having on the world around them. From the food they eat, to the clothes they wear, to how we travel, to the brands we associate with, to the organisations we work for. There’s been a real uptick in engagement on our individual impact on the world. But what we’ve also seen is a significant disconnect between how we think about our money as a vehicle for impact. Most people think about the money in their pensions as being sat in a bank vault somewhere in Switzerland, slowly accruing interest. Hopefully in 30 years’ time when they retire, they’ll have some money to live a nice life on.

But the reality is - that money is invested all around us for better and for worse in the companies which are shaping the world. So you have vegans invested in factory farming, you have doctors who are invested in tobacco and you have climate campaigners who, through no fault of their own, find themselves invested in the very companies they’re campaigning against. So our campaign is all about raising awareness, helping people understand the links between their money and the world around them, and empowering them with more voice and with more choice to say where they want that money to go.

PHILIPPA: We all understand about consumer power, but this is a huge extension of it?

DAVID: Exactly. We see this as the next frontier of consumer power. There’s £3 trillion invested in UK pensions. That isn’t money which belongs to financial institutions. It’s not private capital. That’s money which belongs to each and every one of us. Our pension pots are, for most people, the largest pots of savings that we have. These are huge amounts of money and we can put that to work in businesses which are gonna build a better future for us. We can, not only make our money work better for us today, but over the next decades it can be building that better world for us to actually retire into.

PHILIPPA: So if you want to find out where your pension is invested, here’s Clare telling us exactly how to do just that.

PHILIPPA: If people are listening to this and they’re thinking, ‘yeah, I’m interested’, what are their next steps here? Because investments aren’t always as transparent as they should be. We’ve talked about this, people don’t know, as David said, where their money is invested. How can they find out, Clare, where their pension money is invested?

CLARE: Well, the first thing to do is have a look on the fund fact sheet. Log in to your portal or google the name of the pension fund you’re invested in. Try and find the fact sheet, see if you can look at the top 10 companies that the pension is invested in. If it’s not on the fact sheet, you’ll probably be able to find it on Google. Look at those and ask yourself, ‘is that what I expected? Are those the companies that I want to be giving my money to?’.

PHILIPPA: Not all providers make it that easy to switch, do they?

CLARE: No they don’t. They don’t. PensionBee has been calling for many years for a pension switch guarantee to give people the ability to pick up their money and move it around the system. The way that you can do with current accounts or utilities. You have a right to move that money to another regulated provider. So keep trying, move the money and move it again if you find that the provider that you’ve moved to isn’t offering you the choice or the type of investments that you want.

PHILIPPA: If you’re feeling intrigued about using your pension to drive change, here’s David again with a couple of things you could do to get started.

DAVID: One is an individual finding or switching a pension which they feel works better for them. And that’s absolutely an option people should take if they wish to. They should be able to see where their money is, see the alternatives and make a positive, proactive decision about that. That should be easy and straightforward. There’s also another option for people and that’s something that our campaign encourages. It’s for those who don’t feel confident in switching or who aren’t able to switch, to lobby for change to the pension funds they currently have. And that can have a really significant impact in and of itself.

So, we’re not a switching campaign actually, we’re not trying to move everyone’s money one by one, as valuable as that is. We’re actually trying to impact the ‘macro’ [or large-scale] default investment decisions of those big pension funds where the trillions are invested. And get them to invest the default fund more sustainably, more for impact. And by doing that, we think you can achieve real scale change. So, what we encourage people to do, who don’t wanna switch, is to contact their pension fund and ask them what actions they’re taking on net zero, on deforestation, on investing for impact, on stewardship and on speaking out. We’ve got a helpful template on our website which lets people do that with a click of a button. And we feel like that can drive real change, showing the pensions industry that their customers really expect more and better.

PHILIPPA: So there you have it, a deepdive into what it really means to invest responsibly and how you can get involved if you’d like to.

You can listen back to all of those episodes in full wherever you get your podcasts. The Pension Confident Podcast is available on YouTube and the PensionBee app too! You can subscribe to the series right now and keep an eye on our feed - our next episode will be live at the end of this month.

Risk warning

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E25: How to earn more money with Natalie Campbell MBE, Lynn Anderson Clark and Priyal Kanabar

Find out how to earn more money.

The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 25, watch on YouTube or scroll on to read the conversation.

PHILIPPA: Hello, and welcome back to The Pension Confident Podcast. My name is Philippa Lamb, and this month, inspired by International Women’s Day, we’re focusing on a challenge many of us face at work, bridging that gap between our performance and our pay.

Research tells us that for years now, more women than men have been going to university. Women are actually more likely to complete their studies and gain a first class degree. So you’d think that would translate into better career prospects and pay, right? Well, in fact, the same government study shows that just one year after graduation, men are more likely to be in highly skilled employment, with average earnings 9% higher than their female peers. 10 years later, and that earnings gap balloons to a staggering 31%. So why is this happening?

Joining me today, we have three experts to help us navigate this inequality maze and give us the inside track on how to be bold about asking for - and getting - more. Natalie Campbell MBE is an award-winning Social Entrepreneur and Broadcaster. She’s also Chancellor of the University of Westminster and an independent candidate in the 2024 Mayor of London elections. Hello, Natalie.

NATALIE: Hi. Thank you very much for having me.

PHILIPPA: Thanks for sparing the time. It sounds like you’re busy?

NATALIE: I am indeed.

PHILIPPA: Lynn Anderson Clark is CEO and Co-Founder of The Know, an independent media company on a mission to help everyone start their day feeling both informed and hopeful. Hello, Lynn.

LYNN: Hello, very excited to be here.

PHILIPPA: I love that ‘hopeful’ thing.

LYNN: Yes, it’s very important in today’s world.

PHILIPPA: And from PensionBee, here’s Senior Customer Experience Researcher, Priyal Kanabar. Lovely to have you with us again, Priyal.

PRIYAL: Hi.

PHILIPPA: The usual disclaimer before we start, please remember that anything discussed on this podcast should not be regarded as financial advice or legal advice. And when investing your capital is at risk.

Early careers

PHILIPPA: I think I’d like to open up this discussion by asking all of you about your own experience on pay. Lynn, I know you’ve been looking into this. You had some great responses when you asked your followers about this.

LYNN: Yes, so we did a survey yesterday in our newsletter, kind of in preparation for this. I wanted to see, kind of, what other people’s experiences were. I had my own experience, but I wanted to open that up. And so we asked the same question and what we found was 47% of our readers said yes, that they’d been paid less.

PHILIPPA: So they actually knew...

LYNN: And they knew. 33% said they suspected, but they didn’t have any proof, you know what I mean. And 20% said no. So I thought that was a pretty staggering stat. And you had an opportunity to, kind of, tell a story in there, if you wanted to, of your experience. A couple of the responses were, ‘I was his line manager, but we were both employed at the same time. I only found out when I was given payroll to sign off for the first time’.

PHILIPPA: Wow. So her report was earning more than her?

LYNN: Correct. ‘I only found out because it was my husband and the gap wasn’t small, it was around £20K. When I brought it up, during my appraisal, I was told it was unfortunate that I discovered this. I replied that it was unfortunate that there wasn’t more transparency’. And I’m a business owner and I understand why there are reasons people get paid different amounts, but that can’t account for the numbers that we’re seeing.

PHILIPPA: Yeah, absolutely.

LYNN: And so transparency is key in a workplace.

PHILIPPA: Have you personally experienced it?

LYNN: I have. So my first few jobs were [in] finance in New York, and part of that is looking after budgets, and I’m a bit nosy. So part of that is looking after salaries. I mean, that was part of my job. I had to know these numbers.

PHILIPPA: OK.

LYNN: And you better believe I figured out how much people were making in certain jobs and I was being paid less than a male colleague who was actually my best friend, who’s still one of my best friends.

PHILIPPA: What did you do? Or did you not?

LYNN: I didn’t. And I want to say that I’m really proud of the progress we’ve made as a society. But this was in 2000, not to date myself, but 2007 or 2008. And we’ve gotten so much further in the conversations we can have in a workplace, and I want to recognise that. We have a lot of work to still do. But me, who’s up here now as a female entrepreneur, didn’t have that power.

PHILIPPA: Absolutely not.

PHILIPPA: So if we’re thinking about undergraduates job hunting for that first job, it’s a daunting thing, exciting thing, but it’s daunting, you’ve got no experience, obviously. What would you suggest they should be thinking about to max out their chances of doing well?

NATALIE: So firstly, don’t apply for jobs that don’t advertise the salary. And I think we really need to take ownership of this. The more people that don’t apply for jobs where the salary isn’t visible, the more impetus there is on employers to put the salaries on the job description.

PHILIPPA: It’s really common, isn’t it, not to see a salary.

NATALIE: So common. Competitive salary and all of this opaque stuff.

PHILIPPA: Meaningless.

NATALIE: Yeah, if you know what the salary is, or at least the benchmark of the salary, it means you can have a conversation. When you walk in and they say ‘what’s your salary expectation?’, that’s the biggest bear trap. And it’s such a horrid question. If the salary is there, and at Belu the salary that’s advertised is the salary you’ll get. It’s not a negotiable salary. This is the salary. This is the value we perceive for this role...

PHILIPPA: OK.

NATALIE: That’s it. Lots of organisations are getting better, if it’s not a fixed salary, of sharing salary bands. So understanding where you are on the salary band is really important. But I’d also talk to friends. So if you’re brand new to the world of work, ask your friends what they’re seeing from the roles that they’re applying for. And understand ‘what do you think the benchmark is’. And ask your lecturers, ask people so you have the tools to think about what salary makes sense for the job that you’re doing.

PHILIPPA: That’s really helpful. Thinking about all the things that young people are told they need to do, that they need to do internships, they need to do extracurricular stuff to massage their chances of doing well. What’s your sense, all of you, of how much value that actually brings? Because everyone does it, don’t they? So there’s a bit of a question in my mind about how much value it adds. I don’t know, tell me?

NATALIE: So I don’t think everyone does it. I’m old, so I come from a time where I started working before I was even legally allowed to work. I was interning for free, but also, you know, the bus fare I think was 20p, and I had a ‘Saturday job’. The ‘Saturday job’ is dying.

PHILIPPA: Yeah, I had a ‘Saturday job’.

NATALIE: A ‘Saturday job’ just gives you the confidence of knowing how to deal with the workplace. Being a retail girl is a game-changer.

PHILIPPA: Were you in a shop? Yeah, I was in a shop, too. You have to deal with people...

NATALIE: You have to deal with people, you need to know how to communicate. You’re dealing with money, you understand the value and the price of things. So that was great grounding. I’d say if you don’t have a ‘Saturday job’, just get a ‘Saturday job’...

PHILIPPA: Get one!

NATALIE: Get one. Then onto the internship. Internships are really important if you want to understand the nuances of an industry that you’re entering. And when you’re there, don’t go in like ‘the intern’. Go in and be like, ‘right, I’m here, I’m working. I’m doing the same job as X person’ and add that value while you’re there. If you go in as ‘the intern’ and wait to be fed, you won’t get the best experience.

PHILIPPA: I mean, this draws on confidence, doesn’t it? And not everyone has that confidence. So I’m wondering about tools for that, like mentors. Did any of you have early stage mentors? I didn’t.

PRIYAL: I actually currently mentor someone. She’s a recent grad and I really look forward to our monthly catch-ups. I find that I’m able to share my experience, the things that I wish I knew when I was just starting out, that took years of ‘trial and error’ to learn. But I also really enjoy learning from her, she has fresh ideas. I’m now seeing those monthly catch-ups as more of a, kind of, an exchange rather than like a one-way mentorship.

PHILIPPA: And do you talk about money? Does she ask?

PRIYAL: We do, yeah, we do talk about money. Yeah, we talk about, like, benchmarking. A tool that I recommended to her, that I’d recommend to everyone, is on the Otta website. It’s Otta salary benchmarking. What I like about it is it shows the long-term salary growth of various roles.

PHILIPPA: Other experiences in mentoring, did you two have mentors? Natalie? Lynn?

LYNN: I did, but I think it’s really important when we talk about how to get a mentor...

PHILIPPA: Yeah.

LYNN: I think I’ve had different experiences. When I was working at a big corporation, there were lots of mentoring programmes and I worked on both sides of those, where I’d mentor young people and then I’d also be mentored by senior leadership, which I think is fantastic. But I do think that, what you were talking about, is the exchange and I want to really bring that up, because I think, perhaps a mistake, that people that are looking for mentors make is - I’ve spoken to a class of, let’s say, 200 students at a university, and I’ll get five or six emails after saying, ‘I loved what you were saying, it really resonated’ - which I very much appreciate - ‘will you be my mentor?’. Natalie, you know, you’ve had these emails. And whilst I very much appreciate that and I always, again, I’m so appreciative of the people that have come before me and I always try to give back with anything that I can. It’s about the exchange, and I’d say the better way to approach that would be, ‘I really enjoyed your speech, it really resonated with me, I have a few hours on the weekends and I’d love to help with marketing The Know’, you know what I mean?

PHILIPPA: Oh interesting, OK.

LYNN: Or something like that. And that doesn’t mean I’m going to necessarily take...

PHILIPPA: Exploit them or something?

LYNN: No, exactly! It’s them showing that it’s a two-way relationship.

PHILIPPA: That’s really interesting.

LYNN: It’s about showing that you’re open for a two-way relationship.

PHILIPPA: That you’re bringing something?

LYNN: Rather than ‘will you be my mentor?’.

PHILIPPA: Yeah, so, Natalie’s nodding.

NATALIE: Absolutely. So two things that I don’t do - I don’t mentor anymore and I don’t do LinkedIn recommendations.

PHILIPPA: OK, why don’t you mentor?

NATALIE: I have lots of people that say, ‘will you mentor me?’ and I say, ‘I won’t mentor you, but is there something specific that you want or need?’. And if it’s an introduction, if it’s for me to look at your CV, I’ve got five minutes, I’ve got ten minutes on this day, I’ll do it and I’ll give you feedback. If you’re doing a grant application, ping it over to me, I’ll give you feedback.

PHILIPPA: So it’s task specific?

NATALIE: Very task specific.

Mid-life careers

PHILIPPA: Moving on to job applications. You mentioned LinkedIn, Natalie, according to them, women apply for 20% fewer jobs than men, despite similar job search behaviours. So they’re all searching in the same way. But the men apply for 20% more jobs. Why do we think that is?

NATALIE: So I know the research says it’s because we look at a job profile and say, ‘well, we can’t do 100%, so we’re not going to apply’. But I think we’re looking more objectively at organisations and saying, ‘do I think I’ll thrive in this organisation?’.

PHILIPPA: Do you think so? I mean, that’s a very positive take on it.

NATALIE: Speaking to my team, ‘will I be happy?’ and it’s a broader lens and the pool of organisations where you believe you’re going to be happy is a lot smaller than the pool of organisations that are offering roles. So I think there’s that. I think there’s the, ‘do I fit all of the criteria? Therefore I won’t apply’. And I absolutely say, if you think that, just stop and just apply. I mean, if I can do one thing on a job description or to be honest, if I can’t do any of it, but I just want to apply, I’ll apply.

PHILIPPA: Well, yeah, because there’s good data on that. With men, if they meet 60% of the qualifications, they’ll apply and women won’t, they want a much higher bar.

PRIYAL: I actually totally agree with what you’ve said because it’s what my experience was. After my first experience of the workplace, I was very focused on finding somewhere I could be happy in the long term and thrive.

LYNN: I’ve seen it personally. I’ve got a lot of friends that are hiring and when we put out a job application and we’re a small startup, we don’t have recruiters, we get hundreds and hundreds of qualified applications. And when I talk to colleagues, they’re like, ‘we can’t get 20 good applications’. I think it shows that people think they can be happy in my organisation. We’re mission-driven, we’re female-founded, there’s all of these outward signals that I embody the values that you might have. And I’m so thankful for that because...

PHILIPPA: There’s a clear purpose and people can see it?

LYNN: ...There’s purpose and again, it’s just a qualitative story of my own, but it’s something I hadn’t thought of, Natalie, and I see it every day in my own organisation.

PHILIPPA: OK, I’m going to move us on to job interviews, actually in the room. I’m thinking about what candidates should be aware of right off the bat when they’re talking about salary and benefits with potential employers. What should be in their mind at that moment?

NATALIE: So if you’re asked the question, ‘what is your previous or current salary?’ don’t answer that question.

PHILIPPA: OK, how do you...

NATALIE: We should not be asking the question, first of all. So anyone that’s still asking that question, stop...

PHILIPPA: ...But how do you say ‘no’ without sounding confrontational in an interview for a job you want?

NATALIE: ...and if you’re asked that question, I’d just say ‘what my current salary is, is irrelevant to the value that I’d bring to your organisation on day one of joining’.

PHILIPPA: Yeah.

NATALIE: Because it is. It’s irrelevant.

PHILIPPA: But I suppose I’m also thinking about things like, legally speaking, obviously, your employers, they can’t ask about that. They can’t ask about your age, your status, pregnancy intentions, any of these things. In your experience, are you still finding that - indirectly - quite a lot of employers are still trying to ascertain things like that when they’re interviewing women?

NATALIE: Inadvertently, people sort of say, ‘so, tell me more about yourself, you know, what do you do outside of work?’ and ultimately, ‘do you have children? Do you have a partner? Do you have things that mean you won’t have time to do this thing?’. That’s what they’re asking.

PHILIPPA: How do you counter that?

NATALIE: Again, it goes back to before you did the application, what sort of organisation did you think you were joining? If, at that moment, that question is asked and you believe that you need to hide it because it’s going to be a penalty, that is not a job that you should want to have. And that’s what I’m ultimately saying. We need to take responsibility for what our careers look like, because if you know it’s going to be bad at that point, it’s never going to get better.

PHILIPPA: OK.

PRIYAL: It’s a red flag. I totally agree.

NATALIE: Absolutely, a red flag.

PRIYAL: It’s a bit like dating, you know, if someone asks you on a date, a very awkward question, like, ‘will you continue working if we have children?’ then I know I’d be like, ‘bye!’.

PHILIPPA: Discussing potential children on a first date...

LYNN: There are like 12 red flags there! But I probably am guilty sometimes of asking questions because I do want to get to know the person. I have a small team, but it really is about ‘who are you and what’s important to you?’. But I’d hope that the gut of someone that’s interviewing with me is like... ‘Yeah, I’m a mum’. I talk about my two-year-old in an interview and I say, ‘yeah, he’s right here, and if he makes some noise, apologies’ and so I think probably from that you can understand where I’m coming from. But if you feel, going into something, that this will be used against you, you probably answer it in a very neutral way and you probably don’t accept that job.

PHILIPPA: As your career progresses, and obviously, you’re thinking you’re building up skills, you’re building up experience, you’re looking for more pay. We know that men are better. Data tells us the men are much better at asking for it. And they’re much better at getting it. Nearly one in every three men who ask for more pay get it. For women, it’s one-in-five. Now it speaks to confidence, what else does it speak to here?

NATALIE: There are organisations that just perceive we’re adding less value. So what can we do about that? Talk up the things that you’re doing, don’t do the work and then hope that someone knows that you delivered X or Y that delivered additional value for the business. Find opportunities to talk about the work that you’ve done. Even if you have to create the opportunity, you have to create a lunch and learn to say, ‘there was no strategy for this thing, this is the way that I did it’, or you take the organisation on a journey of having a conversation about something that they’ve never spoken about before. It might be [Artificial Intelligence] (AI), it might be digital marketing, whatever it is, show up. Because men show up in the social spaces, men show up in moments in meetings where they just add that idea. I used to say to all of the women that I worked with and that worked for me, ‘never go into a meeting and not contribute. You’re not here to take notes’, and at the point when someone says, ‘who’s taking notes?’, put your pen down.

PHILIPPA: It’s definitely not you!

NATALIE: Absolutely!

PHILIPPA: I entirely agree with that. We’re saying it’s bias on the part, or potentially bias on the part of employers, but there’s also good data that says when men move jobs, they’re just better at asking for more. So they’re better at asking, it’s not necessarily all about employers saying ‘no’. So it’s that, isn’t it? It’s actually having self-confidence. Why don’t women have it? Now, you’d kind of imagine, wouldn’t you, that now we would, but apparently we don’t.

PRIYAL: Well, we only got the vote 100 years ago. That isn’t actually that long. I think things have gotten better for us, but I still think that - I believe it’s harder to navigate the world as a woman and that can, over time, have an impact on your self-confidence. And I think there are things organisations can do to counter this. For example, I’ve heard of one organisation that has a ‘no negotiation culture’. They just always increase salaries in line with market pay, and that takes the onus off of women to have another thing to fight for and, kind of, puts the onus more on the organisation and it has benefits for the organisation.

NATALIE: Same. So at Belu, that’s what we do.

PHILIPPA: See, this is great, and it’s great that you do that. But we know most employers don’t do this. So, in terms of the onus being on working women to change this outcome, benchmarking? We talked about benchmarking earlier, benchmarking your own worth. How do you do it? You mentioned Priyal, there’s a tool for this. I mean, you obviously do this, Natalie. Do you do it yourself? How do you do it?

LYNN: I think it’s hard to say, you know, ‘have more confidence’. I think that’s like a really hard thing to say, but I think something that helps me is preparation. That’s just something personally that helps me. So when I think about preparation, it’s about doing my research so that’s about benchmarking and things like that.

PHILIPPA: So you know what the job should pay, you know what you’re worth?

LYNN: Absolutely, so it’s about using online tools as well as your social, you know, your friends. And then I think it’s rehearsing that conversation with people that you trust, you know, rehearsing and actually saying it out loud. I think sometimes saying it out loud is hard to do and I’ll speak just from my own experience. And then I think it’s about, also there are tips and tricks, I think. This isn’t woman specific, but I’ve been asked for a raise before in a big corporate job and it was, you know, ‘my rent was raised, so I need a raise’. And...

PHILIPPA: And your response to that was?

LYNN: ‘I don’t know how to tell HR that you need a raise because of your landlord’. You know, it’s not about you...

PHILIPPA: It’s about your performance?

LYNN: It’s about the company. And so you should always be framing those conversations. So, what can you add to the organisation? Hopefully your organisation has Key Performance Indicators (KPIs), goals, so what are your three month goals? What are your six month goals? What are your 12 month goals? And then you can go in and say, ‘I’ve met all my three month goals as well as done these five extra things’, so it’s about showing the value you’ve brought. And if your company does not have those more formalised systems, create your own three, six or 12 month goals, bring them to your manager, say, ‘this is what I’d like to accomplish. Is this in line with your expectations?’, and if they say ‘yes’, then I can’t wait to go back in six months and show you, ‘I’ve smashed all of my goals, I’ve done these extra things...‘

PHILIPPA: So let’s talk about the money.

PRIYAL: I’d add to that, if you’ve been at the same organisation for a long time, make sure you have clarity about what your job role is, and that you and your manager are on the same page. Because what can end up happening is you absorb tasks from here and there and there, and then your role becomes harder to benchmark. So that’s one thing I’d add.

PHILIPPA: What should you do if you’re in the room? Let’s talk about asking for a rise. You go in, you think you’ve done all the things you’ve talked about, and they say, ‘actually, no, not at this time, you know, budgets are tight’. What is your response to that? What do you say?

NATALIE: So there’s one other thing that you need to know before you have this conversation. Where’s the business in the financial planning year?

PHILIPPA: OK, so when’s the best time to ask?

NATALIE: You need to know that.

PHILIPPA: So tell me, when should you ask?

NATALIE: Go onto Companies House and look at the company account. So you can put the name of your company in and you can look up the company accounts and the filing date. And so it’ll either be January to December or generally April to March.

PHILIPPA: And this matters why?

NATALIE: Because budgets are planned in these cycles. So if you go at the wrong time and you get the answer that ‘we can’t accommodate it in the budget’, it’s because the budget’s been set already.

LYNN: And it’s a very valid reason. As a Founder, it’s a very valid reason, you’ve set your budgets and there’s no room.

PHILIPPA: So this is a very valuable tip?

LYNN: Very valuable, keep going!

NATALIE: The budget conversation might start three months before that, or six months, whatever it is.

PHILIPPA: OK, I’m going to play devil’s advocate and be awkward and say, ‘OK, I’m working for a micro business, there’s literally three of us there. So that sort of data isn’t available to me. What do I say?

NATALIE: So if it’s a ‘not right now’ and it’s where you want to be, then I’d say, ‘OK, over a period of time, I’d like to get to this salary. So what are the things that we can work on?’ Goals, activities, what other value can be added?

PHILIPPA: Other responsibilities, whatever it might be...

NATALIE: Absolutely. So that when we revisit this conversation in six months or 12 months, I have a clearer understanding of whether or not I’m in line for this sort of raise. And if it comes back that we just simply can’t afford it - which also is valid, if you’re a startup, there’s only so much money in the pot - you have to make a decision for you as to whether or not that’s something you’re willing to accept. Because there are other things that add value, not just money.

PHILIPPA: Exactly. Yeah. It might work for you in one way or another. There’s so many scenarios here, we don’t all have our ideal jobs, do we? I’m a great fan, I don’t know if you are, of documenting those conversations. Because it’s so easy, particularly in a small business, you know, not everyone’s working for multinationals or even SMEs, you know, small to medium sized enterprises. This stuff isn’t always written down by HR. So if you have a conversation like that with your boss, I mean, what I’ve done in the past is, I’ve sent an email after saying, ‘this is what we talked about and this is what you said’. And this is a good idea, do you think so?

LYNN: I think it’s a great idea, yeah.

PHILIPPA: Because then there’s no debate six months down the line.

LYNN: And also, look, as a Founder, I may have forgotten that conversation. That’s just, you know, there’s a lot going on.

PHILIPPA: Life is busy.

Later-life careers

PHILIPPA: Time’s tight, I’m going to move us on to later-life careers because obviously that’s a whole array of other responsibilities and challenges too. So, Priyal, I think the estimate is two-in-three of us, this is men and women, will have to take time out from work to care for someone at some point in our working lives. And it’s interesting that it’s men and women, because we tend to think of women as being carers. But presumably that must play into a carer’s gap in terms of both pay and pension?

PRIYAL: Yes. In fact, we did some research at PensionBee about the Carer’s Pension Gap.

PHILIPPA: And Lynn, I think you covered it, didn’t you?

LYNN: We did. We covered it at The Know. And the report found that for every year someone takes out, for unpaid caring duties, it’s equivalent to about £5,000 less in their pension pot. And you can imagine how that adds up...

PHILIPPA: How it rolls over?

LYNN: ...over the years. And the main cause, the root cause of that they found, was caring for children. So again, not only is there a gender pay gap, there’s that care pension gap that kind of compounds into later life.

PHILIPPA: I mean, as employers, have you experienced this? In the sense of women coming to you and you kind of get the sense they’re under-asking because they’re so anxious, they know they’ve got other stuff they need to be doing?

LYNN: Yes. And I understand it because I’ve been there. I understand deeply why women will go, why they’ll say, ‘you know what, I’ve got a job, a good enough job’. You know what I mean? You just start saying these things to yourself, ‘I’ve got a good enough job, I get enough pay, and I just need that flexibility’. Because you start thinking about all of the things that could happen, as a mother. Well, ‘what if the nursery calls?’, and it’s ingrained in us. And I really think the onus of this should be on the companies and we need to do everything we can to raise awareness about this, both as entrepreneurs, as employees, within the government, because the onus should be on the businesses to create transparency and flexibility. Show me a company that wants to hire women and wants to employ women. It’s a company that offers flexibility without having to ask for it.

PHILIPPA: Without a pay penalty?

LYNN: Without a pay penalty. And, if you really want to retain women, this is what you need to do. And I think, to me, it’s so simple.

PHILIPPA: Yeah, because it’s interesting you talk about, I mean, obviously working life is changing and one of the ways in which it’s changing is working lives getting longer. And then they run into a whole other challenge again, which is about being undervalued by their employers, because they’re perceived as approaching the point when they won’t be working for much longer and their companies don’t want to invest in them, they don’t want to train them, they don’t want to promote them. Strategies for that, please. I think we’ll close it up with that. What should those women do?

NATALIE: Eleanor Mills has a brilliant network called Queenagers. And I’m seeing more and more networks like this that are speaking to women in their 50s that have possibly had one sort of career trajectory in a very specific industry for a very long time. And what I’m seeing is these women are learning the art of the hustle and the portfolio career. Part of that might be freelancing, part of it might be advising, part of it might be coaching, it might be craft, it could be all of these things...

PHILIPPA: So you leverage your experience?

NATALIE: You leverage your experience. And the thing that I’d say that women should be looking at is board roles. So how can you bring your experience to bear without necessarily needing to work as an executive in an organisation, but also then be paid? And if you have a wealth of experience, there are loads of organisations that would snap up the opportunity to have that around their boardroom table. You can have a couple of board roles well into your 70s or 80s if you want to.

PHILIPPA: Which is a lovely idea. But thinking about the majority of women who aren’t in that career band, who are doing other sorts of more mainstream work, what should they be saying to their bosses, their employers about, you know, ‘please don’t stop training me’. How do they demonstrate their value?

NATALIE: That really hurts my heart. That someone would have to say, ‘please don’t stop training me’ in an organisation.

PHILIPPA: But it happens, doesn’t it? It happens.

NATALIE: So firstly, a training budget should be there for everyone to access. If you’ve gone to - if it’s a larger organisation - HR and said ‘I want to go on this training or I’d like a coach’, or whatever it is, and you’ve been told ‘no’ and you believe that it’s because of your age, then that’s clear age discrimination.

PHILIPPA: You’re legally protected against it.

NATALIE: You’re protected. That shouldn’t happen at all. If you’re in an organisation and you’re being sidelined from projects, again because of your age, you need to call it out. It’s another form of discrimination and this is genderless. But if you’re in an organisation and it’s not discrimination, but you’re not being seen, which I think is a lot of the conversation that Eleanor Mills is talking about, it’s exactly the same advice that we go back to in the beginning. Make yourself seen, talk about the things that you’ve done that add value.

PHILIPPA: And that you can bring? Things that you can add to your role, maybe? Mentoring?

NATALIE: Exactly, mentoring, or being a coach.

PHILIPPA: Or training in any form.

NATALIE: Being a coach within the business to support new talent coming through, helping set up systems and processes. But my biggest bit of advice would be to build out your portfolio career.

PHILIPPA: And to audit what you’ve got to offer at a later stage. If you want to carry on working or you have to carry on working, for whatever reason. That’s the thing that people don’t do. But actually, you should at that point be sitting down saying ‘what can I bring here?’, and telling your line manager what you can bring. Redesigning your job role?

LYNN: It’s being a handraiser, consistently showing when a new project comes up, you’re saying, ‘oh, this is going to be so interesting because in two years I can see us doing this’. It’s signalling, in ways, ‘I’m here, I’m going to be here’. And I think that then there’s some sort of subconscious thing of like, ‘oh, two years’, you know what I mean? And so you speak about the future, speak about the future in a ‘we’ sense, consistently talk about how you’re going to continually be there and be seen. I like that. I mean, I think that’s a really nice way of putting it.

PHILIPPA: And demonstrate you want to be part of it?

LYNN: And demonstrate that you want to be part of it, exactly.

PRIYAL: Oh, I really like that. I’d not considered that before, but this idea of planting those seeds, I love that.

PHILIPPA: I loved that discussion. So interesting. Thank you very much everyone.

PRIYAL: Thank you.

PHILIPPA: It’s been great to have you with us. Lots to think about. And talking of longer working lives, we’ll be back next month talking about saving for your 100-year life.

If you’re finding the podcast useful, please do leave us a rating and write us a quick review on your app. You know we always love to hear your thoughts.

And finally, before we go, just please do remember, anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice. And when investing capital is at risk.

Thank you for listening.

Risk warning

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Bonus episode: Relationships and money

Our expert guests share some of their best tips when it comes to money and relationships.

The following is a transcript of a bonus episode of The Pension Confident Podcast - Relationships and money. You can listen to this bonus episode or scroll on to read the conversation.

PHILIPPA: Hello and welcome to a bonus episode of The Pension Confident Podcast. And as it’s Valentine’s Day, our tips this time are all about relationships and money. And if you’re wondering what your relationships have to do with your finances, listen up because they do - from pensions to property and, crucially, even your credit score.

And if you’re taking a break from relationships right now, this is still for you because the relationships we’re talking about here aren’t just romantic ones - we’re talking about family and friends too!

So before we get into it, just remember that anything discussed on the podcast shouldn’t be regarded as financial or legal advice and when investing your capital is at risk.

Happy listening!

First up, Personal Finance Expert; Ellie Austin-Williams and Barrister; Paul Infield from episode 14 on moving in with a partner who already owns a property.

PHILIPPA: Because the other situation that pops up a lot is, and it’s usually this way round I think, women move into their boyfriend’s flats and then even though he may be paying the mortgage for the next 10 or 15 years, if you stay together, you’re paying other bills, aren’t you? So you’re contributing equally to the household budget, but at the end - that flat’s still his.

ELLIE: It’s a really interesting one because I actually see a lot of cases where it’s the other way around. Where it’s a male moving into a female’s property and women asking this question. How do you get a contribution from the person that’s moving in without them then developing any right over the property?

BECKY: Would that come back to the cohabitation agreement?

PAUL: Well it does because the way that cases often end up on my desk from former partners, who formally cohabited, is where the property’s in one person’s name, but the other person has, say contributed to the payment of the mortgage either directly or indirectly by paying other bills, and so on. And they say, ‘well I’ve got an interest in that property because of that’. And that’s why it’s sensible to have that conversation beforehand.

There’s one other difference by the way, between joint tenancy and tenancy in common, which perhaps isn’t directly important, but it’s important when one of them dies. Because under a joint tenancy, there’s a thing called ‘the right of survivorship’, which means that the whole property goes to the survivor. Whereas that doesn’t affect tenancy in common. And that may mean that the person who ends up with the property isn’t the person who you might want to end up with the property.

BECKY: And these agreements between the joint tenants and tenants in common apply to non-romantic relationships as well. It’s quite important to point that out to single people.

PHILIPPA: Yeah.

Now, onto marriage where Paul told us all about what can happen to pension assets if you get divorced.

PAUL: Coming back to your question about pensions. When I went to the bar in 1980, you could do nothing with pensions. And that continued until the Pensions Act 1995, but it really came in in the beginning of the 2000s.

PHILIPPA: So whoever had the pension, it was their pension?

PAUL: And you had to ‘offset‘, as we call it. So the person who didn’t have the pension got more of the non-pension assets. And that was often very difficult, if there weren’t enough assets and so on. But back in the day, the idea was that the wife got a third and the husband got two-thirds. If you think back in history, that’s what it was like! Now, ever since Pension Sharing Orders (PSO) came in, the courts do divide up the pension. There’s a thing called a pension attachment but nobody really uses that. What the courts use now is pension sharing which is literally - one part of one person’s pension is transferred to the other person and they can invest it normally however they like, sometimes they have to keep it with the same pension provider.

PHILIPPA: This is a Pension Sharing Order that we’re talking about?

PAUL: Yes, and following on from that, what I often find is that women will say to me, ‘I’m prepared to do without a Pension Sharing Order so that I can get more of the house’. And I always say, ‘no no no no, you’ll really need a pension when you’re 67’.

PHILIPPA: But it’s tricky. I’ve been in this situation myself. If you’re raising small children and you divorce, you’re primarily thinking, ‘I’ve got to have the house because I’m probably going to be reducing my earnings for a bit and I’m going to be single parenting instead of with someone else’. But I speak from experience and understand, as a former Personal Finance Journalist, that the pension could even be your biggest asset depending on how big your pension is. But you just think, ‘well, I’ve got time, I’ll deal with that later’. But as you say, women can pay a penalty.

PAUL: Yes, I’m not saying you shouldn’t take the house rather than the pension. All I’m saying is that you need to think about it and not discount the pension.

PHILIPPA: Ever wondered if you should get a prenuptial agreement? Here’s more from Paul on the key need-to-knows about pre and postnups.

BECKY: Can you have a postnup?

PAUL: You can have a postnup as well, yes. Sometimes literally you have a prenup and then immediately after the marriage, literally after you sign the register, you sign the postnup because they’re even more binding. And that’s the first reason I think you should have it. The second thing, in some ways, is more important. It forces people to talk about one of those two, well three, things that British people in particular find very difficult to talk about, which is money. I’ve actually been involved in the drafting of a prenup, which ended up with the couple not marrying because my advice was that I thought the prenup was so unfair that the courts wouldn’t enforce it. So my client, who was the intended husband, decided not to go ahead with the marriage.

ELLIE: Rather than amend it?

PAUL: Rather than amend it. And actually, the couple really ended up finding out what each other were like courtesy of the intended prenup.

PHILIPPA: It’s good to talk and, tricky as it can feel, it’s especially important to talk to your partner about money. Here are money influencers Lynn Beattie and Ola Majekodunmi in episode 23 with PensionBee’s Jasper Martens on exactly why that is.

LYNN: I think from the moment you know that, particularly a relationship, is getting serious, you have to have that financial conversation. And almost ‘marry up’ your money mindsets because I was married to a spender and I was a spender - that’s a really dangerous combination. Don’t be afraid to do it because marrying the wrong person is a really expensive mistake. Not just because of all the assets that have to be split, but getting divorced costs a lot of money.

OLA: Which people don’t talk about either, do they? I think, going back to the early stages of dating, a lot of people don’t ask about money spending habits. They may think it’s weird they were asked that on the date, but I think it’s really important to know. I think it’s a really important question.

JASPER: Would you ask that on the first date though?

OLA: First date? Maybe not. But third or fourth!

PHILIPPA: And getting back to pensions, here’s The Financial Times’ Claer Barrett from episode 17 on why you should keep your pension provider updated on your relationship status. I know it sounds weird but it turns out [that] it’s really important.

CLAER: Now, you can’t leave somebody your pension in your will, you have to fill in what’s called an ‘expression of wish‘ form. Now, I mention this because like any pension that you’ve got anywhere from any company, even old ones - you might have started your first job aged 21 and thought, ‘oh well if I die, I’ll pledge for my pension to go to my lovely boyfriend’. But then, by the time you start your third or your fourth job, you might have split up with him. You know, the relationship could be toast. But if you don’t go back to that pension provider and say, ‘actually I’d like to update my expression of wish form because I’m now married to Peter and I’d like him to get my pension’. So it’s well worth thinking about.

PHILIPPA: And finally, let’s hear from Emma Barrow from the Financial Services Compensation Scheme (FSCS) with a cautionary tale from episode 15 about how your ex-partner’s dodgy credit record can follow you around if you don’t keep an eye on your own credit rating.

EMMA: I remember when my boyfriend and I got a house together, we’ve had the house for a long time now, but I remember when we were buying that house, he didn’t have the best credit rating. In a prior relationship, his [ex-partner] had got into debt from what I remember. I remember the worry and the panic of [thinking], ‘are we going to be able to buy a house?’. And he was worried about whether it would affect my credit rating because I’d, by that point, worked on it. To be fair, I didn’t really understand how it would impact me. That’s the other thing, again, going back to education and understanding, [it] feels like a bit of a dark art sometimes - a credit rating. People don’t really understand how those joint relationships affect it. If you’ve got into bad credit, how do you get out of it? If you’ve got no credit rating, how do you build it? It does seem to be a knowledge gap for sure.

PHILIPPA: And that’s going to apply to all sorts of people. Divorced people and newly independent people. As you say, this business of being affected by previous relationships that you might not have had the agency about.

Useful tips? We hope so! Happy Valentine’s Day to all of you. You can listen back to all these episodes wherever you get your podcasts - we’re on YouTube now and the PensionBee app too! Keep an eye on our feed as our next episode will be live at the end of this month.

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E24: How to start a business with Emilie Bellet, Jinesh Vohra and Lisa Picardo

Find out how to start a business.

The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 24, watch on YouTube, or scroll on to read the conversation.

PHILIPPA: A very happy New Year to you and a warm welcome to the first episode of Series Three of The Pension Confident Podcast. It’s January now and, of course, many of us will be thinking about resolutions for the year ahead. So what if your resolution is to be your own boss?

Have you ever dreamed about it - setting up your own business? Maybe getting a side hustle going where you’re the one in charge? But then, of course the doubts creep in, don’t they? Has your brilliant business idea really got legs? Where’s the money going to come from? And what about all the admin and legal stuff that you’ll need to tackle? No question, getting your micro-business off the ground can feel really daunting, but it’s not impossible. And understanding everything that’s going to be involved is the best place to start.

So today we’re going to explore the very first steps you can take on your business journey if 2024 is the year you decide to take the plunge. I have three entrepreneurs with me, they’ve all made that leap themselves. Jinesh Vohra is Founder and CEO of Sprive. That’s an independent mortgage platform that aims to help customers become debt-free faster. Hi, Jinesh.

JINESH: Hi.

PHILIPPA: Joining us for a second time on the podcast is Founder and CEO of Vestpod. That’s a financial education platform specifically for women. Emilie Bellett. Hello, Emilie.

EMILIE: Hello.

PHILIPPA: It’s nice to have you back.

EMILIE: Thank you.

PHILIPPA: And this last guest from PensionBee is not only the CCO, she’s also our third entrepreneur. She’s the Founder of childrenswear business, LittleCircle. Her name’s Lisa Picardo. Thanks for being with us, Lisa.

LISA: Thank you for having me.

PHILIPPA: Before we start. Here’s our usual disclaimer. Please always remember anything discussed on this podcast should not be regarded as financial advice or legal advice and when investing your capital is at risk.

The idea

PHILIPPA: Now, we’re going to hear all about your own startup experiences in a minute. But first, I think I’d like to know about that moment you all stopped dreaming about your ideas and actually committed to making them a reality and getting them off the ground. I mean, what prompted that? Was it a conversation with someone? Was it redundancy? Emilie, what prompted you to think ‘OK, I’m going to do it’?

EMILIE: I can think of one very specific moment. I had a meeting with a financial advisor who asked me, ‘where’s your husband?’, when I wanted advice on my own finances.

PHILIPPA: Wow.

EMILIE: So that really, you know, started my research and discovery of, you know, ‘how can we help more women become financially independent?’.

PHILIPPA: Yeah, absolutely, I completely understand that. That’s amazing isn’t it? In this day and age!

EMILIE: Yeah it was really annoying.

PHILIPPA: Yeah, really annoying! Jinesh, how about you?

JINESH: So I was at an investment bank and I was there for 14 years and always was focused on trying to progress through getting the next promotion. And then randomly a colleague of mine grabbed me and said, ‘do you want to have a conversation?’, and he basically told me he was leaving the firm and he was going to start his own business. And he was like, ‘we should have a conversation to see if we want to do something together’.

And that kind of led us to after work, sitting in the cafeteria, brainstorming business ideas. And we churned through a whole bunch of ideas and within a five-month period, we then came up with the idea for Sprive and, and now here we are today.

PHILIPPA: So it was the notion of being your own bosses rather than an idea?

JINESH: Yeah, exactly. We actually artificially came up with the idea once we were focused on deciding that we were going to do something together.

PHILIPPA: That’s interesting because I want to ask you later on about people who are in that situation - they know they want to do it but not quite sure what, but we’ll get to it. Lisa, how about you?

LISA: I think I’d long had that, sort of, ambition of one day running my own thing. I had a couple of, sort of, catalysts really. One was that my boss, who I absolutely loved, left. So it meant that I didn’t have to resign from him. Two, I was sort of in my 30s and I’d just had two children and being at that moment really made me reflect on where I was. Did I want to be doing the same thing forever or did I want to take that plunge?

First steps

PHILIPPA: Well, I mean, now we’ve got a sense of what sort of businesses you launched, should we start with first steps? What were your goals? Because I think this notion that we want to be our own boss is one thing - you sit down and think, ‘OK, we’re gonna do it’. Did you sit down and write a list of what you were hoping to get out of it or was it just, ‘I’m going to start this business’?

JINESH: I don’t think at the time I had a big goal in mind. It was very much a journey. And I think sometimes when you set yourself big goals, they can be quite overwhelming. So, I’m a big firm believer of focusing on the next kind of main task that you need to achieve and then start chipping away. So if I think about going back to the beginning, we were kind of trying to find the right idea and it was almost going through a process of validating ideas. Once we felt like, ‘OK, we’ve got a good idea’, then it was like, ‘OK, what do we need? What’s the team that we need to have, the founding team to be able to have a good chance of making the idea a reality?’. And then it was like, you know, ‘should we start talking to investors? Do we need to start talking to people in the industry?’ etc. And so one by one, we were kind of focusing on what was the next kind of step we needed to take. You keep doing that...

PHILIPPA: Step after step?

JINESH: ...Step after step, yeah. There wasn’t a big goal for me.

PHILIPPA: Because the business is really interesting, it’s about helping people pay off their mortgages faster than they otherwise might. Do you want to just tell us a bit about it?

JINESH: Yeah, sure. So it’s essentially an app that helps homeowners, like you said, pay off your mortgage faster and save on interest and we do this in a few different ways. So one is we help people set aside spare cash and with one tap, you can essentially make a mortgage overpayment. But you may obviously all know that mortgages have become much more expensive with interest rates rising, so not everyone can afford to put spare cash towards their mortgage. So then we work with a lot of top-tier brands like ASDA, Amazon, M&S, Waitrose, Uber, the list goes on. So every time you shop with those brands through the app, you get extra money towards your mortgage within 15 minutes of the shop. Again, with one tap, you can pay that towards your mortgage.

PHILIPPA: And when did you launch?

JINESH: Just over two years ago.

PHILIPPA: Yeah, it’s not long, is it?

JINESH: No, not long.

PHILIPPA: Emilie, you said, it was really annoying being asked what your husband thought about your finances. And I think we all understand that. But, what were your other specific goals around being your own boss?

EMILIE: So, life was pretty full-on. I was working evenings and weekends and at some stage, I wanted to work on something different. I wanted to work for myself. I wanted to have more independence. I think you can have this thing with entrepreneurship. But of course, there’s a lot of trade-offs.

PHILIPPA: Sure.

EMILIE: But I think when I set up Vestpod, I had this really big mission. And I think when you start a business, it’s important to try to solve a very big problem that will help you, you know, on this next goal, this next stage and carry on the journey. But I had then smaller goals, as you said. So, you know, how could I break it down? And I started Vestpod in a very simple way. I was like, ‘OK, I’m going to learn about personal finances. I’m going to meet as many financial advisers as I can and try to help women in the process’. So I started writing about personal finances and I started literally from my kitchen table writing a newsletter about money. So I think this early goal, something really small that you can achieve and move to the next thing that helps you validate your idea. I think in the early stages trying to test your idea a little bit.

PHILIPPA: I’m interested in the idea that it’s so easy to fall in love with your concept, isn’t it? We have a thought that, ‘yeah, this is great. It’s gonna be great, it’s all going to go really well’. So I’d like your thoughts on how do you stress test your idea? I mean, obviously there’s research and development, but I’m thinking more around understanding what it might be. Are we talking about a side hustle? Are we talking about a micro business? Are we talking about something that in the future, you want to see floating on the stock market? I mean, how would you suggest people set about that mental process?

EMILIE: With Vestpod, I wanted to try to see if people would pay for my services and would pay for a product. So it was trying to launch, you know, a basic product - the easiest thing possible. And one of the first things we launched was just a class for 20 people teaching personal finances. And I was the teacher so that was a massive learning curve for me. But I, you know, put up this Eventbrite page, you know, designed the logo and tried to get people to actually sign up to this course. We had a lot of people signing up, a lot coming from finance, which was really weird for me - having all these people coming from finance wanting to learn about personal finances. That was really stressful, but at least that validated the need for people to actually want to pay for education. So I’d say talk about your idea, try to get some feedback. There’s a really good book called The Mom Test. So trying to get honest feedback about your idea is hard because your parents, your friends, your partners will tell you ‘it’s amazing what you’re doing’.

PHILIPPA: Yeah, Lisa, how did you do that? I mean yours was around preloved clothing for kids, wasn’t it? How did you market test the idea?

LISA: I totally agree that I think what you do need to do is you develop that idea and then you, you know, you should tap into your networks, you should go and talk to as many people as you can. And I think the more you do it, the more you kind of get that elevator pitch straight in your head. For us, we tested it out, we spoke to magazine editors, we spoke to customers, we spoke to, you know, all sorts really to get that feedback and make sure that we were actually pretty confident before we went live.

PHILIPPA: Yeah, I mean, it’s true to say that you three were all well-connected. So I want to get into the heads of people who just don’t have your sort of networks. And I want to ask you, Jinesh, if you were thinking about that, from the point of view of - you weren’t working in the sector you were in before. How would you have set about working out whether your idea was really viable? And how would you set about looking at the competition?

JINESH: First of all, treat it as a little bit of an academic exercise. And so very much go into, like, ‘how big’s the market? What’s the competition? What are the challenges they’re facing? How do we be different? How do we enter the market? How do we make money?’

PHILIPPA: And you did all this online? You went and looked at the competition?

JINESH: So yeah look at the competition, download the products and just get a real sense of like, can we do something different? For example, talking to customers, we built a waitlist of - not building the product - but theoretically showing them what the product might look like. And 2,000 people signed up to the waitlist saying ‘I’d love to use this product’. And another example is talking to investors and asking ‘have they seen anyone else build something like this? What could be the pitfalls?’. And even doing things that are quite cheeky like talking to people who are the competition technically, and understanding how their business works and trying to get a little bit of intel.

PHILIPPA: So presumably you didn’t tell them, at that point, that you were thinking of setting up Sprive?

JINESH: Yeah, I was just like, ‘I’m a customer, I have a mortgage etc.’, and just trying to get intel because the more information you have, the more equipped you’re going to be, to be able to succeed. Once we came with the idea for Sprive, we then spent six months validating the idea. And it was only until I felt like we properly validated the idea that I actually quit my job and started Sprive. But then we had some really good signs where we had investors who said - we had a powerpoint and they were like ‘can I invest in the idea?’. We even had people in the mortgage industry who were seasoned CEOs who were like ‘can I invest?’.

And the network - I didn’t really have that network because my network was within banking. So I had to put myself out there and create that network. And so, you know, for anyone listening, saying ‘I don’t have the network’, I don’t think you ever do. I think you have to really go out there and build that network from scratch.

PHILIPPA: And how did you do that?

JINESH: Now, what I’m doing, and it’s probably the top tip that can give anyone who does start a business, is to post on social media every day. So I use LinkedIn as a platform and I’d say it took me a little while to start doing that, but that’s really transformed my business in terms of, it’s helped me connect with investors, helped me get new customers, helped me secure partnerships. The power of social media is incredible.

PHILIPPA: That’s really encouraging. Because obviously LinkedIn, it’s available to everyone, isn’t it? And there’s loads of tutorials as well online about how to get the best out of platforms like that. So it’s not like you have to start from scratch and without understanding what you’re doing.

I want to talk now about business plans because this is what everyone always talks about. And when you read into it online, about what your business plan should look like, the range of opinions you get is just huge. So the first question I think I have is how detailed should your business plan be when you start, Lisa?

LISA: I mean, I think it really depends on what your own expertise is because I think there will be, you know, some people will come from finance and, like myself, will be very sort of au fait with building business plans. But you’ll have other people who have a terrific idea and a concept and actually it’s not their bread and butter doing the finances. So then, you know, perhaps for them, what they need to do is sort of buy in that expertise or team up with someone who has it. But I do think it’s important. I think it’s really important to, sort of, have the discipline of writing your business plan in words and then trying to translate it into numbers. So I do think you have to try and I do think you have to be on top of it. But you know, you’ll learn and you’ll evolve and grow.

PHILIPPA: So, in many ways, it’s about getting clarity on the idea for yourself as much as for anyone else. And obviously these business plans aren’t set in stone, are they, they develop? Because the other thing is when you start, I mean, the data you have, the ideas you have about how much money you might spend, how much money you might make, it’s all estimates, isn’t it Emilie? So how useful is a business plan with lots of numbers?

EMILIE: You know, a few numbers, we call it back of it, ‘back-of-the-envelope’. And it’s trying to see, you know, if I build this business, how am I going to make money? How much is that gonna cost me? There’s a good tool called the Business Model Canvas that you can download online that’s free and that will help you identify stuff we’ve been talking about like your key partners, your competitors, costs, revenue, and try to sort of map out what your business is going to look like. And it helps you, it’s a little bit like a framework. So it doesn’t need to be very detailed. But of course, as you progress with your idea or you’re looking for funding, you’ll look to get into the details. When you have - sometimes when you have a very complex business plan, it’s very hard to get the big picture and you may get confused about, you know, where the money comes from and stuff. So sometimes it’s quite good, even when you have these big business plans to come back to something very simple and be able to explain your business plan to someone who’s not part of the business.

JINESH: What I’ve found with startups is all the ideas that you have, they’re all assumptions. And there’s a lot of curveballs that come your way and nothing really goes to plan. So spending a lot of time, you know, creating this big document is probably a waste of energy. And what we did is, what I’d call a business plan is a PowerPoint. And every time we did research, I’d document it and summarise what I’d learned. So if I’d done lots of analysis on the competition, I’d then say, ‘well, what did I learn through all that hard work that I did?’, and I’d try to summarise that on one page in the PowerPoint.

PHILIPPA: That’s a nice tip. I’m wondering, I mean, obviously you need to plan. No question. But I’m wondering whether there’s a danger of over-planning so that you actually never get started because you’re constantly thinking, ‘oh I’m not ready, I’m not ready!’.

LISA: I mean, you can never know everything. What you can guarantee about business planning is that it won’t turn out as you think.

PHILIPPA: Everyone says that, yeah. It’s quite worrying!

LISA: So I actually think it’s really about knowing ‘what could good look like?’ and ‘what could bad look like?’.

JINESH: The one thing I’d say is that numbers don’t lie. So, I’ve met founders who spent two, three, four, five years of their life. And if they did the upfront work on paper, they’d never have made money. So I do think it’s like, at least on paper, being able to like, say, ‘OK this thing can work’, obviously then you’ll have curveballs. But if on paper, the business will never work, then you shouldn’t start the business.

PHILIPPA: Don’t start the business. Can I just ask you about partnering up - because obviously we’re already understanding, there’s a lot of work here. So, I mean, Lisa and Jinesh, you partnered up but you didn’t, Emilie, is that right? You started up on your own?

EMILIE: I started on my own.

PHILIPPA: What are the challenges of that? I mean, obviously you can see that it’s your idea and if it goes really well, it’s all yours. But was it quite hard work doing it all on your own?

EMILIE: Yeah, I think in some ways, it’s hard work, but in others you probably move faster on other things because you’re the only decision maker.

PHILIPPA: But there’s no one to say ‘actually, Emilie, that’s a terrible idea, don’t do that’.

EMILIE: ‘Don’t do that!’. I launched another business before Vestpod where I had some co-founders. And it can be complicated also to manage co-founder relationships. So that’s why I decided after this business not working that I’d start Vestpod on my own. I mean, it’s not like I’m doing everything on my own, I have a team, I have a lot of support. We have advisors, we have a network so I’m not doing everything on my own. So I think it’s a personal decision of ‘do you want to do it on your own or do you want a co-founder?’. But you may want to talk about co-founder relationships because it’s like being in a marriage. So it’s something you have to manage properly.

PHILIPPA: Thinking about partners or co-founders, did you formalise the relationships with your co-founders straight away from day one? As in a legal agreement between you?

LISA: That’s a good question. So for us, I think there was a lot of - I mean, my best friend was my partner. So I was frankly delighted to be married to her for that journey. It was a very happy marriage. But yes, I think we had different roles and responsibilities. When we set up the business, we set up a limited company and we were 50/50. So we were truly co-founders. We had some agreements in place in terms of - for the major decisions, we’ll do these things together. And then in other areas, we’d sort of said, well, actually that’s your domain and this is my domain.

JINESH: For me, I don’t think I could’ve built Sprive alone. I think I’d have crumbled. I think it’s great to have - we have three co-founders - so there’s three of us in total that started Sprive. There was myself, my colleague that I’d worked with, and then we decided that we were going to build a tech company and none of us could code. So we felt like it’d probably be a good idea to bring in a CTO. And so fortunately enough...

PHILIPPA: A Chief Technical Officer?

JINESH: ...Yeah, a Chief Technical Officer. I think it’s really good to act as a sounding board. You almost sometimes get into arguments around certain things, but it’s really a good way of stress testing whether the next step that you’re taking is the right one.

The money & admin

PHILIPPA: Let’s move on to the nuts and bolts - let’s talk about the money. People think about bank loans, don’t they? I mean, I think it’s fair to say that you three had some degree of connection when it came to financing your businesses. If you don’t, I think most people think about a bank loan. Good idea? Bad idea? How easy are they to get?

JINESH: I mean, for me, a bank loan sounds quite scary. Because it’s quite easy for the business to - I mean, most startups, if you look at the numbers, ultimately most startups do fail. So having a personal bank loan if you set up a partnership or as a sole trader, you’re personally liable. So I’d almost prefer to bootstrap if you’re going to come up with a small business idea and have a little bit of savings that you set aside and invest that into the business, get more money back, bring that into the business. And start to really be confident that you’ve got a good, profitable business that generates revenue on a recurring basis. And then you can, with a high level of confidence, you can then say, ‘well, if I want to take out a loan, I know that if I deploy more capital, I’m going to get more money back and it’s less of a gamble’.

PHILIPPA: So save to get the business off the ground rather than borrowing?

JINESH: That’s what I’d do if I didn’t have an idea that relied on, kind of, investment and capital.

PHILIPPA: Everyone’s nodding around the table.

EMILIE: Yeah, I mean, I’ve bootstrapped my business until now. So that’s basically trying to launch the business, with a very minimal cost. So, for me, that was building a website. And I was the one doing the courses and stuff that helped me get some money into the business that I then reinvested in the business. So that’s a way to grow organically. It may take longer, but you keep full independence of the business and then you can decide that you want to get external funding where you’ll have to give shares and you’ll have to give equity to your investors. And there’s different ways, usually when you go through the funding journey, if you manage to bootstrap at the beginning, it’s great because you try to get your idea off the ground, then people usually look at angel investors. So individuals who may have a little bit of money to spare, usually high-net-worth individuals. So of course, when you’ve worked in banking and finance, you tend to have these networks. Not everyone will have a network of angel investors or...

PHILIPPA: Friends and family?

EMILIE: ...Friends and family money.

LISA: That can bring complexity as well!

JINESH: I think the great thing about this day and age is that there are a lot of resources out there that are very cheap or free. So if you want to create a website, you can use a platform like Webflow, Wix or Squarespace. And quite quickly you can find stock images that are free that look very good. And then like there’s AI and there’s ChatGPT and there’s amazing things that they can do.

PHILIPPA: Yeah, spend as little as possible. Because Lisa, I mean, the other side of this, of course is there’s a temptation to plough all your savings into this idea. But thinking with my cautious head on, I mean, you need to keep a cash cushion back, don’t you? To look after yourself if things go badly.

LISA: Because I think when you’re starting a business, it feels like everything, right? It’s your baby, it’s your passion, you’re so into it. But actually there’s a whole life outside of that as well and that has to continue. You need a roof over your head, you need to pay for your children and you need to keep the car going. You need to do whatever it was that you were doing before.

PHILIPPA: How big a cash cushion should you keep aside? Six months’ expenses or, I mean, what’s your suggestion on that? Because it matters, doesn’t it?

LISA: I’m not sure there’s one answer to that. I mean, I think it really depends - I think there’s two sides really, which is one, what are the factors around your business? And then the second is what are the factors around your lifestyle? Are you on your own? Do you live with someone? Do you have a partner that can help shoulder that financial responsibility of life whilst you’re starting your business? So I think it’s a very individual decision based on your circumstances.

PHILIPPA: Can we talk a bit about structure? I mean, how do you set up a business? There’s a sole trader, limited companies, partnerships? Pros and cons? Any strong thoughts on them?

JINESH: Yeah, so we’ve set up a limited company and that was because it was very clear from the outset that we needed shareholders and we needed to raise capital. So that’s the traditional way you’d structure a company. And you don’t take personal liability which is obviously good.

PHILIPPA: So you’re not gonna lose your house?

JINESH: You’re not gonna lose your house, exactly. Whereas if you’re, for example, a sole trader or a partnership, you have personal liability. And so, if the company has personal debts, they’re your debts.

PHILIPPA: Emilie, any thoughts on how you should make that decision?

PHILIPPA: So I want to get into the pros and cons of them. I mean, from what you’re saying, it sounds like you all think that you should set up a limited company, however tiny your venture is. And that’s not an expensive thing to do, is it? I mean, it’s worth saying that. But you think you should?

LISA: Yeah, I think it’s pretty sort of simple and straightforward to actually set up your company. I asked my husband, who’s a friendly lawyer, to do it for me. And I spoke to my dad, who’s a friendly accountant, to help me along the way.

PHILIPPA: Handy family you’ve got there!

JINESH: I think it’s £13 to register a company. And then obviously you need to do your annual accounts.

PHILIPPA: So proper advisors?

EMILIE: And one thing I’d say is that, for me, setting up a limited company was because I had a big vision for the business. So even if the business was small, I thought maybe one day it’s going to be a much bigger business. So I’ll already have the structure, I’ll have a history of annual accounts. So that was helpful. But it was also about separating my personal finances versus the businesses finances. And I know when you’re a sole trader, you should definitely have separate business accounts because it can be very confusing sometimes when you start paying from your own account for the business and for yourself, your mortgages, it all comes from the same pocket. So even if you’re a sole trader, make sure you have separate, at least, bank accounts for you and your business.

PHILIPPA: OK. So if you’re setting up a little retail business online or something, just for yourself, at the kitchen table, you should have a business account and keep everything separate?

PHILIPPA: OK, we all know this isn’t going to be easy. I think the stats that you alluded to earlier, Jinesh, said on average 20% of new businesses fail in their first year and more than 60% only make it to five years. Now, this is all quite dispiriting. But having said that, that means 40% of them do fine and keep on going, right? So, common mistakes; what common mistakes do you see startups making?

EMILIE: For me, it’s focus. So, trying to do too many things at the same time and building something quite complicated and then losing track. So I’d say keep it simple. Cash is king. We talked about cash flow. Especially for small businesses, I think that’s the main reason why startups actually close.

JINESH: Yeah, I also think - I mean, all those things are common reasons. I think also if you start on your journey, you’ll find certain things happen that you didn’t anticipate and so your ability to be able to be quite agile. So I think part of it’s also just reacting to curveballs that go your way.

PHILIPPA: Is there a piece of advice that would’ve made a difference to you in the early days, if you’d known it? Something you know now?

JINESH: Everything takes a lot longer than you think. So, I remember talking to my wife when I had the idea and we decided that I was going to leave my corporate job behind. And I was like, ‘don’t worry in about a year I’ll be earning a salary’. It took me two years. So, like, you know, 18 months later, when’s your salary coming?

PHILIPPA: Yeah. Emilie?

EMILIE: I’d say it’s about the journey and not the destination. It’s a very long journey. So it’s like a series of sprints. You think you’ve got somewhere but then you’re working on the next thing. So I’d say try to enjoy the journey. If you’re really not enjoying it, if you feel it’s not working, you should really reconsider your plans. Take care of yourself and your mental health. We talked a little bit about, you know, the business within your life and it takes a lot of space, a lot more space than you’d think. It’s like having another child for me. And you stress a lot about it, you think about it all the time. So try to have strong boundaries.

JINESH: And that’s a really important point - the mental side of things. I don’t think I appreciated that at all - having a good support infrastructure because it’s really tough.

PHILIPPA: It sounds like it’s gone really well. But was it really tough?

JINESH: It’s tough because, like you say, you don’t switch off. So that’s one thing. So when you’re trying to be present, sometimes you’re having a family event and you’re still on your phone managing your business and people notice. There’s other stresses, like, you’ve got your team and you don’t want to lay the stress onto the team because ultimately, they’re looking to you for inspiration and guidance. And then you’ve got your family life and you don’t want to necessarily lay it onto them. And I found leaning on other founders is a really nice way of doing it, because you’re going through similar challenges.

LISA: Totally.

PHILIPPA: I think, you know, we know there’s a lot to think about here, but I hope it’s not going to put people off giving it a go.

Just a last reminder that anything discussed on the podcast should not be regarded as financial or legal advice. And when investing your capital is at risk.

Next month on The Pension Confident Podcast, we’ll be looking at the financial barriers facing women and how to smash them down, but don’t think this is only for women. Trust me, there will be lots for everyone to know in that episode.

Remember if you’ve got the PensionBee app, you can now listen to the podcast on our brand new in-app player. Give it a try next time you check up on your pension. Thanks for listening.

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Preserve Plan investor update Q3 2020

Nick Pidgeon

Senior Investment Manager at State

Street Global Advisors

18 Nov 2020

minute read

Nov 2020

Inside the BeeHive

Hi, I’m Nick Pidgeon from State Street Global Advisors, and we’re here to give you an update about the Preserve Plan, which you are invested in.

How did the plan perform compared to the market, over the last three months? Did we have a good quarter or a bad quarter?

The Preserve Plan invests into short-term debt of high rated creditworthy companies with the principle aim to reduce risk and preserve your savings. COVID-19 led market stresses - which had prevailed over the second quarter of 2020 - eased throughout the third quarter. Improved market conditions resulted in lower returns for the short-term debt purchased for the plan. The plan performance, however, remains positive to short-term market conditions.

What can savers expect for the next quarter?

Challenging conditions are set to continue unfortunately, with the economic outlook remaining clouded as COVID-19 cases increase and tighter lockdown measures are implemented. These will likely have negative ramifications on the economy.

On a more positive note, the potential for a Negative Interest Rate Policy (NIRP) remains a threat, but expectations of this happening eased after Bank of England Governor Andrew Bailey said that the Bank were not about to use negative interest rates imminently and that the bank has a lot of work to do before considering cutting interest rates below zero.

Brexit trade negotiations are ongoing however at this stage, so it is impossible to say with any degree of certainty that a trade deal will be agreed within permitted time scales.

How has State Street Global Advisors driven positive social change in the past quarter?

Our aim is to promote positive changes to the environmental, social and corporate governance practices in the companies that the Plan invests in by engaging with them and voting on resolutions at company annual general meetings.

Climate change has been, and will continue to be, a key area of focus for our stewardship endeavours. As a result of the impact from COVID-19 the attention of many companies has shifted from longer-term sustainability matters to more immediate ESG and economic factors. It is important that companies focus on the short-term issues that have arisen but this should not be to the detriment of systematic risks, such as climate change, hence we have continued to engage with companies on the topic. So far this year we have had 72 specific climate-related engagements and they have focused on having companies:

Address the risk of climate change on their business
Commit to reducing carbon emissions
Educate boards ensuring directors are aware of climate risks
Provide climate reporting which conforms with relevant standards

Coupled to our engagement efforts to drive positive change, is the use of our vote at shareholder meetings. In recent years most climate-related shareholder resolutions were targeted at energy companies. This year however, we have seen a growing number aimed at financial institutions. One such example is a shareholder resolution raised with Barclays by the responsible investment charity, ShareAction. The resolution sought to direct the company to stop financing energy and utility companies that are not aligned with the Paris Agreement.

Following engagements with shareholders and ShareAction, Barclays announced a plan to reach net zero carbon emissions by 2050 and a commitment to align all of its financing activities with the goals and timelines of the Paris Agreement. Barclays also submitted its own management resolution on climate for investors to consider at the annual meeting vote. The spirit of both resolutions was broadly similar but we opted to support Barclays’ resolution and abstain from the resolution submitted by ShareAction for the following reasons:

We believe Barclays’ proposal was the more ambitious of the two. Further, Barclays’ ambition to achieve net zero emissions by 2050 covers all of its portfolio, not just lending (as proposed by ShareAction’s resolution).
The resolution submitted by Barclays sought to transition its provision of financial services across all sectors to align with the Paris Agreement, whereas ShareAction’s resolution was too narrowly focused on the “phaseout” of specific financial services in the energy and power sectors.
The passing of both resolutions could have created legal uncertainties, as they are both binding.

We will continue to engage and vote on climate change matters and our recently published Annual Climate Stewardship Review which providers further insights into our activities can be found here.

Your updated fact sheet will soon be available to download in the BeeHive. If you’d like to ask a question in the next update or share your thoughts, you can get in touch with PensionBee via email or Twitter.

As with all investments, past performance is not indicative of future performance and you may get back less than you start with.

‍

Period	Market Event	FTSE World TR GBP (%)	4Plus Plan (%)
4Plus Plan’s inception – 6 Sept 2013	QE Tapering, China Interbank Crisis and its aftermath	-5.44	-2.41
3 Oct 2014 – 15 May 2015	Oil price drop, Eurozone deflation fears & Greek election outcome	-5.87	-1.77
7 Jan 2016 – 14 Mar 2016	China’s currency policy turmoil, collapse in oil prices and weak US activity	-7.26	-1.54
15 June 2016 – 30 June 2016	BREXIT referendum	-2.05	-1.07

Period	Market Event	FTSE World TR GBP (%)	4Plus Plan (%)
4Plus Plan’s inception – 6 Sept 2013	QE Tapering, China Interbank Crisis and its aftermath	-5.44	-2.41
3 Oct 2014 – 15 May 2015	Oil price drop, Eurozone deflation fears & Greek election outcome	-5.87	-1.77
7 Jan 2016 – 14 Mar 2016	China’s currency policy turmoil, collapse in oil prices and weak US activity	-7.26	-1.54
15 June 2016 – 30 June 2016	BREXIT referendum	-2.05	-1.07

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