WEBVTT - Financial Planning for Retirement 0:00:04.600 --> 0:00:09.480 Hello, I'm Shirley Ballas and welcome to Rewirement, the retirement 0:00:09.480 --> 0:00:14.150 podcast from Legal & General. I'm on a mission to help you 0:00:14.150 --> 0:00:20.840 reset, reinvent, rewire for the retirement you want. Every fortnight 0:00:20.840 --> 0:00:25.439 I'm joined by fabulous retirees and would- be retirees, with 0:00:25.439 --> 0:00:28.190 their own unique take on retirement. 0:00:28.950 --> 0:00:31.900 Now that I'm entering my 50s, maybe it's a rite 0:00:31.900 --> 0:00:34.110 of passage and I need to start talking about these 0:00:34.110 --> 0:00:35.669 things with my friends. 0:00:36.070 --> 0:00:39.229 Plus my brilliant panel of experts will be diving in 0:00:39.229 --> 0:00:43.379 to tackle the big questions. They'll share their suggestions to 0:00:43.379 --> 0:00:46.979 help make your post- work years the most exciting of 0:00:46.979 --> 0:00:53.159 all. There's a reason this program's called Rewirement. For many 0:00:53.159 --> 0:00:57.620 people, retirement involves a change of pace, a different outlook 0:00:57.620 --> 0:01:01.050 and a different day- to- day. But before you get 0:01:01.050 --> 0:01:04.479 there, it's important to put yourself in the best position 0:01:04.480 --> 0:01:10.250 possible, both financially and in your attitude to money. Fortunately, 0:01:10.420 --> 0:01:13.440 the experts are here to tell you what you can do 0:01:13.440 --> 0:01:18.339 at any age to get yourself ready and steady before 0:01:18.340 --> 0:01:23.839 retirement day comes. Emma Byron and Holly Mackay will be 0:01:23.839 --> 0:01:27.640 with me in the studio later, but first let's catch 0:01:27.640 --> 0:01:34.639 up on our retirement planning friends. I'm chatting to Debbie today. 0:01:34.929 --> 0:01:38.719 My name's Debbie. I'm 50- years- old and I am 0:01:38.789 --> 0:01:42.870 still working. I think this time of life is particularly 0:01:43.009 --> 0:01:46.940 exciting because I feel financially more comfortable than I have 0:01:46.940 --> 0:01:50.460 done in the past. The children are less reliant on 0:01:50.460 --> 0:01:53.820 me, on us, should I say? And we're now looking 0:01:53.820 --> 0:01:59.040 forward to retiring sooner rather than later, and hopefully enjoying 0:01:59.040 --> 0:02:02.110 it while we still have the physical capacity to do so. 0:02:03.390 --> 0:02:06.529 She's only just beginning her journey to working out her 0:02:06.530 --> 0:02:10.000 retirement finances. And I wanted to know what sort of 0:02:10.000 --> 0:02:13.630 questions are in her head. Debbie, what else do you 0:02:13.630 --> 0:02:15.680 think needs to be done to help you get to 0:02:15.680 --> 0:02:18.909 a place where you're really comfortable with your retirement plan? 0:02:20.299 --> 0:02:21.850 I think, first of all, I need to work out 0:02:21.850 --> 0:02:25.519 exactly how much I currently have. So, find all my 0:02:25.519 --> 0:02:30.200 pension pots, actually get answers about what the yield is 0:02:30.200 --> 0:02:32.579 going to be when I do retire and plan that 0:02:32.579 --> 0:02:35.760 way. Maybe it's time at the moment while we're relatively 0:02:36.200 --> 0:02:39.510 secure, touch every piece of wood I can find, to 0:02:39.510 --> 0:02:42.260 put more aside, maybe that's the answer, maybe I'll have 0:02:42.260 --> 0:02:46.179 to do that. I think if everything went tomorrow and 0:02:46.179 --> 0:02:48.590 we had to retire, we would downsize and we'd be 0:02:48.600 --> 0:02:51.769 okay, because again, it's down to house property value, isn't 0:02:51.769 --> 0:02:54.459 it? So, our house, if we sold it now, we 0:02:54.459 --> 0:02:57.109 could get something in the West Country, much smaller for 0:02:57.109 --> 0:02:59.519 a lot less money and be mortgage free. So, there's 0:02:59.519 --> 0:03:03.130 always that kind of safety net, if you like, but 0:03:03.130 --> 0:03:05.209 yes, maybe we should be putting more away. But the 0:03:05.209 --> 0:03:07.350 other thing is that the retirement age, I mean, when 0:03:07.350 --> 0:03:10.340 will that be? When realistically, can you look to retire? 0:03:10.959 --> 0:03:12.929 It's so different now to how it used to be. 0:03:12.929 --> 0:03:15.519 I mean, my husband's a police officer, but he hasn't 0:03:15.519 --> 0:03:19.649 been in the force since he left school. So, the 0:03:19.810 --> 0:03:22.439 usual rule is 30 years and that's it, you retire, 0:03:22.440 --> 0:03:25.000 but he hasn't got that because he started so late. 0:03:25.000 --> 0:03:28.049 So, he's going to have to keep going until he's reached 0:03:28.049 --> 0:03:30.899 a certain amount of pension that he's built up. I 0:03:30.899 --> 0:03:32.850 don't know how long I'll have to work before I've 0:03:32.850 --> 0:03:35.470 got a decent amount saved up. It's all very different, 0:03:35.470 --> 0:03:36.240 very different now. 0:03:36.670 --> 0:03:39.580 Today's society is a lot different. Isn't it? Most people 0:03:39.580 --> 0:03:41.940 aren't thinking about that and what's going to happen when 0:03:41.940 --> 0:03:44.730 they turn 60 or how they're going to manage, well, 0:03:44.730 --> 0:03:47.559 not the groups of people I talk to, anyway. Debbie, 0:03:47.560 --> 0:03:49.990 when you retire, how much money do you think you're 0:03:49.990 --> 0:03:52.340 going to need? Would it be 80% of what you're 0:03:52.710 --> 0:03:55.599 earning at the moment, 50% of what you're earning? What 0:03:55.600 --> 0:03:58.020 do you think you will need when you retire, to 0:03:58.020 --> 0:03:58.410 live on? 0:03:59.030 --> 0:04:01.630 I honestly don't know, we haven't sat down and done 0:04:01.630 --> 0:04:06.010 the sums. I think we've always been assuming that because 0:04:06.010 --> 0:04:08.160 of my husband's final salary pension, we will be able 0:04:08.160 --> 0:04:12.890 to pay off the mortgage. So, in my head, whatever 0:04:12.890 --> 0:04:16.279 we've got from pension income from that point will have 0:04:16.279 --> 0:04:19.060 to do, and that's kind of where I'm at and 0:04:19.060 --> 0:04:21.260 that's probably not the best way to look at it. 0:04:21.260 --> 0:04:23.789 I should be thinking ahead more. But I think once 0:04:23.789 --> 0:04:26.810 the house is paid off, everything else you can make 0:04:26.810 --> 0:04:30.099 do with. I'm in a situation where, because I've worked 0:04:30.099 --> 0:04:32.120 in so many different places, I've got lots of little 0:04:32.120 --> 0:04:34.920 bits of pension and savings and stuff all over the 0:04:34.920 --> 0:04:38.129 place. And quite recently, actually, I tried to get it 0:04:38.130 --> 0:04:41.280 all in one place and I'm still doing that, and 0:04:41.510 --> 0:04:44.430 I absolutely hear you. It is so important for everyone 0:04:44.430 --> 0:04:46.630 to know where everything is, because if I can't keep 0:04:46.630 --> 0:04:49.130 track of it, no one's got a hope when I go. 0:04:50.260 --> 0:04:53.460 That's exactly what I'm going to do as well. Debbie, 0:04:53.460 --> 0:04:56.450 is it good to talk about money? Are you comfortable talking 0:04:56.450 --> 0:04:58.540 about money with your husband and your children? 0:04:59.029 --> 0:05:01.630 Yes. Very comfortable talking to my husband about it. That's 0:05:02.200 --> 0:05:04.539 absolutely no problem at all. I think, as a society, 0:05:04.539 --> 0:05:09.610 we don't really talk about money, especially retirement and the 0:05:09.610 --> 0:05:12.770 savings and insurance and things like that. As you said, 0:05:12.770 --> 0:05:14.830 it goes back to death, doesn't it? People don't want 0:05:14.900 --> 0:05:16.849 to talk about that kind of thing, but I think 0:05:16.849 --> 0:05:19.240 that people should talk about it. I actually had a 0:05:19.240 --> 0:05:22.029 financial advisor in my very first job, so I was 0:05:22.039 --> 0:05:26.250 21, and he came in and he talked to me 0:05:26.250 --> 0:05:29.529 very, very rationally about what I ought to be doing 0:05:29.529 --> 0:05:31.390 at that stage, and of course, I didn't, but I 0:05:31.390 --> 0:05:33.650 did make a start. And I think the more people 0:05:33.650 --> 0:05:37.070 that know about that early on and actually take it 0:05:37.070 --> 0:05:39.880 on board and listen and do something about it, they'll 0:05:39.880 --> 0:05:42.359 be a much better position when they get to retirement. 0:05:42.620 --> 0:05:44.900 Is there anything you would change moving forward? 0:05:45.409 --> 0:05:49.390 Yes. I think I'm probably going to consider my kids 0:05:49.390 --> 0:05:53.080 more. It is a completely different state of play now 0:05:53.080 --> 0:05:55.669 with the kids growing up and getting onto the property ladder. 0:05:56.050 --> 0:05:59.650 So, Debbie, what the most pressing questions you have around 0:05:59.650 --> 0:06:03.450 financial planning for retirement and what questions do you think 0:06:03.520 --> 0:06:05.820 others will also be confused over? 0:06:06.169 --> 0:06:09.349 I'm not a hundred percent clear exactly, at the moment, 0:06:09.359 --> 0:06:12.320 what I will end up getting when I do retire. 0:06:12.650 --> 0:06:17.260 And I'm aware that things change as life goes on, 0:06:17.260 --> 0:06:19.479 and rates change and go up and down, and investments 0:06:19.479 --> 0:06:22.130 change. Bearing in mind, I have quite a few different 0:06:22.130 --> 0:06:24.890 pots of money in different places, it's not a hundred 0:06:24.890 --> 0:06:28.599 percent clear what I'm looking at. I'd like a little bit more 0:06:28.599 --> 0:06:32.680 education, really, and to understand more what each of these 0:06:32.680 --> 0:06:35.940 pots of money does, how it performs and what the 0:06:36.260 --> 0:06:39.080 effects of different things in the economy is going to 0:06:39.080 --> 0:06:39.549 have on it. 0:06:40.260 --> 0:06:43.349 Colin and Tracy are still working, but have a few 0:06:43.349 --> 0:06:46.900 options on their plate. I asked them to compare notes 0:06:46.900 --> 0:06:48.540 on where they seek advice. 0:06:49.229 --> 0:06:53.299 In the past, I have spoken to an independent consultant, 0:06:53.469 --> 0:06:56.909 many years ago, actually. And I think that was recommended through 0:06:56.909 --> 0:07:00.510 a friend. But I think my current context, at the 0:07:00.510 --> 0:07:03.640 moment, I haven't really sought advice in terms of where 0:07:03.640 --> 0:07:06.270 I'm sitting now, because it was a few years ago. 0:07:06.849 --> 0:07:10.660 I probably could go online and get some advice via 0:07:10.660 --> 0:07:14.700 the teacher's pensions, government pension, and maybe get in touch 0:07:14.700 --> 0:07:18.879 with people there to find out a bit more about what 0:07:18.880 --> 0:07:21.210 it's going to look like and what my options would 0:07:21.210 --> 0:07:23.940 be. I prefer face- to- face, though, and talking with 0:07:23.940 --> 0:07:27.170 somebody. So, I feel as though, perhaps, I haven't sought 0:07:27.170 --> 0:07:30.230 as much advice as I should have done because I 0:07:30.239 --> 0:07:34.130 don't know at the moment what my options are. I 0:07:34.130 --> 0:07:37.540 would probably go back to teacher's pension and maybe try 0:07:37.540 --> 0:07:42.249 and get another independent financial advisor, perhaps, to talk about 0:07:42.250 --> 0:07:45.110 ways forward and what it will look like in the 0:07:45.110 --> 0:07:48.360 future. And surely, there must be some sort of badge 0:07:48.360 --> 0:07:51.950 of ... That they would be accredited to or signed up 0:07:51.950 --> 0:07:55.110 to, to know that they are a good financial advisor, 0:07:55.110 --> 0:07:58.920 providing robust advice and legal advice to you. Now, I 0:07:58.920 --> 0:08:02.050 don't usually talk about such matters with my friends, but 0:08:02.050 --> 0:08:07.629 perhaps we should, now that I'm entering my 50s, maybe 0:08:07.630 --> 0:08:09.560 it's a rite of passage and I need to start 0:08:09.880 --> 0:08:12.640 talking about these things with my friends. 0:08:12.810 --> 0:08:14.290 I mean, you don't have to tell them what you're 0:08:14.290 --> 0:08:16.210 worth. You don't need to say how much money you've 0:08:16.210 --> 0:08:19.559 got or what you're thinking about investing. You can just 0:08:19.560 --> 0:08:23.860 have a conversation about investment, about pension policies, about the 0:08:23.860 --> 0:08:25.809 future. What did they do for their children? What are 0:08:25.810 --> 0:08:29.260 they thinking about doing for their children? What are they leaving? 0:08:29.260 --> 0:08:31.780 Or talk about the mortgage, is it paid off? Isn't 0:08:31.780 --> 0:08:33.520 it paid off? I think the more that you can 0:08:33.520 --> 0:08:36.280 communicate, the easier these decisions are to make. 0:08:36.470 --> 0:08:38.610 Talking about it is only going to help. Isn't it? 0:08:39.490 --> 0:08:42.599 Colin, where do you seek your advice when it comes 0:08:42.610 --> 0:08:46.660 to your pension plans? Do you have anybody special, anybody in mind? 0:08:46.660 --> 0:08:50.870 I did have, when I first set up the schemes, 0:08:51.069 --> 0:08:53.860 when I first started my unlimited company, there was a 0:08:53.860 --> 0:08:56.470 financial advisor, who'd been recommended to me by a friend 0:08:57.100 --> 0:08:59.610 who was just round the corner from where I worked. 0:09:00.030 --> 0:09:04.140 And I worked there for about seven years and it 0:09:04.550 --> 0:09:07.520 probably isn't a coincidence, but when I left that organization and 0:09:07.520 --> 0:09:11.459 went somewhere else, 80 miles away, it was never convenient 0:09:11.459 --> 0:09:13.329 to just pop round and see the guy to talk 0:09:13.329 --> 0:09:16.129 about where we're at, do we need to replan things? 0:09:16.130 --> 0:09:17.890 Do I now need to take out this sort of 0:09:18.240 --> 0:09:22.010 insurance plan? How would my pension go in? Although, he 0:09:22.010 --> 0:09:23.559 was only ever on the end of a phone, this 0:09:23.559 --> 0:09:27.510 was probably still pre- mobile phone days. So, yeah, he 0:09:27.510 --> 0:09:32.150 was good. What actually happened was that, fairly soon after 0:09:32.150 --> 0:09:33.679 I took out some of the schemes, that a lot 0:09:33.679 --> 0:09:37.660 of consolidations and mergers and acquisitions took place. So, it 0:09:37.660 --> 0:09:40.880 seemed like every time your plan settled down, it then 0:09:40.880 --> 0:09:43.959 got acquired by somebody else. And then, two years later, 0:09:43.959 --> 0:09:46.429 somebody else acquired it. And so, it got to the 0:09:46.429 --> 0:09:48.900 stage where you thought, " I now don't know whether that's 0:09:48.939 --> 0:09:51.120 the plan that's suitable for me." So, that's probably about 0:09:51.120 --> 0:09:54.059 the time that I stopped contributing to them, and since 0:09:54.059 --> 0:09:57.260 then, I've generally done all the research myself, a lot 0:09:57.260 --> 0:10:00.630 of homework, very rarely rush into making any decisions of 0:10:00.630 --> 0:10:03.850 that type. My friends and family would tell you I'm a 0:10:03.850 --> 0:10:07.030 bit of a spreadsheet nerd, in that I put all the 0:10:07.030 --> 0:10:10.260 information into spreadsheets, analyze it, and that's how I make 0:10:10.260 --> 0:10:11.020 my decisions. 0:10:14.189 --> 0:10:18.630 Remember David and Marcus? Our choir singers. David retired after a 0:10:18.630 --> 0:10:22.440 career in finance, but Marcus is still working in his 0:10:22.470 --> 0:10:26.369 own business. I asked them if they prefer to educate 0:10:26.370 --> 0:10:31.609 themselves or take advice from specialists? David was first to answer. 0:10:32.000 --> 0:10:36.880 I mean, because I've been involved in finance and I'm 0:10:36.880 --> 0:10:41.059 interested in it, I was never likely to ignore this 0:10:41.059 --> 0:10:44.360 field, but when you're busy and you're working all hours in 0:10:44.360 --> 0:10:48.280 practice, you don't do much more than make cursory checks 0:10:48.280 --> 0:10:52.760 on statements that come in. And even, when I look back at the 0:10:53.400 --> 0:10:56.270 information that I've received, when I've left jobs and so 0:10:56.270 --> 0:10:59.520 on, that there've been quite a lot of errors and inconsistencies 0:10:59.520 --> 0:11:01.680 in those, which I didn't pick up at the time. 0:11:02.189 --> 0:11:08.040 So, it is much more recent, I would say, from 0:11:08.719 --> 0:11:13.130 perhaps my mid- 40s onwards when I started to look 0:11:13.130 --> 0:11:16.259 in to a little bit more detail, but I'm still 0:11:16.260 --> 0:11:20.300 learning. My wife is not particularly engaged and she didn't 0:11:20.300 --> 0:11:24.969 do a frontline role. She was secretarial for the general 0:11:24.969 --> 0:11:27.920 management. And I think it's fair to say there's more 0:11:27.920 --> 0:11:32.429 linguistic than numerate in terms of her skill preference. So, I 0:11:32.429 --> 0:11:34.510 involve her in the decisions or I tell her what 0:11:34.510 --> 0:11:36.980 I'm planning to do, but she really does leave it 0:11:36.980 --> 0:11:42.119 to me. She has, I think, after I made one 0:11:42.140 --> 0:11:46.900 error, I mean, the worst financial decision I probably took 0:11:46.900 --> 0:11:51.530 was on her final defined benefit pension with the bank 0:11:51.530 --> 0:11:53.949 that she worked. So, she's never quite forgiven me for 0:11:53.949 --> 0:11:57.319 that, but hopefully I do get more things right than 0:11:57.370 --> 0:12:01.280 the wrong in regard to her pension situation. 0:12:01.510 --> 0:12:03.760 I'd like to be in the room when David's wife 0:12:03.760 --> 0:12:08.459 hears that he thinks she's more literate than numerate. There 0:12:08.459 --> 0:12:10.920 are three of us directors in the firm where I 0:12:10.920 --> 0:12:15.189 work and our financial interests are therefore very much intertwined 0:12:15.219 --> 0:12:17.390 and that's been fantastic because the three of us have 0:12:17.640 --> 0:12:19.770 gone through this journey together and have had a lot of 0:12:19.770 --> 0:12:22.290 chance to talk through and discuss how we wanted to do things. So, I think 0:12:24.250 --> 0:12:27.689 that's been my main support group and my main way 0:12:27.689 --> 0:12:29.390 of finding out the options. 0:12:32.660 --> 0:12:35.679 It's great to hear how our would- be retirees are 0:12:35.679 --> 0:12:40.439 looking ahead and asking the big questions. So, what do 0:12:40.439 --> 0:12:43.050 you need to ask yourself to get the basics right 0:12:43.099 --> 0:12:46.219 in retirement? And do you need to have it all 0:12:46.219 --> 0:12:50.610 worked out before the big day arrives? I'm joined, once 0:12:50.610 --> 0:12:55.420 more, by Legal & General's Emma Byron, managing director of retirement 0:12:55.420 --> 0:13:00.080 income, as well as Holly Mackay, founder of Boring Money. 0:13:00.780 --> 0:13:03.589 What a dream team to give your financial planning a 0:13:03.589 --> 0:13:10.170 boost, welcome both. Emma, for some people, their retirement might 0:13:10.170 --> 0:13:13.429 be almost as long as their working life. When do 0:13:13.429 --> 0:13:16.140 you begin to even work out the numbers for that? 0:13:16.459 --> 0:13:18.009 I think, if you look at it in that way, 0:13:18.010 --> 0:13:21.270 then it feels like a insurmountable task, really, to undertake. 0:13:21.569 --> 0:13:23.599 I don't think any of us start our working life thinking 0:13:23.599 --> 0:13:26.300 about planning for the next 30 years. That's for sure. 0:13:26.589 --> 0:13:28.369 Most of us all work out what we're going to 0:13:28.370 --> 0:13:30.780 be paid, and then what that means we can afford 0:13:30.780 --> 0:13:33.629 in rent or mortgage and how many times a week 0:13:33.630 --> 0:13:35.809 we can go out. So, I think people should try 0:13:35.809 --> 0:13:38.530 not to see it as something completely different to that. 0:13:39.209 --> 0:13:41.500 The first step is really to understand the assets that 0:13:41.500 --> 0:13:46.020 you've got, what retirement income sources you might have. So, 0:13:46.329 --> 0:13:48.980 get your health in order. Think about all of those sources 0:13:48.980 --> 0:13:52.319 of assets, think about maybe consolidating your pension pots, so 0:13:52.319 --> 0:13:54.459 you've got all of that information in one place, to make 0:13:54.459 --> 0:13:57.599 it easier to manage. The government certainly offers a very 0:13:57.599 --> 0:14:01.440 basic tracing service for lost pensions, but we'll also at Legal & 0:14:01.540 --> 0:14:04.240 General, we'll be launching our own tracing service later this 0:14:04.240 --> 0:14:06.610 year, which will help people to do exactly that. Find 0:14:06.610 --> 0:14:09.079 everything they've got, put it in one place. I'd always 0:14:09.079 --> 0:14:10.959 say though, it's not just about what you'd consider to 0:14:10.959 --> 0:14:13.760 be retirement assets, but also any other assets that you 0:14:13.760 --> 0:14:17.370 have, like bonds or savings accounts, ISAs, et cetera. So, 0:14:17.660 --> 0:14:20.479 in the same way as you, at the start of your working life 0:14:20.479 --> 0:14:22.350 would be thinking about what money you're going to have 0:14:22.350 --> 0:14:25.100 each month, it's the same thing really for retirement, getting 0:14:25.400 --> 0:14:28.379 that in order. And then, you can start thinking about 0:14:28.390 --> 0:14:31.320 a different range of scenarios, none of us know how 0:14:31.320 --> 0:14:33.890 long we're going to live for, or how long we're planning for, or 0:14:33.890 --> 0:14:37.610 therefore how long that money needs to last you. So, 0:14:37.610 --> 0:14:40.890 rather than try to pin yourself on the average life 0:14:40.890 --> 0:14:43.140 expectancy, I don't think any of us would consider ourselves 0:14:43.150 --> 0:14:45.500 to be average. I think it's about looking at about 0:14:45.550 --> 0:14:48.740 a different range of scenarios. How would you manage if 0:14:49.000 --> 0:14:52.639 you live to 110 versus if you live to 80, 0:14:52.890 --> 0:14:54.930 and think about it in that way, rather than trying to 0:14:54.930 --> 0:14:57.540 pin yourself to a single lifelong plan. 0:14:58.150 --> 0:15:00.859 Okay. Do you have to have it all worked out in 0:15:00.860 --> 0:15:03.989 your 40s or can you adapt and change your plans 0:15:03.990 --> 0:15:04.920 as you go along? 0:15:05.110 --> 0:15:07.070 Well, I'd hope you don't have to have it all 0:15:07.070 --> 0:15:08.739 worked out in your 40s. I'll be 40 in a 0:15:08.740 --> 0:15:11.269 few months and I certainly haven't got life all worked 0:15:11.270 --> 0:15:15.620 out, that's for sure. So, I think as you approach 0:15:15.620 --> 0:15:17.610 your 40s, it's is a good time to be thinking 0:15:17.610 --> 0:15:20.160 about it. You want to make sure that you are thinking 0:15:20.280 --> 0:15:23.470 about retirement early enough on, to make sure that you 0:15:23.470 --> 0:15:26.500 save enough money. And also, I think that people get familiar 0:15:26.500 --> 0:15:28.640 with some of the concepts and the products and so 0:15:28.640 --> 0:15:31.330 on, that you might want to use in retirement. The 0:15:31.330 --> 0:15:34.720 earlier you do that, I think, the easier it is 0:15:34.720 --> 0:15:36.760 when you come to retirement, doesn't feel like such a 0:15:36.760 --> 0:15:40.920 daunting decision, if you've engaged with your retirement savings much, 0:15:40.920 --> 0:15:44.010 much earlier. In terms of if you end up living 0:15:44.010 --> 0:15:47.560 longer than you expected, again, it's about, I think, scenario 0:15:47.560 --> 0:15:50.340 planning, thinking about if you did live longer, is there 0:15:50.340 --> 0:15:52.210 a different source of asset that you might want to 0:15:52.210 --> 0:15:54.830 draw down on? So, perhaps you'd want to use your housing 0:15:54.830 --> 0:15:58.920 equity, for example, as a backup plan, if you run 0:15:58.920 --> 0:16:01.450 out of money or you live longer than you expected, 0:16:01.650 --> 0:16:05.930 and then obviously having some form of secure, guaranteed income 0:16:06.229 --> 0:16:08.890 through retirement, such as an annuity or a defined benefit 0:16:08.890 --> 0:16:11.580 pension, if you're lucky enough to have one of those, also, 0:16:11.580 --> 0:16:13.350 will just give you a bit of peace of mind 0:16:13.350 --> 0:16:16.140 that you will have sufficient money to at least meet 0:16:16.140 --> 0:16:17.149 your basic living needs. 0:16:17.320 --> 0:16:21.690 Lots of notes there. Holly, what sort of people do 0:16:21.690 --> 0:16:24.540 you get coming to you for help with their retirement 0:16:24.540 --> 0:16:28.100 finances? What are the most common questions you hear? 0:16:28.479 --> 0:16:31.830 We get all sorts, is the honest answer, we had 0:16:31.830 --> 0:16:34.499 about half a million people on our site last year, 0:16:34.500 --> 0:16:37.700 from people with millions of pounds to invest looking for 0:16:37.700 --> 0:16:41.910 tips, to people who had 20 pounds a month to 0:16:41.910 --> 0:16:44.740 save into an ISA. So, all sorts. What I would 0:16:44.740 --> 0:16:49.130 say is amazing, pretty much everyone I ever talk to 0:16:49.130 --> 0:16:53.950 about money, secretly feels really stupid about it. They assume that 0:16:53.950 --> 0:16:56.840 everyone else is smarter than them, better at math than 0:16:56.840 --> 0:16:59.960 them, richer than them, more organized than them. So, I 0:17:00.320 --> 0:17:02.390 tend to spend a lot of time saying to people, " 0:17:02.390 --> 0:17:05.800 It's not that you're dumb, it's that the industry explains 0:17:05.800 --> 0:17:08.479 it in such a boring and a complicated manner." So, 0:17:09.180 --> 0:17:11.740 I try and put people at ease. This is baffling 0:17:12.000 --> 0:17:15.500 for many of us. The most common questions I hear, 0:17:15.500 --> 0:17:19.029 I think, are sometimes it's just, " Where the hell do 0:17:19.030 --> 0:17:22.429 I start? Should I be saving into an ISA or 0:17:22.430 --> 0:17:25.960 a pension? Or what do I do there?" Risk is 0:17:25.960 --> 0:17:30.399 a really, really common question. People saying, " How much might 0:17:30.399 --> 0:17:33.699 I lose?" Actually, is the thing that most people start 0:17:33.700 --> 0:17:36.330 off wanting to know, " How much could I make?" And 0:17:36.960 --> 0:17:40.990 then around retirement as well, people even ask, " When can 0:17:40.990 --> 0:17:44.669 I retire?" As if that's the job of a pension 0:17:44.669 --> 0:17:47.759 company to tell them that, it's, I think, because it's 0:17:47.760 --> 0:17:50.500 such a baffling area, people expect that someone's going to 0:17:50.500 --> 0:17:53.270 tell them what to do. So, it's trying to work 0:17:53.270 --> 0:17:58.020 with people to help them understand the choices that ultimately 0:17:58.020 --> 0:18:01.210 are theirs to make. Of course, when you retire is 0:18:01.220 --> 0:18:03.379 up to you. And as we'll go on to discuss, 0:18:03.379 --> 0:18:07.010 I suspect, dependent largely on how much money you've got 0:18:07.010 --> 0:18:09.340 saved up, but also in what you want to do. 0:18:09.810 --> 0:18:12.820 We heard a few different experiences of advice from our 0:18:12.859 --> 0:18:17.010 Rewirees. What would you recommend in regard to advice? 0:18:17.430 --> 0:18:19.840 I think is difficult. I mean, the reality is that 0:18:19.930 --> 0:18:23.109 advice still can be quite a tainted brand and lots 0:18:23.109 --> 0:18:27.940 of people don't trust financial advisors, but the world has 0:18:27.940 --> 0:18:31.820 changed over recent years. And there has been a split 0:18:31.820 --> 0:18:36.750 now between advisors getting any sort of financial encouragement to 0:18:36.750 --> 0:18:40.629 recommend any particular brands. So, that bias that was there 0:18:40.629 --> 0:18:44.139 in the past, isn't there anymore. And I think, in 0:18:44.139 --> 0:18:47.190 general, the profession is a lot tighter, a lot better 0:18:47.190 --> 0:18:50.510 than it used to be. Something else other people don't 0:18:50.510 --> 0:18:53.500 really know, is that you can pay on an hourly 0:18:53.500 --> 0:18:56.740 basis for financial advice. You don't have to lock yourself 0:18:56.740 --> 0:19:01.419 into a lifelong relationship, and fees range from about 150 0:19:01.419 --> 0:19:04.830 pounds an hour to 200 pounds an hour. So, sometimes, 0:19:05.210 --> 0:19:07.560 if you just want a steer that you're not doing 0:19:07.560 --> 0:19:10.149 anything daft, you might be able to look at that 0:19:10.149 --> 0:19:13.779 as an option. And there are other services. One, I 0:19:13.780 --> 0:19:16.409 think that's quite interesting for people coming up to retirement 0:19:16.409 --> 0:19:20.159 is called a cashflow modeling service. Now, this will set 0:19:20.159 --> 0:19:24.080 you back typically about two or 3, 000 pounds, but 0:19:24.080 --> 0:19:25.850 you sit with an advisor and you say, " This is 0:19:25.850 --> 0:19:28.270 how much I've got." And they work it through with 0:19:28.270 --> 0:19:33.080 you and effectively see if your plans are affordable or 0:19:33.080 --> 0:19:35.649 whether you're likely to run out of money or not. 0:19:35.649 --> 0:19:40.100 So, there are bite- sized ways you can get financial 0:19:40.100 --> 0:19:43.899 advice without having to think that it's an ongoing relationship 0:19:43.899 --> 0:19:44.609 for life. 0:19:45.179 --> 0:19:48.040 Emma, from your experience, what do you think are the 0:19:48.040 --> 0:19:52.310 common pitfalls people have in terms of their mindset? For 0:19:52.310 --> 0:19:55.749 example, do people assume they won't live as long as 0:19:55.750 --> 0:19:59.500 they do? Do they overspend in the first few years? 0:19:59.500 --> 0:20:04.570 I think the first mistake people often make, or the 0:20:04.570 --> 0:20:07.810 common pitfall for people is that they've put their head 0:20:07.810 --> 0:20:10.550 in the sand. They're scared to think about retirement. They 0:20:10.550 --> 0:20:13.970 don't understand the terminology. People who have to kind of bite 0:20:13.970 --> 0:20:17.210 the bullet and spend a day really thinking about retirement 0:20:17.300 --> 0:20:19.670 and trying to understand it. And there's lots of tools 0:20:19.929 --> 0:20:22.970 out there and information out there from the government in terms 0:20:22.970 --> 0:20:26.510 of Pension Wise and also on providers, websites and so 0:20:26.510 --> 0:20:29.610 on. So, I think the second one, as you mentioned, 0:20:29.639 --> 0:20:33.189 people do underestimate how long they'll live for. Often, people 0:20:33.190 --> 0:20:35.979 will use an indication of how long their parents have 0:20:35.980 --> 0:20:39.659 lived for and expect that that's how they themselves will live 0:20:39.659 --> 0:20:42.879 for. But as we know, people are living longer and 0:20:42.889 --> 0:20:46.590 longer thanks to medical science and healthier lifestyles, and so 0:20:46.590 --> 0:20:53.330 on, is much more related to education, socioeconomic factors, lifestyle 0:20:53.330 --> 0:20:56.109 factors, do you drink lots, do you smoke? None of us 0:20:56.109 --> 0:20:59.389 are average. Looking, there's life expectancy calculators out there, that 0:20:59.389 --> 0:21:02.480 would allow people to plug in some information and see 0:21:02.480 --> 0:21:05.000 how long they are expected to live for. But by 0:21:05.000 --> 0:21:08.470 definition, that's an average. So, some people will live for 0:21:08.590 --> 0:21:10.609 a lot longer than that and some people for less 0:21:10.609 --> 0:21:14.050 time. So, I think around that point, it would be 0:21:14.050 --> 0:21:17.109 back to, I think it's planning for different scenarios and 0:21:17.109 --> 0:21:19.580 really thinking through if you were to live significantly longer 0:21:19.580 --> 0:21:22.609 than you expected, how would you manage that? I think, 0:21:22.609 --> 0:21:25.669 in terms of overspending in the first few years, that there's 0:21:25.669 --> 0:21:28.419 a mixture of evidence around that. We see and we 0:21:28.419 --> 0:21:31.840 expect that the jubilation and excitement of being retired, off 0:21:31.840 --> 0:21:35.899 you go on many cruises and fulfilling the travel desires 0:21:35.899 --> 0:21:37.040 that you might not have been able to do, when 0:21:37.050 --> 0:21:41.760 you're retiring or giving grandchildren money, et cetera and now 0:21:41.760 --> 0:21:43.859 you have access to this additional funds. So, I think 0:21:43.859 --> 0:21:47.250 there is definitely a risk that people fall into that 0:21:47.250 --> 0:21:49.820 trap, but saying that, as long as you've thought a 0:21:49.820 --> 0:21:53.020