WEBVTT - Planning for tomorrow, living for today 0:00:04.530 --> 0:00:08.340 Hello and welcome to Rewirement, the podcast where we help 0:00:08.340 --> 0:00:11.700 you make the right connections to create your brightest financial 0:00:11.700 --> 0:00:17.070 future. Brought to you by Legal & General. I'm Angelica Bell, 0:00:17.070 --> 0:00:19.560 and I'm on a mission to find answers to your 0:00:19.560 --> 0:00:23.040 questions about money and how to manage it. I'm carrying 0:00:23.040 --> 0:00:26.100 out my mission by finding people with real issues who 0:00:26.100 --> 0:00:29.040 are looking for real insight, and then pairing them up 0:00:29.040 --> 0:00:32.159 with an expert who can help. Even better we get 0:00:32.159 --> 0:00:35.010 to listen in to their conversation and, we hope, learn 0:00:35.010 --> 0:00:38.550 a whole lot more at the same time. Today we're 0:00:38.550 --> 0:00:40.950 talking about something that I suppose is at the heart 0:00:40.950 --> 0:00:43.890 of pretty much every question you can ask about managing 0:00:43.890 --> 0:00:47.670 your finances. How do you balance the demands of today 0:00:47.970 --> 0:00:52.140 with making sure that you'll be financially secure tomorrow? We 0:00:52.140 --> 0:00:54.150 know that we need to be planning for the future, 0:00:54.390 --> 0:00:57.330 but we also need our money now, especially at the 0:00:57.330 --> 0:01:01.020 moment with the cost of everything going up. Plus, we 0:01:01.020 --> 0:01:07.649 want to enjoy our lives. We only get one today. Today 0:01:07.650 --> 0:01:10.080 we're talking to two people who are trying to get 0:01:10.080 --> 0:01:13.140 that balance right. First of all, let's say hello to 0:01:13.140 --> 0:01:14.760 Beverly who's with me now. How are you? 0:01:15.000 --> 0:01:16.950 Hello, Angelica. I'm fine, thanks. 0:01:16.950 --> 0:01:18.959 So thank you for being here. And I want to 0:01:18.959 --> 0:01:21.660 find out a little bit more about you and your situation. 0:01:21.720 --> 0:01:25.200 Okay. I'm going to be retiring hopefully within the next 0:01:25.200 --> 0:01:28.350 10 years. I'm a single mom, so I have a 0:01:28.350 --> 0:01:32.850 grown up child, but being single means that financially I 0:01:32.850 --> 0:01:34.860 have to be self sustaining. 0:01:34.890 --> 0:01:35.040 Yeah. 0:01:35.069 --> 0:01:38.340 So for about five years I had a break in 0:01:38.340 --> 0:01:38.431 my pension. 0:01:38.431 --> 0:01:40.740 Can I ask you about why you had a break? 0:01:40.800 --> 0:01:43.830 I was made redundant in 2016 from a company that 0:01:43.830 --> 0:01:48.090 I'd worked for for 16 years, and the plan was 0:01:48.090 --> 0:01:51.180 to just get another job. But then my parents became 0:01:51.180 --> 0:01:54.390 ill and I ended up being their main carer. 0:01:54.480 --> 0:01:54.720 Mm- hmm. 0:01:54.780 --> 0:01:58.140 Unfortunately, both of my parents have now passed away. So 0:01:58.140 --> 0:02:01.500 now I'm back in the workforce and I'm looking at, 0:02:01.590 --> 0:02:03.840 okay, I need to look after me for the next 0:02:03.870 --> 0:02:06.750 5 to 10 years and make sure that all my 0:02:06.750 --> 0:02:09.900 finances are in order, and that I'm planning and set up 0:02:09.900 --> 0:02:14.340 and living in my forever home. I live in Birmingham 0:02:14.430 --> 0:02:16.110 and I go into the office two days a week. 0:02:16.590 --> 0:02:19.410 My son lives in Bolton. I want my forever home 0:02:19.410 --> 0:02:21.990 to be closer to him and his family. So I'm 0:02:21.990 --> 0:02:24.660 looking for the funding that will allow me to have 0:02:24.660 --> 0:02:27.270 my forever home in the place where I want it 0:02:27.270 --> 0:02:28.471 to be, near my family. 0:02:28.470 --> 0:02:31.410 So are those the key questions about how you can 0:02:31.680 --> 0:02:32.970 supplement that shortfall? 0:02:33.240 --> 0:02:36.299 Yeah. How I can supplement or whether I need to? 0:02:36.360 --> 0:02:36.600 Yeah. 0:02:36.660 --> 0:02:38.250 What am I going to do in the next 10 0:02:38.250 --> 0:02:41.010 years that's going to set me up ready for retirement? 0:02:41.100 --> 0:02:43.950 Because I don't want to be working till I'm 75 0:02:44.010 --> 0:02:45.150 or even 70. 0:02:45.300 --> 0:02:45.570 Yeah. 0:02:45.660 --> 0:02:48.239 Everybody expects you to know the answers to these questions 0:02:48.240 --> 0:02:51.690 about your pension. Nobody ever teaches you anything, and nobody 0:02:52.080 --> 0:02:54.930 discusses pensions. Who goes to the pub and talks about 0:02:54.930 --> 0:02:59.760 pensions? No one does. It's knowing as well that there 0:02:59.760 --> 0:03:01.889 isn't anybody else that I can ask the questions are 0:03:01.889 --> 0:03:02.910 of or to fall back on. 0:03:03.090 --> 0:03:05.130 Well, let's try and get some of those questions answered 0:03:05.130 --> 0:03:08.280 for you Beverly. We found someone to help you tackle 0:03:08.280 --> 0:03:11.430 some of those points you've mentioned. He's called Phil Anderson 0:03:11.490 --> 0:03:14.100 and he has his own financial services company bait in 0:03:14.100 --> 0:03:17.190 Scotland. So we got you two together, and let's have 0:03:17.190 --> 0:03:18.360 a listen to what happened. 0:03:21.270 --> 0:03:24.809 I'm just wondering how important is it on a scale 0:03:24.810 --> 0:03:29.040 of 1 to 10. 10 being really, really desperately important 0:03:29.040 --> 0:03:31.320 that I keep my payments up and I make up 0:03:31.320 --> 0:03:35.220 that shortfall. 1 being, nah it doesn't matter, just carry 0:03:35.220 --> 0:03:37.350 on as you are. It would be good to have 0:03:37.350 --> 0:03:37.981 some kind of indication. 0:03:37.981 --> 0:03:42.390 To answer your question on the scale of 1 to 10, I would go for 0:03:42.540 --> 0:03:45.420 an 8. And should maybe be going for a higher figure 0:03:45.420 --> 0:03:47.700 than that. But I know, like you say, you've got 0:03:47.700 --> 0:03:50.700 to live for today as well. And especially with the 0:03:50.700 --> 0:03:54.240 cost of living crisis, people are finding things harder. Bills 0:03:54.240 --> 0:03:56.190 are going up a lot. But you also have to 0:03:56.190 --> 0:03:58.560 be mindful for your future as well. And I would 0:03:58.560 --> 0:04:01.770 say great you've got your contribution going in, your employer's 0:04:01.770 --> 0:04:04.740 contribution going in. But I would definitely say if you 0:04:04.740 --> 0:04:07.920 can afford to pay more in, because it's such an 0:04:07.920 --> 0:04:11.610 important thing. And if you've missed five years payments, what 0:04:11.610 --> 0:04:13.050 I would do is try and work out and say, " 0:04:13.050 --> 0:04:16.500 Right, how much have I missed going in?". And then 0:04:16.560 --> 0:04:19.050 you can also look at it and say, " Right, had that money 0:04:19.050 --> 0:04:21.930 gone in that would've grown as well". So you've got 0:04:22.410 --> 0:04:26.279 that almost compounding effect on things, you've missed out on 0:04:26.279 --> 0:04:29.130 that. So although it's maybe five years payments that's been 0:04:29.130 --> 0:04:32.130 missed, in real terms it's probably more than that because 0:04:32.460 --> 0:04:34.890 you've not had the growth on that money either. So 0:04:35.130 --> 0:04:38.490 sometimes you have to make sacrifices to do that. 0:04:38.670 --> 0:04:42.570 So my next question is, how do you calculate how 0:04:42.570 --> 0:04:45.270 much you're going to need in your pension pot? 0:04:45.510 --> 0:04:48.600 One financial advisor that I know, she often says to 0:04:48.600 --> 0:04:52.140 people that if you want an income of 20,000 pounds when 0:04:52.140 --> 0:04:55.770 you retire, you better have a pension pot of 400, 000. 0:04:55.770 --> 0:05:00.150 So she uses a figure 20 times that amount. That's 0:05:00.150 --> 0:05:03.719 something I've seen some advisors do in the past. Some 0:05:03.720 --> 0:05:05.969 people will spend a lot when they retire, others will 0:05:05.970 --> 0:05:08.910 spend a lot less. What I do is I'll say to someone, " 0:05:09.390 --> 0:05:11.010 Let's have a look at your ins and outs now, 0:05:11.520 --> 0:05:13.469 but also let's have a look at your ins and 0:05:13.470 --> 0:05:16.440 outs once you retire. Because at that point you might 0:05:16.440 --> 0:05:20.160 have less commuting costs. Your mortgages likely have been paid 0:05:20.160 --> 0:05:23.580 off. Would you look to downsize on the house?". Again, 0:05:23.580 --> 0:05:27.450 that's almost a good reason to review your finances regularly 0:05:27.570 --> 0:05:28.680 as well, I would say. 0:05:28.830 --> 0:05:31.800 I did it in a very simplistic way in that 0:05:31.800 --> 0:05:35.940 I just took the figure of 20 years, divided my 0:05:35.940 --> 0:05:39.810 pension pot by 20 years to see how much that 0:05:39.810 --> 0:05:42.029 would leave me. At the moment at the current cost 0:05:42.029 --> 0:05:46.620 of living, I could survive on that comfortably, not with 0:05:46.680 --> 0:05:50.520 a huge margin. So there'd be no Caribbean holidays or 0:05:50.520 --> 0:05:53.849 anything, but I could get by. I could treat myself 0:05:53.850 --> 0:05:57.390 to nice food. I could go into White Rose and 0:05:57.390 --> 0:05:59.670 get something really nice a couple of times a week. 0:05:59.880 --> 0:06:02.039 It was a very simplistic way of looking at it. 0:06:02.040 --> 0:06:04.080 But I think from what you're saying is so long 0:06:04.080 --> 0:06:09.029 as I've got my finances organized and I can live 0:06:09.029 --> 0:06:11.700 within that amount, then I should be okay. 0:06:11.970 --> 0:06:15.330 Yeah. One of the great unknowns is nobody knows how 0:06:15.330 --> 0:06:17.820 long they're going to live for, and that makes it 0:06:17.820 --> 0:06:20.640 harder to kind of plan for things. And we can 0:06:20.640 --> 0:06:24.180 only go on averages and say women live longer than 0:06:24.180 --> 0:06:27.480 men, so in theory women should really have bigger pension 0:06:27.480 --> 0:06:29.880 pots than what a man should. It's all got to 0:06:29.880 --> 0:06:33.660 be individual and personalized for yourself and no two people's 0:06:33.810 --> 0:06:34.681 retirement's going to look the same. 0:06:34.681 --> 0:06:38.250 Because one of the questions I was going to ask, at my age, 0:06:38.279 --> 0:06:40.470 what I need to think about or what I think 0:06:40.470 --> 0:06:43.739 I need to think about is where I'm going to 0:06:43.740 --> 0:06:48.210 have my forever home. Now at the moment I work from 0:06:48.210 --> 0:06:51.240 home three days a week and I work from London 0:06:51.240 --> 0:06:55.529 two days a week. My son lives in Bolton, so 0:06:55.620 --> 0:06:57.300 I want to be near where he is and where 0:06:57.300 --> 0:07:00.690 his family are. In a common sense world I would 0:07:00.810 --> 0:07:04.529 move towards London nearer to where I need to commute 0:07:04.529 --> 0:07:07.140 to, but I can't afford to live in London. So 0:07:07.140 --> 0:07:09.510 if I'm going to move anywhere, it's going to be 0:07:09.570 --> 0:07:12.630 nearer to where my son is where I hope to 0:07:12.630 --> 0:07:16.110 have my forever home and to finish my life nearer 0:07:16.110 --> 0:07:20.160 to him. But to do that, I will need some 0:07:20.160 --> 0:07:24.360 additional finances other than the money that I make from 0:07:24.390 --> 0:07:27.870 selling my current house. Is it ever a good idea 0:07:27.870 --> 0:07:33.210 to dip into pension funds to contribute to buying somewhere? 0:07:33.300 --> 0:07:35.220 It's something that I've seen a lot of people do 0:07:35.490 --> 0:07:38.490 in the past, and for some people it's the right 0:07:38.490 --> 0:07:40.200 thing to do because it helps them to buy their 0:07:40.200 --> 0:07:43.860 forever home. What I would say is if you're taking money 0:07:43.860 --> 0:07:46.590 out of your pension pot, that's going to impact on 0:07:46.740 --> 0:07:49.860 your retirement income. So let's say you take a lump 0:07:49.860 --> 0:07:52.380 sum of 50,000 pounds out to use that for a 0:07:52.380 --> 0:07:55.770 home just now, if you've got 10 years until you 0:07:55.770 --> 0:07:58.260 retire, things can be a bit up and down at 0:07:58.260 --> 0:08:01.350 times, but over a longer period of time your investments 0:08:01.350 --> 0:08:04.680 are going to grow. That 50,000 pounds if it does 0:08:04.680 --> 0:08:08.520 okay, that would then be worth maybe a 100, 000 pounds in 10 years times. 0:08:08.850 --> 0:08:11.730 So by taking the money out now, that is going to 0:08:11.850 --> 0:08:15.600 impact on things in the future. Another option might be to 0:08:15.600 --> 0:08:18.810 look at financing things with a mortgage. I know the 0:08:18.810 --> 0:08:22.380 older someone gets the harder getting a mortgage can be, 0:08:22.380 --> 0:08:25.800 but there are lenders out there that will allow you to take a mortgage term 0:08:25.800 --> 0:08:28.830 up to say age 70. There's some that'll allow you 0:08:28.830 --> 0:08:31.830 to go up to age 75 as well. One thing 0:08:32.130 --> 0:08:33.809 that may be an option that a lot of people 0:08:33.809 --> 0:08:37.140 aren't aware of is you get something that's called a lifetime 0:08:37.170 --> 0:08:40.859 mortgage. Now the way that works is that type of 0:08:40.860 --> 0:08:44.400 mortgage is usually designed for people over the age of 60, 0:08:44.460 --> 0:08:49.290 usually over 65 plus. But let's say you were age 66, 0:08:49.530 --> 0:08:52.709 at that point you can take out this lifetime mortgage 0:08:53.130 --> 0:08:57.540 and they would allow you to borrow somewhere in the region or up to about 41- 42% of 0:08:57.540 --> 0:09:00.840 the value of the property. You don't physically make a 0:09:00.900 --> 0:09:04.020 monthly payment at that point. The interest rolls up against 0:09:04.020 --> 0:09:06.689 the value of the property, and then usually when someone 0:09:06.690 --> 0:09:10.260 dies or goes into long term care at that point that's when 0:09:10.260 --> 0:09:13.410 that type of mortgage gets repaid. So that may be 0:09:13.500 --> 0:09:16.260 an option for you somewhere down the line as well. 0:09:16.800 --> 0:09:19.800 That's really good advice, because one of the questions I 0:09:19.800 --> 0:09:23.729 had was around how far do I sacrifice the life 0:09:23.730 --> 0:09:26.520 that I have now for the life that I might 0:09:26.520 --> 0:09:31.679 have? And that has so many implications, so many ramifications. 0:09:32.010 --> 0:09:33.871 And it's such a difficult question to answer. 0:09:33.871 --> 0:09:39.630 One exercise that I always say to people to try is get three sheets of A4 paper. On 0:09:39.630 --> 0:09:42.870 the first sheet, write down where you are now. You 0:09:42.870 --> 0:09:45.209 can do this for more than just your finances. So 0:09:45.210 --> 0:09:47.670 for me I do it and say, " My height is 0:09:47.670 --> 0:09:49.619 this, my weight is this, the money I've got in 0:09:49.620 --> 0:09:52.080 the bank account is this. I've got so much in 0:09:52.080 --> 0:09:55.950 my pension pot". Write everything down. Any loans you've got, 0:09:55.950 --> 0:09:59.429 credit cards. So that's on sheet one, where you are 0:09:59.429 --> 0:10:02.760 now. On sheet two you write down where you want 0:10:02.760 --> 0:10:04.830 to be. So you maybe think, " I want to have 0:10:04.830 --> 0:10:07.920 a pension pot of X amount. I want to weigh 0:10:08.190 --> 0:10:10.020 X amount". I go back to the weight cause I'm 0:10:10.110 --> 0:10:12.929 overweight, that's the one I need to work on just now. 0:10:12.960 --> 0:10:15.390 But on sheet two write down where you want to 0:10:15.390 --> 0:10:19.109 be. And then on sheet three, write down what you're 0:10:19.110 --> 0:10:21.870 willing to give up to get from sheet one to 0:10:21.870 --> 0:10:24.689 sheet two. Because if you do what you've always done, 0:10:24.720 --> 0:10:27.150 you'll get what you've always got. So that's always just 0:10:27.150 --> 0:10:30.270 an exercise that I think is really useful for people 0:10:30.270 --> 0:10:30.780 to try. 0:10:33.030 --> 0:10:34.709 Well, it sounds like a good exercise to try there 0:10:34.710 --> 0:10:37.079 from Phil. Beverly, how was the conversation for you? 0:10:37.860 --> 0:10:41.910 It was really positive. And I think the biggest takeaway 0:10:41.970 --> 0:10:44.670 from the conversation with Phil was that I know more 0:10:44.670 --> 0:10:45.480 than I think I did. 0:10:45.960 --> 0:10:47.700 I think you do, and I think maybe it's giving 0:10:47.700 --> 0:10:50.970 you that confidence to seek out what you want and 0:10:50.970 --> 0:10:52.260 what's right for you and your family. 0:10:52.710 --> 0:10:55.920 Yes, definitely. And it's also given me the confidence to 0:10:55.920 --> 0:10:58.920 talk to other people about pensions as well. I'm going 0:10:58.920 --> 0:11:01.589 to be recommending the podcast to a number of friends 0:11:01.590 --> 0:11:05.460 who were asking me questions about what I'd learnt, what 0:11:05.460 --> 0:11:08.910 my plans are moving forward. And it's given me something 0:11:08.910 --> 0:11:10.470 I can pass on to my son as well. 0:11:10.559 --> 0:11:11.130 Amazing. 0:11:11.160 --> 0:11:13.920 That conversation is something that I never had with my 0:11:13.920 --> 0:11:17.280 parents. So that's something really valuable that I can pass 0:11:17.280 --> 0:11:17.760 on to him. 0:11:17.850 --> 0:11:20.489 Beverly, thank you so much for sharing your story with 0:11:20.490 --> 0:11:22.980 us today. And good luck with getting that balance right, 0:11:23.280 --> 0:11:23.969 I know it's not easy. 0:11:24.179 --> 0:11:24.630 Thank you. 0:11:27.030 --> 0:11:29.970 Now our second person looking for help with their balancing 0:11:29.970 --> 0:11:34.080 act is Lisa. Welcome to Rewirement, thank you for being here. 0:11:34.530 --> 0:11:35.040 Thank you. 0:11:35.460 --> 0:11:37.410 So tell us a bit more about your story. 0:11:37.590 --> 0:11:41.219 In a nutshell, I sort of got to that age where children are 0:11:41.220 --> 0:11:45.449 about to go to university. Recently we lost my mom, 0:11:45.630 --> 0:11:48.600 which made you sort of think about priorities a little 0:11:48.600 --> 0:11:54.270 bit more I guess. Fairly average I would imagine situation, 0:11:54.690 --> 0:11:56.880 not a lot disposable income, lots of places it should 0:11:56.880 --> 0:11:57.270 be going. 0:11:57.480 --> 0:12:01.110 Well our first guest Beverly also lost her parents. And 0:12:01.110 --> 0:12:03.210 often it's when we lose people close to us, especially 0:12:03.210 --> 0:12:05.849 unexpectedly, and also when it's a parent, it sort of 0:12:05.850 --> 0:12:08.400 shocks us into thinking about our own lives and children 0:12:08.400 --> 0:12:10.650 and the protection we've put in place or not. Wouldn't 0:12:10.650 --> 0:12:10.980 you say? 0:12:10.980 --> 0:12:12.179 Definitely. Yeah. 0:12:12.179 --> 0:12:13.949 So Lisa, tell me a bit about the kinds of 0:12:13.950 --> 0:12:15.330 things you're looking to find out. 0:12:15.540 --> 0:12:17.970 I think it was looking to find out how to 0:12:18.059 --> 0:12:22.980 prioritize things originally. Should it be funeral planning, a will, 0:12:23.429 --> 0:12:26.850 financing my eldest for university, put a bit more back 0:12:26.850 --> 0:12:29.939 in your pensions, how to try and find some money to save. There's 0:12:29.940 --> 0:12:33.240 just so many different places that money should be going. 0:12:33.240 --> 0:12:36.960 And with the cost of everything going up, the amount of money 0:12:36.960 --> 0:12:38.731 left to go anywhere is getting smaller and smaller I guess. 0:12:38.731 --> 0:12:42.150 Well Lisa, let's go back to Phil, because when it 0:12:42.150 --> 0:12:44.309 comes to priorities he's a man with a plan. 0:12:46.860 --> 0:12:49.200 Probably the best thing to do would be to list 0:12:49.260 --> 0:12:52.679 the various priorities that you've got. So you'd mentioned about 0:12:52.920 --> 0:12:57.630 the kids going to university, paying off the mortgage. And then maybe 0:12:57.660 --> 0:12:59.970 even just put a number next to them and say, " This is my 0:12:59.970 --> 0:13:03.719 number one priority. This is number two priority". You might 0:13:03.720 --> 0:13:07.020 think life and critical illness cover, that's a priority. And 0:13:07.230 --> 0:13:09.990 some of them will be equally as important as one 0:13:09.990 --> 0:13:12.090 another, but it's good just to kind of see what 0:13:12.090 --> 0:13:15.720 you think is most important to yourself. Then start saying, " 0:13:15.900 --> 0:13:19.080 Let's work on this first, this one second" and kind 0:13:19.080 --> 0:13:19.711 of base it from there. 0:13:19.711 --> 0:13:22.979 I suppose it sometimes you do, whether you do it on what 0:13:22.980 --> 0:13:26.490 you think you should be doing or what's actually the 0:13:26.490 --> 0:13:30.420 most immediate problem. So I think part of me is going, "Actually I should get 0:13:30.420 --> 0:13:32.610 a funeral plan because I'm this age now and it's going to be 0:13:32.610 --> 0:13:34.890 cheaper if I do it now". And the other part of me is going, "He's going to 0:13:34.890 --> 0:13:39.179 university in September". So they both seem to be top 0:13:39.179 --> 0:13:43.170 priorities. Both of my parents died of cancers quite young. 0:13:43.470 --> 0:13:46.950 So I'm holding out till next month really when they 0:13:46.950 --> 0:13:49.709 become regulated, but I was thinking of getting one of 0:13:49.710 --> 0:13:53.190 the prepaid funeral plans. Just because I think actually the 0:13:53.190 --> 0:13:54.989 amount of money I paid into my mom's whole of 0:13:54.990 --> 0:13:57.660 life policy, I probably didn't get back as much as I paid 0:13:57.660 --> 0:13:59.910 in (inaudible) with to be honest. And sometimes think 0:13:59.910 --> 0:14:01.740 actually it'd be better to get one of the prepaid 0:14:01.740 --> 0:14:05.340 funeral plans once they're protected, just something to stop the 0:14:05.340 --> 0:14:07.319 kids having to sell the house to get rid of me. 0:14:07.320 --> 0:14:11.309 That's it. There's a few different options for funeral planning. As 0:14:11.309 --> 0:14:13.859 you say, one is a whole of life policy. That's 0:14:13.860 --> 0:14:17.910 a life insurance plan that guarantees to pay out an amount on someone's 0:14:17.910 --> 0:14:21.690 death. So that's one option, funeral plans is another. And even 0:14:21.690 --> 0:14:23.880 with funeral plans, there's a few different ways you can 0:14:23.880 --> 0:14:27.480 do funeral plans. Some providers you can pay a lump 0:14:27.480 --> 0:14:30.840 sum and then that guarantees your funeral at that cost, 0:14:30.840 --> 0:14:33.479 and other ones let you pay it up monthly as 0:14:33.480 --> 0:14:36.780 well. So if someone died soon after, it's good value. 0:14:37.140 --> 0:14:39.960 But if you were to live to quite a good age, then 0:14:39.960 --> 0:14:42.330 you'll find that you've probably paid in, again, an awful 0:14:42.330 --> 0:14:46.350 lot more than what the cost of it has been. Funeral 0:14:46.350 --> 0:14:50.100 price inflation has been really high over the last few 0:14:50.100 --> 0:14:52.770 years. The average cost of a funeral's gone up. It can 0:14:52.770 --> 0:14:57.540 range from anything 3000, 4000, 5000 pounds if you were paying it 0:14:57.540 --> 0:14:59.640 now as a lump sum. But I guess one of 0:14:59.640 --> 0:15:02.700 the advantages of doing that is that you know regardless 0:15:02.700 --> 0:15:05.190 of what the funeral price is and the future that's 0:15:05.190 --> 0:15:08.310 how much you've paid for it. It's good to be 0:15:08.310 --> 0:15:11.130 thinking about things like that. I mean death is not a nice 0:15:11.310 --> 0:15:14.340 subject to think about or talk about, but it's good 0:15:14.340 --> 0:15:16.739 to be planning and looking at all these sort of 0:15:16.740 --> 0:15:19.560 things. One thing I noticed you had mentioned was about wills. 0:15:20.340 --> 0:15:21.390 I do need to do one. 0:15:21.450 --> 0:15:24.990 Yeah. I would always recommend to people writing a will. 0:15:25.080 --> 0:15:26.640 And if you do have a will, make sure it's 0:15:26.640 --> 0:15:29.130 up to date. I've seen it before where people have 0:15:29.130 --> 0:15:33.330 maybe got divorced or they've separated and that can cause 0:15:33.390 --> 0:15:37.860 issues. And again, you want to have a look and you think what age do I want my children 0:15:37.860 --> 0:15:42.480 to inherit any money at. There's so many considerations, and 0:15:42.780 --> 0:15:45.870 making a will is so important. A lot of solicitors 0:15:46.200 --> 0:15:49.170 will offer free wills, but I'm always a bit not 0:15:49.170 --> 0:15:51.240 cynical, but you don't get nothing for nothing. And what 0:15:51.240 --> 0:15:53.310 they do is they often put themselves down as the 0:15:53.310 --> 0:15:56.310 executor. It's almost a license to print money at some 0:15:56.310 --> 0:15:58.380 point in the future when they are sorting out the 0:15:58.380 --> 0:16:01.140 estate. So I always say to people, if they can, 0:16:01.170 --> 0:16:05.040 try and find your own executors. I know it's asking 0:16:05.040 --> 0:16:08.520 somebody to sort things out when somebody passes, but saves 0:16:08.520 --> 0:16:11.220 the estate a fair bit of money doing that as well. 0:16:11.700 --> 0:16:14.640 In about three years time I finish off paying this quite 0:16:14.670 --> 0:16:16.890 chunky loan. So that will give me a bit more 0:16:16.890 --> 0:16:21.180 disposable income. I'm thinking child one will probably be coming 0:16:21.180 --> 0:16:23.850 out of university at that point, while child two might 0:16:23.850 --> 0:16:27.990 be going in it. Would you recommend using that disposable 0:16:27.990 --> 0:16:31.680 income towards a pension or helping to reduce their student debt? 0:16:31.740 --> 0:16:33.990 There's quite a number of different things that you can 0:16:33.990 --> 0:16:37.080 do. You mentioned there about trying to help your son at university, 0:16:37.080 --> 0:16:40.500 so that's one of the options. But it's really important to look 0:16:40.500 --> 0:16:44.310 at your own financial future and make sure that's all taken 0:16:44.310 --> 0:16:47.100 care of as well. So looking at your own needs 0:16:47.160 --> 0:16:49.859 as opposed to your sons, you've got the needs of 0:16:49.890 --> 0:16:53.310 retirement planning. So there's the option to look at paying 0:16:53.310 --> 0:16:56.430 money into a pension. You might also want to consider trying to 0:16:56.430 --> 0:16:59.310 repay the mortgage earlier. I think you were looking at 0:16:59.370 --> 0:17:02.490 the mortgage term running out at age 70. Now you might think, " 0:17:02.490 --> 0:17:04.710 I don't really want to work until age 70". So 0:17:04.950 --> 0:17:07.109 trying to pay the mortgage off sooner may be a 0:17:07.140 --> 0:17:11.040 good consideration as well. But it's so important to have 0:17:11.040 --> 0:17:14.580 your retirement plans all in place and make sure that 0:17:14.580 --> 0:17:16.350 they're well funded as well. 0:17:16.350 --> 0:17:19.859 That's probably given me quite a lot to work with to be absolutely 0:17:19.859 --> 0:17:22.290 honest. I've got share safe plans that I take out 0:17:22.290 --> 0:17:25.409 through work, but I'm only putting in about 10 pounds into each 0:17:25.650 --> 0:17:28.199 at the moment. And it's before you actually get paid, 0:17:28.200 --> 0:17:30.840 so you don't really notice it too much. But as 0:17:30.840 --> 0:17:33.660 for sort of putting any extra money away for saving 0:17:33.660 --> 0:17:37.530 at the moment, it seems that's probably not an option 0:17:37.530 --> 0:17:40.560 for me. That money really should be directed to paying 0:17:40.560 --> 0:17:42.389 off some of the debt on the credit cards, rather 0:17:42.390 --> 0:17:44.310 than putting some away for a rainy day over and 0:17:44.310 --> 0:17:46.859 above the share saves or the pension. Would you agree 0:17:46.859 --> 0:17:47.280 with that? 0:17:47.520 --> 0:17:50.520 Even even small amounts. I mean if you think, " Yeah, 0:17:50.520 --> 0:17:52.859 I can afford 10 pounds a month or 20 pounds 0:17:52.859 --> 0:17:56.760 a month". Something is better than nothing. And you've got 0:17:56.760 --> 0:18:00.300 the option where you can put money into ISAs, Individual 0:18:00.330 --> 0:18:03.030 Savings Accounts. Any growth that you get in that you 0:18:03.030 --> 0:18:06.300 don't pay any income tax or capital gains tax on 0:18:06.300 --> 0:18:07.889 it. And one of the things I would say is 0:18:07.890 --> 0:18:11.250 that financial planning and investing, it's not just for people 0:18:11.250 --> 0:18:14.190 who have got a lot of wealth. Building up for 0:18:14.190 --> 0:18:17.730 someone in your position, Lisa, even trying to save small 0:18:17.730 --> 0:18:21.660 amounts, whether that's 10 pounds a month, 20 pounds a month, if you do 0:18:21.660 --> 0:18:24.240 your budgets and feel that you can afford a certain 0:18:24.240 --> 0:18:26.609 amount it's always good to try and build the savings 0:18:26.609 --> 0:18:29.400 up. It gives you a lot more options in the future as well. 0:18:29.670 --> 0:18:32.970 So Phil, what would be your recommendations around budgeting? I 0:18:32.970 --> 0:18:35.369 mean obviously at the moment it seems like you've got 0:18:35.369 --> 0:18:38.820 very little left at the end of paying all the bills and it 0:18:38.820 --> 0:18:41.250 seems to need a hundred places to go. How would 0:18:41.250 --> 0:18:43.320 you start sort of seeing where you could cut back? 0:18:43.830 --> 0:18:46.109 When I'm looking at budgeting with people, I see all 0:18:46.109 --> 0:18:49.170 sorts of ways that they could improve their finances. It 0:18:49.170 --> 0:18:51.929 might be that they've maybe got current account with a 0:18:51.930 --> 0:18:54.600 bank and there may be better ones out there. You 0:18:54.600 --> 0:18:57.660 get some current accounts that actually pay you for having 0:18:58.050 --> 0:19:01.560 the account with that bank. Another option may be to 0:19:01.619 --> 0:19:03.570 review the mortgage. I know you're in a fixed rate 0:19:03.570 --> 0:19:05.640 at the moment, but when that fixed rate ends you've 0:19:05.640 --> 0:19:07.859 got the option to look at remortgaging to try and 0:19:07.859 --> 0:19:10.800 get a better deal. Sometimes for some people it's worth 0:19:10.800 --> 0:19:14.129 consolidating their debts into the mortgage as well, that can 0:19:14.130 --> 0:19:17.429 sometimes save quite a bit on the monthly outgoings. The 0:19:17.430 --> 0:19:19.500 downside with that is that you're then taking the debt 0:19:19.500 --> 0:19:23.490 over a longer period of time, so there can be disadvantages there. 0:19:23.880 --> 0:19:26.250 Sometimes it can be that you maybe got a credit card 0:19:26.250 --> 0:19:29.609 that's on a high interest rate. So we can look at redoing 0:19:29.609 --> 0:19:33.240 that. Is there a naught percent balance transfer deals out 0:19:33.390 --> 0:19:38.639 there? Are there subscriptions? I mean people will subscribe to 0:19:38.640 --> 0:19:42.420 things like Amazon Music, they might have a Spotify subscription. 0:19:42.690 --> 0:19:46.530 Quite a lot of the times, those things not always are they 0:19:46.619 --> 0:19:50.130 used or needed. And sometimes people duplicate things. They've maybe 0:19:50.130 --> 0:19:53.310 got broadband with one company if they put it in 0:19:53.310 --> 0:19:56.190 with their phone deal they can sometimes save a bit 0:19:56.220 --> 0:19:58.980 there. I've had a couple of people who's been paying 0:19:59.220 --> 0:20:02.609