Videos

Pensions, savings and tax can be confusing when it comes to choosing what's right for you. This is why we've created short and informative videos designed to give you the basics, and help you make the most of your money. These videos should be used in conjunction with our other guides and tools.

Pension freedoms

How will you get ready for retirement? Learn what you'll need to consider.

Watch the video or read the transcript Pension Freedom video transcript (below).

Pension freedoms video

Transcript: Pension freedoms

Running time:

Sophie

This is me. Sophie, 63. Grandmother. Retiree.

We’re selling our family home and looking for an apartment in town, which means selling off some of the things we don’t need.

I’ve got two more years before I retire and Jack’s only got one, so we thought we should get ready. It’s all a bit daunting so we spoke to a financial adviser.

The adviser was very reassuring and helped us get a plan of action together. First we worked out how much income we could get from both Jack and my employers’ pension schemes.

This involved thinking about our joint and individual financial commitments and whether we could pay those off before we retire. Luckily we’ve paid off our mortgage, but it’s other things like loans and credit card debt.

Then we looked at our state pensions to see what they’ll provide, and what we needed to live off comfortably.

With no children at home it makes sense to downsize from our house to an apartment because this house is just too big for the both of us, so we could have more money to add to savings.

Next I realised I should consider consolidating all my pensions into one pot. Jack’s been with his employer for quite some time; however I’ve worked for a number of employers over the years and built-up quite a few. Putting them in one pot makes sense for me, and is easier to keep an eye on.

It’s a bit like our bulky record collection– our son’s putting them all on computer for us.

With government changes to how pension pots can be accessed through pension freedom rules introduced in April 2015, I’m glad the adviser was able to talk us through our options.

How Jack and I choose to take our pensions is an incredibly important decision.

These pension freedom rules mean we’ll have more flexibility when we take our money. From 55 anyone with a defined contribution pension can take some or all of the money from their pot as and when they want. We don’t need to stop working to access our pots and we and our employers can continue to make contributions on our behalf. Although the exact options available will depend on what your pension provider will allow.

Increased access also means there are more options available when it comes to taking our money as an income, but drawing large amounts of cash from our pots may push us into a higher tax bracket, or affect our entitlement to certain state benefits.

I can’t stress how vital it was for us to talk to someone before taking any action, as there’s a lot of information to take in and it could be one of the most important decisions we’ll ever have to make. If you don’t want to pay to talk to a financial adviser, you have the option of getting free and impartial guidance from a government backed service called Pension Wise.

Through Pension Wise you can make an appointment to speak to someone face-to-face or over the telephone, or find more information through their website.

There are a number of options when it comes to taking money from our pension pots. These options can be taken separately or combined. We can take some or all of our money as a cash lump sum, take a regular or occasional income from our pots or buy an annuity with the option of some cash.

As Jack retires next year and I’m over 55, we’ve been considering taking some of my pots as cash in one go. If I do this, up to 25% is normally tax-free with the rest taxed as income at my marginal rate.

An interesting option for our plans is to go to Australia to visit our daughter; it’s one I’ll need to consider very carefully. Tax implications and the potential risk that I could run out of money too soon means another option might be more suitable.

If we didn’t take our entire pots I could still withdraw 25% of some or all of my pension pot tax-free whenever I like. I could then take the rest as a taxable income on a regular or occasional basis by using flexi-access drawdown or take it as a taxable lump sum. I could also take a regular income through buying an annuity.

An Annuity provides a regular income when you retire. You can receive this as a taxable income for the rest of your life or over a fixed-term.

If I choose this option how much income I’ll receive depends on a number of factors, including how much money I have to buy one with, how old I am and my health. Annuity rates can vary significantly from one provider to another, so it’s important to shop around for the best deal. Once I commit to an annuity I can’t change my mind, so I’ll need to be sure.

However, I could consider leaving my money invested and taking an income directly from my pension pot as and when I need it. This is called flexi-access drawdown.

Through flexi-access drawdown I can decide how much and how often I’d like to take a taxable income from my pot. I can take my tax-free cash and start, stop or change the amount I want to take from the rest of my pot to suit my needs and tax position, leaving the rest invested. Providers may set a minimum required pot size and may charge a set-up fee, and it’s also worth keeping an eye on your investment as performance will affect how much you have to draw down. Flexi-access drawdown is not risk free, and the value of my pot can fall as well as rise.

If Jack and I decide to continue working we’ll need to consider the impact of any taxable income or lump sums on the total amount of tax we’ll pay.

Now we’ve made a start on retirement I have a lot to look forward to – a new home, and a new life.

For more information on pensions and retirement please visit Pension Wise www.pensionwise.gov.uk or call 0800 138 3944, alternatively contact a financial adviser through www.unbiased.co.uk. Please note that advisers usually charge for their services.
Remember, shop around before proceeding with any retirement option and check their availability against your scheme and chosen provider.

You can also use our online tools to get an idea of what income you might receive from your pension savings through our Retirement Planner: www.legalandgeneral.com/retirementplanner.

Important information, all investments and funds carry an element of risk. It's important you read your key features and accompanying fund information for full details of all the risks and check what options are available from your scheme and chosen provider.

The value of the investments that make up your pension fund may go down as well as up, and is not guaranteed. It is particularly important to remember this if you are close to taking your benefits.

Any money in your pension plan is tied up until you take your benefits, which is generally available from age 55. The law and taxation relating to the benefits you can take from your pension can change.

Workplace pension

What's a workplace pension, and why it is it important to consider one?

Watch the video or read the transcript Workplace pension video transcript (below).

Workplace pension video

Transcript: Workplace pension

Running time:

Tom

This is me. Tom, 27. Promoted employee. Pension saver.

So I just got a promotion, yay! And as well as a raise, my boss told me about the workplace pension scheme.

I didn’t know much about pensions, so I got in touch with a financial adviser to find out some more.

So yeah, I found out that pensions are a great idea, especially for me. As soon as I get paid, I’ll end up spending the money on going out with my friends or planning trips off the beaten track. And yeah, I know that I’m going to want to continue travelling when I’ve retired. So, now with this pay rise, I can put a little extra aside each month, which I won’t be able to touch until I’m a lot older, and hopefully I’ll have a nice big pot of money to look forward to later on.

So I knew that a pension was a way to save for retirement, however these workplace pensions are a good place to start as it’s already sorted out for me. This is because my employer arranges for a percentage of my wage to go into their chosen pension scheme each month. And in most cases the employer and government will contribute too.

It’s the perfect way for me to start saving for what I hope will be a nice chunk of money – and I’ll remember to thank my boss when I’m trekking through South America in my sixties!

The final amount I’ll receive at retirement depends on a number of things such as how well my investments do, because they can go down as well as up. If I don’t get a workplace or personal pension, then I’ll have to rely on the State Pension. And this is where the government pays you a set amount when you retire. This may not be enough to live off alone, and certainly won’t be enough to pay any world trips.

Whether it is enough or not really depends on your lifestyle. But I know that the workplace pension is ideal for me because I can take what I’ve put into my own pot, as well as the State Pension, to really make sure I can make the most of my retirement.

Based on what I think I’ll need to live off after I retire, I’ll have to work out how much I need to save. And I’m guessing it’s going to be quite a bit if I want to do the odd trip away and meal out with friends.

The pension that my company offers has something called a default fund. Now this is where employees’ contributions are paid into unless they say otherwise. And it’s typically a balanced portfolio that invests your money across different types of assets, such as company shares.

I don’t have to stay in this fund if I don’t want to. I can move my investments depending on my attitude to investment risk, to make the most of my pension. I’m only just finding out about different funds now though, but I know that I can look for another option that may suit me better, to grow my pension pot, and do all that travelling I want to do!

I’m pleased I’m planning for the future. I can make the most out of now!
Workplace Pension

For more information on company pensions please visit our Learning Zone www.legalandgeneral.com/learnaboutinvesting or contact a financial adviser through www.unbiased.co.uk. Alternatively please visit www.moneyadviceservice.org.uk. Please note that advisers usually charge for their services.

Important information, please remember that the value of an investment and any income from it may go down as well as up and is not guaranteed. You may get back less than you invest.

Tax relief

What's tax relief, and how can it help your pension savings?

Watch the video or read the transcript Tax relief video transcript (below). 

Tax relief video

Transcript: Tax relief

Running time:

Mark

This is me. Mark, 48. Veggie gardener. Pension saver.

My wife and I, we really enjoy our home-grown vegetables. And we wanted to make the most of our allotment and also save some money on the weekly shop, so we started a small plot. Before long it took off, and now I’m out here most weekends and during the week after work.

Watching my vegetables grow got me thinking about my pension. I asked around, and a friend recommended I speak to a financial adviser.

I learnt that the government doesn’t take the tax from my pension contribution; instead it puts it into my pension pot. It’s called tax relief. And just like growing vegetables, you could get back more than you put in!

But it’s worth remembering that your investment can go down as well as up.

As a basic rate taxpayer, I get £1 from the government for every £4 that I put into my pension. So if I contribute £80, I’ll end up with £100 in my pension pot. And that goes up if you’re in a higher rate tax bracket.

It’s a little bit different for higher rate taxpayers, so it’s good to get advice.

It turns out to be really simple. And whether you choose a personal pension or workplace scheme, you get the same tax relief.

I have my own personal fund that I pay contributions into, straight out of my salary. This is paid in after I’ve paid income tax, and then my pension provider puts the tax relief from the government back into my pension.

If I joined my employer’s workplace pension scheme, they’d take the contributions from my salary before deducting any tax, so I’d get tax relief straight away. Other pension schemes might do this differently, so it’s worth checking.

I can get tax relief on any contribution I make up to 100% of my earnings. It’s great, but there are limits called the Annual Allowance. These limits are based on all my pension savings, including my employer contributions. I can pay more into my pension, but I’ll be taxed on any amount above these limits. It always helps to check each tax year, as they can change.

The Lifetime Allowance is another limit. This is based on how much I have by the time I retire. Again, it’s worth checking what these limits are each year.

I’m getting the most out of my allotment. And now, I’m getting the most out of my money too!

For more information on tax relief please visit our Learning Zone www.legalandgeneral.com/learnaboutinvesting or contact a financial adviser through www.unbiased.co.uk. Please note that advisers usually charge for their services. Alternatively please visit www.moneyadviceservice.org.uk or www.gov.uk and search Tax Relief.

Important information, like the Annual Allowance and Lifetime Allowance, tax relief on basic rate tax can change so it’s worth checking these limits each year.

Please remember that the value of an investment and any income from it may go down as well as up and is not guaranteed. You may get back less than you invest.

Risk and reward

How do you feel about about investment risk? What are the influences on your investments, and how could they affect you?

Use our attitude to risk tool and read our guides in Funds information

Watch the video or read the transcript Risk and Reward. (below).

Risk and reward video

Transcript: Risk and reward

Running time:

Jane

This is me. Jane, 32. Investing novice. Budding entrepreneur.

I have a hobby that takes up a lot of my spare time. I make chutney, in the evenings and weekends.
I sell to a few local places, and my Red Pepper and Tomato chutney is really popular. I've been thinking about leaving my job and starting a business to do it full time.

But rather than put all my money into the business, I'd like to invest some in case I need it in the long run.#

Friends suggested that I speak to a financial adviser, as I haven’t had much experience in investing or investments.

I'm really glad I did because the first thing I learned about was the risks and rewards of investing, and that it's really important I understand how I feel about risk.

Higher investment risk does mean the potential for higher rewards, but it also comes with greater chance of the value of your money going down in value.

On the other hand, a lower risk has a smaller chance of loss, but your money will normally grow less. So with money in a savings account with a bank or building society for instance, the risk as well as the reward (the interest), is usually quite low. Investing money in a single company's shares is high risk. If something bad happens to the company, you could lose money. If the company does well, you could potentially gain money. And that’s the plan for my chutney business.

There are many different risks that affect investments. For example, company shares can go down and up every day. Sometimes an investment market can experience catastrophic conditions where the value of all investments go down dramatically. Any recovery can take some time.

Other things like inflation and changing interest rates also affect investments. Inflation is the increase on the price of goods and services we buy such as bread, cinema tickets and alcohol, as well as council tax and mortgage rates. The value of investments may not keep up with inflation and may reduce what you can buy with the value of the investment in the future. And the Bank of England decides the interest base rate that influences bank and building society interest rates, and this varies depending on economic conditions.

I learned from my adviser that I also need to consider how much risk I can afford to take versus the timescales in which I want to achieve my goals. I don’t want to risk everything to get to my goals. I know my investment portfolio has to have the right mix of risk and reward for me; it makes sense for me to spread my money over a number of different types of investment.

Some people think making chutney is complicated, but once you find out about it, it’s not at all. Since speaking to my financial adviser, I've found the same with investing.

To find out more about investing, please visit www.legalandgeneral.com/investments/getting-started/learn-about-investing, and read our guides via www.legalandgeneral.com/workplacebenefits/employees/help-support/fund-zone/wpp3/.

Alternatively, please contact a financial adviser through Unbiased via www.unbiased.co.uk . Please note that advisers usually charge for their services.

Important information, please remember that the value of an investment and any income from it may go down as well as up and is not guaranteed. You may get back less than you invest.

Asset classes

Cash, Bonds, property and shares, how do you put together a balanced investment portfolio?

Watch the video or read the transcript Asset Classes. (below).

Asset classes video

Transcript: Asset classes

Running time:

Chris

This is me. Chris, 28. Just married. Future dream saver.

Yeah I’m a bit of a health nut. I look after myself...for work and because I enjoy it.

I got married recently. And Sarah and I have started focusing on the future. I put money into my pension each month, but I'd like to learn more about investing. My boss suggested talking to a financial adviser, to learn more about investment options.

Now I know I can put together a balanced range of investments, to spread any risk. A bit like a balanced diet.
A balanced portfolio typically has four types of investments, or asset classes, called cash, bonds, property and shares. Let's start with cash.

Lettuce is a little like cash. It’s healthy but the taste is not very exciting – and the returns from cash in a deposit account or bank account, are generally lower than any other asset class over the long term.

There are also bonds, also known as fixed interest securities. A bond is an IOU from a company or a Government to pay you back your original investment, at a set date in the future, plus regular interest payments in-between.

You can also invest in commercial properties. I didn’t know this but you can invest in offices, shops, warehouses, factories, leisure facilities and all sorts of business buildings. You just need to do your research and find out which one you prefer.

Last but not least are company shares, or equities. This is where you buy a small part of a company, like a slice of this tomato. And if the company does well, you get a share of the profits in the form of dividends. Likewise, share prices can fall too, and your investment decreases.

With these four asset classes you have the ingredients that could help build a successful investment strategy… like a good salad! Initially I had no idea what investments to put my money into, or even what the different types were. Now Sarah and I have a better idea how to put together a balanced portfolio that could help us towards our future.

To find out more about investing, please visit www.legalandgeneral.com/learnaboutinvesting or
www.legalandgeneral.com/workplacebenefits/employees/learning-zone/investing/investment-assets/.

Alternatively, please contact a financial adviser through Unbiased via www.unbiased.co.uk . Please note that advisers usually charge for their services.

Important information, please remember that the value of an investment and any income from it may go down as well as up and is not guaranteed. You may get back less than you invest.

Types of investment fund

How do you want to invest your money? Discover what a fund is and the different types to help you understand the basics of investment.

Find out more about funds, by visiting our Funds pages for investment guides and fund information.

Watch the video or read the transcript Types of Investment Fund. (below).

Types of investment fund video

Transcript: Types of investment fund

Running time:

Lucy

This is me. Lucy, 24. Shoe lover. Potential long-term investor.

I just started my first ‘grown up’ job a couple of months ago. I’m getting used to it all and everything that comes with it...especially the pay cheques!

I would say my biggest weakness with my money is spending it on shoes. I have a lot of them. My dad tells me they’re a waste of money, but I personally think a girl can never have enough shoes!

I do know that I’m going to have to start doing something a bit more sensible with my money soon though. So after repeated ‘hints’ from my family, I finally went and spoke to a financial adviser.

We caught up and discussed my options. And I now know that although there are lots of different investment funds out there, they generally seem to work on the same principle. So you would hand your money over to a Fund Management company. And a Fund Manager then invests your money in either cash, bonds, property or shares...or even a combination of all of these.

There are many investment funds available and they may focus on a particular industry, country, or region while others look to invest in the whole market.

The names of these funds can sound a bit serious - such as Unit trusts, Open-Ended Investment Companies and Investment trusts. But they’re really not that confusing once you understand the basics.

Another type of investment is through a pension fund. I can get tax relief on money that I contribute, but I can’t access my investment until I take my benefits at any time from the age of 55. And by this point I’ll probably have a family and a couple of Labradors...so it would be nice to have an income to retire on.

I could also save up to a certain amount of money each year in an ISA, and these tax-efficient savings could prove really handy when saving up for something special.

Whichever way I choose to invest my money, I know the wise thing to do is spread the risk, and not to put all my eggs in one basket. Good thing is, I’m paying a professional to manage my investment for me; which gives me more time to get on with the things I enjoy doing...like shopping!

To find out more about investing, please visit www.legalandgeneral.com/learnaboutinvesting or www.legalandgeneral.com/workplacebenefits/employees/help-support/fund-zone/. Alternatively, please contact a financial adviser through Unbiased via www.unbiased.co.uk. Please note that advisers usually charge for their services.

Important information, please remember that the value of an investment and any income from it may go down as well as up and is not guaranteed. You may get back less than you invest.

Active and passive investing

Once you've discovered your attitude to risk, learn the different ways in which your investment fund can be managed.

Watch the video or read the transcript Active Vs Passive Investing. (below).

Active and passive investing video

Transcript: Active and passive investing

Running time:

Gavin

This is me. Gavin, 40. Father of promising students. Education funder.

Daniel is really excited at the moment, because he’s looking forward to going into primary school. It’s got us thinking though, about starting to save for their education. Because they might want to go to university, and the way the fees are at the moment, it could cost us quite a lot of money.

I've done a bit of investing in the past but to be honest, I didn't really understand how it all works.

Someone at work suggested I get in touch with a financial adviser.

We talked about the ways investment funds can be managed. It seems there are two main ways – active management and passive management. And each fund manager has their own style. A bit like the way we look after the kids – each needs different attention!

Active investment is a hands on approach, where a fund manager picks the funds he wants to invest in. They analyse data, using expertise to look for the best possible growth.

Passive fund managers generally believe it is difficult to out think the market. So instead they try to match the performance of a market, by tracking it, rather than try and beat it. That's why passive investments are often called index funds or tracker funds.

By doing some research and talking to an adviser, I now have a better understanding of how funds can be managed and what to look for when I get my investments set up.

To find out more about investing, please visit www.legalandgeneral.com/learnaboutinvesting

Alternatively, please contact a financial adviser through Unbiased via www.unbiased.co.uk. Please note that advisers usually charge for their services.

Important information, please remember that the value of an investment and any income from it may go down as well as up and is not guaranteed. You may get back less than you invest.

Cash family challenges

Our popular Cash Family Challenges are a series of fun and interactive modules based around the Cash family and their own particular financial challenges. You’ll have the opportunity to help them make decisions about their pension savings by completing a mini challenge.

The Cash Family Challenges are for educational purposes only and are not providing advice.
The episodes are packed full of information on topics like auto enrolment, saving for retirement and your options when accessing your pension savings. Help the family by exploring the topic in detail or just 'get the facts' for information and tips to help you manage your money successfully.

Peter considers accessing his pension pot
Anna Cash wants to save more for retirement
"Sam Cash is automatically enrolled in her workplace pension scheme

Manage Your Account

Log in to Manage Your Account to take control of your pension account.