Rewirement podcast

Angellica Bell: Hello, and welcome to this brand-new series of Rewirement, the podcast where we help you make the right connections to create your brightest financial future, brought to you by Legal & General. 

I’m Angellica Bell and over the next eight shows, I’m going to be meeting a whole range of people wrestling with real financial issues from ‘how do I buy my very first home?’  to, ‘can I retire at 50?’  We've searched up and down the country for those willing to share their stories and we’ve found a team of fantastic financial experts already to help them get where they want to go.

Now, each time you’re going to hear what happens when the person with the questions meets the person with the answers, and we hope you’ll learn a whole load of useful tips along the way, wherever you are in your financial journey. 

Today, we're meeting two people, but they share a story, (Amy) and (Dan) are both in their thirties.  They're married to each other and they have a beautiful two- year- old daughter called (Maya) and live in South Wales, and they are joining me now.  Lovely to chat to you, both.  How are you?

Dan: Yeah, very good.  Thank you.

Amy: Yeah. Good. Thank you.

Angellica Bell: Now, before we get to where you are going on the financial front, tell me a bit more about where you’ve come from, because you’ve got quite a story to tell isn’t that, right?

Amy: Yeah.  A bit of a financial rollercoaster, I guess, is our story.  We’ve been together 10 years and about two, three years into our relationship I knew Dan had a bit of credit card debt and basically got to that point where we were just about to buy our first house.  And I think Dan had a natural panic and confessed that, his debt was quite a bit more than he had told me.  He basically had more debt than he was earning in his annual salary.

Angellica Bell: Right.  Okay.  That must have been quite a shock for you.  It’d be interesting to know how you found yourself in that situation because it does happen to lots of people, although they don’t speak about it.

Dan: I’ll be honest.  I didn’t realise the situation until the panic set in, debt can be built up in so many ways.  And with me, it was just overspending on literally nothing.  And that was the worst part about it was when you realized how much debt was in, there was literally nothing to show for it.  I’d hit the point, I guess, I needed some help, I needed to get out of that situation.  And I wasn’t being honest with Amy was the bigger part.  And I guess, that was the bit that was really eating me.

Angellica Bell: So, do you think before that you, weren’t being honest with yourself, maybe burying your head in the sand, thinking, " This will just go away."?  Or...

Dan: Oh, 100% for me, I felt that I was trying my best to get out of debt.  So, making payments to clear credit cards and things like that, and then doing it in such a bad way that you realize you get to a few weeks before payday and you’ve got no money in your account again.  So, the only thing that you can then do is spend on a credit card again.  It becomes this vicious cycle. 

I had credit cards that I had forgotten about.  So, I was making payments on them because there was a direct debit set up.

Angellica Bell: Oh, my goodness. Really?

Dan: I’d almost blocked it from my mind because I hadn’t sat down and looked at it at all in any detail.

Angellica Bell: Well, we know that debt and financial problems can bring on anxiety, and depression.  It can ruin relationships, but obviously, love conquers all in this one because Amy, you didn’t run.

Amy: I didn't.  I think the first bit I’d say is talking to somebody and Dan absolutely hated talking to...  Obviously, come, and clean with me.  But my next step was, " I want you to tell some of your family and some of our close friends because I don’t want to be in this on my own." 

I want other people to know that this is what we’re dealing with, that this is what I’m having to deal with and help you with.  And I think that was important for us.  And I don’t know that we’d have done it without some of that friend and family moral support, if not, if not financial support.

Angellica Bell: Would you agree, Dan, with that?

Dan: Oh totally.  I’m now at the stage where it’s much easier for me to talk about any of it but at the time the anxiety that came with it and the guilt and the shame and the pride all kicking together.  And that’s where part of that burying your head comes from is because you’re too ashamed to even look at it yourself, to understand how have you got yourself into this position?

Angellica Bell: You are talking about it will help somebody else and they will go on to help somebody else.  And I think that’s what you should take heart from.  And financial management doesn’t come easy to some people and there’s nothing wrong with that.  So, Amy, do you want to tell me about the list of things you did to help you get back on track?

Amy: Yeah.  There are all the traditional ones where we took a jam jar approach to our finances.  We said, " All right, how much do we think is fair to spend on going out for drinks and dinners and stuff?" 

And you say, " All right, that’s that money. And when that’s gone, that’s gone."  The other bit was how do we make a bit more money?  How do we try and clear this debt down faster?  We realised the car was costing us a ton.  It wasn’t like we had a fancy car; it was the opposite.  So, we were spending loads on repairs and insurance.  So, we got rid of the car and that meant we had a free parking space.  So, I rented out our parking space and let someone else in the building have it.

 We ended up renting a room to my brother for nearly a year that really helped.  I am a massive couponed now.  So, we would have a club card and we use club card points or Morrison’s points or Nectar points. 

And they would get saved up for Christmas and presents when you needed them or needed decorations. 

And I don’t know how many times I changed our current account that year.  We made at least £ 1,000 changing current accounts and any new subscription offers because I liked my wine, so I would sign up to those Naked Wine type offers, and we would get a little crate of wine and that would be my month’s supply of wine.  And then I’d unsubscribe, and we’d get another offer.

Angellica Bell: I love this.  Dan you’re literally just sitting there going, " Yep.  She did this.  She did that." I mean, that’s incredible.

Dan: I mean it was amazing. Right. And I mean, I was, "I hope she’s still with me.  I’ll do whatever she tells me to do."  Look, and we’re 10 years on and I still don’t know how this happened, right?  But the way that Amy’s managed to steer us in that way was incredible.

Amy: I think at one point I even did mystery shopping on my lunch break.  I was like, " If I’m going to browse the shops, I may as well get paid for it."  So yeah.

Angellica Bell: Oh, my goodness.  I mean, your story is inspiring.  And one thing I say to people about their finances is it’s a continually changing thing to navigate.  So, what are the main questions you are looking to find answers for right now?

Amy: Yeah, that’s it.  So, we’ve come through all that side of it.  We’ve now bought our family home.  We’ve done the maternity leave and saved for that and we’ve kept all those spending habits.  So now we’ve built up this little pot of cash, but it’s just sat there and it’s in a bank account. 

That’s not earning very much money, what should I be doing with it?  How should we be looking at our long- term savings?  And should we be changing something about our pension?  Do we keep building that little pot of cash and look at buying a buy-to-let and getting into property? Or how does someone begin to get into buying stocks and shares and getting a bit more adventurous with their investments in their cash?

Angellica Bell: Well, that’s where we can help, we hope.  We paired you up with Andrew Scouller, an independent financial advisor.  And he’s based in Aberdeen and he’s been supporting couples just like you for many, many years.  Let’s see what happened.

Andrew Scouller: When we’re looking at putting plans together, I tend to work on a three- part strategy with clients.  So, part one is your day- to- day spending money, that’s your current account.  You keep whatever balance you need in a current account.  Part two is an emergency fund, so an emergency fund is basically where you go when a big bill comes in. 

Now I’ve got clients that keep £5,000 in an emergency fund.  I’ve got clients that keep £250,000 in an emergency fund.  The key is what they’re comfortable with.  Some people say three months’ salary.  Some people say six months’ salary, a year’s salary.  Personally, I’ll have my own opinions for my situation.  You’ll have a completely different view on that side of things.  So normally I recommend it being a cash- based savings account.  Interestingly, where should I put my emergency funds?  Because the banks are doing absolutely nothing now with regards to interest.

Amy: Yeah.  Tell me about it.

Andrew Scouller: I'm a big fan of premium bonds.  There isn’t any risk attached to it because let’s be honest, you’re not getting any interest on a savings account anyway, but you’ve got the potential for greater returns.  So, if you hold the full amount, you should be getting a £ 25 check every month, which does mean it’s a reasonable interest rate.  I think it works out to about one, 1.8%. 

I think that’s a great option to look at.  Once the emergency fund is full, leave it alone.  Don’t need to add anything more to that unless your situation changes.  Plow everything that you are wanting to save into part three, long- term savings.

 So that is pensions, that’s investments, whether it be investment ISA, bonds, or general investment accounts.  Other things as well, buy- to- let properties, shares, et cetera.  These are all classified as long- term savings.  So, you don’t need to go all in on one area.  You can split the money between all different types of plans.  And I always recommend if you’re going to be saving on a regular basis, you get that set up, so as soon as you get paid, the money’s distributed to the different accounts.  I think you said you’ve got emergency funds already in place. Is that right?

Amy: Yeah.  We’ve got, what I’d say feels, probably too much in that short- term cash fund now and where we’re probably, where I’m not as confident anyway, is how to push that into more of the medium to longer term?  How much is it safe to release and let go of actually and put a bit of faith into it still being there and playing out in the long term?

Andrew Scouller: Let’s speak about the pros and cons of different products.  Let’s start off with investment ISAs for example. 

So, that’s always the first place that’s free investment.  It’s free from all forms of taxation, capital gains tax, income tax, dividend tax, the only tax that’s not free from is inheritance tax.  That’s a whole other conversation.  So, you can put £20, 000 a year into an ISA, so it’s a very generous allowance and that’s each, so £40, 000 total.  So that can be done as a lump sum.  It can also be done as a regular saving and you’re never tied into a specific amount. If you want to change it going forward, absolutely fine.  Another benefit of an investment ISA is it’s accessible, you can access money from an investment ISA anytime you want.

I would always say it’s one of the last places you go, but in an emergency, any money that you’ve saved into an investment ISA, you can take out.  Investment ISAs are accessible, but you’ve still got the potential for growth. 

Now, there is a myriad of different ways that an investment ISA can be set up.  When we look at specifics, we go through an attitude to risk, we go through our capacity for loss with clients.  And that really determines how we should be investing money for clients, whether you’re from very cautious to very adventurous and highly speculative.

Dan: From my perspective, Amy is the financial powerhouse in our relationship. As in I trust Amy’s decisions when she spends a lot of time explaining them to me.  But at the same time, I am probably a little bit more risk averse than I think Amy would be. And I think Amy might even say the opposite.

Amy: I wouldn’t even buy a lottery ticket because I think that’s a waste of money, but I’d rather put that into premium bonds because I’m a nerd.

Andrew Scouller: You get your money back.

Amy: Where you're going to get your money back. Whereas Dan would buy a lottery ticket and go play Blackjack.  And I would think that’s a waste of money.

Dan: My attitude just changed over the years, we are once upon a time there was zero long- term planning from my perspective, medium to me was in three months’ time as opposed to anything longer.  So just to give you a very quick story, Amy and I went to Vegas on our honeymoon, the most we ever spent was £ 10 on a Blackjack machine.  And we were very happy that we took $11 out of it.

Amy: For me, I think it’s being new to it.  And we’ve only got a small amount of our savings already in. And I said, because of that reason, right, I would say I’m comfortable.  I understand that the stock market’s going to go up and down but look how much it’s moved in the last two years since the pandemic. 

And so, it’s hard to build that trust, to know, " Okay, if I really do put a little bit more into it, what if it drops 10% overnight to 15%?" To have the trust that it’s going to recover.  Whilst you might know it and the logic is there and we’ve seen it over time we’re not experienced in it. So, that’s what probably makes  me  nervous. The fact versus heart.

Andrew Scouller: First off risk is subjective. Everybody has a different view on risk and risk changes as well.  There’s a thing that we assess with clients that’s called capacity for loss.  So what impact is your pension going down in value by 10% in one year going to have to you right now? 

And the answer to that is very little because you’ve got time ahead of you to recoup those losses.  Now, we’re in an interesting period now.  There’s a lot going on within the markets.  Will there be a recovery?  History has told us there will be a recovery, but depending on how big the drop is, depends on how long that recovery takes.

So, for someone who is investing a lump sum, they will see the value of their investments or their pensions going up and down daily.  If somebody’s looking at it daily, it can be quite a dangerous thing because they’re then seeing, " Oh my goodness, I’ve dropped £10,000 in three days." And it’s like, " Well, you haven’t actually lost that money. The value has just gone down." You’ve lost the money if you earn cash at that point in time, it’s gaining the trust of the markets and how things are invested.

Amy: That is my question really, is that we’ve probably got 30 odd years ahead of us.  And now we do make the most of trying to put into our employer pension, but it’s just sat on the default now.  So, whatever our employer has chosen for our pension is what we’re getting.

Dan: As Amy said, we’ve got unfortunately 30- something years, probably, left of working, but we obviously want that to make the most amount of money that we possibly can over that period.

Andrew Scouller: This is where somebody like me comes into play.  I assess a client’s risk profile and then I would advise clients on how funds should be invested.  So, if somebody is an adventurous investor, for example, most of their money is going to be in the stock market. 

So, it’s going to be invested in equities, that isn’t just UK- based, it’s worldwide.  If someone’s more cautious, we will see less equity investment, so the percentage holders will reduce, and then we’ll see more stability elements.  So, these are things like bonds and gilts, so loans to large corporations and governments.  You may even see some commodities coming in there. 

Classic is gold, stock market goes down; price of gold goes up.  That’s what’s happened in the past.  Cash, foreign exchange comes into those portfolios as well.  So, risk profiles can change.

Amy: I have taken the leap and gone in and we’ve got an online portal where I can see my work’s pension and I can do one of those little quizzes like you mentioned, Andrew, and assess your risk profile.  But then it opens to maybe 250 different funds that I can choose from. And that is too many for me to look at and feel confident in choosing the same one.  Many of them have the same risk profile.  How do you know which one is better than another?

Andrew Scouller: So, if a client’s doing it themselves or a family's doing it themself, I would always tend to go for a multi- asset portfolio so that you’re getting a bit of everything.  And then you can experiment with funds here and there, that’s an option.  You know the risk profile; you know the risk of the funds because your pension provider will tell you that. And you can make that decision at that point in time.

Amy: That was going to be one of my questions was one of the options I know we have is that you can just say, "I want 50% to go into the medium risk and I want 50% to go into the high risk." And you play with that. Does splitting it in that way, does that make it redundant that you’ve chosen one that’s high and one that’s medium?

Andrew Scouller: I’m not a fan of that approach. I’ll be honest with you. I much prefer to say well, " Okay, let’s say you are a seven out of 10, moderately adventurous investor." The portfolio that you would be looking at, the risk profile to that attitude to risk is got the medium risk elements in it, it’s got the high-risk elements in it. If you are using other risk profile portfolios, you’re just pulling your risk profile down or up.

Amy: That’s been how I’ve looked at it and gone, "Well, would that soften the blow?" If I only put half of it into the high-risk one, would I protect myself because I've got half still in the safe one?

Andrew Scouller: There's two sides to that argument. Yeah, absolutely, it could soften you against losses, but it will also soften you against potential gains as well. You don’t have the exposure to the stock market that you would’ve done. So

Amy: Which is defeating the purpose we’ve just said, put it in and I've got 10 years to wait, that's okay. That's actually number one for me. Can I go log in now?

Dan: Yes.

Andrew Scouller: So that approach is for your pensions. It can also be an approach for regular  savings into an ISA, et cetera.

Amy: And I think with your pension, that does feel like the one that's more comfortable maybe trialling some of that risk with because you know that you're not going to get to touch it anyway, right?

Even if I wanted to, I’m not going to be able to take that out for another 20 years.  So, one of the other things that we’ve been debating, is whether we should be saving that pot that we’ve got now, and instead of putting it into our ISA instead, maybe looking at a property and a buy- to- let and the house prices around us just seem to be skyrocketing at the same time as I’m watching the small amount that I’ve got in my ISA fall.  What are your thoughts?  Is there a benefit to property versus stocks and shares?

Andrew Scouller: Dan, what are your thoughts on property?

Dan: I have mixed feelings on it if I’m brutally honest. An ideal dream would be that you could own second or even multiple properties if you had the cash to do it, earn an income from it.  But I guess my understanding of doing that probably isn’t fantastic. And so, I guess for me it feels like a lot of money spent potentially to not have much of a return on what you’re getting for it.

Amy: I think Dan also knows that he would be the one that’s going to be sent to fix the plumbing and...

Dan: 100%.  So, from my perspective, I would 100% be in there day in and day out working on a house that I won’t live in.

Andrew Scouller: First, you’ve got to think about how are you going to finance the purchase of the property?  Is it going to be done 100% in cash?  Are you going to be using all your savings to then purchase a property?  Or are you putting down a deposit and then taking out a mortgage to finance it?

Amy: Is there a natural almost, yes, and no, even at that decision point?  If you’re going to have to get a mortgage, does that mean you’re going to erode the earnings so much that that’s not on the table?

Andrew Scouller: No, not at all.  Some people look at it as leveraging their savings.  Let’s say a property costs a £100, 000 and you have £20, 000 in savings. So basically, you are leveraging your £20,000 by getting a mortgage of £80, 000 to then buy the property, it’s then let out.  So, what you need to think of is a buy- to- let property, whether it’s 1, 2, 3, 4, or 15, you’re running-

Dan: Whoa, whoa, whoa.  Calm down.  We’re trying to get onto one now.

Amy: We're winning, Andrew, you and I are of the same mind.

Andrew Scouller: We'll get there.  We’ll get there.  So, you need to think of it as running like a business because effectively that’s what you’re doing.  Rental income comes in and you are going to pay income tax on that rental income. 

If you are getting a £1,000 a month income if you’re a higher rate taxpayer 40% of that is going to go into tax. And if you live in Scotland, that’s 41% that you’re paying in tax. So straight away that £1,000 income has dropped down to £ 600. From that £600, you still must pay the mortgage, you still must pay the insurance, the upkeep, all the other expenses that come out. 

So, a lot of people look at rental income and think, "Brilliant. That’s great."  But hang on. There’s a lot of deductions that then come off that before it goes in your pocket.

Dan: And that’s what I’m saying, Andrew.  So, you front X amount of cash to get a mortgage, you then must invest in the property to get someone attracted to coming to rent it from you.  At that point, our savings has taken a massive hit.  At which point then we rent it out but your return on what you’ll get in income from a rental, may be nothing.  You may just net out.

Andrew Scouller: One thing to bear in mind, depending on how you’ve set up your mortgage that rental income that you’re getting net of tax is hopefully paying the mortgage back. 

So over 25 years or however long you’ve taken it out, you then own that asset outright without any borrowing. 

So, it’s a way to think that your tenants are paying for your mortgage.  They’re investing the money for you and then you’ve got the asset at the end.  Property prices should in theory go up as well.  So not only are you seeing the loan or the £ 80,000, let’s say in this situation, being repaid over 20 years, you’re also seeing a capital increase in the value of the property.  So that’s a rose- tinted view on things.

And if you watch Homes Under the Hammer or any of that side of things, you’ll see everybody ploughing into property.  The darker side of that is if the property isn’t let out, you’re not getting any income coming in, but you still must pay your mortgage.  You still must pay the council tax you still have to pay the insurance.  And property prices can go down in value, it happens. 

Some people say property’s a no- risk investment, there is as many risks with property as there is with investments, but all your eggs are in one basket with property.  You are 100% reliant on that doing well, that being let out, capital growth and having good tenants, if that all works out, brilliant.  A lot of people have profited a lot from property and they see it as that’s the route they want to go down.  But it’s a very narrow view when it comes to investments.

Dan: That’s helpful.  Thank you.

Amy: And we overpay on our mortgage now.  So, if we didn’t overpay on our mortgage, for example, and put that into savings, again, is there a better choice there?  We could put it into our ISA, or we could put that away.  So, that eventually that does become enough savings to buy a second property.

Andrew Scouller: Making overpayments to the mortgage is a great idea because an investment would then need to perform above that level for there to be a benefit for you.  We’ve always got to look at what you’re paying on interest and the mortgage compared to what an investment could do.  Now, a lot of people will say, " Yeah, 100% put the money into an investment over the medium to long term, you will get a better return than you’re going to be paying interest on a mortgage."

There are no guarantees in life, by not paying into the mortgage and let’s say paying into an investment, yes, absolutely. 

It could perform at a far higher rate than the interest and then you can use that lump sum either to pay down some of your mortgage when your fixed rate comes up, you could say, " Well I’m happy with a 25- year term on my mortgage because you know what, it’s affordable I’m comfortable with it."  My priority is I want another property, or I want more money in savings then I have flexibility to retire early.  So, it all comes down to what your objectives and what your priorities are really going forward with savings.

Dan: Oh, I was going to say all second properties (crosstalk).

Andrew Scouller: 15 properties down the line and you’ve got a nice little income coming in.  (crosstalk) 

Dan: It’s funny we circle back to that.  I think (crosstalk) 

Amy: So, you got him to say it.

Angellica Bell: So much to take home from that, but I want to go to you, Amy, what was the main thing that you took away from your time with Andrew?

Amy: Yeah.  My big takeaway from Andrew is taking that confidence into the long- term investment.  If we’re comfortable putting that money away for the next 10, 15 years, and that sounds a long time, but Maya is only two so that only just gets her to Uni potentially.  And if we have that in mind, then that’s a long enough time to be quite comfortable letting that money sit somewhere else and don’t watch it going up and down and don’t think of it as a bit of gambling as I might have done in the past.  That it’s in safe hands in those accounts.

Dan: Yeah, I would agree.  I think there’s a step first to build on in that because where I thought Amy might have been in terms of her attitude to risk and where mine is, we probably meet in the middle a bit more than I thought we did, but that will help us make, I guess, decisions moving down the road. 

So, I think it’s been helpful for that.  For me, I’d gone from hiding away from debt to looking at what does savings look like for the short to medium term to now look at, well, what does my retirement look like?  And I think for us, we’ve got time on our side to use, to use to our advantage.

Amy: Angelica, these are words I never would’ve thought I would hear Dan say seven years ago.

Dan: I know.

Angellica Bell: Amy, I’m glad that I could be part of this experience and hear it too.  But I think it was fascinating to hear what kinds of options are open to you and get an insight into what might be the best way forward.  Amy and Dan, thank you so much for sharing your story with us, and the best of luck for the next steps as well.

Dan: Thanks very much.

Amy: Thanks very much.

Angellica Bell: It sounds like you’re in a great position to create the brightest financial future you can, so...  And send my love to Maya as well.

Dan: Will do. Thank you.

Amy: We will.  Thank you.

Angellica Bell: I’m sure you’ll agree that Amy and Dan’s story is quite an inspiring one and like me, you’re impressed at the discipline they showed.  But it’s all paid off for them.  So, what are the key things to think about when you’ve managed to get yourself into a stronger position financially, and you’re looking to make the best of your money?  Well, to give us some general pointers,

I’m joined now by Matt Frain, who is a Director at Legal & General Financial Advice.  Hello Matt.  So, what do you think are key points we can learn from Amy and Dan’s story?

Matt Frain: So, Amy and Dan have done a great job in building up their savings.  I think it’s incredibly powerful given where they started from, with the debt that had been built up initially.  I think it’s a powerful story.  Now, there were lots and lots of different areas covered during that discussion.

And I thought that the financial advisor, Andrew, did a fantastic job in explaining the various options that Amy and Dan have available to them.  I’m just going to draw out a few key points.  And the first one that I think is the number one priority for people in Amy and Dan’s position or similar positions is to seek the right help and advice from experts.  There are many, many ways to get help and advice, many different sources, some are close to hand. 

So, you may have your employer, your workplace pension provider, your insurance company, your bank, your solicitor, your accountant, lots of these people who will be able to help you out with certain aspects.

But then there are other things like free guidance services.  One of the better- known ones is Money Helper.  And they can provide information across a wide range of topics from the likes of state benefits, budgeting, money concerns, right through to the likes of pensions, investments, and house purchases. 

So, they can offer a wide range of help and support there.  And someone like Money Helper can be a useful source of information to people who have debt problems.  And they can also give you advice and support and tell you where to go for free debt advice or access to a free debt advisor.

And then going beyond those guided services, there are of course financial advisors that people can turn to.  So, if you are looking for a personalized recommendation based around your individual circumstances, then I would suggest seeking out a financial advisor locally to you.  And if you don’t already have one, you can source one from websites such as unbiased.co.uk.

Angellica Bell: Okay.  Let's move on to another point and talk about inflation because it does impact our lives in loads of different ways, but especially savings, doesn’t it?

Matt Frain: Yeah, absolutely.  And inflation erodes your savings, it erodes your real returns.  And current rates of inflation are sitting around 9%, forecast by most to go to double figures at some point later in this year. 

So, it’s really impacting people.  We can feel it when we go to the supermarkets and we can certainly see it at the petrol pumps right now. 

So, it’s important that people initially work out how much they need as cash holdings, that emergency fund, that safety net, and any short- term planned expenditure.  So, you may be, I don't know, planning to buy a new car in the next couple of years, you might be planning some home improvements, things that you need readily accessible cash for. 

But when you have that cash held, it’s so important that you shop around to make sure that any cash savings you do have are getting the highest interest rates possible.  What I would always say to people, in short, we all work hard to earn our money.  So, you need to make sure that money’s also working hard for you.

Angellica Bell: And what should people consider if they’re looking for the long term for some returns and some investments?

Matt Frain: Yeah, this is probably more important than ever right now with the inflationary environment we’re in.  So above and beyond those emergency funds and short- term cash holdings that people need, any excess cash savings people should really consider investing them, looking at things like ISAs or pensions and where they can invest it to potentially beat inflation. 

So, whilst there are investment risks to consider and investments aren’t for everyone, over the long term, pensions and investments have historically provided greater returns than cash and alongside property are arguably your best option in combating inflation. 

Plus, the financial advisor, Andrew, mentioned there are many tax benefits with the likes of pensions and investment ISAs, an obvious one, a big one is tax relief that you get on pension contributions.  All those tax benefits can make a really big difference to the net returns that you receive.  So, people should be looking to take advantage of those.

And then finally, the final point I would make around investing it’s a common misconception that it’s the domain of the wealthy, it’s for the rich of society only.  However, stocks and shares ISAs, for example, can often be opened with as little as £100 as a single lump sum or just £ 0 a month as a contribution. 

And likewise, pensions will usually accept relatively small monthly contributions into them.  So, these products are very much available to all, and I would encourage everyone to try and take advantage of them whenever possible.

Angellica Bell: So, what you’re saying, basically, Matt, is if you have savings and they’re not doing anything for you, it’s worth looking at other options and getting a financial advisor who has your best interest at heart.  Look at other things you can do to make your money work.

Matt Frain: Absolutely Angellica.

Angellica Bell: Well, Matt, thank you so much. And of course, a big thank you to Amy and Dan for sharing their financial lows and highs. And wherever you are in life, you can find lots more resources and information on Legal & General’s website.

Just go to legalandgeneral.com you'll also see details of the free Midlife MOT course, which they produced with The Open University.  It’ll give you the tools you need to plan your future wealth, work, and wellbeing.  I’m Angellica Bell, and I’ll be back soon with more people looking for answers to their financial questions, more experts who can help them and I hope some more insight is just right for you.  Follow this podcast on your favourite platform and I’ll catch you then.