An introduction to financial wellbeing

An introduction to financial wellbeing 

For Legal & General Workplace DC pension scheme members 

This script is intended for use with the presentation deck D100435 04/24 DC002809 

Slide 1 – An introduction to financial wellbeing 

Hello, my name is Charlotte Anthony. I’m a member of the Member Presentations Team at Legal & General and I’d like to welcome you to today’s session on financial wellbeing.  

Over the next 30 minutes or so, myself and my colleague David Rickus are going to be covering a range of financial wellbeing topics including the benefits of having a financial safety net, the gender and ethnicity pension gaps, and the different challenges you might come across at different stages in your retirement saving journey. We’ll also look at the tools and resources that are available to support both your financial and mental wellbeing.  

And, while some of the information we’ll be covering today may not be new to you, today’s session will hopefully provide you with a timely reminder to take some time out to think about - and prioritise - your own wellbeing.  

Slide 2 – Important information  

Just a quick health warning, before we get started, that this presentation is designed for general education purposes on the subjects covered. Please note that we’re unable to give financial advice. 

If you think you might need financial advice, you’ll find a list of financial advisers in your local area at unbiased.co.uk. Please note that advisers may charge for their services. 

Slide 3 – Agenda: What are we going to cover today? 

During today’s session we will be covering: 

1. What is financial wellbeing? 

1. Helping you to manage your money. 

1. The gender pension and ethnicity pension gaps. 

1. Dealing with everyday financial challenges at different stages in your retirement saving journey. 

1. Resources that can help to support your financial wellbeing. 

1. Supporting your mental wellbeing. 

1. Summary. 

Slide 4 – What is financial wellbeing? 

So, what is financial wellbeing?  

According to the government’s Money & Pensions Service, financial wellbeing means: 

• having a good relationship with your money.  

• feeling secure and in control.  

• making the most of your money from day to day, dealing with the unexpected, and being on track for a healthy financial future.  

In short, it’s about being financially resilient, confident and empowered. 

If you’d like to find out more about the Money & Pensions Service, scan the QR code on the slide. 

Slide 5 – Supporting your financial wellbeing 

At Legal & General we want to support you at every stage of your retirement journey. 

Wherever you are in your retirement journey, looking after your financial wellbeing is vitally important.  

So, whether you’re just starting out, already saving and preparing for later life, or working out how you’re going to use your pension pot to support you once you’re ready to slow down or stop working altogether, we’ve got tools and information to help you build and maintain a good relationship with your money. 

Slide 6 – The benefits of having a financial safety net  

Our dedicated website, which you can access by scanning the QR code, has lots of tools and information to help you manage your money and build your own ‘financial safety net’, including: 

• our financial safety net tool that can help you to identify how resilient your financial situation is. 

• a budget planner, which we’ll look at shortly, to help you review and reprioritise your spending. 

• our free Midlife MOT Open University course. 

• our ‘A little bit richer’ and ‘Rewirement’ podcasts which focus on a range of topics such as staying financially healthy and the gender pension gap. 

• a collection of articles that provide more information on managing stress and balancing work and life. 

• links to organisations that can offer guidance and advice on a range of topics. 

Slide 7 – Helping you to manage your money 

Over the last few years, we've seen uncertainty in financial markets caused by the COVID-19 pandemic, invasion of Ukraine and the rising costs of goods and services.  

With this in mind, we’ve gathered together a number of useful links on our dedicated ‘cost of living’ webpage, which are intended to help you deal with a wide range of financial challenges, including links to: 

• MoneyHelper 

• Citizen’s Advice 

• Which? Money 

• Money Saving Expert 

• The Trussel Trust 

We’ve also created a ‘Managing your savings in uncertain times’ hub for our Workplace pension scheme members that provides information and support specifically in relation to saving and investing in a pension during periods of economic uncertainty. In addition to this, there’s also a government website called ‘Help for households’ that has lots of information about all the help and support that is available with things such as energy, childcare, household and transport costs. 

To go to any of these pages to find out more, please scan the QR codes on the slide.  

Slide 8 – Get on top of your monthly outgoings 

It’s no surprise then, that lots of our members are looking for ways to reduce their outgoings right now.  

To assist you with this, we’ve created a budget planner that can help you review and reprioritise your spending. To find out more and/or to get started please scan the QR code on screen. 

And if you’re looking to find ways of reducing your expenditure, try shopping around to see if you could find a better deal and save money on your mobile, TV and Internet contracts or on financial products such as home insurance, mortgage or credit card. 

If you decide to shop around, you might want to tackle one bill at a time, otherwise it could feel slightly overwhelming. Try making a plan, based on the expiry dates of your existing contracts, so that you know which bills to focus on and when. 

Do some research before you commit to purchasing or renewing. Look for discounts, and/or cashback offers. 

Use comparison websites to research the best deals and don’t be afraid to negotiate with your existing providers. 

Check for any old or unused subscriptions that you no longer want or use and cancel them. 

And, if you have to, cut back. Sometimes saving money means having to reduce your spending on the things you enjoy for a while until you get yourself back in control or have saved up enough to pay for what you want. 

Slide 9 – Mind the gap!  

You may not realise it but your gender or your ethnicity can make it even harder to achieve your goals for later life.  

Known as the ‘Gender pension gap’ and the ‘Ethnicity pension gap’, we’re going to take a look at both of these in more detail before highlighting some of the actions that members, who might be concerned that they may be impacted by one or both of these, can take. 

Slide 10 – Gender Pension Gap  

Recent research shows that the difference in pension pot sizes between men and women begins at the start of our working lives, with an initial gap of 16%. This is likely to double by the time women reach their 40s and, by the time women reach retirement, their retirement savings could be 55% smaller on average. 

The gender pension gap exists because women: 

• are still paid less. 

• are less likely to be in senior leadership roles (meaning lower pay and lower pension contributions). 

• are more likely to take a career break (for childcare and unpaid carer). 

• are more likely to work part time or reduce hours. 

• often retire early due to the menopause. 

Women are also more likely to waive their rights to a partner’s pension as part of a divorce, despite entitlement to a portion of their husband’s private pension wealth and are likely to see their annual income fall by almost twice as much as men following the separation.  

With one in four divorces occurring after the age of 50, considering the impact on retirement is really important. 

Indeed, according to our recent research, - the average income target in retirement for people over 50 and still working is £25,000 a year. For most people, their income in retirement is likely to come from different sources. The new State Pension for people reaching State Pension age now is currently £11,500 a year, leaving many short of the retirement lifestyle they hope to enjoy in later life, particularly if you’re a woman. 

Slide 11 – Ethnicity Pension Gap  

Research carried out by Legal & General in late 2022, involving more than 4,000 UK adults, identified that minority ethnic savers have an average pension pot of £52,333, which is 46% of the £114,941 saved by their white British counterparts.  

And it’s not just a size issue; 69% of our minority ethnic respondents didn’t even have a pension pot compared to 44% of white British people. 

This gap exists for many of the same reasons that impact on women, with low pay being a key factor as many workers from an ethnic minority background are more likely to have a lower income and not to qualify for the £10,000 auto-enrolment threshold. 

However, in addition, our research also highlighted 5 main reasons that prevent minority ethnicities from saving into a pension, which are: 

• not enough spare income. 

• not wanting to take risks with their money. 

• concerns about the cost of living. 

• a lack of pensions knowledge. 

• preferring to save for the future in other ways, e.g. investing in property. 

There’s a great deal that needs to be done in terms of improving communication and financial education and removing barriers that create mistrust, in order to create a level playing field for all. 

Slide 12 – Closing the gap  

And, while many of these societal factors are outside of our control, on a positive note there are still some practical steps that you can take to try and improve the situation for yourself: 

• Use our Retirement planning tool to estimate how much money you’re likely to get when you retire. 

• Contribute as much as you can to your pension - and start early!  

• Talk about your pension planning with your partner. Make sure you know about each other’s saving plans, contribution limits and that you’re both on the same page. 

• Carry out a regular Midlife MOT. That'll help you see how your finances - as well as your health and mental wellbeing - are doing. 

• Make use of free support like the MoneyHelper or Retirement Living Standards websites. 

• Keep a regular eye on your pension to check whether you’re on track to achieve your retirement target. 

Scan our QR codes to access the retirement planning tool (via your online account), the Midlife MOT course or the MoneyHelper or Retirement Living Standards websites.  

To get you started, you might also want to listen to our ‘helping women close the pension gap’ podcast from our rewirement series. We’ll cover this in more detail on a later slide. 

Slide 13. Dealing with everyday financial challenges  

We realise that it’s not always easy to increase – or, sometimes, to even maintain - the amount you pay into your pension, given all the competing demands on your day-to-day finances, particularly in the current economic climate. 

It’s likely, however, that most of us will face a variety of challenges as we go through our lives, both financially and emotionally. It’s also likely that these will change over time, as individual circumstances and priorities change. 

Slide 14 – If you’re just starting out … 

For savers who are just starting out, one of the ways in which you might be able to improve your financial situation is to make the most of any ‘perks’ - or additional benefits - offered by your employer. 

These can vary widely from one employer to another but could include: 

• Paid Leave - such as Parental Leave or Maternity Leave. 

• Staff discounts on the things you buy. 

• Health Insurance - which might include access to an online GP. 

• Employee Assistance Programs - which could include free counselling sessions on financial or mental wellbeing. 

• Death in Service cover - which provides life insurance based on a multiple of your salary. 

You may be able to find out more on your employer’s intranet site. Alternatively, you might want to speak to your manager, HR team or Benefits provider. 

Saving for your first home could be an important consideration for a number of our audience today.  

The average house price in the UK in September 2023 was £291,000 compared to £176,000 in September 2013, representing an increase of £115,000 (65%) in just 10 years. As a result, borrowers taking out a new mortgage will typically borrow up to 4 or 5 times their annual salary and most lenders will require a deposit of at least 5-10 % of the property’s valuation in order to provide a mortgage loan.   

There is some help available for those who are saving up for a deposit. 

The government offers help to people aged 18 to 40, who are saving up for a deposit to make that first step on to the property ladder. Savers can put up to £4,000 per year into a Lifetime ISA and the government will add a 25% bonus to the amount that has been saved (up to a maximum of £1,000). 

Before putting your money into any savings product always check that you are aware of the risks and understand the terms and conditions. 

Many of today’s audience might already be renting a property but if this is something that you’re thinking of doing for the first time, it’s important to be aware of the ‘hidden’ costs. These can add up to more than you might think, so before entering into a rental agreement, it’s a good idea to: 

• establish whether your rent includes bills and council tax (and budget for the additional costs if it doesn’t).  

• find out if there are any upfront fees or deposits needed. 

• check the inventory and make sure any damage is noted, especially before you move in.  

• take meter readings when you move in and when you leave so that you aren’t paying someone else’s bills. 

It’s also important that you don’t forget about your student loans.   

Although students don’t have to pay anything back, after leaving university, until they start earning above a certain amount each year, this could represent a significant monthly amount, once you’re earning enough to begin repaying any loans. 

To find out more about student loan repayments, please scan the QR code on the slide.  

It’s never too early or too late to get into good saving habits. 

If you aren’t already familiar with it, the ‘50, 30, 20’ rule might provide you with a good ‘rule of thumb’ when it comes to working out how much of your income should be allocated to essential items, having fun and saving for the future. If you were thinking of adopting this approach you would allocate: 

• 50% of your income on essentials. 

• 30% on the things you want to do (in other words the ‘fun stuff’). 

• 20% on savings.  

Hopefully, this is something that might help when it comes to managing your everyday finances. 

We’ve looked a few different things here and, whilst I’m sure there’s more we could look at, the question you ought to be asking yourself is, "Could I weather the storm if something unexpected happened?"  

Slide 15 – If you’re already saving …  

If you’re already saving towards your retirement then, chances are, you’ll be faced by a variety of challenges – not just financially – on a daily basis.  

For this group in particular, it’s vitally important to ensure that you’re taking care of your own physical and mental wellbeing.  

Getting into and maintaining good lifestyle habits, such as walking regularly, having a good diet and getting plenty of sleep are crucial to how we feel and our general health. Our busy working lives don’t always make doing these things easy but they can deliver real benefits to your physical and mental wellbeing.  

Coping with uncertainty is crucial to maintaining good mental health. It’s a mindset that we’ve all had to learn over the last few years.  

Financial markets don’t like uncertainty any more than we do, and it’s all too easy to get unsettled by the short-term impact this can have on our finances. It’s important, therefore, to take a long-term view about your investments and pension. As we touched on earlier, you can find out more by visiting our ‘Uncertain times’ hub, which you can access via the QR code on the slide.  

With the cost of everyday essentials going up - and with credit freely available from a variety of sources these days - it’s easy to get yourself into debt, just to ensure that you’re getting by. So, whilst it may not always be possible, it’s a good idea to steer clear of getting into avoidable debt if you can. 

Before taking out a loan or buying something on credit ask yourself if you really need to make that purchase or whether you could pay for it in another way. 

And, if you decide to take out a loan or buy something on credit, it’s important to understand how much interest you will be charged and what your monthly payments will be, so that you can be confident in your ability to afford those payments.  

Be realistic about how much you can afford to borrow or purchase on credit and give some thought to how you would manage any repayments if your circumstances changed.  

If you’re needing to find care for a family member or partner, you may be able to use our Care Concierge service at no cost. If it’s available to your scheme, you’ll have access to a team of dedicated care experts, who are committed to helping you navigate the often challenging and difficult later life care journey.  

Finding, and paying for, care is a deeply personal experience - everyone's needs are different.  

The friendly and helpful Care Concierge team aim to understand your specific situation and requirements and will help you work out what your options are.  

If this is something that might be of interest, please check your scheme website for more information. 

You may have children and want to help them with further education and accommodation costs. 

We realise that not all parents can afford to help with these costs. However, even if parents aren’t paying the tuition or accommodation bills, they may still face difficult tasks to support their children such as: 

• navigating the student loans system and making applications.  

• helping their children get settled into new accommodation by providing emotional support or helping them to find work while they are studying. 

You may also want to support your adult children with getting their first home. 

To put this into context, last year, 19% of all home purchases were funded wholly or partly by parents and 56% first-time buyers aged under 35 will get help from parents to buy a property this year. Given the ever-rising property costs of both renting and buying a property, supporting an adult child is quite a difficult ask of any parent! 

And for those of you who might be looking for more structured help, we’ve partnered with the Open University to create a free 4-hour ‘Midlife MOT course. We’ll provide you with more information on this later in our presentation. 

Slide 16 – If you’re getting ready for retirement …  

For those audience members that are getting ready for retirement – who probably have less than 10 years to go before they plan to start taking their pension benefits - now would be a good time, if you haven’t already, to start thinking about all aspects of your life in retirement, from your purpose and how you might want to spend your time (including the things on your bucket list) through to the assets you have and paying off any debts.   

To help with this, we’ve partnered once again with the Open University to create another free online course ‘Retirement planning made easy’ and we’ll also look at this in more detail shortly.  

We know that in the early retirement years, your spending may increase as you have more time. Maybe you’ll want to participate in hobbies and interests that you didn’t previously have time for. If this could be you, you may want to consider slowing down and going part-time, to supplement your retirement income, rather than stopping work altogether. 

Equally, there’ll also come a time when you may want to consider slowing down further – or stopping work completely – at which point your income needs may also change.  

To help you identify the things that you might want to focus on at different stages as you approach and go beyond your retirement date, we’ve created a free 4-hour Open University course, called ‘Retirement planning made easy’, which we’ll look at in a little more detail shortly.  To find out more, scan the QR code on the slide. 

And don’t forget to take the State Pension into account when thinking about your income in retirement. If you haven’t done so already, you can request a forecast by going to the Gov.uk, website, which you can also access by scanning the QR code on the slide. 

Now would also be a good time to start giving some thought to the way in which you plan to take your retirement savings and when. The options for taking your money at retirement section of your scheme website would be a good place to get started. 

If you haven’t already, you might also want to start putting plans in place for yourself and your loved ones.  

There could be more to think about than you might realise. For example, you may: 

• want to think about making a will - or review an existing one. 

• need to set up a Power of Attorney for yourself or other family members. 

• need to make the necessary arrangements associated with the transfer of any large assets (e.g. property). 

And, as we mentioned on the previous slide, if you need to find care for a family member or partner, you may be able to use our Care Concierge service at no cost. See your scheme website for more information. 

Remember, being prepared can help to reduce the emotional and financial stress on both you and those around you, at whatever stage you’re at in your retirement savings journey. 

Slide 17 – Resources that can help  

We want to help you look after your financial wellbeing. 

To help you with this, we provide a range of useful tools and resources. 

Slide 18 – A little bit richer  

Our ‘A little bit richer’ podcasts provide members in their 20’s and early 30’s with regular bite-sized personal finance tips. 

Hosted by Kia Commodore, these sessions cover a range of financial topics, from helping to make sense of your payslip, your pension and everything in between from ISAs and student loans to mortgages, budgeting and even your mental health.  

Scan the QR code on the slide to listen to the latest episode, see the list of previous episodes and find out how to subscribe and listen via your preferred podcast platform. 

Slide 19 – Rewirement  

Our 'Rewirement' podcast series - featuring broadcaster Angellica Bell along with a host of guests including real-life pension scheme members - offers information and support on a wide range of retirement-related issues, for members of all ages, from retirement planning to looking after your mental wellbeing.  

There’s an episode that looks at ways of ‘Staying healthy as the cost of living rises’. There’s also an episode that focuses specifically on ‘Helping women close the pension gap’.  

You can access all of the Rewirement podcasts, by scanning the QR code on the slide. 

Slide 20 – Helping you take the next step  

To help you with your retirement planning, and take control of your financial wellbeing, we’ve created 2 Open University courses, both of which are free and take around 4 hours to complete.  

The Midlife MOT is aimed at people in their 40s and 50s who want some help when it comes focusing on their own financial and physical wellbeing.  

Completing this course will help you to assess your financial situation, understand how you can improve it and identify how much income you’ll need in retirement.  

It will also help you to look at your work life and assess your wellbeing. 

Retirement planning made easy sets out the stepping stones to a more financially secure retirement.  

Completing this course should provide you with a better understanding of your finances in retirement, the different ways you can take an income from your retirement savings and the impact that lifetime events can have on your retirement finances.  

You can access both of these courses via your scheme website or by scanning the QR codes on the slide. 

Slide 21 – Supporting your mental wellbeing

So far, we’ve focused on practical steps to improve your financial wellbeing. However, it’s just as important to ensure that you’re looking after your mental health in these challenging times.  

Not surprisingly, money worries - particularly when we don’t feel in control of our finances – can lead to stress, causing us to: 

• feel anxious. 

• develop sleep problems. 

• stop socialising with friends (to avoid spending money). 

• avoid opening financial correspondence or logging on to banking apps. 

• turn the heating down or off. 

• skip meals or generally eat less healthily. 

All of which can have a detrimental impact on our mental health. If you’d like to find out more about the impact of financial stress on your mental health and some of the steps you can take to reduce it, scan the QR code on the slide.  

You’ll also find a wealth of information, resources and support on the NHS’ ‘Every Mind Matters’ website, which you can access by scanning the QR code, where you’ll be able to: 

• create your own personalised Mind Plan with hints and tips. 

• sign up for anxiety-easing emails. 

• try a variety of self-help CBT techniques. 

Slide 22 – Summary  

We’ve covered a lot of ground today.  

You may have already identified some of the things that you need to do following this presentation to start firming up your retirement plans but, if you’re wondering where to start, we’d suggest focusing on the following: 

1. Allocate a regular time to review your finances. Regularly checking your outgoings will help to identify if - and where - you might need to make any changes. 

1. Don’t fall into the gap! Use our retirement planning tool to regularly review your retirement savings and check if you’re on track to achieve your goals – and take action if you aren’t. 

1. Take advantage of all the available tools, resources and organisations that can help to support your financial and mental wellbeing. 

Slide 23 – Thank you 

Thank you for attending today’s presentation. We hope you found it useful. 

If you have a specific query about your individual workplace savings plan, you can contact our Helpline on 0345 070 8686 between the hours of 8.30am and 7pm Monday to Friday.  

Please note that call charges will vary. We may record and monitor calls. 

You will also find more information about your workplace pension by visiting your scheme website or by going to your online account, which you can also access by scanning the QR code. 

We’d be keen to get your feedback on today’s presentation, so that we can continue to improve these sessions going forward.  If you’re happy to provide us with some comments, there’s a feedback form on the BrightTalk platform that is quick and easy to complete. 

We hope to see you at one of our events in the future. 

Bye for now. 

Legal & General (Portfolio Management Services) Limited. 
Registered in England and Wales No. 2457525. Registered office: One Coleman Street, London EC2R 5AA.  

We are authorised and regulated by the Financial Conduct Authority. 

Legal & General Assurance Society Limited 

Registered in England and Wales No.166055. Registered office: One Coleman Street, London EC2R 5AA.  

We are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 

Trust-Based Occupational Pension Schemes are regulated by The Pensions Regulator. 

Administrator: Legal & General Assurance Society Limited. Registered in England and Wales No. 00166055. Registered office: One Coleman Street, London EC2R 5AA. 

Legal & General Assurance Society are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. However, the administration of occupational pension schemes is not regulated by the FCA or PRA.