Bonus episode: Personal finance tips from the experts part one

The Pension Confident Podcast

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at PensionBee Content

04 Sept 2023 /  

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The following’s a transcript of a bonus episode of The Pension Confident Podcast - personal finance tips from the experts part one. You can listen to this bonus episode here or scroll on to read the conversation.

PHILIPPA: Hello and welcome to a bonus episode of The Pension Confident Podcast. This time, we’re sharing personal finance wisdom from some of the brilliant guests who featured on the podcast so far. So confused about compound interest? Need help with budgeting? Keep listening for simple explanations on those two, and hear our guests discuss credit ratings, ISAs and more.

Just remember that anything discussed on the podcast should not be regarded as financial advice and when investing your capital is at risk. And remember to follow and subscribe to the series wherever you find your podcasts so you never miss an episode. Happy listening!

First up, it’s a friend of the podcast, Damien Fahy, Founder of Money to the Masses. In our launch episode, he laid out one excellent reason to save money into your pension pot.

DAMIEN: Because this is a wonderful world of pensions - that you get a Brucey bonus from the government. Yes, free money. So, if you ensure that you claim back the tax relief that you’re owed, then you will actually reduce the amount it’s costing you out of your net pay. That’s your take home pay, that’s what most people are concerned about.

PHILIPPA: Here’s one for the entrepreneurs and wannabe entrepreneurs listening in. It’s Ken Okoroafor, from episode four with a smart plan for maxing out his pension contributions.

KEN: Well exactly, this is actually a really important point, because a lot of people I know who run - lots of my friends are entrepreneurs now. You tend to hang around people who do what you’re doing or something quite similar. A lot of them don’t actually know that within a limited company, if you’re registered as a limited company, you can set up your own pension, and your business can contribute into that and it’s 100% tax deductible.

PHILIPPA: Einstein called it the 7th Wonder of the World. Yes, it’s that magical force of nature - compound interest! And here’s The Money Whisperer; Emma Maslin, explaining how it works in episode eight.

EMMA: Compound interest’s where your interest earns interest on itself. So, if we leave our money in the bank and allow it to grow with the power of interest. If you leave the money that’s there to continue to grow, it acts sort of like a snowball effect. Now, we live in a society where we’re encouraged to consume, consume, consume. So we end up not leaving our money in the bank to do this. If we could encourage and educate children to do this, and certainly if I’d have learnt that when I was younger and not spent so much on going out, and handbags, and shoes, I think I’d be in a better position now!

PHILIPPA: And in episode five, Lynn Beattie, aka Mrs MummyPenny talked about how much she regrets all the interest she missed out on because she just didn’t know how compound interest worked.

LYNN: If I think back to when I was in my 20s, I didn’t put any money into my pension in my 20s because I just felt like the future was too far away. But then when I got into my 30s and 40s, my mindset changed dramatically. But then I’ve lost out on sort of the compound of those pension contributions. So there’s nothing that can compare to a pension.

PHILIPPA: Onto episode 13 and Mr MoneyJar, Timi Merriman-Johnson on how the wonders of AI are helping his savings pot to grow.

TIMI: When it comes to saving, just set up that standing order to your separate savings account and let it run.

PHILIPPA: It’s not a decision, it just happens?

TIMI: It just happens using budgeting software which automatically categorises your spending. You just need to review and check it. I do that every week. I like relying on tools and things outside of me, systems that can help me make good decisions.

PHILIPPA: As the cost of living crisis hit home, we’ve talked a lot about how to spend less and save money on the podcast. And in episode 14, Ellie Austin-Williams laid out some of the ways savvy single people could dodge all those unfair added costs that singletons often have to shell out when they travel alone.

ELLIE: Buddying up with people’s a good idea. You don’t have to be in a couple romantically to benefit from sometimes splitting costs. So asking people, if you’re going to something like a weekend away, if you can split the costs, if you can share a ride. There’s sharing hotel rooms as well. Things like hen parties or weddings are expensive to attend as a guest a lot of the time, but if you’ve got another friend or an acquaintance who’s going, who’s single, why not just get a room with two single beds and share the cost?

PHILIPPA: We all lust after a perfect credit rating, but lots of us don’t have one for one reason or another. That can make it harder to access all sorts of financial products like loans and mortgages. In episode 15, Nina Mohanty, Co-Founder of Bloom Money, told us about the horrifying moment she realised that a case of mistaken identity was badly affecting her credit rating.

NINA: I came to realise that one of the credit rating agencies, I’ve no idea why, said I had a terrible credit rating and the other two said I was in good standing. I started going through and I realised that it had my address as a place that I lived three or four years ago. So whatever was going on with that particular residence was negatively affecting me. There’s usually a link on the websites of the credit rating bureaus where you can file a correction. It’ll take ages and it’s very paperwork heavy, but I highly recommend having a quick audit and looking to make sure.

PHILIPPA: We’ve already heard about Timi Merriman-Johnson’s reliance on AI to do his saving for him. In episode 17, the Financial Times‘ Consumer Editor, Claer Barrett, celebrated just how easy it now is to open a Stocks & Shares ISA compared with the complicated process she had to go through in her 20s.

CLAER: I was always put off opening a Stocks and Shares ISA as a young worker because I didn’t know where I could get one, and I also didn’t know how I’d make the decision of what investments to put in it. But nowadays it’s much, much easier with the different investment platforms that you can open ISAs on. There’s even apps where you can open a Stocks and Shares ISA which have made it much more user-friendly for people to find, maybe select a risk weighting that they’re comfortable with, even answer a questionnaire about the sort of investing they’d like to do, and get going.

PHILIPPA: Easy to open, but not always that easy to choose which ISAs are right for you. Peter Komolafe, in episode 17, told us how important it is to weigh up the risks of each type of ISA before you take that plunge.

PETER: One of the key things that people often make a mistake on is not understanding what type of ISA they want to go for. I think it’s really important to understand how they work. Cash ISAs, Stocks and Shares ISAs, Lifetime ISAs. Particularly when it comes to things like Stocks and Shares ISAs, you can’t get away from the immutable fact that you’re going to have some investment risk with it and you shouldn’t underestimate that. It’s a great vehicle in terms of potential growth, but the downside to that is also very, very real.

PHILIPPA: Peter, again, hammering home the point that the risk’s very real, especially if you’re hoping for, or relying on short-term growth.

PETER: I see a lot of people looking to get on a property ladder with a Stocks and Shares Lifetime ISA, that want to buy a house in three years time. And I think the risk’s too high. Do you want to potentially lose your deposit on the stock market? I think that’s really important to understand.

PHILIPPA: That’s it for this episode. We hope you found some useful financial nuggets. See you next time!

Listen or watch any of the episodes mentioned above and stay up-to-date with all of our new episodes. And if you’re enjoying the podcast? Don’t forget to rate and give us a review! As always we’d love to hear your suggestions and feedback.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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