E54: How to build generational wealth with Rotimi Merriman-Johnson, Anna Brading and Rosa Buttice

The following is a transcript of a bonus podcast episode of The Pension Confident Podcast. Listen to the episode, watch on YouTube or scroll on to read the conversation.

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PHILIPPA: Today’s episode is about building generational wealth, the nuts and bolts and the bigger picture. We usually talk about generational wealth flowing down the family tree, from parents to kids or grandparents to grandchildren.

Today though, we’re looking at money moving across the whole family tree because plenty of people are now sandwiched financially, supporting the generations above as well as those below.

Joining me today to outline the roadmap for building generational wealth, I have Rotimi Merriman-Johnson. He’s the Founder of Mr MoneyJar, a trusted financial education brand. He’s also a qualified IFA [Independent Financial Adviser] and Ambassador for the charity National Numeracy.

Anna Brading is a Certified Financial Education Instructor from Mentora Money. She’s the Author of Money Mentor: The 10 Essential Steps to Do Your Future Self a Favour. Recently, she’s worked with the UK government, including HM Treasury and Downing Street, to help shape better financial education resources.

From PensionBee this time, we’re joined by Head of People Operations, Rosa Buttice, and a little birdie tells me, Rosa, you’ve been shortlisted for an award. Tell us.

ROSA: Yeah, that’s correct, Philippa. So, I’ve been shortlisted for the Role Model of the Year [at] the Women in Tech Awards.

PHILIPPA: That’s spectacular. Congratulations.

ROSA: Thank you.

PHILIPPA: Hello, everyone.

ANNA: Hi, Philippa.

ROTIMI: Hi, Philippa.

ANNA: Great to be here.

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What generational wealth means

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PHILIPPA: So, growing up with money, we all have different experiences. In my family, no one ever talked about it. I mean, I knew literally nothing by the time I left home. What about you guys? Was it discussed around the dinner table?

ANNA: In terms of discussion, not so much. I was a bit of a disaster with my finances in my 20s.

PHILIPPA: Yeah, me too. Big overdraft?

ANNA: OK, so one thing I got right, I was anti-debt. I was like, “I’m not going into debt”. And my parents did talk to me about debt -

PHILIPPA: OK -

ANNA: and that’s essential.

PHILIPPA: Yeah.

ANNA: Both my husband and my parents both had the same outlook on debt and they were like, “Don’t do it, it’s not worth it”. So [I] never went down that road. But in terms of maximising, making use of what I did have, [I] didn’t know what to do. [I] wasn’t saving -

PHILIPPA: interesting -

ANNA: wasn’t investing.

PHILIPPA: Rosa, how about you?

ROSA: We were talking about money all the time, so definitely something that we discussed.

PHILIPPA: You did?

ROSA: Yeah.

PHILIPPA: That’s interesting. How about you, Rotimi?

ROTIMI: We did talk about earning and spending, but the learnings that I now have around saving and investing came later, when I was in my adulthood.

PHILIPPA: On the generational wealth point, amassing wealth so that you can pass it on, I’m thinking that that’s now a broader definition than maybe what it used to be, because it just used to be about cash, right, Rotimi? It was like the stuff you handed on to your kids. But do you think it’s a bigger picture conversation that now, isn’t it?

ROTIMI: Yeah, it’s a great question. What does generational wealth mean to me? I think it’s got three components -

PHILIPPA: yeah -

ROTIMI: I think first and foremostly, it’s about money. So, it’s about resources and passing those on to the next generation. I think it’s also about education -

PHILIPPA: yeah -

ROTIMI: financial education and the lessons you learn about how to manage that money, how to spend it, how to save it. And then lastly, I think generational wealth is about networks and relationships.

PHILIPPA: Talk a bit about that.

ROTIMI: Everything from the nuclear family, the family structure that you have around you, to people that your parents could maybe put you in touch with, could impact things like jobs you could get down the line or opportunities that might be available to you.

PHILIPPA: Interesting. That’s an interesting definition of generational wealth, isn’t it?

ANNA: It’s fascinating. Yeah, you’ve just opened a door in my brain there, because I think, yeah, that’s different from what I was thinking.

PHILIPPA: Yeah, I hadn’t thought of it in that way. How would you define it, Rosa? What’s your picture of it in your own mind?

ROSA: Yeah, I think money and emotional intelligence and how taking care of others, like how can I make sure that I’m saving for my kids, but also maybe saving for my parents if [one] day they might need something. I want to be ready for that call in case.

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The expectation gap

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PHILIPPA: We should get onto the nuts and bolts really, shouldn’t we? Of actually how do you start building generational wealth? And I’m interested to know, because Rotimi, I know you’re first in with this. Where did you start with that journey?

ROTIMI: My generational wealth journey, I guess, started with my job - like the first jobs I got out of uni. Because just for context about me, within my family, I’m the first to have started the business and made money for myself and to have some of the opportunities that I’ve had so far. And on the one hand, that’s really exciting. And I’m really proud of myself. And I think my family is proud of me -

PHILIPPA: yeah -

ROTIMI: but on the other hand, that can come with a greater sense of responsibility and perhaps even like [an] obligation to support those around me. So, it’s just something that I’m navigating with each year that I run this business.

PHILIPPA: So, I know, Rosa and Anna, you both have kids, don’t you? So, Anna, for you, is it mostly in your mind about children?

ANNA: It’s mostly about my children. However, what I find most striking between what my parents have experienced, we’ve experienced it, I’m an elder Millennial for reference, and my kids are about to experience, is how much more expensive it’s now to start adult life than when I was a kid and when my parents were kids. So, I remember my parents telling me they got a grant to go to uni, I think, they actually got money to go to uni -

PHILIPPA: yeah, living expenses and no fees and all that, yeah -

ANNA: yeah, it was such a different experience. Obviously less people went, of course. By the time I went to university, there were fees involved. It was less expensive -

PHILIPPA: yeah -

ANNA: than it’s now, like by a long shot. I keep thinking about my kids and I keep thinking about what’s going to happen when they start - when they’re 20 years old. 19, 20, 21, I think about trying to get on the property ladder, trying to go to uni if they want to. What’s that actually going to cost them? Are they going to come out with huge amounts of debt? Are they ever going to be able to buy a house?

There are all these things that I just think, “Gosh, the pressure on them to get started in life is humongous compared to what I experienced”. So that’s in the back of my mind constantly. I’m thinking I need to be putting aside because I want to support them, I want to help them, and I want to get them going when they hit their 20s.

PHILIPPA: And it feels to me like the pressure is almost more because the future is so unpredictable now. Just in 10, 20 years, what the landscape might look like for them, which I think perhaps previous generations didn’t have. Because it’s like, you got educated to whatever level, you went out, you got a job, you know. And of course, everyone was living shorter lives.

ANNA: I’d just like to add as well, I think there’s an expectation gap as well, because I think my parents, when they tell me what they expected for their adult life, it was so different to what I expected -

PHILIPPA: was it? -

ANNA: yes! because they came out, they didn’t have a lot growing up. They - it was all hands on deck, it’s post-war generation -

PHILIPPA: yeah -

ANNA: and it was just, like you just said, get a job, just get going, do something -

PHILIPPA: yeah -

ANNA: and they didn’t expect to build wealth, they didn’t expect to have a humongous home. They just got cracking and it unfolded as they went. But I think we saw, as Millennials, we saw this generation and the houses they were able to afford and the lifestyle they did build, and you go into your 20s with your parents owning maybe a home, or not everybody, but a lot of people, and you think, “Well, that’s the experience I’m going to have. I’m going to be able to go from, get on the property ladder -

PHILIPPA: yeah -

ANNA: this, that, and the other”. So, there’s this gap in expectation, I think.

PHILIPPA: I think you’re right. And it’s expectations, isn’t it? Because my parents were the same as yours, post-war generation. They didn’t expect to own property. They expected to just go out and get a job, pay the bills.

ANNA: My dad tells me a story about how he used to treat himself to a Mars bar. It was like a really big deal when he got his job in London. I just think, “Wow” - 

PHILIPPA: different world.

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Junior ISAs

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PHILIPPA: So, nuts and bolts of saving. I think we all understand now really why we’re saving and what the landscape is. If we think about kids, Junior ISA is the first thing that comes into my mind. Rotimi, talk us through it. How does it work? What are the limits?

ROTIMI: Sure. So, Junior ISA is a tax-free savings account that we have in the UK. There are two types. There’s a cash version and a stocks and shares ISA version, which is used for investing. You have an annual limit of £9,000 per tax year (2026/27) that you can put into a Junior ISA, and that’s across both types. And the tax year runs from the 6 April to the 5 April.

Whenever I speak to friends, family, because of the age I’m at, people in my circle are either on their first or second child. I think what they find quite attractive about the Junior ISA is the ability to save for their children long-term -

PHILIPPA: yeah -

ROTIMI: and particularly the investing version to benefit from compound returns over that 18-year period, because you can do it from when the child is born.

PHILIPPA: The power of compounding. I don’t mind saying it again. It’s like magic, isn’t it?

ANNA: It’s magic.

PHILIPPA: Yeah. Do you have these for your kids, Anna?

ANNA: I do. I do. 

PHILIPPA: Because you’ve got three children?

ANNA: I’ve three kids, yeah. And I started late. I didn’t start when they were born. Didn’t know about it then. So, I had to - I played catch-up in my 30s. And we got them Junior Stocks and Shares ISAs. And the thing that I think is really important to understand is a lot of people think, “Well, I don’t have any money to put aside”. And we didn’t. Money was really tight when we started. So, we started small -

PHILIPPA: yeah -

ANNA: we started really, really small with those. I think it was £25 a month per child that we could put in. And, you might say, “well, what’s the point in that? Well, it’s only a little bit”. But again, with compounding, we’ve seen that grow and it’s nice to match it compared to what could’ve happened if we were saving that money. Because before that, we were actually saving in a bank account -

PHILIPPA: yes -

ANNA: not investing it. And the growth has been obviously pretty good.

PHILIPPA: Rosa, you too?

ROSA: Yeah, very similar to you, Anna. Before, like, I think up to probably three-to-four years ago, we used to just have it in our own bank account. We’ve been saving. We have two kids, so I’ve been saving since she, my older one, was born. Basically, all presents, birthdays or Christmas [gifts], I always try to tell my family that instead of buying a lot of toys for them to just split it up. So, half of it’s going to be on toys and then the other amount is like, I usually get cash, which goes into their account.

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Handing over control

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PHILIPPA: So, here’s my question for all of you, because this is the one we’re talking about, transfer of wealth. At what point do you give your kids control of this money?

ROSA: I really feel like it’s just too uncertain, like them at 18 years old, [to] be the owner. So, what we do is like we [put it] into our own one and yeah, we, I think it’s, yeah, I wanted to see how things play out before I can make sure that at 18 years old, they’re having [it].

PHILIPPA: So, what do we think about that at this end of the table?

ANNA: We’ve got the Junior Stocks and Shares ISA for them, which they’ll get at 18 [years old], which is terrifying. But we only put a little bit in because I’m limiting the amount because I just can’t, I just think of myself at 18 [years old]. I think “That wouldn’t have gone well”.

PHILIPPA: So, you’re deliberately doing it that way -

ANNA: oh, goodness me. So, we’re doing the same as well. We’ve got our own Stocks and Shares ISAs that we’re putting money in, and we’ve portioned off like mentally, “This much isn’t ours, this is for them”. We’re going to hand it on.

PHILIPPA: So, Rotimi, you’re the [Independent Financial Adviser] (IFA). Does this sound like a good way to go about it?

ROTIMI: Yeah, so I don’t have children, but my youngest brother was born when I was 16 [years old] -

PHILIPPA: yeah -

ROTIMI: so, I’ve seen a child grow up into a now 20 year old. And this is why I think it’s so key that we incorporate financial education into that definition of generational wealth, so that you’re not just giving the money without the education piece. I actually quite like the sound of this hybrid approach where you set aside some money for the child into the Junior ISA -

PHILIPPA: yes -

ROTIMI: so, you can take them on the journey and co-invest with them, but then you perhaps keep a bit back and put it in your own ISA allowance as well, if you can. Another thing that’s great about Junior ISAs is that parents, guardians, and grandparents can all put money in -

PHILIPPA: yeah -

ROTIMI: as well. So, it does make for an alternative to just buying lots of toys. Yeah, over an 18-year period, that’s plenty of time to ride out the lumps and bumps in the stock market.

PHILIPPA: I mean, there’s a bit of a question in my mind about if you’re looking at your children thinking, “I’m going to decide when they’re older”, what if you have different thoughts about different children? -

ANNA: oh God -

PHILIPPA: are you ready to give money to some of them and not the others, Rosa?

ROSA: Very interesting, because actually I was so convinced when we had the second in 2024, I was like, “No, this is her money and this is going to be his money”. But then when I saw the difference, like then she’s actually having double because not all our aunties and all our uncles have given the same gift as they did for the first one. So, [the difference] became quite huge.

And I’m like, “OK, hold on. Maybe I’m now changing my mind of what really I want”. Before I was like, “No, this is her one”. And now I’m like, “You know what, maybe let’s keep it separate for now. So, I need to know exactly the amount, but at some point, I might need to, pick it up for the second one or maybe put them all together if I can’t and then split it equally because I feel like you shouldn’t be penalised just because you were born [after]” -

PHILIPPA: it’s quite common, isn’t it? Second kids, subsequent children just don’t do as well, do they, with the cash gifts? Which is very sad, but true. And yeah, you’ve to plan for it, don’t you?

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Junior SIPPs

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PHILIPPA: But if we don’t want to hand over the money at all, I mean, we could be thinking about things like Junior SIPPs, right?

ROTIMI: Yes, so the Junior SIPP, SIPP stands for Self-Invested Personal Pension, and this is the lesser-known junior version of an adult personal pension. Fairly similar in structure to the Junior ISA, in the sense that you can pay into it from when a child is born. Where it differs is in the annual allowance, it’s £2,880 per tax year, which after tax relief [of £720] gets grossed up to £3,600 per tax year (2026/27).

PHILIPPA: So, a sizable amount when you compound it over all the years they’re going to have it.

ROTIMI: Yeah. And then the age of access is different as well. So, it goes up from 18 years to [age] 55 currently. And then that [age] 55 is going up to [age] 57 in 2028. And if we’re being honest, it’ll probably be higher still by the time they get to their mid-50s.

But I think that the Junior Pension is particularly powerful because if we take ourselves back to when we started working, think about the freedom we’d have been afforded if we knew that we’d a pot of money that was compounding for us in the background -

PHILIPPA: oh yeah -

ROTIMI: to do particular jobs, to perhaps start our own businesses, to take time out of work, which - to provide caring responsibilities, which women overwhelmingly do. I think that there’s something quite powerful in that. But that must be balanced with the fact that the age of access isn’t necessarily known right now.

PHILIPPA: No, I mean, they’re going to be definitely middle-aged by the time they get their hands on it. If they’re not financially prudent by then, well, I guess it’s not our problem, is it? I mean, it’s really a matter for them. Why don’t you put some numbers around that, guys?

ROTIMI: OK, so yeah, this example is pulled from the Unbiased website. Sally opens a Junior SIPP for her baby Rose soon after she’s born. She contributes the annual maximum of £2,880, which becomes £3,600 a year [after tax relief], and stops paying into it as soon as Rose turns 18 [years old]. Assuming no further payments by anyone and a steady 4% growth each year -

PHILIPPA: yeah, so quite conservative.

ANNA: very -

ROTIMI: by the time Rose is 65 [years old], the pension pot will be worth over £583,000. However, Sally paid in only £51,840, so the total growth over the period is over 1,000%.

ANNA: Isn’t that amazing?

ROTIMI: Yeah.

PHILIPPA: It’s amazing. A little put away regularly in that way rolls up to astonishing numbers, doesn’t it?

ROTIMI: Half a million.

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PHILIPPA: The government loves tinkering with pensions. In the last five years alone, we’ve had an increase to the annual allowance, the scrapping of the lifetime allowance, and upcoming changes to pensions and Inheritance Tax. That’s not to mention the five Prime Ministers and six Chancellors!

If you want to stay in the loop on all the pension changes that could affect you  coming out of Downing Street - both the good and the bad - then join me, Philippa Lamb, on The Pension Confident Podcast. Subscribe today wherever you like to get your podcasts.

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Child Benefit and Child Trust Funds

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PHILIPPA: I mean, you mentioned having savings accounts, Rosa, and it brings us nicely to the point of, well, we’ll talk about saving, but you can’t save everything or invest everything. So, Rosa, how do you find the spare to put away?

ROSA: We have our family budget. There’s a pot for everything. Since we received the Child Benefit, from day one, we’ve been saving that. Now it’s £179.80 for two kids. So, we usually take it up to £200 and then we split it £100 each.

ROTIMI: OK.

PHILIPPA: There’s a sting in the tail with the Child Benefit though, isn’t there?

ROSA: Yeah, absolutely. So basically, if your earnings exceed £60,000 as a ‘[adjusted] net income’ (so you need to deduct the pension contribution). Then in that case, you’ll need to pay back some in taxes, because you’ll need to pay the High Income Child Benefit charge.

ROTIMI: Is there a thing you can do with contributing more into your pension to bring your salary down? -

PHILIPPA: salary sacrifice -

ROSA: yes -

PHILIPPA: So, there’s ways of doing it, but the limits aren’t that high because they’ve stayed static, haven’t they? So, it’s £60,000, you or your partner, it starts tapering off. And if it’s £80,000 or more, you pay it all back, don’t you? So, for a couple, in a city now. It’s not a vast salary, is it?

ROTIMI: Yeah. So, Andy Burnham, if you’re listening to this, help the parents out.

PHILIPPA: Yeah, just to say, we do have the [Autumn] Budget coming up very shortly. Yeah.

ROTIMI: I think something that might be worth mentioning is the Child Trust Fund. So, the Child Trust Fund actually preceded the Junior ISA. It was opened for children automatically that were born between September 2002 and January 2011. £250 was put in by the government and I think a further £250 for lower-income households. And so, it was succeeded by the Junior ISA, so it’s not open anymore, but there are still hundreds of thousands of unclaimed Child Trust Funds with an average balance of just over £2,000 in them.

PHILIPPA: How do you go and find out if one of those is yours?

ROTIMI: So, if you do an internet search for ‘find Child Trust Fund GOV.UK’, there’s a Child Trust Fund Finder and you can ask HMRC if your child has one.

PHILIPPA: It’s well worth doing, isn’t it?

ANNA: It’s well worth doing. Yeah, I spoke about it online recently and the amount of comments I got, people saying, “I’ve just found this, I’ve just got that. Oh my goodness, I had this much in there”. And you’re just like, “Oh right, it really is just sitting there”. It’s a lot of people.

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Inheritance Tax and gifting

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PHILIPPA: Now we can’t really talk about generational wealth without talking about tax and estate planning. So, as I say, we’ve got a budget coming up imminently. Who knows how that will play out? Inheritance Tax (IHT) has been talked about, but what are the current rules right now, Rotimi?

ROTIMI: So, Inheritance Tax is a tax on your estate, essentially the value of the assets you own over a certain amount. The Inheritance Tax threshold is currently £325,000. So, if when you pass away, the value of your [qualifying] assets exceeds £325,000, the difference, like the amount that goes over that threshold, is taxed at 40%. If you’re passing on a residence, then the residence nil rate band increases this £325,000 to half a million.

PHILIPPA: Different rules if you’re passing to a spouse or a civil partner?

ROTIMI: There’s no Inheritance Tax to pay -

PHILIPPA: yeah, well worth remembering -

ROTIMI: between spouses.

PHILIPPA: Yeah. But if we’re talking about children, Then the rules kick in.

ROTIMI: Yeah. And if you’re married, the £325,000 doubles. So that’s a potential £650,000 or £1 million if passing on the residence.

PHILIPPA: OK. So again, if we think about some numbers, say your estate’s worth half a million, fortunate enough to have half a million, tax-free threshold’s £325,000. So where would that leave us on the tax bill?

ROTIMI: 40% of £175,000 is £70,000. Yeah.

PHILIPPA: It’s a big bill. He’s desperately calculating it in his head there, but it was impressive. Yeah, I mean, a huge bill. So, what about living gifts instead? How do they work?

ANNA: A lot more people are doing that now, I think. Now people are thinking, “Hang on a second, if I’m going to be paying all that tax, can I move some of it now?”. You’ve got the ‘seven year rule’. If you’ve given it away, seven years, then you’ve -

PHILIPPA: so, you’ve to stay alive -

ANNA: you’ve to live another seven years -

PHILIPPA: for it to be tax-free -

ANNA: I mean, that’s tricky in itself because we don’t know, you never know what the future’s going to hold. that’s got its own challenges. £3,000 a year you can give to a person or split between several people without paying tax, just as gifting.

But then there’s small gift allowances as well. So, you can [give] £250 per person to as many people as you like per tax year. So, you can be super generous and go gift your friends. Birthday and Christmas gifts from regular income are also exempt.

This piece around what’s coming from your regular income is interesting as well, because if it’s a gift that you can afford, it’s after your living expenses and you can then give what - from what’s left over. That’s not included.

And there’s also rules around weddings and civil partnerships, which is nice. So yeah, £5,000 to a child, £2,500 to a grandchild or great-grandchild, and £1,000 to everyone else.

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Supporting ageing parents

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PHILIPPA: Thinking about the bigger sums though, this seven year rule, that’s quite a thorny issue, isn’t it? -

ANNA: it’s a thorny issue -

PHILIPPA: I mean, how do you decide?

ANNA: I think for the elderly there’s this big question mark around “How much is it going to cost me in care? How much do I need?”, and I think it’s really hard to plan at the moment. It’s hard to plan your final years of your life. It’s awful having to talk about it even, isn’t it? It’s very, it’s a very sensitive topic, it’s a very emotional topic.

And so I think with these question marks around the difference in care home prices. And that - it can be £1,500 a week for care homes, it’s a lot of money. And so people have got that at the back of their minds and they’re thinking, “What do I need? What should I have in a pot in the instance that I might need it for that?”.

PHILIPPA: Yeah, I mean, I’ve personally experienced this myself and, carers, it’s expensive -

ANNA: really expensive -

PHILIPPA: and it’s a completely open-ended commitment because you’ve no idea how long you’ll be doing this for. And of course, it can be two sets of parents, right? So, Rosa, you were talking about, potentially thinking about the generation behind you and financially contributing. This is in your mind?

ROSA: Absolutely, yes. Because also my parents are in Italy and in Italy the pension contribution works slightly differently than in the British one. So basically, in order to have a pension, you need to contribute for at least 20 years. Otherwise, you just get the bare minimum. So of course I’m always thinking about it. I’m like, “Well, exactly if something is happening to one of my parents. I wanted to be sure that I can have my little pot for my emergency sinking fund” -

PHILIPPA: yeah. So, you’re directly saving for that? -

ROSA: yeah.

PHILIPPA: The flip side of that’s, of course, grandparents used to be, if you’re fortunate enough to have grandparents with a bit of spare cash, a reasonably reliable source of money to be passed down but that too is much less something I think people can rely on now, isn’t it? Because as you say, Anna, care costs can eat it all up in no time at all.

ANNA: Yeah, according to the IFS, 83% of the value of lifetime gifts comes from parents. Grandparents, just 3%.

PHILIPPA: Really? That’s a real change, I suspect, from previous generations, don’t you think?

ANNA: I think so. I wonder if it’s like you say, that the longevity of life, I think, [it’s a] wonderful thing, absolutely brilliant thing. Brilliant problem to have, rather it that way round. But it does make this - these numbers change and shift.

PHILIPPA: You can’t really rely, can you?

ANNA: One thing that fascinates me about it all though is what does it do to your psyche if you’re relying on a lump sum or a handout from your parents? And what does it do to your work ethic?

PHILIPPA: And particularly if it doesn’t arrive in your life for whatever reason.

ROTIMI: Based on my personal family situation, I never grew up with the expectation that I was going to inherit anything. And so, I think that that’s given me the drive and the aspiration to build my own wealth. And I think whether you’ll be in receipt of an inheritance or not, you should try to operate as though you’re not going to get one and see it as a bonus. I think that that’s quite a good rule of thumb.

PHILIPPA: I know it’s a personal question, but are you expecting to inherit?

ROSA: No, I’m not expecting anything. And that’s why I’ve been, I moved here, I was in my 20s and straight on, I was - my first thing was to have a career and to go fast and don’t stop because I can’t stop.

ANNA: Yeah, for me, it’s a bit different. I’d say the answer is yes, but I’d agree with Rotimi’s mindset of ‘I don’t live my life like that’. I don’t think that’s a - it doesn’t help me. It doesn’t, like having my own business, you get paid in invoices. I don’t believe that’s real money until it lands in my account. I don’t think that we know what the future is going to hold.

And I don’t like the weird dynamic as well. I think it makes it weird. When you’re relying - when you’re - I’m 40 [years old]. I don’t want to be relying on my parents. I want to be giving back. I want to be supporting them, helping them, being there for them. So, I find the whole thing a bit weird. But also, I’d say in family units, it’s still very taboo. It’s a hard thing to talk about because we want our family to live forever. We never want that day to come.

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Teaching children about money

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PHILIPPA: The financial education piece, I think it’d be nice to loop back and perhaps finish with that because we’ve talked about the transfer being about more than assets now. It’s about understanding knowledge. And in this room, lots of knowledge on all your part about good education for your children. Is that something you’re actively doing, Anna?

ANNA: Oh yes. I don’t want -

PHILIPPA: How old are your kids?

ANNA: 14, 12, and 10 [years old].

PHILIPPA: Perfect.

ANNA: Yeah, a good age. I mean, I wanted - I started earlier when they were younger. It’s quite hard to figure out how to explain these concepts, and I’ve been like, I don’t talk about this loads on my platforms because I feel like it’s a work in progress. I’m learning every week. “Oh, that didn’t work, did it? Oh, that lesson didn’t go down very well” I’d had, in the early days, it was things like using Monopoly money when they were younger. So, helping them to visualise it, because everything’s digital now -

ROTIMI: yes -

PHILIPPA: yes -

ANNA: it’s so hard. Even if they see it on a screen, it doesn’t feel as tangible and as real. So, getting out the Monopoly money, I did this experiment around the table like this, and I’m - oh, it’s just so funny. If you could be a fly on the wall in my lessons with my kids, it’s just ridiculous. I [gave] them out money, and I said, “Right, you’re going to save every year. One of you is just going to save and get no interest, and the other person’s going to get whatever it was, 5% interest” -

PHILIPPA: OK -

ANNA: And I was the banker and they gave it to me. And at the end, we saw who had the extra cash and we’re like, “You’ve got the extra cash, how come?”. “Oh, because it was growing”. That’s so exciting. So, it was nice to visually see that extra pile of cash next to the one who got a good return on their money compared to the person who just put it in and didn’t get anything on top of it and they were just stashing it away. So little visual things like that, really helpful.

ROTIMI: I completely agree with what Anna said. So, the three things I’d say about financial education are [that] physical money is still important in an increasingly cashless world. Yeah, using Monopoly money to teach them. I think in a similar way that we teach children handwriting, even though they’ll probably use a computer for the rest of their lives, I think you should use physical money.

The second thing I’d say is that you should start early. So, there’s the oft-quoted 2013 Money Advice Cambridge study that shows that your adult financial habits are set as early as age seven.

PHILIPPA: Yeah.

ROTIMI: And then that segues into the third point, which is we often say that we weren’t given a financial education from when we’re young, but I happen to believe that we’re given one. It’s just in how to buy things.

PHILIPPA: Yes, to consume, to spend.

ROTIMI: So, the education must start early, but it must also be holistic. So, it can’t just be in how to consume and to buy, but it must also be in how to borrow responsibly, how to save, how to invest, what a pension is, what a mortgage is, and so on.

PHILIPPA: Do you use these things, Rosa?

ROSA: Not yet. Not yet.

PHILIPPA: Yeah, a bit young.

ROSA: Yeah, a little bit. Yeah. The oldest one, she’s five [years old] and the little one is two [years old].

PHILIPPA: So yeah. Too little.

ROSA: But definitely, like, I think my mother-in-law, she always [has] been saying, “You need to save the money when you [have it], because when you don’t, you can’t save [it]”. And “try to give small [money] conversations like this can help”.

And, in social media, I was looking, someone was saying about giving them a budget. maybe when they’re seven years old and you say, “OK, now we’re going to have a family trip. You organise it. You need to put everything in there, the train ticket and, like the museum or wherever you [want] to go and see”.

PHILIPPA: That sounds fun.

ANNA: That’s a great idea.

PHILIPPA: Do you do that with your kids?

ANNA: Well, I’ve just had a sort of 45-minute PowerPoint presentation from one of my kids about a trip she wants to go on, and she budgeted it all out with her best friend.

PHILIPPA: OK, we’re impressed.

ANNA: I sat there just, like, gobsmacked [thinking] “What is happening?”.

PHILIPPA: Your work is done, isn’t it?

ANNA: Yeah, I don’t know, I feel like I’m getting hoodwinked a bit. But it’s lovely to see them doing those things and understand how it all works and actually putting it into practice and pulling it together. So, I don’t mind if they want to con me a little bit into a trip. That’s all right.

PHILIPPA: Yeah, seems fair enough, doesn’t it? So, for your younger brother, do you feel he’s well-set now on a path to amassing generational wealth, is it?

ROTIMI: I think if the laws of compounding remain true, he’s in a good position. And I just, I think it’s great. That for me is what generational wealth is all about.

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Final thoughts

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PHILIPPA: We need to wrap this conversation up now, but I’m intrigued to ask you two in the room who have you have children right now. Has any of this conversation changed or inspired the way you’re saving for your kids, or did you know it all before?

ANNA: I think I’ve got a system in place, but I think coming right back to the start when you mentioned about “What is generational wealth?” -

PHILIPPA: yes -

ANNA: and broadening it out a little bit. So, it’s education, it’s relationships. Who do you know that could help your child? That’s a bit of a - yeah, that’s a take-home for me for sure.

PHILIPPA: It’s not just cash. Yeah, Rosa?

ROSA: And for me, Anna, what you said, maybe the hybrid approach. Instead of having [it just in our account, maybe] a little bit in a Junior ISA and a little bit into our own ISA. Definitely something that I’ll take away.

PHILIPPA: So, thanks very much for sharing all your insights.

ALL: Thanks so much for having us.

PHILIPPA: Stay tuned for our next episode. We’ll be joined by Maike Currie to answer all your Autumn Budget questions and what they mean for your finances. And if you’ve missed an episode, don’t worry, you can catch up anytime on your favourite podcast app, YouTube, or of course, if you’re a PensionBee customer, in the PensionBee app.

Here’s a reminder before we go: anything discussed on the podcast shouldn’t be regarded as financial advice or as legal advice, and when investing, your capital is at risk. Thanks for being with us. We’ll see you next time.

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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.