5 highlights from our webinar 'Investing: The Over 40s Club'

On February 1, we were delighted to host our second webinar of 2022: 'Investing: The Over 40s Club', which was sponsored by Aviva. You can watch the full webinar replay here.

A huge thank you goes out to our wonderful guests, Justin King from MFP Wealth Management and Alistair McQueen from Aviva, who kindly supported the webinar.

And a huge thank you to our audience!

Hundreds of people registered for the event, and we received many questions, queries and helpful tips from you all. Sadly, we weren't able to respond to all of them in the strict hour timeslot, but fear not! You can now post all your questions to our panel of advisers.

Five highlights from this webinar:

1 – Pension Tax Relief explained:

What is it?

Basically, the government wants us to save, so you get tax relief as an incentive.

As an example, if you’re a basic rate taxpayer you’ll pay £20 on £100 of income – BUT if you choose to put it into a pension, the government won’t take that tax away.

So when you take out your pension, you get 25% back tax free. Now those are big incentives!

2 - State Pension age explained:

The State Pension age is slowly creeping up, and some people will get theirs later than others.

Googling 'State Pension forecast' will take you to the government's forecasting tool. Here, you can find out exactly when you can expect yours.

But a word of warning: originally the State Pension was setup for people to take at age 70, even though average life expectancy was 65! Obviously, that’s no longer the case, which is why the State Pension has become very expensive for the government (or the taxpayer, depending on how you view the world). As a result, they do tinker with the State Pension age to keep the bill affordable. So it is possible it could change in the future.

3 – What do you need in order to retire?

A good starting point is to try and get a handle on your spending in retirement. This isn’t easy, but think about whether you’ll still be paying a mortgage or rent, and whether some expenses like commuting might be lower. But at the same time, expenses like utilities might be higher if you’re at home more.

Once you’ve a rough idea of what you might need, you can begin to work backwards to figure out how much you need to build up in your pension pot.

A useful rough guide is the Retirement Living Standards, which you can find here.

4 – OK, so how much money do I need to get there?

Once you’ve got a rough idea of the sort of retirement you aspire to, you can begin to work out what you need to get there.

Unfortunately, this isn’t a simple calculation. There are several variables to take into account. The most important are a) you don’t know exactly how long you’ll live and b) you can’t guarantee how your investments will perform in retirement.

These factors will affect how much you can safely withdraw from your savings in retirement, and how much you need in the first place.

However, as a very basic rule of thumb, withdrawing 4% a year from your pot is probably going to be ok. There are absolutely no guarantees here, and paying for some professional advice to go through the maths could be absolutely vital.

But it gives you a starting point – work out how much you might need in retirement each year, and then multiply that by 25 (4% x 25 = 100!)

5 – Our webinar polls

We ran a few polls to find out a bit more about our attendees. Here are some of our key findings.

How confident do you feel at managing your investments?

Only 34% of you said you were not very confident at managing your investments.

Which of The Retirement Living Standard levels of income do you think you will reach at retirement?

22% of you think you'll end up in the top band of the Retirement Living Standards.

If you were to give yourself a mid-life financial MOT do you think you would...?

Luckily, only 6% of you thought you'd be destined for the scrapheap based on your existing financial plan.

Thinking of setting up a new pension or switching to a new provider?