Hi folks. As mentioned in the video, here are a few apps and sites that can be used to make some extra income... Carquids.com (sell advertising space on your car), Storemates.co.uk (sell storage space in your home), Airtasker.com and Taskrabbit.co.uk (do odd jobs in your area for people and get paid!), Roamler app (mystery shopping and mini-tasks - get paid instantly!)... Please feel free to add your own by replying to this comment 👍
Saving typically results in you earning a lower return but with virtually no risk. In contrast, investing allows you the opportunity to earn a higher return, but you take on the risk of loss in order to do so
Whichever firm you select, make sure you get your insurance from a reputable financial adviser, such as *Jenny Pamogas Canaya,* who has dedicated her career to financial planning. Because they will assist you in escalating, navigating better, and completing the task in a safer manner..|
I've come to realize that the key to amassing wealth lies in making sound investments. I purchased my first home at the age of 21 for $87,000 and sold it for $197,000. My second home, acquired for $170,000, was later sold for $320,000, and my third property, purchased at $300,000, fetched $589,000, with buyers covering all closing costs and expenses. Not reaching a million before retirement feels like an unfulfilled goal.
I've said it on a few videos like this, the best advice my Dad ever gave me was to pay into your pension from your 1st day in your 1st job (as "you'll not miss what you never had"), and pay in whatever is required to get the most out of your employer. I'm a working class lad from the North East but I'm on track to have a pension worth over £1m.
Thank you so much for this, Chris! I am a 37 y/o immigrant working in academia as a researcher and was completely lost as to how this system works here. This is going to be a life changer for me as I build my life in UK. The lack of financial skills and education is so prevalent across all possible parametres: cultures, classes, professions, age... so many of us are clueless. Thank you so much for all your help!
What an excellent, clear video. Thank you. I'm mid 40s and have clocked up about 100k in workplace pensions which only recently I've taken control of by moving old ones to a SIPP. I would like to retire early, or at least be in a position where I don't care too much if my career comes to an unplanned end. On top of my current workplace pension I invest 100 quid per month into a stocks and shares ISA. I had thought about starting a SIPP for my wife. She doesn't earn anything but I've received advice that she can still have a SIPP and get tax relief as long as we keep the annual deposits under about 2.8k, which we would do, but I wondered if it was just my idea or an accepted practice to do so.
Hi there. So glad it was helpful to you! That is certainly accepted practice, and sensible tax planning. The amount is £2,880, with £720 added via tax relief. I regularly advocate for non-earners to take advantage of this, especially if they can draw back out tax free too!
I went to swaps whenever I found something for me or my kids I put the money I would have spent on item into kids account they get a high interest tax free
I bore my friends at work banging on about pensions and lifestyle. They cannot understand how I, the lowest paid worker, can own my home and put £500 a month into my pension, which is over 25%. The sad reality is people in general want to live the very best life they can, or can get away with.
Hi there. I know Martin Lewis has always been a big fan of cash ISAs, but stocks and shares ISAs aren’t really his area of expertise so he may have mentioned that they are more volatile and you need to be aware of that fact. An ISA is simply a tax free wrapper though, not an investment in its own right - it just makes the growth on accounts or investments within it tax free. There really is no disadvantage to a tax free shelter.
l love how you break it down and make it so easy and do-able. £200 a month invested from now until you retire, most people could do that (but don't) but the ones that do will be laughing with all those stock market gains (hopefully) and all that compound interest. I was speaking to a 26 yr old on Monday and I said to her that if was her age again the one thing I would do different is to put as much as i could away in an isa and a pension (without sacrificing too much of her travelling etc) even £100 in a pension and £100 in an Isa a month best of both worlds one you can't get to so is long term plan and one you could get to if needed to update car or something unexpected etc (although should have an emergency fund for that) I think I made her think about it all by having that conversation which makes me very proud. (just hope she acts on it as it will repay her so much in the future)
Great video, any chance you can do a follow up whereby you give example splits of investing between say isa's (easy to access money) vs sipps. Also taking into account cash also
Hi Raymond. Thank you! The only danger with this is that a SIPP will always give a significantly better result due to the tax relief, making the ISA look less attractive. The gap is often narrowed when it comes to taking money out though because SIPP withdrawals are taxable whereas ISAs aren’t. People’s income situations are so different though it would be impossible to demonstrate all of this in a single example. I’ll have a think on it!
Hi Ian. Thanks I’m glad you’re enjoying them! They’re both excellent vehicles. It’s more a case that they complement each other rather than choosing one over the other. The SIPP will give you more growth due to the tax relief, but there is more complexity and tax considerations when withdrawing, not to mention an age lock on access. An ISA on the other hand is a very easy to understand wrapper which allows you to access all of your capital and growth tax free at any time. I always suggest that most people hold both.
Average age here in NI is 73. Work til 67 pay taxes. Retire 6 years of life left who knows, So all this saving is for roughly 6 years spending. The most men have healthy lives until problems at 60arrise... Save for those six years. And live a life. Maybe this is negative thinking. But its real life situation. 🇬🇧✌️🍻 Luckily for me i joined the military at 16, now I have a full paying pension. And live my life to the full... Any advice on military paying pensions. Just a thought. ✌️🇬🇧
Yes that's quite a low average age! It's around 81 I think in rest of UK, but slightly less for men and slightly more for women. A military pension is a great thing to have, but also hard-earned I'm sure!
Hi Chris, your videos are brilliant. Not to sound weird but feels like I’ve been searching for you all my life 😂 Can I ask - my husband & I are both 39 with no savings, both self employed and middle income earners. We’ve always flipped property and have just completed our 4th house reno and have a mortgage with 30% LTV (so we have done something!). Is the Vanguard SIPP (“Target retirement fund”) a good one for me to set up if I know nothing about pensions? Also should we start paying into LISAs or instead each get a S&S ISA to regularly pay into? I can’t decide whether to focus on overpaying mortgage before our 1.54% fix ends in 4 years or else start investing! Thank you so so much.
Hi Hannah. Thanks very much for those kind words! It’s not a bad idea to open a LISA because after 40, you can’t. The LISA can still be stocks and shares based and just uses up part of your £20k overall allowance. You just have to be aware of the access terms. If you know you’re paying 1.54% on a mortgage, but can get higher rates on cash savings at the moment without risk, it makes sense to save. You can use what you’ve saved to pay a lump sum off the mortgage in 4 years and pocket the difference in interest.
This all rings true for me and a quite a few of my friends. Every time I see a car I like and my mid life crisis alarm goes off, I jump on the compound interest calculator to see how many years of retirement and travelling it'll cost me!
That’s a great defence mechanism Roger! It’s a real difficult balance I think - you don’t want to not live at all today just to have a few more pounds tomorrow, but at the same time it’s important to think in terms of the ‘future value’ of what you’re spending. I’ve found that people who don’t spend while working find it difficult to spend in retirement too because old habits die hard, so that balance has to be found.
@George Johnson Same here! I'm not exactly curbing my life style, but if I'm going to spend some money on something I'll think twice and perhaps put it into my pension instead. I was chatting to my father in law, and he said he knows a few people in their 80s pretty much on the bread line. I just don't want to be in that situation!
George, that’s exactly what I think retirement should be… being able to throw the curtains open and decide exactly what you want to do that day without any ties. Even if you can do that on more than half of the days of the week though I’d say that’s a good retirement!
Hi there... thank you! This depends on your timescale to retirement. Bear in mind that your husband will probably be able to access SIPP benefits in 6 years, but you will likely have to wait 12 years. That is because the private pension access age is increasing from 55 to 57 in 2028. SIPPs will provide the greatest growth potential of mainstream investment wrappers (i.e. SIPPs, ISAs, investment bonds) because of the tax relief, but ISAs still have the tax free access advantage. I would say that if you are investing for the long term and don't have other guaranteed pension incomes already in place for the future, a SIPP will probably have the advantage, but do bear the above in mind.
@@chrisbourne-retirementplanner thank you Chris yes we don't have any other pensions. We do have a nest egg in an ISA, not earth shattering amount but something. Then we've been focusing hard on the SIPPs . I thought hubby and I would access them at the same age so that's good to know, we're hoping to not touch them a while after that. Might just cash out 25% of his for the mortgage.
Hi Chris, great video. As a 32 year old, I started investing using plum around 6 months ago. I currently can put anywhere between £150-200 per month away into investing. I currently invest into the S&P 500 and other index funds, I also pay into my teacher pension. Am I doing the right things right now, or is there anything else I could be doing? My aim is to retire before 60.
Hi Dan. You’re in the habit of investing which is a great start. You’re utilising tax efficient wrappers too, which is great. The thing you need to focus on is simply increasing your power to invest more money. That only comes from investing in yourself and your own development in order to improve your earning/investing potential.
@@chrisbourne-retirementplanner thanks for the reply. I have always being anxious about change. I have been a secondary school teacher since the age of 25. It has had its ups and downs, and at times I have wanted a career change. However, I've never known anything else, and genuinely wouldn't know where to start if I quit teaching. Would you recommend using equity in your own house to purchase a second property? As that is something we have been pondering recently.
Hi Dan. I couldn’t recommend anything specifically here. Other people have done that, but there are certainly risks. You’d have to think about what the long term goal is, because a single additional property is unlikely to provide financial independence on its own; particularly if it entails borrowing. If the plan is to grow a property portfolio it can work, but it then becomes more of a business and will require a lot of time and effort. That said, any serious financial independence journey will require some sacrifice.
Hey Chris, I’m 37 and looking into investing after watching a load of your vids. I have about 15k credit card debt (interest free but some transfers coming up), do I try to clear this asap before saving (currently have no savings as spent everything renovating our house)? Thanks for any advice!
Hi George. I would actively try to get that debt down and if it’s not possible to extend the interest free periods on those transfers, then everything should be allocated towards clearing debt that incurs interest first. If you are able to continue paying no interest, clearing the debt within the interest free period should be the main focus, but if there is spare income available it would be fine to start investing too. I.e. if you have 24 months interest free and work out it will cost £200 pm to clear the debt within this period but you have £300 pm spare, investing £100 pm is a good idea.
Hello Chris, I came across your videos and I enjoy listening to you. I would like to liaise with you if this is possible to talk about investing etc. Thanks in advance
Hi Chris, do we have to pay CGT if I sell stocks and shares from GIA and if gain is more than £12300.How do we pay ? Is HMRC send us letter or we have to write to them ? Whats EIS and SEIS shares ? Is it stocks and shares we buy from platforms ?
Hi Amandeep. You have to declare the gain you’ve made on a self assessment return - it is your responsibility to do this. If you don’t, then HMRC will charge penalties. EIS and SEIS are special, higher risk investment schemes for investing into young companies. There are tax advantages to these schemes, but they are for more sophisticated investors or those with higher amounts of capital available with greater capacity for loss.
Hi Chris, I discovered you about 2 months ago and I'm currently working my way through your excellent videos. Have you done a video yet on your rating of platforms? I'm with Charles Stanley, which never seems to get much of a mention, and just wondered your opinion of them...
Hi Gary. I actually do quite a lot of work with Charles Stanley on the inheritance tax planning side. They are a discretionary investment manager and so tend not to cater to the mass market, hence why you wouldn’t see much coverage on RU-vid, but they are a very reputable and long established company. In fact they are one of the oldest listed companies on the LSE. They’ve just been acquired by US Wealth Manager Raymond James, so it will be interesting to see what impact that has.
Hi Chris, watching this video again. I have a GIA and an ISA, so is a good option to move any dividends from the GIA to the ISA? GIA has individual stocks and ISA is all funds.
Hi there. Do you mean dividends that have already been paid or the stocks that yield dividends in the first place? You will pay some tax on unwrapped dividends when they exceed £2k (if dividend allowance isn’t already used elsewhere), but reinvesting them into an ISA will certainly ensure no further tax will arise from gains made. Holding dividend paying stocks in an ISA will ensure that no dividend tax is ever paid. Funds will often yield dividends too so your ISA will already be protecting you against this.
@@chrisbourne-retirementplanner yeah, from stock already held in a Gia but have paid the dividend. I don't intend on breaching the allowance with the non taxed account
Well if there is scope to hold the dividend paying stocks in the ISA as well (I.e. your ISA subscription isn’t already full), then it definitely makes sense to hold them in there.
With the interest rates likely to increase in December 2021, or throughout 2022; is now a good time to invest in UK/USA stocks? Of course nobody knows, but it seems likely that stocks may drop, property prices may drop, and savings accounts may increase. Perhaps now is a good time to put your money in saving accounts, and then buy property/stocks later, assuming they do actually drop?
It’s always worth holding some cash in reserve, but the asset class that will ultimately protect you against the effects of inflation the most is stocks. Out of UK and US, my personal opinion is that UK looks better value.
Enjoyed this video Chris, I am 58 and already have money invested with Pension Bee. Also have my Pensión contributions taken from my salary each week into The Government Pension Scheme. Thinking about an ISA for my last ten years, any ideas??
Hi John. I’m a big fan of ISAs, but you may find that the tax relief awarded on pension contributions and the extra impetus that provides over a 10 year period is a greater benefit than tax free access to an ISA. ISAs are brilliant for giving flexibility to access regardless of age, but you can already access pension benefits at your age so the flexibility is equal. There is tax to think about on the withdrawal of pension benefits but you have to weigh this against the front end uplift, as well as the fact that a tax free lump sum can be taken from a pension too. Of course, rules can change and it may still be wise to hold ISA capital too. There are many providers out there and I would adopt the same investment principles outlined for any long term investment.
Hi Chris, great video. What is the site you used to do the pension calculations?. Also. my partner is self employed but on a low income and has no personal pension at age 57, what advice would you give ? Cheers
Thanks Phil. The site I use is thecalculatorsite.com. It’s got some really useful calculators for financial planning. I suppose I would say to follow the principles outlined in the video - even a relatively modest contribution can grow to significant sums given enough time, especially with tax relief on a pension. Even people who do not earn at all are allowed to contribute up to £3,600 per tax year into their pension. This would cost only £2,880 though as the remainder would be added in tax relief.
If you have £100 in pension by the time you retire, £25 will be tax free, then the remaining £75 is taxed at 55%, which means you will get roughly £30, so in total from £100(£20 free from government) you will get £55! IS NOT THAT A ROBBERY?
No the remaining wouldn’t be taxed at 55%. I’m not sure where you’ve got that from. The remaining may be taxed at 0% if the withdrawal falls within the Personal Allowance. It would be taxed at 20% if you are a basic rate taxpayer (£12,571 - £50,270 of income). It would be taxed at 40% if you are a higher rate taxpayer (the next £74,870) of income), but to be regularly receiving this much pension income you will most likely have been at least a higher rate tax payer during your working life and received 40% tax relief. Any income above £125,140 is taxed at 45%, but this impacts few people and they also would probably have received tax relief at the same 45% rate on contributions in.
Hi Chris thanks for this one. I currently pay in2 my work based nhs pension and also an investment isa made up of 3 index funds. Would I be better off replacing the investment isa with a sipp? I'm 43 Many thanks.... jj
The impetus provided by tax relief on the SIPP will lead to greater growth, but you also have to consider your tax position in retirement. It sounds as though your personal allowance will be used up at least in part by the NHS pension, which limits the tax efficiency of other pension withdrawals. You also have to accept not being able to touch the pension until age 57. I would say that a SIPP could complement your ISA - they each have different advantages.
Hi Chris. Thanks for the video. I was wondering what your thoughts are on Vanguard’s forecast returns for the next 10 years which they released recently? Roi of 2.5% etc😳🤔
They’re basing it on current high valuations Simon. It’s very possible that they could be right, but I always think there’s an element of wanting to ‘under-promise and over-deliver’ rather than the other way around. There was actually a video of Jack Bogle a few years ago when he was still with us predicting that we’ll see low single digit returns over the next few years, but returns have been significantly higher than that as we know! The point is, no one really knows for sure.
@@chrisbourne-retirementplanner Thanks Chris. I sincerely hope it’s much higher like any other investor. Else it won’t making investing an attractive culture for many. I had some big plan for my Isa and pension in the new year only to see the headline from vanguard. Almost spat out my tongue 2.5% what🤪?
I’d say expectations for growth will be lower until we have a crash, then they’ll naturally be higher again because valuations will be more attractive. That will be helpful to regular investors.
Thanks Chris, exactly what I needed. I just turned 40 and don't have any pension. As a freelancer with a Ltd Co I'm in a position to decide to pay into a pension whatever I want so should I simply pay as much as possible into a "company pension"? or should I also get into investing my salary?
Both methods are useful Greg. The difference is in who receives the tax relief - if your company pays the contribution it receives corporation tax relief, whereas personal contributions receive income tax relief. Which is the best option for you would require advice based on a full appreciation of circumstances. The more important thing is just to start putting something aside into a pension for your future benefit.
Paying into a pension will generally see your money invested in the stock market, yes. Most 'default funds' will have a mixture of stocks and bonds, along with some small exposure to other assets (like commodities and property).
Hi I’d love to do that! Unfortunately I don’t have the same knowledge about the US tax system though. With the UK financial planning framework and tax system being my niche I’m afraid many of my videos won’t be 100% relevant over there. I guess the principles are the same, but the tax reliefs and products are slightly different.
When setting up a pension you should have completed a nominated beneficiary declaration. This needs to be checked from time to time to make sure it is accurate. Pension benefits don’t get paid to your estate, they go directly to your nominated beneficiaries outside of your estate. The beneficiaries have a number of options as to how benefits are received. Your age upon death also determines how benefits are taxed (tax free if you’re under 75 upon death).
No this was not a sponsored video. I do mention an app that I use myself and I highly recommend from my own experience, but it’s not an advert. I’ve included a link which is an affiliate link in the description, but I think the Snoop app is really good, costs nothing and can help a lot of people. They certainly haven’t paid me to promote them in this video.
@@chrisbourne-retirementplanner please do not justify yourself. If you put double the amount of ads I wiyld still watch it. The value you provide is immesurable. In an attempt to return the favour I let all the ads play to the end. I mute them and read the comments. There is so much information in each of your videos and in the comment section that each require my undivided attention. Thank you SO MUCH. 🙏
