Our annual get-your-finances-into-order event with our two brilliant and knowledgeable speakers Claer Barratt, the FT’s award-winning personal finance editor, and Emilie Bellet, founder of Vestpod, an exciting start-up designed to help women get smart about money.
They covered everything we needed advice on – mortgages, savings, work pensions, Brexit fears… how to financially empower ourselves for 2019.
We were also delighted to be hosted by Wealthsimple, an online investment manager
Disclaimer: the following is for your information only and is not formal financial advice; we can not accept any liability for any loss or damage incurred from you acting or not acting as a result of this information.
Why financial planning is so important
- Women have 35% less saved for retirement – the wealth gap is even starker than the wage gap. But when we do save and invest we are better at it.
- It’s not about money, it’s about the life you want to have. The global economic slowdown means that we have three options – work for longer, expect a less comfortable retirement or start saving!
What to prioritise
- Pay off credit card or any expensive debt first
- Then ensure you have short term savings – an emergency fund of 3-6 months savings in case you need it. Nationwide, TSB and Tesco all have current accounts at 5%.
- Then invest in your future:
- Pensions are a great way of saving because you pay no tax on the money going in and you can pay in up to £40K a year. Plus your company will often match the money you pay in so this is essentially ‘free money’. Find out what your pension terms are and pay in the maximum possible. Also look to combine pensions (if you have more than one) in to one place.
- ISAs are another tax-free way of saving. You can pay up to £20K a year into an ISA. There are a range of ISA products: cash ISAs (not great in the current climate); stocks and shares ISAs (there are now plenty of DIY platforms to be found online), a lifetime ISA (you can pay up to £4K in a year and you’ll earn 25% back, but be careful of the conditions), or a junior ISA (one for the parents among you to consider). If your partner earns less than you, you can pay into their ISA to make use of their full allowance.
- Overpay your mortgage to reduce debt and so get your monthly payments down. Be careful of fees on this and of other conditions on mortgages; do your research carefully.
Rules for smart investing
- Start early – remember the 8th wonder of the world, compound interest! Get into the habit of dripping even just a small amount into your savings each week.
- Keep costs low – high fees make a big difference over time.
- Don’t pick stocks – single stocks are bumpy, versus the market as a whole
- Diversify – don’t put all your eggs in one basket, buy into a balanced fund and consider foreign markets
- Drown out the noise (and avoid downloading apps to check all the time!) – markets will go up and down, but its the long term that matters
And finally, some general points to consider
- Pay yourself first – setup direct debits at the start of the month
- Check out www.moneysavingexpert.com for helpful advice on all of the above
- Sign up to the Vestpod newsletter and the FT Money Show podcast to keep yourself informed
- Wealthsimple is offering BroadMinded members no fees on the first £10,000 they invest with Wealthsimple, for up to one year, if you are interested in kick-starting your savings in 2019 (sign up here). If you’re not ready to get started just yet you can also book a call with one of their advisers who can answer any questions you may have on investing.
- Maybe consider moving abroad for a bit to avoid all the Brexit mess!