Money News August
Julia Shepherd
Everything you wanted to know about Personal Financial Wellbeing but didn't know who to ask! Trained and Qualified Financial Adviser working now as an Educator and Coach. No sales of expensive financial products here!
Generation X and the Pension Shortfall.
How did we get here?
The average pension pot for those born between 1965 and 1980 in the UK is ￡80,000- ￡120,000.
Average means that those who have comfortable corporate jobs with a defined benefit pension, have higher amounts invested and those who have gaps in their employment, struggle with their financial literacy or have worked only in low paid, part time insecure employment, or are self employed, have less or nothing. Yikes!
In order to understand these woeful figures, its important to know how they came about and how much of it has been in the control of the individuals.
Factors that are out of our control can be categories into PESTLE.
Political factors - how much control do we have after the vote on the policy changes that concern our pay and working conditions? Pensions are used as a political carrot and a stick. The generous tax advantages that come with a pension are not guaranteed as the government in house decides how to raise income for their spending or keep wealthier voters on board.
Economic Factors - Generation X have seen the movement of assets from public ownership into private hands. This means that those who are able to become stakeholders are able to profit from dividends and the companies are driven rather than from public service to profit focus. With the focus on profit comes the streamlining of pay and the cutting of benefits such as pensions. Profit first, price gouging, shrinkflation, inflation, interest rate rises, macro and micro economics all take money from the individual and move it into big business meaning less for the pension and later life spend.
Social Factors - Generation X have seen so many social changes in their lifetime. Some excellent but some which have stymied their opportunity to build a later life fund. Changing family dynamics is one which impacts. The traditional family set up where there is one main wage earner able to support a whole family is becoming rare. Both parents working, blended families, single person households all impacts on the availability of any spare cash for future funds. Financial literacy is also very low for the Gen Xers.
Technological Changes -Spare a though for the tech avoider when it comes to your finances. The rise of fintech was meant to democratise the accessibility to financial products and provide choice. For the financially uninspired or underinformed (which is a great percentage of us) this has only served to terrify rather than empower. Two step authentication, scam alerts, jargon and the FCA, FSCS, HMRC and the Financial Ombudsman, Financial Institutions in all their difficult to access, no phone line, gatekeeper, safeguarding inaccessibleness, unfortunately only serve to bamboozle and befuddle. Trustworthy? Eh?
Legislation - The rules concerning all products including pensions, financial advice and the sale of products are many - and ever changing!. The Financial Conduct Authority as a regulatory body is slow to react on scandals when they occur. They have a dual focus, to protect consumers while also allowing the financial markets to operate effectively, they are probably also understaffed with suitably qualified individuals.
Environment - Investment funds to suit an environmentally aware Gen Xer are available for pension investment but the risks and returns may fluctuate. A drop in the value of a pension fund for someone approaching retirement may be an unexpected and unwelcome impact of a persons ethics and values.
While all of these factors are out of our individual control, there are things we can do to empower ourselves.
领英推荐
Summer Holiday fun and adventure.
As the summer holidays draw to a close, a quiet period of what has probably been a difficult year for most small businesses is over...... hopefully. For those who are looking to build their financial resilience just in case of another market down turn, or a period of quietness, it may be worth considering diversifying your income streams.
If you are unsure on how to invest or what protection you may need or would like some ideas for alternative income streams, let me know. I am always available for a coffee and chat. I love to chat!
(I also still love my Van - after much faffing about with RAC Europe and Garages in the back arse of France, it got us HOME!)
"Do not blindly accept the advice of others" Morgen Housel
The benefits of Financial Coaching is that it is not advice. It is empowerment. Listening to your Dad and doing what he did with his money might not serve YOU well. Times have changed, options have narrowed and widened, its all more complicated yet simplified. Your life is your own, your financial future is an individual challenge. Unique. Financial Coaching with me will ensure you are upskilled, confident and ready to take your own advice. You will know where to look and what to find. Earning, growing and spending your money in alignment with your ethics and values. Acknowledging your money stories past and yet to come. Identifying your unhelpful blocks and finding ways to overcome them.
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I am a Financial Adviser Qualified Coach and Educator, available for Financial Wellbeing Corporate workshops and one to one or couples’ money coaching. My why is to empower more people to financial wellness through education and awareness, to plug the financial advice gap. My expertise is personal finance, money mindset and ideas for wealth creation. Contact me directly if you think I can help you find funds to live a generous and adventurous life.