TAKE CONTROL of your FUTURE
How clued-up are you on pensions? Business partners Vicky Matthews and Caroline Gowing open up about how they’re planning for retirement
The idea of what retirement will look like is different for all of us. However, ensuring that we have the funds we require to make our desired retirement lifestyle a reality means we’re likely to need some expert financial advice to help us get there.
It’s not surprising that many of us feel unprepared. Between paying the mortgage or rent, household bills and the cost of raising a family, few of us are actually saving enough for our dream retirement, and we may be unsure about how much we will ultimately need. The good news is that retirement can represent a whole new adventure and a chance to explore fresh opportunities on your own terms. It’s never too late to take action, so as long as you have a plan in place, you’ll be on the right track.
Friends Caroline Gowing, 48, and Vicky Matthews, 49, started Pink Spaghetti PA Services together in 2009. Until recently, their pensions seemed like a private subject, but now, with retirement becoming less of a distant concept, they’ve opened up for a candid conversation about their future finances…
CAROLINE: We’ve been friends for years. We started Pink Spaghetti because we felt there were loads of people who had kids and wanted to work but didn’t have enough time to do everything in their life. We became a franchise seven years ago, and now have 50 franchises operating across the UK; all women, all working flexibly and running businesses. Now retirement isn’t that far away for us, so we need to consider what it looks like.
VICKY: I’m trying to see it as exciting!
CAROLINE: I think the most important way to ensure you have a happy and comfortable retirement is to have a plan. It’s something I’ve actually had to think about fairly recently as my mum died this time last year and she left me a very small pension pot, so I had to figure out what to do with it. That gave me the opportunity to actually work out how much I’ve got and, well, it’s not a lot! Both my husband and I are self-employed, so our businesses are technically our pensions.
VICKY: Whereas I looked at my pension about five years ago. My husband and I bought a house, so we needed to take a look at our finances and check it was a good investment. But I wouldn’t be able to tell you how much I’ve got saved or know exactly how much state pension I’m entitled to. I broadly know that I’m in a pretty good position, but that’s largely because my husband has a decent pension scheme through his employer. When we were talking
about retirement, he actually joked that he’d better not leave me.
CAROLINE: He won’t!
VICKY: He’s not! But I’m in a better position because of him. Still, I want to take responsibility for my own future and make sure I have a strong pension fund of my own.
CAROLINE: If I could tell my younger self anything, it would be, ‘Pay into your pension. You can still go on lots of holidays, but start small and build up your pension over time.’
VICKY: But it’s about balance too. We both have children and I think holidays, for both of us, are really important, so they’re what we spend our money on.
CAROLINE: It’s about making those memories, isn’t it?
VICKY: You can always say, ‘Oh, I wish I’d put more into my pension fund,’ but I don’t regret my spending choices and having the experiences that I’ve had. Even in retirement, I know that I want to travel. It’s just the next phase of life.
CAROLINE: I think because I had to collate what and where all my pensions were (from all the different businesses I’ve worked for), it’s made me very aware that over the next five to 10 years, instead of increasing my income – which I could do as the business grows – I’m going to pay that money into my pension. I’ve realised that this could be a tax-efficient way to save.
VICKY: I don’t really understand how the state pension works.
CAROLINE: I checked the state pension age calculator online and realised how long it was until I could start to claim it.
VICKY: I think I’ve just shied away from sorting it all out. I feel that perhaps I’ve been a bit naive when it comes to handling my pension, and I don’t think I’m alone in that.
CAROLINE: Yes, I ignored my pension plans for years too. That’s why it’s important to start having these conversations with each other as early as possible, especially as women!
Start your own conversation with a St. James’s Place adviser. Find out more at sjp.co.uk/gh
*The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested