Wayne’s world: Save hard, don’t waste your cash …and take advice
Would you describe yourself as good at saving for retirement?
Yes. It comes from having a working-class background. The aim is to live a long time and have the last of your years enjoying yourself in comfort. It’s common sense to save for that.
What is the most expensive frivolous item you have ever bought?
My Brooks running shoes. I’ll spend between £80 to £95 on a pair – I hate spending it but I don’t have a choice, because that’s what running shoes cost. I also buy old Northern Soul records and occasionally I’ll spend £20 or £30 on a rare record. Apart from that, I don’t think there’s anything we’ve ever bought that’s expensive or frivolous.
Do you live a frugal lifestyle then?
We’re not flash in any way – and we don’t spend, really. Our car is the first Prius that came in the country, in 2003. It’s done 230,000 miles. I collect mass market art and the most I ever pay for it is £5, from car boot sales. We design our own clothes, or buy them secondhand. I’d never buy new clothing, apart from socks, underpants and – as I say – running stuff.
Don’t you ever want to buy yourself something extravagant, just for fun?
We wouldn’t want to because it would go against what we stand for. We hate extravagance. Part of why people follow and support us is because we stay true to our background. To me, the concept of owning a Rolex watch or anything like that is obscene.
What’s the most expensive thing you’ve ever done?
The only thing we’ve ever spent a lot of money on was Gerardine designing and building our own home in Chichester Harbour. We bought some lovely land by the coast and built a really nice house. But by the standards of other people in our position, it wasn’t an extravagant thing to do. We were amazingly thrifty. People wouldn’t believe how cheap we built it for and what it’s worth today. It’s more than doubled in value – it’s the best investment we’ve ever made.
When did you begin saving in a pension and what prompted you to start?
Our accountant said it was a sensible thing to do. We were aged 23. We just listened to him. We had no experience. Luckily, he was good and his advice was right for us. In our early 20s, we were making decent profits and he’d ask us the question: Do you need that money? Normally, if we could afford to fully subscribe to our pension fund that year – pay in the maximum you’re allowed to – we’d always do it.
What kind of scheme do you have?
It is a Sipp – a self-invested personal pension.
How is your pension saving going?
We’re both at the £1.25million lifetime allowance cap. We can’t put any more in. So obviously, it’s gone really well.
Does that give you peace of mind?
Yes – and the freedom to experiment. Having a solid family is more important than having money, but having enough to enjoy yourself is quite handy. We have always been very brave in the things that we try and do. Knowing that we’ve got some financial security in our old age, whatever happens, is a really nice thing. You think: let’s keep being brave and trying unusual things in the knowledge that there’s some money there that nobody can touch, and that we’ve been sensible with all our lives.
Did you get advice on how to invest your pension or did you go it alone?
We took advice from our accountant. We invest almost totally in ethical stocks. I wouldn’t be happy if our money was going into a national housebuilder to build expensive housing that most of us can’t afford.
Do you choose your pension investments carefully?
We do think about it. We normally get ethical investments recommended to us, and then we’ll have a look at them. We’ve invested in companies involved in housing associa- tions and renewable energy, as well as a museum building.
Have you made any mistakes with your pension – or any other investment for your retirement?
Like everybody, you occasionally see your investments go down in value but we’ve always spread it across different sectors with a mixture of risk. I can’t remember any individual mistake we’ve made – so it can’t have been that bad, or I would have remembered.
What’s the best investment you’ve made for your retirement?
Getting married and staying together. Having a long-term relationship and building something financially together has been brilliant, really.
Do you think the new pensions freedoms are a good idea?
I think that if you’ve been sensible enough to save up and not rely on the state pension, then anything that helps you enjoy the money you’ve saved is the right thing to do.
Do you plan to take advantage of the freedoms now or in the future?
I won’t be accessing my pension at age 55, or for a long time yet. We earn our money from our business – we don’t need to touch our pension, or take the 25 per cent tax-free lump sum. I can’t imagine retiring. I can’t think of anything other than illness that would make me retire.
What are your plans for your pension?
I haven’t got any. I don’t know. We don’t need to buy any cars or houses. We do go on decent, long-distance holidays because it’s a lovely thing to do as a family – but £1.25 million will buy you plenty of flights to nice places.
If you don’t spend it, will you pass it on to your children?
I’m not a great believer in saving up all your money to pass it on when you die. We had our children when we were young so if we live to our 80s and 90s, our children will be in their 60s and 70s. It’s not much use having money left to you at that age. We might give it away. I’m not really thinking about it at the moment – I’m only 54.
Do you save in other ways for retirement, such as in Isas or property?
We put the maximum we can into our Isas most years. We don’t have any buy-to-let properties, but because we’ve designed housing estates, we lived there while we developed them.
A message for your 20-year-old self about saving for the future?
Get a good accountant and listen to them. Take advice. Wayne Hemingway was speaking to Donna Ferguson.