How Much Do You Need to Save?

[@DanRobards]

Damo's got to Tesco early on a Sunday for the upload! Dedication!

[@DamienTalksMoney]

Get that all day breakfast meal deal.

[@JoeeyTheeKangaroo]

Hope so, my Tescos shares are down

[@monkey39128]

@@DamienTalksMoney What snack and drink do you have?

[@jb-hg4us]

I hope he wasn’t dressed as Carol.

[@joshaskew7]

Brilliant videos, I'm 19 and started my career instead of uni, watching these videos has helped me massively and you seem like a really sound guy too. Opened a LISA and a Stocks/shares ISA now, managing to put away ~40% of my salary monthly as im living at home currently :) never thought id be so entertained by these topics

[@MrVice101]

God, I wish I was financially literate as you are at your age. So jealous.

[@BlearyBoy1]

That's really good, but you may become obsessed or resentful if you have to save less than 30% into your savings

[@vascularlab]

Wow! That is great. So many of our peers don’t take any interest in investing. I am sure you will be a millionaire one day!

[@garycooper3777]

I am super late to the party (50) - parents had nothing and taught me nothing about finances. Relatively well paid job but spent the last 30 years of adult life cruising along assuming all was well. Bumped into Damien (and others) maybe 12 months ago and have managed to significantly turn my financial life around (basically stopped pissing it all up a wall) - daughter 12 months from going to Uni and we are calm, controlled, happy with our position now. She will be OK and we will continue to plan and grow. My biggest learning is to ensure that my kids know all about this, that they educate themselves and better prepare themselves for the future through watching channels like this - free content that literally changes the outlook on lives for people. My number, possibly too late for that, but my kids will have a number - but i will go out fighting!

[@100grandboost]

@garycooper3777 omg, that's an a virtual mirror of my situation. I'm late 40s with a daughter prepping for university. Well done. If you can do it, so can I 👍🏼

[@leepashley531]

I’m 51 years of age and just started opening up a stock share account into the FTSE global all cap 👍 Aiming for the next 20 years

[@vldgrs]

​@@leepashley531I'm early 40s and I just accidentally opened this video. I have no idea what you are all talking about😮

[@elliot5504]

Your writing and word play is next level

[@DamienTalksMoney]

Thank you so much. I like having a bit of fun sometimes

[@davidlaw3819]

Couldn’t agree more with this - fantastic!

[@bernardo.daSilva]

Honestly, I don't know of many people who have the gift of being able to deliver a message in such a clear and concise way while also making it fun, and actually give us something we can reflect on and action. Damien is Exceptional 💯

[@davemitchell8756]

View from a 58 year old. As you age your mortality comes more and more into focus. Yes save as much as you can , but live your life to the full while you have your health and your partner, not through buying stuff but experiences, family times etc. I have friends who happen to be 15 years older than me. The picture changes rapidly after retirement which for us is 67, possibly later if the politicians have their way. Yes I could save every penny awaiting a ‘comfortable retirement’ but Intend to enjoy life, travel and enjoy the healthy mobile years as much as possible. If you’re ’lucky’ to live to old age our age group become aware of the cost of care for parents and the way the state takes everything it can from those with any saved wealth. Be prudent but there’s no pockets in shrouds.

[@AFCDakota]

100% agree - if you haven’t got your health you won’t be enjoying a well planned out pension. It’s about striking a balance between the here and now and the future.

[@Marenqo]

You lot are probably the lost of the golden generation of cheap housing, defined benefit, Economic growth etc

[@zaidahmed9527]

Well said Dave

[@alanc457]

Why not do both?

[@alanc457]

@@Marenqokeep looking for excuses son

[@markkitchen4916]

Brilliant video, as per usual Damien! I am one of the lucky ones…I had a father that made me start a pension the day I turned 18 (my 14th birthday present from him was my first job- at the time I thought he hated me!) and I have paid into one ever since. My problem is that I have been self employed pretty much all my life so it’s been hard to pay ‘enough’ into the scheme without any employer conts. My saving grace was finding a partner who has the joy of a DB pension scheme. Without her input to our pot, I don’t think we would be looking at a ‘moderate’ retirement, let alone a ‘comfortable’ one. Even then, we are banking on her getting one further promotion at work to ensure our number. We now have a teenage daughter, who thinks I hate her (I got her a job at 15) and who I have saved a nest egg to start her retirement savings with when she’s 18! What goes around, comes around! Keep bringing us these clever, funny insights Damo! You’re one of the best.

[@chrislambert9435]

Compare the Finance and Financial outgoings of two retired couples living next to each other, couple number one the Smiths have worked-hard saved-carefully, they have a small private Pension of around £70 per week then they both get the State pension each, they own their two bed Flat. Couple number two, next door is the Jones' they have no private Pension and they do not own their two bed Flat, but they both receive a State Pension each. Which couple is better off ? ? Which couple receives more Benefits/Handouts from Tax-Payers ? ?

[@Cassp0nk]

If you have a nest egg why have you not already opened her pension and got the tax relief already? You can put in about 2.8k which then gets 20% tax relief from the gov. Just need a junior SIPP.

[@HelplessHawk]

Well done! I've been paying in also since I was 18 and "hoping" to retire at 60 (10 yrs time) but even then with employer based contributions for the last 31 years, still only meeting the minimum to scrape by. Im putting savings away to draw an extra 6k per yr until my 65 pension kicks in. I'm trying to get my nephew who's 18 to invest. It's a nightmare when the family just says leave it for now it's his first job. Good job with ur daughter to ensure she has something when the time comes

[@mrlover4310]

​@@chrislambert9435don't let that bring you down continue saving for your future learn a language and move abroad.

[@stephen2203]

I have done as @Cassp0nk, I have paid into a junior SIPP for my granddaughter. The government adds 25% to my contributions and the account holder can't get their hands on the money until they are wiser (in their 60s).

[@haloKINGSstudios]

That ending was sublime.

[@ginger8383]

You've got me listening intently to the end now (half way through now and loving another great chat)

[@BobSmith-z5c]

Informative, funny and empathetic...you should be allowed to do this stuff on television like Martin Lewis does his thing; it would help so many people.

[@DamienTalksMoney]

Lovely of you to say this thank you

[@markkendall6854]

I think your housing situation during retirement has a MASSIVE impact on the amount required each month to reach the desired expected standard of living. Someone who has rented all their life will be in a VERY different position to someone who owns their home (considering the same pension pot size).

[@DamienTalksMoney]

Yes if you want to know the impact not owning a home has on the pot you take the expected monthly rental figure at multiply it by 375 to show what pot is needed just for the rent component

[@ario2264]

​@@DamienTalksMoneywhy 375?

[@panemetcircenses6003]

@@ario2264 4% per year on the pot (so divided by 0.04) --> 25 x number of months = 25 x 12 --> include the mentioned 20% tax (so divide by 0.8) --> 20 x 12 x 1.25 = 375

[@DrTFW1]

Sent this video to a few of my friends, we never talk about retirement, but you're right, we should start thinking about this sooner rather than later. Thank man.

[@zachdoyle5027]

The way you phrase and knit sentences together is highly highly under appreciated ❤❤

[@DamienTalksMoney]

Thank you so much I spend a lot of time thinking about this

[@zachdoyle5027]

@DamienTalksMoney can tell. Your videos have been so helpful and in a format that i have learnt so much about personal finance. KEEP IT UP 👍

[@PrinciplesPersonalFinance]

Great video and thanks for the shout-out mate! 🙌

[@benpoole1800]

The reference to the song Babylon was masterful. Thanks as always for your top tier content.

[@DamienTalksMoney]

Glad you enjoyed it!

[@MichaelHulse-b5o]

I’ve been paying into my workplace pension for about 4 years now, I’m quite lucky that I was enrolled into the scheme when I was still only 16. I spent a few hours about a year ago going through my providers fund options and found one that was a decent tracker of US & Global markets, for a little bit of time now adjusting your funds can help you out a lot in later life. I also have a secondary pension pot like Damien in a S&S ISA to try and insulate myself against any tax rule changes to pensions

[@stumac869]

Beyond the age of 50 time becomes more valuable than money. Yes you need money to live but as people die around you longevity and health becomes far more important.

[@raphaelsmithwick4363]

Enough money is critical at that age mate

[@Ufu4847]

I understand you but don’t forget as you age your medical expenses also rise up.

[@Elspm]

As well as pure financial behavious, I think some of the work we can do is also try to foster life habits where our entire wellbeing doesn't rely on income. We can develop hobbies and relationships that don't use high running costs. This allows us to save more, but it also puts us in a position of not losing important aspects of our life entirely if we find ourselves lower on cash in retirement than we anticipated.

[@warfish0r]

I put in 6% and my company (very generously!) puts in 2:1, so 18% total. This still often doesn't feel enough and I top up to avoid 40% tax if we get a generous bonus. I feel like I'm being as responsible as I can be and am lucky to have a generous employer, but with at least 20 years out to retirement, it's far from certain that I will have enough as I'm still banking on the stock market providing strong returns over that period.

[@garethmartin4443]

Who do you work for that’s a nice pension

[@mattywisey]

I'm lucky enough to have similar but upto 7.5%. so 22.5% of a very good salary. And my wife puts in 6 and her company does 16. So just hope neither of us have to move companies!

[@jackatkins749]

@@mattywiseydamn who are you guys working for? I put £1k in total in a month but I have to pay most of that as my company pays the minimum as a start up

[@kevh7941]

I'm in a similar situation, going to start paying £800 a month into the S&P 500 and hope for the best really lol hopefully have over half a million by the time I'm 60 I'm 39 now

[@ImmuneGEORGE]

@@jackatkins749 My company puts in 16% on top of my 8%, so 24% total. Oil & Gas sector here!

[@TheYorkshirePhotographer]

Great video as always. I wish they’d taught us even some of this in schools. So many people have no idea about basics like inflation or compound interest. Even the basics would surely make a massive difference to so many people.

[@MrDuncl]

I suspect the two cancel each out. My starting salary in 1984 after finishing Polytechnic was £6880.

[@VoiceOfThe]

It’s all by design. Think about it. If they’d taught you in the education system about investing everyone would be millionaires by the time they were 40. Majority would leave the workforce and retire, or just leave the country. The result would be, the government’s coffers would get nothing from you. They want and rely on Joe Public being ignorant paying into the system and on that hamster wheel of the 9-5 paying their taxes for as long as possible. It’s a trap and people are completely oblivious to it all.

[@neilboniface2161]

Another good informative video.. I wish people would watch these and take in what U saying...lot of people are sleep walking into retirement thinking there be enough cash in the kitty...and for a lot there won't be...keep the videos coming...

[@DamienTalksMoney]

Thank you!

[@Zx6rBlue]

When the budget comes out, will you be covering it in a video Damien? You can really break down economic issues for the every day person to understand their own situation

[@DamienTalksMoney]

Yes i will be covering it all. Lovely to hear you think i explain things well. We have a few bits planned for the budget

[@Zx6rBlue]

​@@DamienTalksMoney amazing, look forward to the content 🙌 😊

[@MrDuncl]

@@DamienTalksMoney "We have a few bits planned for the budget" That is what Labour have been saying 🙂. Being close to retirement I have never been so interested in what will be announced.

[@JevansUK]

​@MrDuncl likely this will be the most negative budget in this parliament but it be interesting as anything that needs a few years to pay off has to hit the ground now

[@brownfox3180]

I think saving 10% of your monthly paycheck would have been sufficient in the past; when we were safe in the knowledge of receiving our state pension when the time came. However this is no longer a safe assumption, with the goalposts being moved.

[@kinggeoffrey3801]

That's why a S&S ISA is vital. It can help bridge the gap. That's my plan anyway.

[@mikeybraps2705]

I work for JLR and they just did study into retirement savings and decided that they needed to increase how much we put into our pensions. Over the next few years they are increasing the minimum contributions to help push us all to save more. I'm quite happy I work for a company thats looking out for me. I was already contributing more than the minimum, i was contributing the maximum where they increased their match, but its nice that people who arent as into finance as me are getting pushed towards a better future.

[@TheJPHarvey]

I worked for JLR and didn't get a payrise in 4 years, so they didn't exactly look out for me. Very glad i left and went to finance instead, but i am glad to hear they have finally started caring about people.

[@mikeybraps2705]

@@TheJPHarvey Different experiences then, in 2 years of work I got a payrise before I started, but after already accepting the job offer and another after a year.

[@TheJPHarvey]

@@mikeybraps2705 Yeah i think my biggest issue was that payrises are determined as a company wide thing regardless of your actual performance. And then the fitters in our lab always got stronger payrises at the expense of the engineers due to the unions power.

[@vikasshukla4553]

We can do this!!😅Property ladder, saving for retirement and living. The balance is hard.

[@rob-123]

The last 50 years everything has gone up 10 fold! But Salary has also followed this so althought the numbers look scary now, it really isn't plus as you have more money you get better returns on investment so if you are good in the long run you will be better off than the last generations.

[@adpriceless9106]

De-risking made a lot more sense when you were forced to buy an annuity with your pension pot - nowadays with much more flexibility and the ability to drawdown makes a lot more sense to leave money invested in equities for a lot longer.

[@psprog]

Not that report again with the crazy £31k for a "moderate" lifestyle. For me the number is £20k, maybe less, as that's what I spend currently and live really well.

[@puddle_puddle]

Yep, these figures are likely dreamt up by Londoners with no connection to real working family spending requirements.

[@David-bi6lf]

Yes and if you were able to buy a property you will have likely paid off the mortgage so will be living rent free.

[@ImmuneGEORGE]

Exactly, £31k would be more than comfortable if you've paid your mortgage off. Could go away on 3 or 4 holidays abroad per year and have money to spend most weekends with that. Agreed, £20k would be moderate.

[@Swipe650]

I agree. I'm retired, no mortgage and single and spend nowhere near £20K even though my retirement income is way higher. I'm not sure I could spend £31K if I tried. It would feel like spending money just for the sake of it.

[@MrDuncl]

£31K is about my take home pay now. quite a bit of which goes into savings. I have seen that report before and I recall the "comfortable" figure included a new kitchen and bathroom every ten years. Most pensioners wouldn't want the disruption of that.

[@adamp6320]

I think if you did 10% from your very first role, continued to do 10% and worked into your 60s, that would probably cover you if you invested in a global index fund all along. Compounding and time do the heavy lifting.

[@DamienTalksMoney]

Yes, but most work-based schemes are unfortunately not in a global index, and they de-risk or 'lifestyle' both at the start and the end of the journey in some cases.

[@limpjim4000]

@@DamienTalksMoneyif you are with NEST you can opt for higher risk options

[@MrDuncl]

@@DamienTalksMoney In our scheme the default is lifestyle but there is a choice of about five options one of which was a Global Tracker so I chose that. There certainly wasn't an option to switch to a different companies Global tracker.

[@oliverbassil7943]

​@@DamienTalksMoney i would really appreciate some advice on how to influence this... Ive got around £10k a year going into a work place pension and 30 years before i can withdraw it... If it was in global funds i wouldn't be nervous but they seem to suspect much lower compounding returns.

[@DamienTalksMoney]

@@oliverbassil7943 download the free pension sheet in the description. I go through loads of the workplace providers

[@MrsFrançoisCharlotte]

Well explained. Thank you for bringing up this video. Financial education is indeed required for more than 70% of the society in the country, as very few are literate on the subject. Thanks to Caroline Suzan Olson, the lady you recommended.

[@RalphTaylor-g3e]

Truly facing this recession without investment is actually risky; salaries are easily spent off. This inflation has taught people the importance of multiple income investment, which helps a lot.

[@BeataWalczak-d1m]

This is correct. The Caroline Suzan Olson strategy has normalised winning trades for me also, and it's a huge milestone for me looking back to how it all started.

[@uwerathsack]

​@@BeataWalczak-d1mWow, I know her too. Caroline Suzan Olson is a remarkable individual who has brought immense positivity and inspiration into my life. Her unwavering wisdom has been invaluable assets, enriching my journey in countless ways.

[@AngelaPhillips-v9x]

I was advised to diversify my portfolio among several assets, such as stocks and bonds, since this can protect my portfolio for retirement. I'm seeking to invest $200K across markets but don't know where to start. Who is this, Caroline Suzan Olson? How can I get in touch with her? please.

[@uwerathsack]

​@@AngelaPhillips-v9xShe is a US-based CFA. Just search for Caroline Suzan Olson online, and you'll find her official website where you can learn more about her services and even schedule a consultation. Trust me, getting started with her is one of the best decisions I've made.

[@user-qk5fg7ye5p]

Great video! Might be one of your best yet. So informative and well put together. Thanks again for such great, accessible, fun content.

[@carguyuk7525]

Everyone says that your house is the most expensive thing you will buy. This is not correct. Your pension is now the most expensive thing you need.

[@peterwstacey]

This is because we cannot ever buy a house, but we can buy a pension 😁

[@thomashall7035]

The most expensive thing you will buy is the Government. The tax rates in this country are flat out insane.

[@arcan762]

Owning where you live massively reduces your monthly expenditure by not having to pay rent until you die, which makes any pension go a lot further, especially for those with the smallest pension, as the cost of rent is proportionally much higher for those with the lowest incomes. If you never sell and end up living in your own home until you die, then the value of the property is meaningless, but still priceless in terms of the financial freedom it can give you.

[@peterwstacey]

@@arcan762 True - but keep an eye on leaseholds and ground rent over the next 20 years or so. Those in apartments will still have to pay them irrespective of mortgages, and some new build houses are starting to be leasehold instead of freehold. But yes, mortgages are generally better than renting if you are looking to stay long-term

[@VoiceOfThe]

@@arcan762 I purposefully sold up and now just rent. Invested most of my net worth and live off the passive income in retirement. Historically, the stock market out performs the housing market. Many people don’t realise this. If you don’t have children it makes more sense to not own property and just rent. You also have the freedom to manoeuvre.

[@Holdeenio]

I started deliberately and intentionally choosing jobs and companies to work for based on factors like benefits and employer pension contribution. My first “proper” job, paid only £18k/year, but between employer and employee contributions, got me used to putting 16% of my gross pay into pensions from age 24. Some companies I’ve worked for have had a lower % match, some higher but it’s averaged out in monetary terms at £14k per year pension contribution. It’s only with thanks to channels like yours providing such education, that I’d even have thought about this in my 20s. I’m not special and had basic education and grades when I secured that starter job, just working my way up slowly, but sticking with that contribution % as my income slowly increased. If I can do it, anyone can.

[@howard8573]

Damien, Another excellent video and some really salient points, the key one being "habits", for which I totally agree. I am 66 and left school at 16 with no education ( my own fault), however, I’ve always found work and grew the habit of putting a little aside. As you rightly say ,as you get older your life, generally, improves and you possibly grow a family and a home. Times become tight; however, you should keep the "habits" of putting a little away. Now at retirement my "little habits" have given me a comfortable retirement and I planned to not have a state pension ( as when I was younger, I felt that by my time for receipt, they would have been stopped. At the end of the day, they are a Ponzi Scheme and if not run by the state would be illegal), however, I am fortunate as they are still being paid out. My key point is the "habits" you start when young help you out when you get older. As a closing point, I remember at 18 saying to my "old man" if I reach 21 I’ll have had a good life!! How naive of me. Keep up the good work mate.

[@JaNouWatIkVind]

7:46 this risk of drop in portfolio just before retirement applies to all of your portfolio, and it assumes that you will need all of your portfolio at the moment of retirement. In reality, you need some of your portfolio each year/month over the course of another 20-30 years. Plus you have a stable state pension. It might be more interesting to leave the risk higher and draw parts from your portfolio as needed, while leaving the rest to grow.

[@leecrowther8322]

Hi Damien i have followed you from the early days and love your content and the making money podcast, the guests you have on are all so called experts in there field and so far i have gotten great value from it, what i would really like now is to see somebody on the podcast explaining how they have used your content to change their lives i think your subscribers would get great benefit from that.

[@FIREarly]

Perfect Sunday starter ! 🎥

[@DamienTalksMoney]

Up first thing getting that FIREarly

[@gonnahavemesomefun]

"the biggest thing you'll do financially is prepare yourself financially". This is spot on. I think we need to change the coined phrase from your house to your pension "the biggest financial purchase is your pension". Get it into people's heads that this is the case. I wish I knew this 30 years ago. Instead, I suppose I am lucky enough to be able to do it, I am shoveling £60k into my pension to catch up.

[@guyr7351]

I have “enough” in that until I receive state pension I can combine draw down and rental income from a flat that matches what I was earning. We still have ten years left on a mortgage but we’re overpaying that and it will be cleared in 7 maximum. So that’s £1950 a month net, I have a company DB scheme due to start next Feb inc a lump sum so I can then Reduce what I’m taking from the drawdown pot. The DC funds stand at £205K and in 16 months I’ll receive full state pension so again can reduce what I’m taking from the drawdown pot. My wife is still working and is planning to do so until her state pension Jan 2027. We’re Not rich but not poor and can afford to do what we want to. Once the mortgage goes ( £600 month) again eases what I need to take from the drawdown pot. I’ll remortgage when this deal ends in 2 years and hopefully new payment will be around £500 m.

[@BISOBOKA50B]

This the best video i have come across in the last six days.for my age i could not understand everything.but i picked what belongs to me and want to start with.thanks and starting now

[@David-bi6lf]

There is no long term planning in this country. In 2003 I worked in Australia whilst travelling and was told 10% of my pay went in to a superannuation fund mandatory. That was years before mandatory enrollement was introduced in the UK and higher and I believe may be even higher now.

[@giraffecat]

I loled at 'baby long'. It was a brief break in the tears and anguish thinking about my lack of pension.

[@Kl3mzwero]

Another brilliant video Damo! Love your content man. If it wasn't for discovering your videos accidentally 2 years ago. I would still not be investing for my retirement and relying on my WBP. Thank you! I hope more people discover your stuff. All of my mates watch your content now.

[@millwow]

This was an excellent video. So many people don't know how much is in their pension, how much they put in each month or how it's invested. They also have rarely considered how much they will need either - so they don't know where they are or where they're going. When considering derisking toward the end of the accumulation phase - I think the concept of "Enough" comes up again in the form of the question - "Do I have Enough now?" If the answer to that question is yes - you might consider derisking. This does mean you may miss out on some growth; but it also means reducing the chance of a loss when you haven't the time to recover.

[@brysoga]

Here my take on this. I am saving as much as i can without compromising on my lifestyle. Basically i sat down and thought about what my life today would have to look like to not be desperate to retire. So now my focus isnt just retire as early as i can, its more life and enjoy life now but be prudent and cut out anything unnecessary. (I dont buy take away coffee for example). If i cant afford to comfortably retire at my target age I'll just keep working for a few more years till i can.

[@davidperkins3621]

I always have trouble with these forecasts of how much one needs for a comfortable retirement. I live very comfortably as a single guy, owning my own house and retired on pensions that equate to less than half of the forecast for a comfortable retirement. I have untouched SIPPS to cover unforeseen events and am still able to save from my paid pensions. I have no idea where the forecasters get their numbers and what is true of someone living in the North of England may well not be true of someone in the home counties

[@darius2640]

I am fully trusting my fall on inheritance. if houses keep getting more expensive at the same rate then by the time I inherit and sell my childhood apartment it will make me a millionaire in one sale

[@craiglangton200]

Exactly the same book that got me hooked!!!! Thanks for your knowledge Damo!!

[@iFlyTheWorld]

In Australia we started compulsory retirement saving in the 90s with employer contributions progressively rising to 11.5% of your salary this year with tax incentives to add personal contributions.

[@stace3000]

The Warren-Buffet-as-child riding back down the graph line as a slide is gold. Oh, and the video is interesting too!

[@bigboldbicycle]

Ah, the Richest Man In Babylon, fantastic book. 7:20 I have no intention of putting any significant slice of my pension into bonds after retirement, instead I will have a few years' worth of cash to act as a buffer against the market crashing.

[@kasmstamps1897]

Cash is melting ice cubes. Have you thought about bitcoin? Hasn't been in the news lately but when you do, will you think too much?

[@AlisonWonderland999]

Apart from anything else... I had completely forgotten David Gray!!!!!! 🤩🤩🤩 You should have a parallel life in which you replace Johnnie Walker now that he's retiring

[@RajR96]

Love the David Gray edits!

[@manymoms920]

As a Quaker I heard the phrase, only keep (buy) what is useful or beautiful. I can’t say I’ve always kept to this but I do more and more. Rarely are things that beautiful of course. Stops you buying junk. Might be interesting to highlight what different regions say about finance. Stuff that’s useful and relevant like ethical finance. Sort of money philosophy light.

[@johnkidd1529]

Exactly the reason I’ve maxed out my newborns junior SIPP, at least give them half a chance of retirement

[@johnkidd1529]

@@NoNowwwell I suppose it depends on what they start with or what they accumulate throughout life. I certainly wouldn’t say it’s impossible but definitely will be difficult without help.

[@TheRoad2Scratch]

Damo, i have been thinking about growing my isa pot for retirement and then drawing the minimum from my pension before incurring tax and then my isa to supplement my living costs, and sounds like thats what you're planning on doing to. Might be a good video idea with some examples, the government will try and get every penny out of you through tax so why not try and keep what you have earnt in your own pocket. Thank you Damo. Im 38 and been watching you for years now and you have absolutely without a doubt helped me become finaniclally better off for the future. I will tell my kids (and anyone else i can) what i have learnt from you as they grow up and start earning themselves.

[@davem.4003]

We don't know what will happen in any future budget and there are no guarantees that ISAs will not be affected. As things stand today (14/10/24), for a basic rate taxpayer, SIPP investments will provide a 6.25% benefit, after 20% income tax is paid, when compared with ISA investments. Although it probably feels better to not pay tax on withdrawal, the ISA is not actually more tax efficient. If that changes following some future budget, then you can adjust your strategy. My view is that over the longer-term, the value of the state pension will decline, placing greater emphasis on personal pensions, so the current advantages of personal pensions will be retained but time will tell.

[@PureMetalNS]

"The focus and assumption that people will only have a workplace pension is unrealistic" 6:15 I don't know... The only people I know who have meaningful savings in things like ISAs or private pensions are high earners. Everyone else, nearly all university educated people in decent jobs, simply can't afford to save anything beyond what's mandated in their workplace pension. So for us it's going to be state pension and workplace pension, that's it. Some of us might have an inheritance coming that would make a big difference, but as you said it's probably best not to plan on that as you don't know what's going to happen in our parents' old age regarding care needs, etc. We're mostly in agreement, sadly, that we're going to have to work until we die. COL just makes saving impossible except for those high earners!

[@mauraudersaif]

Thanks for the information Damien, It truly is invaluable information for the youngsters and making them aware. Keep up the good work son its brilliant.👍🏿

[@maxodidily]

Seems like yoloing it all on Gamestop is the only way I will be able to retire.

[@PowerofRock24]

Yolo your grandmothers 700k inheritance on Intel. This is the way.

[@kevh7941]

Someone I work with has lumped all his money on game stop and crypto 😂

[@RichUK1980]

Very helpful, insightful and thought provoking. Time to stop burying the head in the sand I reckon 😬

[@robertmillings282]

Great video mate!! Keep up the good work, invaluable content.

[@shadeofheresy]

I'm self employed, all I know about retirement....is that i'm fucked.

[@baron-vd6bo]

Im 41 now and few weeks ago i decided to invest some of my savings to junior isas .i moved my pension to sipp and my wife's pension to sipp to.still got some of cash in case of emergency and move them to stocks and and shares isa ,just in case i need then in emergency (may not) . i don't want to sound to sweet but... thanks to you i made my first step forward to invest money and hopefully get profits in future. You are good man.cheers

[@davem.4003]

Stocks and shares are not a good place for an emergency fund but you could use a Money Market Fund in a S&S ISA. S&S are for the long term (5+years) whereas, by definition, your emergency fund should be readily accessible and not subject to volatility.

[@TheBoringInvestorMan]

Great food for thought, appreciate it mate. Happy to say that after probably too long I've finally looked at planning for retirement in the sense of increasing my workplace contribution to 10% (work match 7) which also brings me closer to the lower tax bracket. I also invest into FWRG in my s&s ISA. I hope to be one of these people that can have a comfortable retirement or even better, fire.

[@dihydrogenmonoxide]

Editing on this on is on point, nice work

[@FrostiesDoodles]

All that build up for a throwaway David Gray joke. Worth it 😂

[@DamienTalksMoney]

I live for those moments.

[@FrostiesDoodles]

@DamienTalksMoney i can only imagine the sheer joy when you thought of its more shades of David Gray. Lovely work 👏

[@_Information_]

Should also take into account us couples where one is stay at home parent and the other works. The worker needs to save enough for both retirements 😬

[@vladislavasnovikovas6271]

The richest man in Babylon number can still be enough if it is applied in the right way (It was a book which put me on the right track as well, by the way) . If you diligently save 10% from your after tax wages, while contributing to the workplace pension and paying off the mortgage, then you can look to a fairly secure retirement. It might not be a lavish lifestyle, but you certainly won't need to stress about the government removing fuel allowance. Technically, if all those payments are put together - it is way more than 10%, but framing it in the previously mentioned way makes it more simple and agreeable. I look at it this way: Workplace pension - I don't see it, hence I am not missing what I can't see. Mortgage is just an expense for having a roof over my head, and actual saving is that 10% I am putting away from my after tax wages. It might be just me, but it feels like I am squeezing myself less when I view things this way. My calculator seems to back up that it should be enough and my personal progress seems to match the trajectory, but because it is more of an anecdotal evidence rather than robust academic research - take it with an oil tanker of salt.

[@Asif24960]

I used to watch your Videos religiously and then all of sudden they stopped appearing on my homepage for about 5 months. Great to be back here and now to catch up on the videos I’ve missed

[@DamienTalksMoney]

Yes mate! So good to have you back

[@hooksforestchin]

I suspect the base auto-enrolement levels are to replace state pension in the end. Once the first ones with it reach retirement age (still many years away) I can't imagine they'll get state pension, whether removed completely means tested. You need to do the maths to get the rough figure you'll need - base it on current spending if you weren't contributing to a pension/ISA and had no mortgage (unless you're renting). It'll be different for everyone based on where they live and how much they need a new car and iPhone - don't do it, spend the money on experiences with friends and family instead.

[@Stuart-f2m]

100 % People. With large private pensions ain't getting the state pension for dam sure. Great advice. Spend & enjoy your life or give your life savings to government.

[@auldare7053]

Well put together and simple thoughts for us mere mortals.

[@davidwhiteman4649]

I wasn’t eligible to join a company pension scheme until I was 30, so started late. I worked hard though, qualified as an accountant and achieved my goal of breaking into a well paid sector (asset management). I then played catch up, tried to hit the £40k (now £60k) pa annual contribution limit and at 54 I’m now in reasonable shape to retire in the next couple of years. It can be done but it does need to be something you actively think about, not ignore until it’s too late.

[@00dude3]

Anyone who owned property prior to 2020 will have massive equity, especially those in 40s/50s which would massively supplement any pensions.

[@davem.4003]

Equity is not the same as income. Only by downsizing, or having some other form of equity release does that "investment" become available for expenditure. Also, that property is still a good way to pass-on some wealth to your beneficiaries.

[@VoiceOfThe]

Yes, too many people have their wealth / equity built up in their homes. It’s illiquid. You’re better off just renting and investing everything into index funds, the returns historically beat the property market, but, many prefer to psychologically own the bricks & mortar they live in.

[@johnsausby2987]

White Ladder! What an album it spent over 3 years in the top 100! I have to admit to having owned a CD of it, a legit one too!!

[@jaysterling26]

Hello poppicker, How could you forget to add its ( how many?) multi platinum status? I did't own it / listened to it but good luck to Mr Gray - 10 years later & streaming revenues wouldn't have got him a Hampstead house.

[@Mikey_NoCap]

Another great and informative / thought provoking vid. ‘Please forgive me’ ‘now and always’ as I ‘shine’ and ‘sail away’ from the upcoming ‘January rain’. ‘This years love’ will ‘say hello and wave goodbye’ like a ‘bird without wings’ as we all look for the ‘silver lining’ on ‘the other side’. Everyone wants it ‘faster, sooner, now!’ Ending with ‘nightblindness’ ‘now and always’. Crying out loud, I need to stop now, Babylon…..

[@TheRoad2Scratch]

Some people think they cannot save money, and some people cant, yet. But some people arent in a position to save as they arent willing to give up a certain lifestyle. There is an element of sacrifice and discipline in all this 'saving for the future'. Stop giving up all your money to big corporations for material posessions, the joy is all short lived.

[@drunksupportcharacter]

£1 I say this because £1 leads to £2 and so on, and you have it in your pocket, but put it this way, go shopping with physical cash, put the change in a pot and leave it, rinse, repeat however many times, after a while you find out you have some money at all times, and honestly thats a skill these days.

[@andreamiranda3275]

Another great video, Damien, thanks! Can you make a video explaining the options of Bonds in the UK, specially in Vanguard, pleeaaase!!!

[@ThunderousMellow]

Great video and information, thank you for making this!

[@DamienTalksMoney]

You are welcome

[@fungirl0123456]

Love this video but surely we also need to be looking at the wage growth as to why people aren't saving more. If you don't have the money to begin with where are you going to save?

[@malufreedom]

Great video! I'm on my way... The accent😍

[@nocathedral]

I can't recommend James Shack's retirement planner spreadsheet enough.. It takes a while to get used to (and he has explainer videos which are a must-watch beforehand), but its so detailed and works like a living document that you can dip back into every few months to input any changes in your circumstances or stress-test different scenarios. I also imagine it'll be something i'll come back to year after year as all you have to do is update the year and your age in the setting and the projections will gradually become more and more accurate as the time horizon shortens.

[@ExoticDoll-ct3ud]

I know a bloke that was in and out of prison most of his adult life (a no hoper) and has no pension but gets pension credit, a free flat and says he manages to save without a pension - he's 77 nw!

[@Marenqo]

All things considered, Damien, the fact remains that very few people can afford to spend 700 pounds of savings every month in isad, sipps or whatever Financial vehicle there is available to them. I'm not sure this is a matter of choice . We are after all in the cost of living crisis, so whether it is 3 or 5% or even 7%, it doesn't really matter if you can't save that amount. It is dangerous to hear that the Automatic pension contributions will not be enough to even have a bare minimum pension. Add to that, the fact that many of us have been on zero hr contracts not contributing enough to state pensions, it shows the absolute disaster that is going to happen

[@tomnorton7817]

Currently, between me and my employer I have £1,500/month going into my pension pot. That's about 7% from me. 41, about £210k in the pot so far. I paid my current mortgage down to around £100k left on it, got married a few years ago, got a child on the way. Any raise I get next year will see an uptick to 10% from me.

[@A_View_From_The_Shire]

Well done Tom 👍

[@TheSockWomble]

Sounds like your doing well there 👍

[@Baud2Bits]

You need to know what you need to live. I have a guaranteed low rent house (2 Bed currently £260/month) and no debt. So can live on my current pensions of £9000/year running a car but no overseas travel. In four years I will get my state pension and that will double my income, which should make me quite comfortable. You can use this for yourself. Your mortgage/rent/debt payments will alter the minimum you need. If you had 200k saved in a pension right now you could take 25% tax free (£50k) and have that £900 / year. Take £20k of that 25% and put it in a T212 isa for £1k per year interest and use the other £30k as you like. I would suggest that you do not need a million in your pension pot. You can easily achieve that if you are reading this and in your 20's or 30's. But if you are in your 40's then looking to have 200k in a pot by the time you are 60 is much more achievable and might allow you to retire earlier than the state pension age.

[@Mike2708s]

Love the David Gray input

[@deanbartram1297]

Unsure how to word this, but would be great to see if you met the criteria for pension credit, how much do all the additional amounts you potentially can then claim ( as it opens you to additional benefits/ reductions) add up to? Then compare to the amount you would need to have to actually cover this? Hope that makes sense.

[@belindalarmour5457]

Great question, another channel said folk with just a little private pension will be worse off than those with pension credit

[@AA4PJM]

Always good to be reminded that retirement is our own responsibility and it's never too late to start putting something by ( I was a late starter myself). The 'number' is different for everyone but doing something rather than nothing will always put you ahead. I am just recently semi retired and paid off my mortgage, have always earned less than £25,000 a year. I save between 40-65% of my wages a month, investing ISA's etc and am hoping to continue part time work for as long as possible. I am hoping to get some state pension as have paid in for over 40 years. When I was younger people never discussed pensions or how to go about it, I am glad that young people now have the knowledge to start early and stick with it.

[@chrislambert9435]

Compare the Finance and Financial outgoings of two retired couples living next to each other, couple number one the Smiths have worked-hard saved-carefully, they have a small private Pension of around £70 per week then they both get the State pension each, they own their two bed Flat. Couple number two, next door is the Jones' they have no private Pension and they do not own their two bed Flat, but they both receive a State Pension each. Which couple is better off ? ? Which couple receives more Benefits/Handouts from Tax-Payers ? ?

[@AA4PJM]

@@chrislambert9435 Are couple number 2 on benefits? Do they get housing benefit and universal credit? Have they benefitted from free boiler upgrades, double glasing or solar panels?, free prescriptions and glasses? Have they had their council tax reduced? They might have worked all their lives but just not had the opportunity to buy a home in their lifetime or they might have a lot of dependants or just be bad at budgetting and saving? I think the premise should be ' If you can, then you should!'. If, on the other hand 'You can, but you don't!' then that is on the individual and shouldn't be used as a stick to measure against others who 'have and did save for their retirement'. There seems to be a lot of animosity toward people who did or do plan and save for retirement, like they have some advantage over people who choose not to, and I think that is misleading. I do not think people should be denied their state pension, however much wealth they have accumilated in their life time or be made to feel guilty because there are others on benefits who may never have worked or contributed to that particular pot but may have recieved other benefits that they are entitled to. What do you think? Who do you think gets more state handouts?

[@chrislambert9435]

@@AA4PJM It should have been obvious to you that the 2nd Couple are on Benefits, the whole point of this Post is to show that for "the sake of getting votes" Government will constantly give Tax-Payers handouts to top up the so-called poor people. Many UK Citizens are selling their homes before retirement and are squirrelling the money out of sight, so that they can get full benefits

[@_--____--______--___]

The only "pension" that I currently have is my S&S ISA. I chose to opt out of my workplace pension because I'd looked at the pension calculator for a high risk fund and it just wouldn't be worth it. It made more sense to invest in the stock market as I could effectively triple what a regular pension could give me with the same contributions. At some point I'll be putting £500+ a month into it and sticking to that figure. I'm currently putting £200 a month in, but I'd have to invest for longer and retire much later than I'd like.

[@Abdul_Rahman86]

Out off all my qualifications and books and studies I’ve done. Economics degree, 3x chartered banker courses, integrated modules in my banking job. The richest man of Babylon is the best book ever

[@JohnHobbs-o3z]

Same in Canada,Government pensions only cover about half of your basic living costs,you need to look out for your self.

[@GeightD]

I'm not sure if you've talked about it before but it's worth also pointing out that employers have the option of calculating pension contributions on "qualifying earnings" rather than full salary. Someone on £40k and only doing the 5/3 match will be getting 6.75% of headline salary into their pension if based on qualifying earnings. Someone on £20k would be getting only 5.5%.

[@vipulhitesh7719]

Good Morning! Excellent video to start the day.

[@seanduffy2214]

Hey Damien, do you not think the PLSA numbers are nonsense? I'm extremely comfortable spending much less than that for a comparable lifestyle they describe - and I'm still paying for a mortgage. I'm sceptical of their intentions - and unrealistic numbers like that have the opposite effect on people who think it will be impossible to reach and do nothing, while others will save too much and sacrifice the scarcest resource they have - time. Would love to see a video analysing these PLSA numbers as the media regurgitate them like they are the only truth.

[@MrDuncl]

The "moderate" lifestyle is close to what I take home today. Despite having always been in the highest level whatever pension was on offer I am now paying over £1000 into my pension each month to avoid higher rate tax. Having worked 46 years the figures never make any sense to me. When I started work my take home pay, after paying about £1 into the final salary pension scheme was £25 a week. There again a brand new Honda motorbike was £500.

[@thomasbrooks9947]

I love your videos. I'm 35 and earn a very good salary. Currently 80kish sterling. 45k of that is from my full time job which I can switch off from 4pm onwards. They contribute 15% towards my pension and I do 15% also. On top of this, I also put 500quid into my stocks and shares ISA and 100 each into my children's. My wife doesn't work and my extra income on top of my salary could end just as easily and quickly as it came. I often think I'm putting away too much.

[@emmaswan6585]

Whilst I'm not putting 26% into my pension, I am putting more than the average. A trick I do is every pay rise, I increase my pension contributions. Helps prevent lifestyle creep and saves more for my retirement

[@SashaGrace94]

I’ve felt behind in life financially for my whole adult life but one thing I’ve always been grateful for is having an LGPS pension. I may lose a few £ compared to my private sector friends but I’ll take that for the secure DB pension, among other things.

[@Gizmo10777]

Great vid again Damo. Always appreciate your ability to break down complex topics in a way that’s understandable. I’ll admit I thought I was doing great before this video. I put 20% in to my workplace scheme. Including 7.5% from my employer, which is a 1.5X match up to that limit. I’m paying more than the match as it’s easier to administer my tax situation that way. I thought this would mean I’m smashing it, but after seeing this I feel like I’m set to be “good enough”, But the prospects of retiring early are slim. The thing I didn’t think about is that we’re also contributing to ISAs & we’re in a pretty high spend part of our lives with a mortgage & a young child. When these expenses go we can really ramp up the saving so there’s still hope that we won’t be 68 when we finally become independent.

[@EdGeyy]

Uhm... yeah. Those savings figures are nothing short of impossible. Love the UK - thanks.

[@johnnybravo9087]

One key thing that is left out of all these withdrawal rate / fund required calculations; how much do we die with? In your 375 example using “David”, is the goal to die with zero or with a static capital fund??

[@WeAreTheUnhappyMajority]

Anyone whose just starting out on their working life should seriously think about it. I started @ 19, you'll definitely dip into it, when you get your first car, when you marry and your first child and the the biggest drain is your down payment for a mortgage. Just keep in mind to continue saving and eventually you'll save enough money to live comfortably enough to retire early as I did.