WEBVTT 00:00:00.000 --> 00:00:03.940 So look, it's been a really tough week of pensions 00:00:03.940 --> 00:00:06.099 this week with what's been going on in the stock 00:00:06.099 --> 00:00:08.599 markets. And I just wanted to check in really 00:00:08.599 --> 00:00:12.560 just to update you with where Tracy and I are 00:00:12.560 --> 00:00:18.280 up to with our upcoming retirement and the little 00:00:18.280 --> 00:00:20.120 thoughts and thoughts about where we are with 00:00:20.120 --> 00:00:22.359 the stock market and how they're affecting pensions. 00:00:22.760 --> 00:00:26.399 Now, people who tend to watch this channel are 00:00:26.399 --> 00:00:28.760 in one of a few different positions. You're either... 00:00:29.239 --> 00:00:31.940 building a pension and you're interested in hearing 00:00:31.940 --> 00:00:34.960 what I'm chatting about because, you know, you'll 00:00:34.960 --> 00:00:37.380 be in a similar position soon in terms of getting 00:00:37.380 --> 00:00:41.060 ready to retire. You're just about to retire 00:00:41.060 --> 00:00:44.560 or you've already retired. So that's kind of 00:00:44.560 --> 00:00:46.359 the people who watch this channel. So we take 00:00:46.359 --> 00:00:49.320 that one by one. If you're kind of building your 00:00:49.320 --> 00:00:53.359 pension at the moment now, the You could say 00:00:53.359 --> 00:00:55.399 there's a sale on at the moment, couldn't you? 00:00:55.539 --> 00:00:57.719 You could look at it that way and say that if 00:00:57.719 --> 00:01:01.939 you're looking to buy the main indices this week, 00:01:02.179 --> 00:01:05.799 then they haven't been this cheap for nearly 00:01:05.799 --> 00:01:09.299 12 months now. So that could be one way to look 00:01:09.299 --> 00:01:13.760 at it, but that's a very glass half full way 00:01:13.760 --> 00:01:15.980 to look at it. Another way to look at it could 00:01:15.980 --> 00:01:20.709 be that everything you've saved, and built up 00:01:20.709 --> 00:01:24.189 and invested over the last 12 months has had 00:01:24.189 --> 00:01:27.349 a pretty good shakeup over the last few weeks 00:01:27.349 --> 00:01:29.909 and the stock markets are not looking great and 00:01:29.909 --> 00:01:33.750 you've actually lost some money. The thing with 00:01:33.750 --> 00:01:37.969 stocks and shares though, until you convert them 00:01:37.969 --> 00:01:42.510 stocks and shares into cash, then they are... 00:01:42.480 --> 00:01:46.780 just bits of paper or just numbers in an app 00:01:46.780 --> 00:01:50.459 for you. It's when you actually decide to convert 00:01:50.459 --> 00:01:54.200 that into cash. So that takes us to the second 00:01:54.200 --> 00:01:57.060 category of people really, which is those who 00:01:57.060 --> 00:02:00.959 just have retired or are about to retire. Now, 00:02:00.980 --> 00:02:03.780 if you were this week planning to go out and 00:02:03.780 --> 00:02:06.900 buy an annuity, it's been a disaster for you 00:02:06.900 --> 00:02:09.580 because what that means is you're converting 00:02:10.139 --> 00:02:13.780 what you have right now in stocks and shares 00:02:13.780 --> 00:02:15.960 into an insurance policy that's going to pay 00:02:15.960 --> 00:02:18.599 out. If you'd have taken this out three months 00:02:18.599 --> 00:02:25.219 ago, you could have potentially had 20 % potentially 00:02:25.219 --> 00:02:29.080 more in that pension than you have as of this 00:02:29.080 --> 00:02:33.319 afternoon. So that is a very difficult position 00:02:33.319 --> 00:02:35.840 to be in if you were looking at buying an annuity. 00:02:38.019 --> 00:02:40.520 Like many watch this channel what you've got 00:02:40.520 --> 00:02:44.479 is a company pension Then you know, there's a 00:02:44.479 --> 00:02:48.159 good chance that you get annual statements and 00:02:48.159 --> 00:02:51.659 you'll be Blissfully unaware what's been going 00:02:51.659 --> 00:02:54.840 on with your pension over the last week and if 00:02:54.840 --> 00:03:00.780 you do log on to the Website of the pension right 00:03:00.780 --> 00:03:04.039 about your company works with you'll probably 00:03:04.039 --> 00:03:07.360 be in for a nasty shock today in terms of what's 00:03:07.360 --> 00:03:09.219 happened over the last three months. If you look 00:03:09.219 --> 00:03:13.620 at these charts here, we can see that particularly 00:03:13.620 --> 00:03:21.099 the S &P has been an absolute disaster over the 00:03:21.099 --> 00:03:25.419 last three months there since Trump took over 00:03:25.419 --> 00:03:29.740 and all the shenanigans that we've been having 00:03:29.740 --> 00:03:35.039 with the tariffs. So that has been, you know, 00:03:35.099 --> 00:03:39.580 an absolute disaster. But markets recover, they 00:03:39.580 --> 00:03:47.520 generally do recover. This feels slightly more 00:03:47.520 --> 00:03:50.879 unusual than some of the other things that have 00:03:50.879 --> 00:03:55.219 gone on in the stock markets. So, you know, for 00:03:55.219 --> 00:03:57.620 me, it is a little bit more worrying longer term. 00:03:58.139 --> 00:04:01.180 Now, where Tracy and I are, we're at that point 00:04:01.180 --> 00:04:05.460 where I'm literally just on the point of retirement. 00:04:05.879 --> 00:04:08.680 I'm fortunate in that I've got defined benefit 00:04:08.680 --> 00:04:12.479 pensions. Now, they're unaffected by the stock 00:04:12.479 --> 00:04:15.840 market in the short term. Now, the reason to 00:04:15.840 --> 00:04:17.660 say that, they are affected by the stock market 00:04:17.660 --> 00:04:23.279 because my pensions were paying out a 60th every 00:04:23.279 --> 00:04:26.750 year. you know, 60th of my final salary. And 00:04:26.750 --> 00:04:31.769 then the 2008 crash happened. Pension funds realized 00:04:31.769 --> 00:04:34.589 that they couldn't afford to pay me a 60th of 00:04:34.589 --> 00:04:37.350 the salary. So like many other pension funds, 00:04:38.110 --> 00:04:40.850 they now from that point on then only give you 00:04:40.850 --> 00:04:44.509 an 80th of your salary every year as a pension. 00:04:45.069 --> 00:04:49.629 So the stock markets do impact defined benefits, 00:04:49.689 --> 00:04:51.829 but not directly. So the way a defined benefit 00:04:51.829 --> 00:04:53.810 works is you put money in, there's a formula. 00:04:54.189 --> 00:04:58.329 That formula may change over the years, but it 00:04:58.329 --> 00:05:00.670 doesn't change very often. And we're in a fortunate 00:05:00.670 --> 00:05:03.050 position, Tracy and I, because we both worked 00:05:03.050 --> 00:05:05.730 quite a lot in the public sector and have quite 00:05:05.730 --> 00:05:08.269 good defined benefit pensions, which aren't going 00:05:08.269 --> 00:05:11.089 to be disrupted. And because of that, even though 00:05:11.089 --> 00:05:14.730 I'm retiring now, 55, I wouldn't have been looking 00:05:14.730 --> 00:05:19.110 to withdraw from my defined contribution pots 00:05:19.110 --> 00:05:24.589 at this point until I'm 60, really. The stock 00:05:24.589 --> 00:05:27.110 market's got another five years to recover from 00:05:27.110 --> 00:05:29.990 what's going on this week for us, so we're quite 00:05:29.990 --> 00:05:32.449 fortunate there. Another thing that's definitely 00:05:32.449 --> 00:05:37.769 worth talking about is that's if you have a company 00:05:37.769 --> 00:05:40.509 pension, but what if you've got a self -invested 00:05:40.509 --> 00:05:45.490 personal pension, a SIP? Well, People use SIPs 00:05:45.490 --> 00:05:49.250 in different ways and if you open a SIP and you 00:05:49.250 --> 00:05:52.430 put it in a default fund, that default fund will 00:05:52.430 --> 00:05:57.709 be balanced between bonds, between stocks and 00:05:57.709 --> 00:06:01.569 shares. The bonds haven't done quite as badly 00:06:01.569 --> 00:06:03.149 over the last few months as the stocks and shares 00:06:03.149 --> 00:06:07.209 have. You might also have self -invested yourself 00:06:07.209 --> 00:06:10.050 and you've made some decisions and what many 00:06:10.050 --> 00:06:12.970 people have decided and certainly what I did 00:06:12.970 --> 00:06:17.750 is I put a significant proportion of my pension 00:06:17.750 --> 00:06:21.470 investments into a money market. pretty much 00:06:21.470 --> 00:06:26.069 goes up 5 % a year. It's unaffected by global 00:06:26.069 --> 00:06:28.329 politics and what's going on at the moment. It 00:06:28.329 --> 00:06:31.850 was 5 % per year. Last month, it's 5 % per year. 00:06:31.910 --> 00:06:33.889 This month, unless inflation changes dramatically, 00:06:33.930 --> 00:06:39.810 it'll stay at 5 % for the next 12 months. Sorry, 00:06:39.930 --> 00:06:44.810 interest rates, not inflation. Part of my... 00:06:45.829 --> 00:06:48.629 portfolio has been protected from this. The other 00:06:48.629 --> 00:06:51.910 part of the portfolio, I have quite a lot in 00:06:51.910 --> 00:06:55.189 UK shares and they have been significantly affected, 00:06:55.230 --> 00:06:58.069 but not as much as the, if I had invested in 00:06:58.069 --> 00:07:01.329 likes of the NASDAQ and the S &P 500, which the 00:07:01.329 --> 00:07:04.649 American indexes, you know, anyone who's been 00:07:04.649 --> 00:07:06.269 watching this over the last six months or so, 00:07:06.410 --> 00:07:10.009 you know that I'm very down on the American stock 00:07:10.009 --> 00:07:12.149 market. I just think it's the price to earning 00:07:12.149 --> 00:07:16.930 ratio is on. on the American larger stocks are 00:07:16.930 --> 00:07:19.750 just ridiculously high and I could never have 00:07:19.750 --> 00:07:23.329 really committed to investing in the S &P or 00:07:23.329 --> 00:07:27.790 the NASDAQ and I try to build my portfolio to 00:07:27.790 --> 00:07:30.189 dodge it really as much as I can. It's hard to 00:07:30.189 --> 00:07:32.389 dodge it when you look at world indices though 00:07:32.389 --> 00:07:35.230 because the American stock market is so big compared 00:07:35.230 --> 00:07:38.790 to the others that any kind of impact in America 00:07:38.790 --> 00:07:41.069 will have a smaller impact around the world. 00:07:41.859 --> 00:07:45.379 So, you know, my portfolios have taken a hit 00:07:45.379 --> 00:07:48.279 for my direct contributions, but I won't be drawing 00:07:48.279 --> 00:07:50.439 on them for five years. So personally, I'm not 00:07:50.439 --> 00:07:53.100 too worried. It's not going to stop me from retiring, 00:07:53.300 --> 00:07:56.560 which is the main thing. You know, I'm locked 00:07:56.560 --> 00:07:58.699 into my retirement now. My notice has gone into 00:07:58.699 --> 00:08:01.579 my employer and I'm just waiting to finish now. 00:08:02.680 --> 00:08:04.939 So we've been fortunate, but you know, if you 00:08:04.939 --> 00:08:07.819 are in a position where you've heavily invested 00:08:07.819 --> 00:08:10.459 in the likes of the S &P and the NASDAQ, and 00:08:10.459 --> 00:08:12.259 you do have a self -invested personal pension. 00:08:12.379 --> 00:08:14.259 I do feel for you this week. It's been really, 00:08:14.259 --> 00:08:16.660 really difficult, but markets go up and down. 00:08:17.019 --> 00:08:19.199 The thing is to not panic generally, isn't it? 00:08:19.199 --> 00:08:23.360 That's the general advice. Let's see where the 00:08:23.360 --> 00:08:25.980 markets head within the next two, three years 00:08:25.980 --> 00:08:28.800 because that's the timeframes we've been looking. 00:08:28.959 --> 00:08:31.500 Someone in the comments on the last video said, 00:08:32.159 --> 00:08:33.840 they've got self -invested personal pension and 00:08:33.840 --> 00:08:37.240 they check it on the 31st of December every year. 00:08:37.440 --> 00:08:39.929 Now that is brilliant. That is fantastic. I wish 00:08:39.929 --> 00:08:43.509 I could do that because you're not riding this 00:08:43.509 --> 00:08:46.490 rollercoaster up and down every day are you on 00:08:46.490 --> 00:08:53.129 where the stock market's headed. It's a much 00:08:53.129 --> 00:08:56.350 stressless way of investing for your pension. 00:08:56.700 --> 00:09:00.019 As investment, pensions are long -term investments, 00:09:00.039 --> 00:09:02.519 so we shouldn't be really looking at our investments 00:09:02.519 --> 00:09:05.659 on a daily basis. We're not trading here, we're 00:09:05.659 --> 00:09:08.100 investing. We're not buying and selling every 00:09:08.100 --> 00:09:11.399 other day, hopefully, to try and time the market. 00:09:11.460 --> 00:09:13.379 That's not what pension investment's all about. 00:09:13.639 --> 00:09:16.799 It's about picking a long -term strategy and 00:09:16.799 --> 00:09:19.220 sticking with it and having lots and lots of 00:09:19.220 --> 00:09:21.860 years to build them funds will gradually, and 00:09:21.860 --> 00:09:24.539 that's what we're all for. I hope you haven't 00:09:24.539 --> 00:09:28.429 had a... too bad a week and that your retirement 00:09:28.429 --> 00:09:31.029 plans have not been too disrupted and Tracy and 00:09:31.029 --> 00:09:34.289 I's haven't been. So we are feeling fortunate 00:09:34.289 --> 00:09:37.070 at the moment, but good luck everyone. And I'd 00:09:37.070 --> 00:09:41.070 love to hear your comments in the, what you got 00:09:41.070 --> 00:09:43.110 to say in the comments. Have a great weekend. 00:09:43.389 --> 00:09:43.450 Cheers.