view the digital version of myfuture on ……it’s a great idea for making sure you’re on top of...

VIEW THE DIGITAL VERSION OF MYFUTURE ON YOUR MOBILE DEVICE.

Use this QR code.

Or download the app from the app store on your device.

Search for ‘myfuture online’.

WHAT’S NOT TO LOVE ABOUT

SAVING?

FIDELITY’S PENSIONS MAGAZINE

AUTUMN 2017

The big question: how much money will I have to live on when I retire?

Why women (and men) need to mind the pensions gap

Think it’s impossible to save £20,000 in one year? Think again

Also featured...

MYFUTURE AUTUMN 2017MYFUTURE AUTUMN 20172

Contents

18 Ask Penny The advantages of saving

for retirement through your employer’s scheme

11 Top 5 Tips Be a saving superhero

6 What’s not to Love about Saving? Inspiration for how and where

to save

10 Fidelity’s View Having a baby can be more

expensive than you expect

12 The Insider Why women (and men) need

to mind the pensions gap

14 Money Multimedia Save the date on your

money calendar

5 Spotlight on: Fidelity’s Charting Tool

A tool that puts you in the driving seat

17 Number Power The big question: how much

money will I have to live on when I retire?

16 Pension Focus In the News

4 Money Talk Think it’s impossible to save

£20,000 in one year? Think again

The proverb ‘look after the pennies and the pounds will take care of themselves’ has never been truer. Yes, life is getting more expensive. Yes, it feels harder to save. But as true, is how important saving continues to be. And how it isn’t difficult to find small amounts that you can put to work to make a difference to your finances over time.

In What’s not to Love about Saving? on page 6 you’ll find simple ways to save a little here and there, and some inspiration from people like you on where they save. Also take a look at Money Multimedia’s money calendar on page 14. It’s a great idea for making sure you’re on top of your finances. It could also save you money.

There are many good reasons to save for retirement and even more from doing it through your employer’s scheme. In Ask Penny on page 18 we set them out for you. One of the biggest advantages is that your employer helps you save – you can see what this means for you in a short video at fidelity.co.uk/wp-video

It’s a sad reality that women tend to earn less than men. This fact and career breaks mean they often have less retirement savings too. The Insider, Fidelity’s Maike Currie, looks at how to close this pensions gap on page 12. It’s in all our interests to address this imbalance. For a brief preview you can take a look at this video at fidelity.co.uk/mindthegap-video

We’re here to help you so get in touch if you have any questions about your retirement planning.

Julian WebbHead of Workplace Investing

MYFUTURE AUTUMN 2017 3

Welcome to myfuture

Issued by FIL Pensions Management. Authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No. 201514. Registered offices at: Oakhill House, 130 Tonbridge Road, Hildenborough, Kent, England TN11 9DZ. Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo and F symbol are trademarks of FIL Limited 2017. CSO8489/0318

Take control PlanViewer is the simplest way to take control of your retirement planning and manage your pension account. If you don’t have your login details you can request them on the site: planviewer.co.uk

There is general retirement planning information on our main website: fidelity.co.uk/pensions

Your contacts If you need to contact us:

Email [email protected]

Call 0800 3 68 68 68 (open Monday to Friday from 8am to 6pm)

To give us feedback or share your thoughts on the magazine: [email protected]

MYFUTURE AUTUMN 20174

“ I definitely wasted money on food before this challenge.”

I set a basic food budget that I got down to about £32 a week. It was a big deal to get the food bill that low. But we did it. It meant good, old-fashioned housekeeping. Keeping track of what was in the cupboard, meal planning, making and sticking to shopping lists, and batch cooking everything.

“Of course, it wasn’t easy.”The hardest thing to give up was socialising. When you don’t have the money, going to the pub is boring. So, we found new ways to spend our free time.

“Over the year, we saved £20,000 and met our goal.”With extra income from a lodger and being careful with spending, we managed to pay extra into our mortgage as we’d planned.

“ I’m so much more careful with money now.”I used to fritter it away on a lot of mindless spending. It’s about setting the line between need and want. Now every time I go to hand over some money I think ‘do I need to spend this?’.

“ My advice would be to set small goals.”It’s easier to make a short-term sacrifice if you’re working towards something that matters to you. You could do a no-spend month. Choose something you know you waste money on and cut out all spending for a month. It’s those little bits of money that filter out of our accounts and we think ‘oh, it’s only a few quid, it’s not going to make a difference’. But it does.

If you think you can’t afford to save, you may be inspired by someone who does.

Michelle McGagh stopped spending on everything but essentials for a year. She saved £20,000, which she used to pay off a chunk of her mortgage.

While you may find Michelle’s approach extreme, she has ideas we could all use to save money.

She spoke to us about her year of being smarter with her finances.

“I got the idea because we had so much stuff.”We’d recently bought a new house. When we moved we had to put a lot of stuff in storage, and seeing it all piled up it hit me that we didn’t need all this. There was one box that I had labelled ‘not needed’! We also wanted to overpay our mortgage. So, I had the idea to stop spending for an entire year.

“The rules of the challenge were simple.” We’d spend on essentials only. The mortgage, council tax, electricity, water, our phones, broadband – all the things you have to pay. All non-essentials were off limits. I went everywhere on my bike. No more wasting money on trips to the cinema or pub, no eating out or buying clothes, gadgets or books.

Think it’s impossible to save £20,000 in one year? Think again.

Watch Michelle tell her story at fidelity.co.uk/how-i-saved


SPOTLIGHT ON: FIDELITY’S CHARTING TOOL

The charting tool is on the PlanViewer (planviewer.co.uk) homepage – look for the orange ‘Chart your funds’ button.

You can add other funds that your scheme offers to see how they compare

to yours.

You pick the funds – up to seven.

You can add a stock market index

to see how your funds compare to it.

Make it more detailed if you

want to.

You can compare funds to see if other

funds might suit you better.

Make more informed investment

decisions.

You can see the details of all the funds

you can invest in together in one place.

Click on the links to open each fund’s

factsheet.

You can check how your funds are doing

over time.

Easily stay in the driving seat.

A TOOL THAT PUTS YOU IN THE

DRIVING SEAT

It creates a graph that shows how the

funds your account is invested in have

performed.

You can choose different time periods.

A TOOL THAT

GIVES YOU THE INSIDE TRACK

ON YOUR FUNDS


When you think of your finances does the word happy spring to mind? Probably not.

Would you like it to?

A study1 done a few years ago found that saving made 26 million people (that’s 53% of us) happier. And that people who weren’t happy with their saving habits were more likely to spend on spur of the moment purchases than those who were saving.

Saving means having a cushion for a rainy day, or the money to pay for a holiday. It means being able to slow down when you’re older, or buy your first home. It brings some peace of mind that you should be able to afford to pay for the things you’ll need.

To help you reap the benefits of saving we’ve put together some ideas to make saving a bit easier. Depending on where you are on the happiness with your finances scale, you might like to choose where you start:

• See why saving can make us happier in ‘Why save?’ on page 7.

• If you think you can’t afford to save anything, take a look at ‘Who has money to save?’ on page 7.

• If you think you don’t have enough to make saving worthwhile, find out why that’s not the case on page 8.

• Find out how other people are putting their money to work on pages 8 and 9.

Source: 1. NS&I, 2012

SAVING VERSUS INVESTINGSaving and investing are different.

Saving usually means putting money in a bank or cash-type account where you earn interest.

Investing means putting your money into an investment product or a property with the hope that your money will grow with investment returns, but there’s no guarantee.

You can put your money to work for you by saving and investing. For simplicity, we’ve mainly used the term saving here.

What’s not to Love about Saving?Inspiration for how and where to save


What’s not to Love about Saving?Inspiration for how and where to save

Why save?Because your money will do more for you. It’s as simple as that.

If you’d put £100 a month under your mattress for the last ten years, you’d have £12,000.

If you’d invested £100 in the stock market every month for the last ten years, you’d have around £18,9002.

That’s why we save money: we want our money to grow.

Please note that past performance is not a guarantee of future returns.

Source: 2. Fidelity, July 2017. Based on the returns of the FTSE All Share Index. Returns do not take into account the impact of any charges or fees.

Who has money to save?You do.

Saving can be a challenge. While saving shouldn’t mean depriving yourself of the things you enjoy, we can all take a good look at what we spend to find ways to save.

We can suggest two great places to start: around the house and checking your bank statement. Both offer easy ways to save something.

TO DO LIST:CHECK YOUR BANK STATEMENT

THE NOT SAVING BANK

Your Statement September 2017

Don’tPayMoreThan Car Insurance £32.50

Good Intentions Gym £50.00

Too Much Coffee To-Go Coffee Shop £2.50

Enticing Takeaway £12.00

No Idea Direct Debit £8.00

It’s often cheaper to pay insurance upfront if you can.

Your intentions were good, but take up running or cycling and save yourself £600 a year.

A twice-a-week habit adds up to £1,248 a year. An expensive habit! Cut down to once a week and save £624.

Buying it five days a week, or approximately 235 days a year, adds up to £587.50.

Make sure you know everything you’re spending on. If you don’t recognise it, you can put the £96 a year to much better use.

TO DO LIST: SAVE MONEY AROUND THE HOUSE

1. Save £25 a year if you use a bowl to wash up

rather than leave the tap running.

2. Save £80 a year by lowering the thermostat by 1°C.

3. Spend one minute less in the shower and a family of four can save up to £28 off

energy bills each year.

4. Save £30 a year if you turn your appliances off standby mode.

5. Save up to £75 a year by installing a water-efficient shower head.

6. Draught-proof windows, doors and cracks in floors and skirting boards, and save around

£25 a year on energy bills.

7. Turn off the lights and save around £14 a year on energy bills.

Do them all and save a whopping £277 a year.

Source: Energy Savings Trust


Saving inspiration from saving superheroesThere are many ways to put your money to work. Here’s some inspiration from people like you.

“ISAs are perfect for me.”

Sarah, 31, loves ISAs.

“I save £150 a month into a stocks and shares ISA. It comes straight off my salary so I don’t even think about it. I started with £50 a month six years ago, and have increased it gradually.

I set it up through a company that gives me access to the funds of over 100 different investment managers. They have some useful tools that helped me decide which funds to choose.

I think ISAs are great. They’re simple to set up at the start of each tax year. The money is taken from my salary so I don’t miss it. I can change funds whenever I want to. And if I need the money – which thank goodness I haven’t until now – I can take some of it out. And all the growth on my ISA is tax free.”

ISA facts:

• You can invest up £20,000 this tax year.• This tax year started on 6 April 2017 and ends on 5 April 2018.• If you don’t use your ISA allowance this year, you’ll lose it.

You’ll get a new allowance in the next tax year.• You can invest in a cash ISA or a stocks and shares ISA, or a

combination of both up to the annual limit.• You can open ISAs with banks, building societies, credit unions

and investment companies.

If you invest in an ISA or pension there is no capital gains tax on growth and no income tax on interest. The value of tax savings and eligibility to invest in an ISA or pension depend on personal circumstances. All tax rules may change in future. If you redeem ISA holdings, you cannot reuse that ISA allowance. The value of investments and the income from them can go down as well as up so you may get back less than you invest.

Val decides to try all the household money-saving tips shown earlier.

A little extra can make a big difference over time.To see why this is so true, you can watch a brief explanation of compound interest at fidelity.co.uk/compound-video Source: Fidelity. The figures given are in today’s prices, are only examples and are not guaranteed. They are not minimum or maximum amounts. The returns in the examples are based on a 5% gross annual return, which includes re-investment of all returns. There are no initial charges on funds and the total expense ratio is 1% a year. The final values do not take account of taxes or the effect of inflation.

Val saves £23 a month. If she spends it, she’ll have the memories but if she saves it she’ll have...

If Val decides that she can afford an extra £10 so increases her savings to £33 a month, she’ll have...

After 1 year £281 £403

After 2 years £475 £823

After 5 years £1,525 £2,189

After 10 years £3,387 £4,859

Think you need to save loads to

make it worthwhile?You don’t. Small amounts

can add up. Saving regularly is more important than how

much you save.

“My focus is retirement.” At 42 Ed is starting to focus on saving for retirement.

“I like the fact that I get what is extra money from my employer every month. I’ve just increased my contribution to 6% of my salary and they’re matching it.

And of course, the tax man is helping me out too. How often can you say that? Tax relief is a benefit that we can’t afford to throw away. I read somewhere that we wasted £1.9 million3 last year by not making pension contributions and getting the tax relief.

I try and review my retirement savings about twice a year – my reminders are the new tax year in April and my birthday in October. This April I used a planning tool to see how increasing my contributions now could affect my savings. It’s amazing the difference a little extra makes over many years.”

Retirement saving facts:

• If you’re a basic-rate taxpayer and pay in £80, the government tops up your contribution with tax relief to £100.

• Higher and additional-rate taxpayers can get extra tax relief.

• Tax relief works in different ways for different types of pension schemes.

If you invest in an ISA or pension there is no capital gains tax on growth and no income tax on interest. The value of tax savings and eligibility to invest in an ISA or pension depend on personal circumstances. All tax rules may change in future. With pension products you will not be able to withdraw your money until you reach age 55.

Source: 3. unbiased.co.uk, 2016


12.7 million people put

money into an ISA in the 2015/16 tax year.4

The average retirement savings as at March 2017,

were £36,364.6

The average amount invested

in ISAs in the 2015/16 tax year

was £6,307.4

The average family can put away £114 a month and has a nest egg of

£4,426 as at summer 2016.7

In 2015, 33.5 million

people saved for retirement through their company’s

retirement scheme.5

14 million people own their

home as at July 2016.8

Sources:4. HMRC, 2015/165. Office for National Statistics6. AVIVA Protecting our Families, 20177. AVIVA Family Finances Report, 20168. gov.uk, 2016

“Having my money in the bank suits me right now.” Leo, 35, prefers to keep his money in a savings account.

“I know that I can probably earn better returns if I invested it, but for now I’m comfortable with my money in the bank. It’s important I get the best rate of interest I can, so I’ve done my homework and chosen a fixed-rate bond.

Price comparison sites were so useful to look at the different options and find the deal that worked best for me. I’ve tied up a part of my savings for two years to earn better interest. It’s working well for me. I also have about £1,200 in an easy-access account. It pays me less interest but I can get to that money any time I need it.”

Savings account facts:

• Before applying for a fixed-rate bond check whether you can make further deposits once the account is open, and what the penalties are if you need to access the money during the fixed term.

• Fixed-rate bonds aren’t suitable if you might need your savings at short notice because of the penalties.

• With easy-access accounts, you can dip in and out of your savings and deposit more money into the account when you want to.

• Basic-rate taxpayers can earn interest of £1,000 a year tax free.

• Higher-rate taxpayers can earn interest of £500 a year tax free.

Tax treatment depends on individual circumstances and all tax rules may change in the future.

“It’s time to buy my first home.” Suresh is 28 and ready to get on the property ladder.

“I was pleased to hear about the new Lifetime ISA the government introduced earlier this year to help people like me buy their first home. The bonus the government adds to your LISA will make such a difference for me.

I’ve been saving for a deposit for almost two years. I’ll be able to save the maximum amount of £4,000 this year. The £1,000 bonus I’ll get from the government means I should be able to start looking for a place by the end of the year.”

LISA facts:

• 18 to 40-year-olds can invest in LISAs to help them buy their first home (worth up to £450,000).

• You can save up to £4,000 a year.

• For every £4 you save the government adds £1, so the maximum bonus each year is £1,000.

• The money is tax free.

• Contributions to a LISA count towards your annual ISA limit. This means if you put £4,000 into a LISA this tax year, you’ll have £16,000 left to put into other ISAs.

If you invest in an ISA or pension there is no capital gains tax on growth and no income tax on interest. The value of tax savings and eligibility to invest in an ISA or pension depend on personal circumstances. All tax rules may change in future. If you redeem ISA holdings, you cannot reuse that ISA allowance.

“I like earning the extra income.”Isabelle, 54, bought a flat last year that she rents out.

“I inherited some money last year and took my time considering my options. I’d read about the buy-to-let market, and decided it was a good idea for me.

I’d tell anyone interested in property to do their homework to find the right area and the right mortgage. It took me a while to work out all the mortgage options, as a buy-to-let mortgage is more expensive than a regular one. I also spent a lot of time working out how much rent I’d need to make it worthwhile, and the unexpected costs I could have.

I’m pleased with the extra income I’m getting from the property. And when I’m ready to retire I’ll have the option to downsize and move into it.”

Buy-to-let property facts:

• Buy-to-let mortgages tend to need a deposit of around 25% of the property’s value.

• From April 2017, higher-rate taxpayers can’t offset all their mortgage interest against the rental income they get before calculating their tax. By 2020 the amount they can offset will fall to zero.

Read Money Talk on page 4 to see how someone

saved £20,000 in one year.


For women, having a baby can be more expensive than you expectResearch shows how becoming a mother can affect a woman’s career and finances.

Fidelity’s View Thinking of having a baby? About to become or are already a parent, grandparent, aunt, uncle, godparent? Read this and share it.

You may think this makes sense. Many women stop working or work part-time after starting a family.

But there are two important – and often overlooked – consequences for women:

Women’s salaries are less and continue to be

Women who work part-time lose out on future wage progression. So, the hourly wages of men (and women in full-time work) pull further and further ahead. Women who take time out of paid work altogether and then return to work, also miss out on wage growth.

Women’s saving for retirement can fall by the wayside

Many women stop saving for retirement when they leave work. Or if they return part-time they pay in less, so their eventual pension will be lower.

Here’s what you need to know:

If you return to work

Your employment contract and the rules of your scheme will determine what happens.

In some schemes, you and your employer will continue to make contributions, unless you decide to stop. In this case, your employer will also stop contributions and you’ll be treated as if you’ve left the scheme.

In other schemes, while you’re on paid leave you’ll make contributions based on your maternity leave salary. Your employer will pay contributions based on your full salary (i.e. as if you hadn’t gone on leave). If you take unpaid leave once your maternity leave ends, you can continue your contributions if you want to. Your employer also doesn’t have to, unless your contract says otherwise.

When you return to work you may be able to make extra contributions to make up for a period of unpaid leave. Your employer may help too.

Speak to your HR or pensions team about what applies in your scheme.

Please note: Tax treatment depends on individual circumstances and all tax rules may change in the future.

Source: 1. The Gender Wage Gap – Monica Costa Dias, William Elming and Robert Joyce, 2016

Don’t stop contributions

If you’re on reduced pay when you’re on maternity leave try not to stop your contributions. You won’t be saving for retirement, and will miss out on your employer’s contributions and tax relief from the government.

If you become self-employed

You’ll need to arrange your own pension. There are many options, and you’ll still receive the tax relief that pensions offer.

If you become a full-time Mum

You can still save for retirement – up to £2,880 a year, which tax relief could bump up to £3,600.

WOMENMEN

GENDER DIVIDE: EMPLOYMENT RATES1

In the first year of having kids, a woman’s employment rate drops an average of 22 percentage points.

By the time their first child is 20 women still haven’t caught up.

Before kids, the employment rates of men and women are about equal.


Be a saving superhero with these tips

Waste not, want not A few pounds spent on a sandwich at work may not seem extravagant, but lots of these little money leaks add up. We waste £17.6 billion1 a year – that’s £360 per person – on small spends and services we don’t use. The top culprits? Takeaways, lunch and snacks at work, not shopping around for better deals on bills and insurance, and paying avoidable bank charges.

Source: 1. gocompare.com

Balance your booksPut together a budget that gives a good idea of how much you have and how much you spend. Budgeting is the best way not to waste money and to find a little extra to save. With the Money Charity’s Spendometer app you can record your spending, set spending limits and get regular spending reports. Find it on the app store on your device.

Start smallYou don’t have to save big to make a difference. Start with small amounts that you can afford. You probably wouldn’t notice a direct debt of £30 off your bank account as soon as your salary comes in. After 12 months you’d have £360. Invest it and you could have more.

Reap the rewardsSaving doesn’t only earn you interest. It earns you compound interest too. In other words, you start to earn interest on the original amount you saved as well as on the interest you’ve earned. The result? You earn more interest.

2

1

4 Thank the taxmanThere are tax-efficient ways to save that it’s great to take advantage of. With pensions you get tax relief* on your contributions. Contribute £100 a month and the government tops it up by £25, so £125 goes into your pension account. With ISAs you don’t pay tax on the interest or dividends you receive, or capital gains tax on the growth.

Note: *Tax treatment depends on individual circumstances and all tax rules may change in the future. The example applies to a basic-rate taxpayer.

5

3


We’re all living longer and chances are many of us will live long enough to receive a happy birthday message from the Queen – or perhaps King by then – on our 100th birthday. Take a look at the latest figures from the Office of National Statistics1, and you’ll see that in 2015 there were estimated to be 14,570 centenarians living in the UK. Drill deeper into the numbers, and you’ll see that the majority of these people are women.

Today, 7 in 10 people aged 90 and over are female1.

If women live longer than men, logic dictates they should have larger pension pots to ensure their income in retirement lasts for as long as they do. But the truth is far from this. According to the Cridland Report2 (a deep dive into the state pension age), women are projected to have around a 25% lower income on average than men in their first year of retirement.

Fidelity’s Maike Currie on why women (and men) need to mind the pensions gap

Maike Currie is an investment director at Fidelity International and the author of The Search for Income – an investor’s guide to income-paying investments. Follow her on twitter: @MaikeCurrie

YOU MIGHT LIKE TO...

...watch Maike briefly explain how women

can mind the pensions gap at fidelity.co.uk/mindthegap-video

...read Fidelity’s View, which looks at the unexpected costs

of having a baby (page 10).


This glaring gap in the pension savings of many women means they face the prospect of spending retirement in poverty. Now if you’re a man, you may be tempted to stop reading. But consider the outlook for your wife, mother, daughter, and all the other important women in your life. Closing the pensions gap is in everyone’s best interests.

“If you’re a man... consider the outlook for your wife, mother, daughter and all the other important women in your life.”

While huge strides have been made in improving gender equality, women are still the primary caregivers. They’re the ones taking a career break, or opting for a more flexible working arrangement to raise a family or take care of an elderly or ill relative. This ‘break’ will have an inevitable impact on what goes

into their pension accounts.

To build up a substantial pot to provide them with an income that can maintain a decent standard of living, women must make the most of their employer’s retirement scheme, and be proactive about where their savings are invested.

If this sounds like hard work, it doesn’t have to be. Think of yourself as a farmer and your pension account as a fruit tree.

Concerned about how a career break could impact your savings or those of a woman in your life?

Have a look at the Women & money section of our website (fidelity.co.uk under the Markets and insights tab). It offers a female perspective on the challenges and choices women often have to navigate to achieve their financial goals.

Every year when you’re retired, you’ll want to pick income from your tree without damaging the capital – your retirement savings. But you also want the harvest to grow each year because the cost of living is rising.

This means that capital growth is of equal importance – the bigger your tree grows, the more fruit (or income) you’ll be able to pick from it when you retire.

You could look for investments that offer both income and sustainable capital growth as part of a well-diversified pension portfolio. If you’ve taken a career break and then go back to work, explore whether it’s possible to increase the monthly contributions into your pension account. Because pension contributions enjoy tax relief, the cost to you of paying in more might be less than you think.

“...women must make the most of their employer’s retirement scheme, and be proactive about where their savings are invested.”

A good discipline is to increase your pension contributions in line with any pay rises or promotions. For example, if you’re in line for a 3% rise in pay, keep 2% of the increase so you see some extra cash each month, but allocate the other 1% to your pension account.

The biggest factor in saving a significant sum for retirement is completely free – time. The earlier you start, the longer you’ll have to build a pot and, crucially, the longer your investment returns will have to grow.

Please note:

1. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.

2. Tax treatment depends on individual circumstances and all tax rules may change in the future.

3. The value of investments and the income from them can go down as well as up so you may get back less than you invest.

Sources: 1. Office of National Statistics, September 20162. Independent Review of the State Pension Age,

Smoothing the Transition, March 2017


Save the date on your money calendar

planviewer.co.uk - use the myPlan tool to see how you’re doing.

Use it or lose it!

Includes Junior and

Lifetime ISAs.

Don’t just renew... could you get a better deal with your current or a different provider?

Can you find a better deal? Use comparison websites.

planviewer.co.uk

- use the myPlan

tool to see how

you’re doing.

Does keeping on top of your finances feel like a juggling act?

Are you surprised when a certain bill arrives?

Do you never manage to get around to looking at your pension account?

If this is you, why

not try a

money calendar?

What is a money calendar? The place where you keep on top of important dates that affect your finances. Whether it’s bills that need paying or reminders that contract renewal dates are looming, it helps you organise your finances and may even save you money.

What does it look like?A physical calendar that you hang on the back of your kitchen door (old-style!). The calendar linked to your email. One of the many financial apps around. Use whatever works best for you, but make sure it’s easy to update and add to.

Can you find a better deal? Use comparison websites.


My Money Calendar

My pension – look at my account online31st - online tax return and payment deadline

Car MOT and service due

TV licence renewal

Home insurance renewal31st - my work benefits –

flexible benefits window closes

Review electricity, gas, broadband,

digital TV suppliers

Review bank accounts and credit cards

15th - train season ticket expires

Christmas shopping

Pet insurance renewalCheck travel insurance before summer holiday

Breakdown cover renewal

31st - theatre vouchers expire

Organise boiler service

Review my will

5th - ISA deadline17th - John Lewis gift cards expire

Mobile phone contracts end in August

My pension – look at my account online

Car insurance renewal31st - paper tax return deadline

Don’t just renew...doing your homework could save money.

Review your options.

Could you get these services cheaper? Use comparison sites.

Consider interest rates offered and charges. Compare options on comparison sites.

Plan ahead for large expenses.

Here are some ideas for your money calendarSome may apply every year, some more often and some less. Think about what you need.

For everyone…

Please take a moment to make sure we have your correct National Insurance number. This is an important identifier for you when we deal with HMRC on your behalf. Problems or delays can arise if we don’t have it.

How to check: Log into your account on PlanViewer at planviewer.co.uk and look for ‘Your personal information’ under the My profile tab. If your number is blank, starts with TN or TM, is formed from your date of birth, or doesn’t have an A, B, C or D at the end it isn’t valid.

While you’re on PlanViewer, check that your other personal details are correct too.

What to do if this applies to you: Please send us a copy of your National Insurance Card, P60, self-assessment paperwork, or a letter from HMRC showing your correct NI number. Include a signed covering note with your first and last names and your address. And don’t forget to tell your employer too.

Visit gov.uk and search for ‘National Insurance’ number if you need help finding yours.

For high earners…

The annual allowance – the maximum amount you can save in your pension account each year without being taxed – is currently £40,000. But for high earners it could be less.

It’s complicated to work out, but basically anyone with income over £150,000 has a lower annual allowance up to a minimum of £10,000.

Speak to your HR or pensions team if you think this applies to you. You might like to get advice on your options from a financial adviser.

Remember the annual allowance applies across all the schemes you belong to, and includes all the contributions you or your employer pay in.

For over 55s who’ve started to take their pension…

The government has reduced the Money Purchase Annual Allowance to £4,000. This is the amount you and your employer can pay into your pension account. You would be affected if you’ve:

• cashed in a defined contribution pension account of more than £10,000

• taken income of even £1 from any pension account you have, and you’re still paying contributions to a pension account.

Speak to your HR or pensions team if this applies to you.

For Scottish taxpayers…

From April this year Scotland implemented its own income tax bands, which are different from the rest of the UK.

If the Scottish government decides to change the current basic rate of tax relief of 20% it could affect pension tax relief for Scottish taxpayers. The impact would be different for different types of schemes, but the major impact will be on personal pensions. In theory it would mean that we’d have to apply and claim tax relief at the correct rate for Scottish taxpayers. This could be more or less than for individuals in the rest of the UK. We’ll know more about the Scottish government’s plans later this year. The pensions industry is working with HMRC on a major project to manage this process.

This affects you if Scotland is your main residence for most of the tax year. It doesn’t apply if you sometimes work in Scotland, if your company is based in Scotland, or if you’re Scottish but live elsewhere in the UK. HMRC is responsible for letting employers and pension providers know who are Scottish taxpayers.

It’s your responsibility – not your employer’s – to let HMRC know of any change in your circumstances that may mean you’re liable to pay Scottish income tax or not.

We continue to offer value for money

Fidelity’s Independent Governance Committee, which is independent of Fidelity, recently published its annual report The committee’s main aim is to assess and challenge Fidelity on the value for money we offer. The latest report, which you can read at fidelity.co.uk/igcreport2017, sets out the results of the recent assessment. It confirms that Fidelity’s pension schemes continue to offer members value for money.


In the News


WOULD YOU LIKE TO GET AN IDEA OF WHAT YOUR INCOME COULD BE? With our planning tool, myPlan, you can work out the income you’re projected to have. It also shows the difference that small tweaks – such as retiring later or contributing more – could have on your income. You can use myPlan over time to track how your retirement savings are growing, and consider other changes you could make to boost them.

You’ll find the tool on PlanViewer under My toolkit, Am I saving enough? Log into your account at planviewer.co.uk

Please note:

• The figures given are examples and are not guaranteed.

• These examples assume that when they retire, Olivia and Khalid will buy an annuity that pays out a monthly income. They’ll have other options that would affect their income.

• These examples are based on Olivia and Khalid aiming for a retirement income of 60% of their current income. This value tends to be less than 100%, as the cost of living after retirement usually goes down.

• The projected income figures are before tax.

The big question: how much money will I have to live on when I retire?

• Earns £28,000

• Saved £12,000 so far

• Contributes £150 a month

• Retirement at 65

• No other sources of income for retirement right now

• Moderate investment style (no cash, 25% in bonds, 75% in shares)

• Earns £65,000

• Saved £72,000 so far

• Contributes £550 a month

• Retirement at 65

• Has some other income for retirement from a defined benefit pension with an old employer

• Moderate investment style

OLIVIA AND KHALID WOULD LIKE TO KNOW WHAT THEIR RETIREMENT INCOME COULD BE:

Source: Fidelity’s myPlan tool

HER PROJECTED INCOME: £11,600 a year HIS PROJECTED INCOME: £32,700 a year

Retire at 68 Retire at 68

And contribute £250 a month And contribute £750 a month

HER PROJECTED INCOME INCREASES: £12,350 a year HIS PROJECTED INCOME INCREASES: £35,350 a year

HER PROJECTED INCOME INCREASES: £14,600 a year HIS PROJECTED INCOME INCREASES: £37,900 a year

They could tweak their plans to increase their income:

OLIVIA, 33 KHALID, 45


Not sure why you’re saving for retirement? Penny makes it clear.

Lauren Mason is questioning why she’s joined her company’s retirement scheme. As she said to one of our team in a call recently:

“I don’t see the point of saving for retirement at this point in my life. Why should I stay in the scheme?”

This is Penny’s response:

There are advantages to saving for retirement and even more from doing it through your employer’s scheme.

It’s simpleSomeone has set up a structure for you to save. Every month your contribution is paid via your salary into your pension account. You don’t need to do anything, and you can’t get to the money so you’re not tempted to spend it. You know it’s working for you, and will be there when you decide to take your benefits.

A lot of us have great intentions about saving. It’s like a New Year’s resolution: we mean to do it, maybe we do it for a while, but then we stop and feel guilty. Saving through your scheme means the money comes straight from your salary and you don’t have to think about it.

Email [email protected] if you have a question for Penny


The early bird gets the wormPlanning for retirement when you’re young might feel premature, but the earlier you start the better.

The facts speak for themselves:

So, the longer you save the more you’ll save – in this example, an extra 25 years’ saving gives you an extra £95,0001.

And your contributions may go up over time as your salary changes, so your savings can grow further.

A ‘tax’ worth knowing aboutThe next big advantage is that the government helps everyone who saves for retirement. They top up your contributions with tax relief2. If you’re a basic-rate taxpayer and contribute £200 a month, tax relief adds £50. Higher and additional-rate tax payers can claim extra relief through their tax return.

Tax relief is a bonus that you shouldn’t ignore. In the example above, if you saved £250 every month you’d have around £152,0001 after 35 years – an extra £30,000.

START SAVING £200 A MONTH TODAY AND IN 35 YEARS YOU’LL HAVE AROUND £122,000.

SAVE £200 EVERY MONTH FOR 25 YEARS AND YOU’LL HAVE AROUND £78,000.

SAVE £200 EVERY MONTH FOR 10 YEARS AND YOU’LL HAVE AROUND £27,000.

Partners in planningAnd the last big advantage: your company also contributes to your account every month. In some schemes, the more you contribute the more your company will contribute up to a certain limit. These extra contributions would add even more to the savings in the example.

For a brief explanation of how your pension scheme works and what your employer adds to your account, take a look at this video at fidelity.co.uk/wp-video

Lauren, if you log into your pension account on PlanViewer at planviewer.co.uk you’ll be able to see the contributions going into your account. You can also use the myPlan tool to work out what you could save by retirement. You can read about the tool in Number Power on page 17.

Please note:

1. These compound interest calculations assume a 2% rate of interest over the period of calculation. The figures have been rounded up or down to the nearest £1,000.

2. Tax treatment depends on individual circumstances and all tax rules may change in the future.

News and views. Insights and outlooks.

We aim to be your first port of call whenever you want to find out what’s going on in the markets. Alongside the basics, we give you Fidelity’s exclusive take on the latest developments, so you

know what’s important and why it matters.

Visit fidelity.co.uk/insights today

Head to markets and insights today to:

1.

2.

3.

Watch our latest episode of MoneyTalk, featuring expert opinions from Fidelity Investment Directors Tom Stevenson and Maike Currie.

Read our regular financial planning articles to learn how to get the most out of your finances.

Sign up for our investment Pulse email, providing daily news and insight direct to your inbox.

view the digital version of myfuture on ……it’s a great idea for making sure you’re on top of...

Documents