The Buzz.

One-in-four young children receive regular childcare from their grandparents, government data shows. Even 9% of children aged 12-14 are still often looked after by their grandparents. 

It’s easy to see why. The government does provide help with childcare costs for working parents. But even then, the average fee in 2026 for a full-time nursery place for a child under two is £149 a week in England.

While many grandparents are happy to help, there’s also a financial benefit you may not be aware of.

If you’re under State Pension age (currently 66, rising to 67 from 2028) and caring for a grandchild, you can claim Specified Adult Childcare credits. These can help you plug gaps in your National Insurance (NI) record and boost your State Pension.

It’s free, simple, and could make a big difference to your retirement income.

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What are Specified Adult Childcare credits?

Specified Adult Childcare credits are a type of NI credit. You can claim them if you’re caring for a grandchild or other family member under 12 while their parents are working. 

Most people build up their NI record through work, with each full year of employment counting as a qualifying year. You need at least 10 years to get any State Pension at all and 35 years to get the full new State Pension - currently £241.30 a week (2026/27).

But there are other ways to earn NI credits too. That includes claiming Child Benefit as a parent or receiving certain benefits. 

You might have gaps in your NI record if you take time out of work. That might be to raise children, care for a relative, or work part-time. Those gaps can reduce how much State Pension you’ll receive when you reach State Pension age (66 in 2026/27, rising to 67 by 2028). That’s why credits like this matter. 

A working parent can effectively earn two NI credits: one through work and one through claiming Child Benefit. But you can’t claim two credits a year - only one is added to your NI record. 

That’s where Specified Adult Childcare credits come in. These allow you to give your Child Benefit credit to a family member who’s caring for the child instead.

By caring for a grandchild or child under 12, you get a Class 3 NI credit for each week or part week you do so. These can make a real difference to filling in gaps to your NI record.

You can also backdate your claim to April 2011, when the scheme began. So, you could meaningfully boost your State Pension payments if you have gaps in your record.

Who qualifies for Specified Adult Childcare credits?

To claim these credits, you need to be:

• under State Pension age (use PensionBee’s State Pension Age Calculator to find out yours);
• a UK resident;
• caring for a child under 12; and
• giving that care while the child’s parent is working and claiming Child Benefit.

You don’t have to be a grandparent. Any family member who helps with childcare can claim if they meet the criteria above.

Why you should claim

52% of grandparents care for a child for free. That’s often in the years just before retirement, when there’s little time left to fill gaps in your NI record.

Before you apply, it’s worth checking your State Pension forecast so you know exactly where you stand. You’ll be able to see your current forecast, how many qualifying years you have, and whether you have any gaps. This will also show you whether Specified Adult Childcare credits would fill any of those holes. 

Missing just one qualifying year - so having 34 instead of 35 - could affect how much State Pension you receive over your entire retirement. 

Here’s an example of what could happen if you had one missing year in 2026/27.

At today’s rate, you could receive £234.41 a week, rather than the full new State Pension of £241.30. Over a year, you’d miss out on just under £360. Over a 20-year retirement, that adds up to £7,166.

You can make voluntary contributions to fill in missing years. But that can be expensive and there’s the chance you won’t live long enough to make that money back. 

Claiming Specified Adult Childcare credits for all the time you’ve spent looking after grandchildren is free and can make a big difference. And, because you can backdate it to April 2011, you could find this quickly fills up a missing year or two.

How to apply

Applying is straightforward. Here’s what to do:

1. Check the child’s parent is claiming Child Benefit and is working.

2. Download and fill in form CA9176 from HMRC. 

3. Get the working parent to sign the form.

4. Wait until 31 October after the end of the tax year you want to apply for to claim your credits.

Remember, you can claim the credits back to the 2011/12 tax year. So, it’s worth gathering details of all the time you’ve spent caring for children since then before you apply.

HMRC will then update your NI record once they’ve reviewed your application. Check your NI record on the government website.

Final thoughts

Claiming Specified Adult Childcare credits is a straightforward way to boost your State Pension, and it won’t cost you a penny. Many grandparents are sitting on unclaimed credits going back to 2011, without even realising it.

Start by checking your State Pension forecast at GOV.UK to see if you have any gaps in your NI record, and go from there. It could take as little as an hour and could mean thousands of pounds more in retirement. 

Ruth Jackson-Kirby is a Financial Journalist passionate about making money matters clear and accessible. She’s written for The Mail on Sunday, MoneyWeek, The Sun, and Good Housekeeping, helping readers navigate pensions and personal finance with confidence. She believes everyone deserves financial security and is on a mission to cut through jargon and make finance relatable.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

I recently celebrated my five-year anniversary of becoming self-employed. It’s been a blur of exciting projects and clients, and I’ve enjoyed a decent work-life balance (most of the time).

But, of course, there are challenges that come with being a freelancer. Namely, that’s chasing invoices and the lack of perks like annual leave and, in particular, employer pension contributions.

Setting up a pension as a freelancer can feel daunting. And retirement planning can become trickier when you mix employed and self-employed work, like I have. 

I’ve gone from PAYE to freelancer (and back again!). I’ve had spells as a part-time contractor where employers have signed me up to pension schemes thanks to Auto-Enrolment. That left me with lots of little pots dotted around.

However, taking control of your nest egg and planning for life after work doesn’t need to be time-consuming or difficult. 

Here’s what I’ve learnt about maximising my pension while juggling employed and freelance work - and how you can supercharge your savings as you progress your career.

1. When you go freelance, carry on contributing

One of the biggest risks when moving from PAYE employment is forgetting about your pension altogether. 

Without the contributions coming straight out of your payslip, the responsibility falls to you. That leads many self-employed people to not contribute, with data showing less than a fifth do. 

Fortunately, you can continue making contributions, including to a pension you already hold.

When you leave a company, you may be able to continue making personal contributions to the workplace scheme. Ask your pension provider if you’re unsure, and bear in mind you won’t receive any more contributions from your previous employer.

Alternatively, you can set up a personal pension when you’re self-employed. 

Building pension contributions into your monthly budget helps maintain momentum. Even if your income fluctuates, you'll still keep paying into your pot if you're used to doing so.

You might be worried about your earnings when you start as a freelancer. In that case, you could consider setting a low monthly payment and topping up in higher-earning months. I began my self-employed pension with £100 a month and paid in more when I’d done my tax return and knew how much I had left over.

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2. Make the most of tax relief

You don’t get employer contributions as a freelancer. But did you know that you’ll usually still get tax relief from the government?

Most basic rate taxpayers get tax relief on their personal contributions. So, for every £80 you pay into a pension, the government will add £20, boosting it to £100. If you’re a higher or additional rate taxpayer, you can claim back more via your Self-Assessment tax return.

This makes pensions one of the most tax-efficient ways to save. Just keep an eye on the annual allowance. That’s the limit on the gross amount that can be saved into a pension each tax year without incurring tax charges.. 

The current standard annual allowance for pension contributions is £60,000 (2026/27) - this includes personal, employer and any third party contributions.

There’s a separate limit on tax relief. You can receive tax relief on personal and third party contributions (excluding employer contributions) up to 100% of your relevant earnings, capped at £60,000 per year (2026/27).

3. Tidy up time

It’s key to stay across and dedicate time towards your pension admin.

Most of us will accumulate a few pension pots throughout our working lives. You might well have a few from your time as an employee. 

Look out for companies auto-enrolling you for freelance work too. Auto-Enrolment doesn’t technically cover the self-employed. But if you’ve signed up to a temporary part-time contract, or, say, a zero-hours contract, you could find yourself tipped into a pension scheme.

That’s because most employers have a duty to enrol eligible staff on their payroll who:

• work in the UK;
• are at least 22 years old, and haven't reached State Pension age;
• earn more than £10,000 a year; and
• aren't already a member of a suitable workplace pension scheme.

So, if you meet these criteria, you’d be auto-enrolled in the scheme unless you opt out.

For example, one newspaper I freelanced for on an ad-hoc basis started paying me via PAYE. Before long, I became a member of their pension scheme. 

Likewise, a wealth manager I worked for as a content editor for three days a week also enrolled me into their workplace pension.

It could be simpler to combine these pensions into a single plan. This can make things easier to manage and give you a clearer view of your total retirement savings. It may also reduce fees you might be paying across multiple providers. 

However, consolidation isn’t right for everyone. For example, you may lose valuable benefits by transferring, so check these first before you make a decision.

Set aside half a day to run through your pension admin. If you’ve opened a new personal pension as a freelancer, it could make sense for you to consolidate some of your old ones into it.

4. Dial up those contributions

If you’ve been freelancing for a while, it’s worth considering whether you can pay more into your pension. Contributing a higher amount could help you build a larger pot. In turn, that might result in a more comfortable retirement, or even allow you to retire early.

If you’re contributing £100 a month, can you stretch to £150 or £200? You can usually change the amount if you have months when you earn more or less, too (check with your pension provider if you’re unsure). 

So, if you dial up during a lucrative year, you can dial down again if needed. For instance, if your earnings go through a dry patch or you have a large, unexpected bill, you can always cut back.

With PensionBee, you can make one-off contributions or set up a regular bank transfer. There are no minimums and you can adjust the amount you pay in, too. That flexibility can be highly useful when you’re working for yourself.

As long as it’s within the limits I mentioned above, a higher contribution usually attracts more tax relief. That might give your nest egg a double boost, which could even upgrade your retirement. 

With extra funds to hand, you might not have to think twice about affording theatre trips with friends, or booking that dream holiday.

5. Returning to employment and boosting your savings

If you move back into a salaried role, one of the big benefits over being self-employed is that you’ll usually get employer pension contributions.

If you’re eligible under Auto-Enrolment, a minimum of 8% of your eligible earnings will be contributed to the workplace pension, unless you opt out. Of that, your employer must pay at least 3%. 

So, as standard, they’ll contribute 3%, you’ll pay 4%, and the government adds 1% tax relief to your contribution. 

But, many companies pay in more than 3%, especially if you also contribute above the minimum. Some employers ‘match’ your contributions - for instance, if you pay in 6%, they’ll pay 6% too. This is a great way to turbocharge your retirement savings.

Giving up just a small amount of take-home pay today could be worth more by the time you stop work and retire.

Maintaining your pension contributions, no matter your work status

Whether you’re working for yourself or someone else, you want to make the most of the money you earn.

That’s why it can be sensible to keep paying into a pension when moving from employment to self-employment or the other way.

The tax relief on offer can make it an efficient way to keep hold of more of your earnings. And your provider will usually invest your contributions, offering the potential for growth over time.

No matter your employment status now, a pension could help you set aside what you need to enjoy life after work.

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Ruth is an award-winning Journalist with more than 15 years' experience of working on national newspapers, websites, and specialist magazines. She's passionate about helping people feel more confident about their finances. 

She was previously Deputy Money Editor at The Sunday Times, and now freelances for a range of titles including The Telegraph, The Observer, and MoneyWeek.

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Risk warning

As always with investments, your capital is at risk. Past performance is not an indicator of future performance. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

The following is a transcript of a bonus podcast episode of The Pension Confident Podcast. Listen to the episode or scroll on to read the conversation.

PHILIPPA: Recently, we’ve been enjoying hearing from listeners like you telling us about their journey with pensions. Today, we’re going to hear from Becca and how it was a friend of hers who gave her a much-needed pension wake-up call after she became self-employed.

I’m Philippa Lamb, and if you haven’t subscribed to The Pension Confident Podcast yet, why not click that subscribe button right now so you never miss an episode? Just before we hear from Becca, here’s the usual disclaimer. Please remember, anything discussed on the podcast shouldn’t be regarded as financial advice or as legal advice. And when investing, your capital is at risk.

Meet Becca

PHILIPPA: Here’s Becca introducing herself.

BECCA: My name’s Becca Poutney. I’m a Marketing Consultant that specialises in the wedding industry. I’m 39 years old and I live in Bedfordshire, just north of London. I first started tentatively saving for retirement in my first job.

So I graduated in 2009. My first couple of jobs were actually contract-based, but when I went into my first full-time employment in a radio station, they auto-enrolled me onto the radio station pension - and so I had no say over it.

But I automatically started paying a bit towards my pension. The thing is, I only stayed in that job a couple of years because my real dream was to be self-employed. So as soon as I left that job, the pension stopped.

PHILIPPA: Pensions expert, Dani Skerrett from PensionBee, is here with me. She’s been listening along too. Hi, Dani.

DANI: Hi, Philippa.

PHILIPPA: Quite a familiar story there, isn’t it, from Becca?

DANI: Yeah.

PHILIPPA: She’s auto-enrolled, which obviously is great, but when she leaves that job, the pension stops. Can you just talk us through Auto-Enrolment and what that means for employed people?

DANI: Yeah, so ‘Auto-Enrolment’ was introduced as part of the Pensions Act [2008] in [October] 2012 and it really improved pension savings for lots of workers in the UK. So, what it meant was that all eligible employees must be auto-enrolled, full-time and part-time, if they fit a certain criteria.

So that’s working in the UK, being at least 22 years old but not yet State Pension age, earn more than £10,000. If you earn less than £10,000 but above [£6,240] or thereabouts, you can ask your employer to enrol you and they can’t refuse. But within that criteria, if you’re working in the UK, you should be auto-enrolled.

PHILIPPA: And your employer, they have to pay a minimum amount of money [into your pension] every month, don’t they?

DANI: Exactly, yeah. So, under Auto-Enrolment rules, your employer has to pay at least 3% of your qualifying earnings and you as the employee will be paying 5% of your qualifying earnings. So, that totals 8%, and that will just come out of your paycheck straight into your pension. And those qualifying earnings I mentioned are between just over [£6,240] and up to [£50,270].

PHILIPPA: OK, so just to recap, if you’re an eligible employee, you’ll be auto-enrolled into your workplace pension scheme. It just happens automatically. You can opt out, but obviously it’s not a great idea to opt out.

DANI: You can, yeah. But I think Auto-Enrolment has just made it that much easier for people to automatically save into their pension. Like Becca mentioned, she didn’t think about it. I think she described it as she had no choice over it.

PHILIPPA: Yeah.

DANI: She didn’t have a say. She was just automatically enrolled, and at least for that period of time, she’s putting something away into her pension without even thinking about it.

PHILIPPA: Because it can feel a bit like that, can’t it? It’s like money comes out of your pay packet every month, but the thing to remember is your employer is paying in.

DANI: Yeah, exactly.

The Self-Employed pension gap

PHILIPPA: So for Becca, this was all fine - until she went self-employed.

BECCA: When I decided to go self-employed, pensions became tricky. They just weren’t top of my mind at all. I was a young Mum, I had two children. I was starting to go self-employed mainly so that I could spend more time with them, but also because I wanted [to] build a business in the background.

So although I went self-employed in 2015, I didn’t actually put anything at all into a pension again until 2023. So there was a huge gap where I was building my business, raising my children, and pensions, to be honest, were very low on my mind. I knew I had this tiny little pension pot that had once been saved up in the radio station, but nothing to write home about, and it just wasn’t on my radar.

PHILIPPA: So I can really identify with this. I’m self-employed myself. Pensions, I think it’s really fair to say, can feel like a massive headache for a lot of self-employed people because most of us were employed before. We were used to employers doing all the heavy lifting on this, so it’s completely new territory, isn’t it?

DANI: Yeah, it’s so much more difficult for self-employed people. I was just saying how beneficial Auto-Enrolment was, but it completely excludes self-employed people. And so many people consider themselves self-employed now. That means if you’re freelancing, if you run your own business, if you’re doing a bit of contracting - so many people fit into that self-employed category and they’re just completely not included in Auto-Enrolment.

So if you’re self-employed and looking at how you can start retirement saving, I think the key thing to look for is flexibility. The way you earn when you’re self-employed is completely different to when you’re full-time employed and on a payroll. You might have inconsistent earnings, so you might have a really, really busy season. You might have a month off where it’s much - the earnings are much lower.

PHILIPPA: Yeah, just the nature of the business.

DANI: Yeah, exactly. So I think the key things to remember are: have a good look at your situation, and within those first couple of months of being self-employed, looking at what your ingoings and outgoings are, and how much can you reasonably afford? And try and start [saving] as soon as you can, because it’ll make it much less painful when you come to thinking about it years down the line. So have a good look at your situation, ingoings and outgoings. Try and find that flexible provider because you want the ability to either dial up or down your pension contributions as things change.

PHILIPPA: Yeah, depending on what you’re earning.

DANI: Depending on what you’re earning, depending on what you’re doing. And just keep in mind the annual limits, because with a lot of self-employed people, and you’ll relate to this, you might only think about your earnings when it’s coming up to [the] end of [the] tax year -

PHILIPPA: yeah -

DANI: and you’re starting to think about the tax that you owe, and you might have a very busy season or have a very good couple of months, and you might have some extra earnings that you can put into your pension.

What stops self-employed people saving?

PHILIPPA: I think the key thing is to actually just not forget about it, isn’t it? Because you’re getting self-employed, maybe you’re starting a business, there’s so much to think about, as you say, tax, all these things. It’s easy to forget about pensions, and kind of sounds like Becca did a bit, but then she did have a chat with her husband in the end.

BECCA: I spoke with [my husband] about my [pensions] a little bit over my self-employed journey because he’s in full-time employment and he has a really good pension, and we talk often about how he has a really good pension. And actually, in some ways, that just added to my guilt because I felt like, “Well, yeah, great, you’ve got a really good pension, and I have nothing, I probably should do something about it”.

And I think sometimes there’s a bit of pension envy because when your employer’s sorting it out for you and adding extra money into it and all of those great perks that they can do, and you’re self-employed, you don’t necessarily have the same power to do those things. And so in some ways it made me feel a bit guilty.

PHILIPPA: I kind of know what she means. It kind of does feel a bit unfair. You’re doing all, doing all the work of being self-employed. Self-employed, employed people don’t have to worry about this.

DANI: Yeah, you’ve got so much to think about already being self-employed, let alone your retirement savings.

PHILIPPA: So there’s nothing for us, is there, unless we do it ourselves?

DANI: Exactly, yeah. And [at] PensionBee, we’re actually calling for a reform for Auto-Enrolment to include self-employed people. So there was a campaign last year that we started called the Invisible Worker Campaign, and this includes self-employed people. But also carers, people on zero-hours contracts, gig workers, and like I mentioned, freelancers, contractors, all those people that consider themselves self-employed. And yeah, we were just highlighting the fact that they’re underpensioned, there’s much less support for them, and the government needs to do something about it. There needs to be more support for people who work for themselves in any capacity.

PHILIPPA: Yes, because there’s millions of us, right?

DANI: And a growing number, I think.

PHILIPPA: OK, well, it sounds like an excellent campaign. But until that bears fruit -

DANI: yeah -

PHILIPPA: where can self-employed people get good guidance?

DANI: It’s really difficult, isn’t it? Because like you said, with the workplace, you have colleagues, you have your manager, you have the HR team.

PHILIPPA: Yeah, you just go and ask someone, they tell you.

DANI: Exactly. With some self-employed people, they work completely on their own. So I think it’s really important to have conversations with other people that are self-employed. And so I think trying to connect anywhere you can.

PHILIPPA: Yeah, ask them what they’re doing.

DANI: Exactly. Money date, popping in a money date with yourself to like look at your ingoings and outgoings and look at your retirement planning and kind of making - romanticising it a little bit and talking about it.

PHILIPPA: I’m going to say Dani, it doesn’t sound that romantic! But I get the point that you can make a date in the diary to think about this.

DANI: Exactly. Well, we spoke about this in our ADHD episode (Episode 40). One of our guests, Krystle McGilvery, spoke about ‘body doubling’.

PHILIPPA: Oh yeah, I remember that.

DANI: That’s the first time I had heard that, but that’s essentially what a money date is, I suppose.

PHILIPPA: I guess it is. So just explain how that works.

DANI: Either being in the room with someone, or on a Zoom call with somebody - and it’s that feeling that you’re both sort of cracking on and getting that admin done together, and it’s a bit motivating. It’s kind of like going to the gym with a friend.

PHILIPPA: Yes, because then you actually do have to do it because otherwise you’re letting them down.

DANI: You’re committed. Yeah, exactly.

PHILIPPA: There’s stuff online, I mean, like proper reliable advice online as well, isn’t there?

DANI: There is, yeah, lots of guidance. I think resources like Money Helper have lots of guides for self-employed people. On the PensionBee website, we have various different blogs, explainer pages, and videos tailored towards self-employed people that really help break down the jargon, especially around pension saving and personal finance.

The cost of disengagement

PHILIPPA: Now, ultimately, Becca did realise that she needed to start thinking about pensions again.

BECCA: In 2023, I realised I probably should start thinking about this pension thing. I’m heading towards 40 [years old]. I actually need to start thinking more longer term. And it was something that suddenly - I was talking to my clients about, the wedding business owners, telling them, “Are they thinking about pensions?”, but not actually doing it for myself.

And I wanted to do it right. And then I had a really interesting conversation with a friend about this dilemma, saying, “I’m self-employed, I don’t really know what to do about pensions”. And she just said, “Oh, I actually just set up on PensionBee”.

And so I left that meeting, I went home, I got the app, I did it - and it really did only take me 10 or 15 minutes. And this huge weight dropped off my shoulders because now I wasn’t thinking, “I don’t even care about this pension thing”. At least I was doing something.

PHILIPPA: So she’s like the perfect ad for PensionBee, isn’t she?

DANI: Yeah.

PHILIPPA: But it’s a good point she’s making that it’s important, whatever you do, it’s important to do something.

DANI: Yeah, something is better than nothing is the bottom line there really, isn’t it?

PHILIPPA: So she did sort out her pension as she said, but, and this is the kind of important bit in some ways, between 2015 and 2023 she didn’t put anything into her pension at all. Obviously she had other stuff going on, there’s no blame here, it just happens, doesn’t it?

But just to highlight how important it is to try and avoid years when you don’t save at all, where would she have been financially? I’m sorry, Becca, to do this to you because this is going to be painful, but where would she have been if she had at least made some contribution in those eight years?

DANI: Comparing somebody that’s starting at either 32 years old or 40 years old with nothing.

PHILIPPA: OK.

DANI: And let’s say they’re contributing £30 a month.

PHILIPPA: OK.

DANI: Not contributing that £30 a month for that eight - during that eight year gap, the difference when you come to retire at 68 [years old] would be £5,500.

PHILIPPA: Now obviously these are estimated figures.

DANI: This is a bit of an estimate.

PHILIPPA: But even so, £5,500 gap.

DANI: And actually the amount that she didn’t put in during those eight years would’ve only been just under £3,000, but it amounts to £5,500 when you consider the compound interest and the potential investment growth that she missed.

PHILIPPA: And the tax relief.

DANI: And the tax relief that’s added on top, so it’s nearly double.

PHILIPPA: OK, so for the purpose of this, we’ve assumed there was no money in this pension pot, this imaginary pension pot at all. If there had been some money in it, say £50,000, and then there was an eight year gap when no more money was paid in, that’s even worse, isn’t it? That makes an even bigger loss.

DANI: Yeah, the gap there is then £18,000 together because you had that original £50,000 and you carried on contributing for the eight years, you get the compound interest of the stuff that’s existing there, your contributions on top and everything, so it makes an even bigger gap.

PHILIPPA: It does. So £18,000 better off, even with a basic contribution over those eight years.

PHILIPPA: Seems to me the point here is, we’re only talking - I say only - but we’re only talking about a contribution for this example of £30 a month, so not a lot of money, but the difference is really, really big, isn’t it? If you don’t pay in at all -

DANI: yeah -

PHILIPPA: you really pay for that.

DANI: Exactly. I use that £30 a month example because when my partner started his business and he went self-employed from working full-time, we were talking about setting up a pension and he was very, “I can’t afford it, I need to think about my tax bill, I need to think about what I’m going to be able to take home”. And I said, “just start with something, £10, £20, £30, what’s going to be comfortable?”. And we just sort of settled on £30.

PHILIPPA: Yeah.

DANI: And had he not done that, we’re years down the line now, he could’ve had a gap like Becca of eight years of not doing it. So I think it sounds very nominal but just start wherever you can. £30 a month, and then if you, a couple months in, you realise you can’t afford that, dial it back to £25, £20.

PHILIPPA: Yeah, or conversely, if the business is going well, you feel a bit more financially confident, pop it up a bit.

DANI: Exactly.

PHILIPPA: Even if it’s only a tiny amount.

DANI: Yeah, and I think that there’s a real satisfaction with seeing your money grow with your own contributions and the potential investment growth you’ll be getting. Add on the tax relief, think about when it comes to the end of tax year and you might have £100 or £200 spare, pop that in as a lump sum. Like, I think there’s a real satisfaction with seeing that pot grow starting with just £30. Just imagine yourself eight years down the line then looking at thousands of pounds.

PHILIPPA: I know it all sounds a bit sad, but I do feel this. It’s really reassuring, isn’t it, when you look at them and think, you say, “OK, I’m saving, there’s going to be some money there later”.

DANI: Exactly.

PHILIPPA: It’s a nice feeling.

DANI: Yeah.

Becca’s belief in teaching kids about money

PHILIPPA: So I mean, all in all, Becca’s had quite a journey with her pension and working out what to do about it. But she does know, and certainly I think she knew it before, but she certainly knows now, good housekeeping around money, this is a great lesson to teach your kids too.

BECCA: I think it’s really interesting to think about how our childhood builds our thoughts around money. My Dad was self-employed and I think that’s definitely had an impact on me, and they definitely saved for me as a child, and we weren’t able to touch that money until we were 18 [years old].

And once we were 18 [years old], we could make a decision about what we did with that money, and it actually helped me get on the property ladder. So I know that from an early age, my parents talked to me about things like business skills, but also saving for the future.

And I’m trying to do the same with my own children as well. We give them pocket money, we give them allowances, and then we encourage them to think about whether they want to save that money for something in the future or spend that money on instant gratification.

And although they’re only young, I think it’s important for them to start learning those money lessons. That definitely had an impact on me as a child and I hope I can carry that forward and have an impact on them too.

DANI: We’ve spoken about this [topic] loads on the podcast, about financial education [in schools] and parents talking to their children about money from a young age. So one of the early episodes [Episode 8] we did I think we spoke about the research from Cambridge University and the Money Advice Service [now known as MoneyHelper] that showed financial habits are formed from age seven.

PHILIPPA: Right, yeah, I remember this now. Yeah, really early.

DANI: So it seems odd to talk to your children about pensions when they’re seven or eight years old, but it definitely, definitely helps. And I think those, the mindsets that we have as adults and the ‘financial personalities’, as we call them, that we have as adults are formed from such an early age. So in whatever way you can, talking to your children, talking as a family about finances, as early as possible is definitely a good start.

PHILIPPA: Yeah, you can start them off talking about savings. I must say, I didn’t speak to my son about pensions when he was seven [years old]. But we did talk about saving and about not spending all your pocket money straight off the bat.

DANI: Exactly, and starting talking about saving is sort of a good entry because then when you start talking more about investing, because they’ve got this basic understanding of saving, it’s probably a bit of a step up, a leg up already, to understand what it means if then that money you’ve saved is invested.

PHILIPPA: Yeah, rather than it being a completely fresh thought when you’re older.

DANI: Exactly.

PHILIPPA: Thanks, Dani. And our thanks to Becca too for sharing her story with us. If you’d like to find out more about pensions and retirement planning, head to the show notes on this episode. As we said, we have shared lots of resources there for you. You can explore them, try things out for yourself, see how you feel.

Here’s a final reminder before we go that anything discussed on the podcast shouldn’t be regarded as financial advice or as legal advice, and when investing, your capital is at risk. Thanks for being with us. We’ll see you next time.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Investing can give you the chance to grow your wealth over time. Yet many people don’t know where to start, or are even put off doing so entirely.

You might not think of yourself as an investor. But if you have a pension, you probably already are. Whether through a workplace scheme or a private pension, your provider will usually invest your contributions with the aim of growing your savings over time.

Even so, you could feel that investing isn't for you. You might be worried about losing money, think you don’t have enough to get started, or not be sure who to trust with your investments. These barriers could mean you’re missing opportunities to grow your wealth.

But if you can beat these concerns, you could start investing money now that might help you achieve financial freedom in future.

Here are five of the most common investing barriers, and how to overcome them.

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1. The fear of losing money

All investments carry risk along with opportunity, which means you could get back less than you invest.

But before that puts you off, it’s worth keeping these things in mind:

• You could ‘lose’ money in real terms by not investing - over time, inflation reduces the spending power of your money. This means that as the cost of living rises, your savings won’t go as far in the future as they would today.
• Historically, investments have outperformed cash in the long term - to combat inflation, you might save in cash with the hope that the interest you receive will outpace rising prices. While this can happen, in the long term, money invested in the stock market has been more reliable at doing so. Though it’s important to remember that past performance doesn’t guarantee future performance.
• Risk and reward are closely linked - generally speaking, the more risk you take with your investments, the higher the potential returns. You could choose lower-risk investments that might be more suitable if you’re new to investing. But bear in mind lower risk will usually mean lower returns.

Seeing your investments rise and fall in value is part of investing. By thinking about your risk tolerance and your investment time horizon, you can find a strategy that works for you.

2. Not having enough money

When the cost of living is high, investing can fall off the priority list. But, you don’t need lots of money to invest - even small, regular sums can make a difference over time. 

Putting just £50 or £100 from your monthly income could help you slowly build up your investments. They could start to grow over time thanks to compounding (that’s returns on your returns). 

Setting aside money to invest in your budget can help you stick to a regular plan. A common approach to budgeting is to break down your monthly income so you use:

• 50% on essential bills; 
• 30% on ‘wants’ such as entertainment, shopping, dining out, and so on; and
• 20% on savings, investments, and pensions.

You can adjust these numbers to fit your lifestyle. For example, if you’re currently clearing debt (an essential outgoing), you could spend a bit less on your ‘wants’ and more on essentials.

Using a framework like this can help you balance short and long-term savings with your everyday costs.

Small contributions now could help you build a retirement pot for later life. In fact, you can open a PensionBee pension and start investing for your future with just £1.

3. The need for easy access

Money you invest in the stock market is usually harder to access than most cash savings.

It normally takes at least two days to access money held in investments in a General Investment Account (GIA) or a Stocks and Shares Individual Savings Account (ISA). It might take as long as a week, depending on your provider or what you’ve invested in.

The same is true for pensions. It usually takes around 10 days for a withdrawal to land in your bank account, especially if you’re withdrawing for the first time. For most pensions, that’s only possible from the Normal Minimum Pension Age (NMPA) of 55 (rising to 57 from 2028).

One other element to consider with GIAs is that you may have to pay Capital Gains Tax (CGT). If your investment returns in a GIA exceed your annual CGT allowance, you could have to report the tax charge on a Self-Assessment return. That could add an extra complication to accessing your invested money.

This is not a concern for ISAs or pensions where your returns are free from tax - although you may pay Income Tax on pension withdrawals, depending on your circumstances.

With all this in mind, it could be sensible to hold some cash in an easy access account for short-term goals as well as having some money invested. For example, if you’re planning a big purchase like a holiday, you might want funds immediately available. That way, you don’t have to wait to access investments or rely on credit cards.

Similarly, it can be wise to hold an emergency fund for unexpected expenses. That might be needing to pay for a new washing machine or car repairs. 

Generally, a good target is having three-to-six months’ expenses in your fund. In retirement, this increases to one-to-two years’ as you’ll no longer have a regular income from work. 

It can be sensible to hold money you've invested in the stock market for the long term - especially pensions which are designed to help you save for decades ahead. Leaving your investments untouched can give them the opportunity to benefit from compound growth and potential returns.

Having a mix of both cash savings and investments could be a sensible approach.

4. Not knowing who to trust

Trust in financial services in the UK is fairly low. A 2024 Financial Conduct Authority (FCA) survey found that only 39% of adults had confidence in the UK financial services industry. Just 36% said they felt most firms were honest and transparent.

When it comes to your wealth, you need to be able to trust the firm you’re dealing with. Before you choose a financial firm or product, it’s important to check:

• whether the company is authorised and regulated by a UK regulator, such as the FCA;
• what the firm does to meet the FCA’s Consumer Duty rules (if applicable); and
• if you’ll be covered under the Financial Services Compensation Scheme (FSCS).

These are fast becoming ‘hygiene factors’ of financial firms. Companies that meet these criteria could give you confidence that they’ll manage your money with care.

Bear in mind this doesn’t usually affect investment values. Your investments could still fall in value, even if the firm is regulated and acts in your interests.

5. Not knowing where to start

Many would-be investors don’t put their money in the market because they don’t know where to start. 

You may not realise that if you have a workplace pension, you’re already an investor. Your provider will usually invest your pension savings on your behalf, aiming to grow your retirement pot for later life.

So, if you want to invest more of your wealth, contributing to your pension could be a straightforward way to do so.

As for investing more broadly, the key here is knowledge. The more you know, the greater confidence you’ll have. There are plenty of free resources available online to help you learn. 

Remember: what you read or see online isn’t personalised advice or recommendations. It’s important to invest in what’s right for you.

If you’re still unsure, consider speaking to an Independent Financial Adviser (IFA). 

Invest in your future through your pension

Your pension contributions are usually invested, aiming to grow your wealth for retirement over time.

If you want to invest for your future retirement, the PensionBee pension could be right for you. Choose from our range of plans, contribute easily via our website or app, and track your progress with retirement planning tools.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Switching careers in mid-life can feel both exciting and daunting. You might be seeking greater purpose, flexibility, or enjoyment from your work. Or adapting to life changes such as caring responsibilities, health issues, or redundancy.

For many people, this stage of life sparks a desire to reshape how they work, rather than stop altogether. This might mean retraining, freelancing, or cutting back hours.

Career changes later in life carry important financial implications. With retirement on the horizon, there’s less room to recover if anything goes wrong. On the plus side, you could have more financial stability and experience to build on. 

Here’s how to plan your finances for a career change.

Review your finances

Before changing careers, it’s vital to take stock of your finances. What’s your income going to be? Will you need to live off savings for a while? How can you build an effective budget?

Understanding what comes in each month, what goes out, and how much you hold in savings or pensions will show you how much flexibility you could have.

Start by focusing on core living costs. For example, your mortgage or rent payments, food, household bills and transport. From there, you can work out the minimum you need to cover essentials. If your income is likely to dip, even in the short term, you’ll want to know whether your budget can absorb the shock.

Reviewing debts is just as important. Do you have any high interest borrowing such as credit cards or personal loans? If you do, paying down these debts can ease the pressure later on.

Wherever possible, look to simplify your finances. This could be reducing unnecessary spending or closing unused accounts. Even small things could help you streamline your finances to make money management easier during your career transition. 

Build a cash buffer

A career transition could mean your income is changing month-on-month. There also might be times when you have no fixed income for a period of time. In these cases, most experts suggest having three-to-six months of living costs stashed away as an emergency fund. 

This money should be designated for covering your living costs if your income drops or becomes unpredictable. 

A strong cash buffer could be particularly important if you’re planning to retrain, move into a new field or go freelance. Having savings gives you something to fall back on if your new career doesn’t take off straight away. It could also be invaluable if your caring responsibilities suddenly increase.

It might make sense to keep a cash buffer in an easy access savings account, rather than investments. Having these savings separate may also reduce the temptation to dip into your pension or other investments too early.

Make the most of your workplace pension

If you’re thinking about changing your career while still in employment, it can be worth making the most of your workplace pension first.

If you *qualify for Auto-Enrolment, you’ll likely be paying into a workplace scheme. This means you’ll be contributing at least 5% of your ‘qualifying earnings’ into your pension. And your employer must add at least 3%. Some employers will pay in more if you increase your own contributions - these are known as employer matched contributions. Taking full advantage of this can be a savvy move, as employer contributions are effectively free money.

Once you’ve left employment to become self-employed, employer pension contributions stop. When you work for yourself, the responsibility of saving into a pension will rest entirely with you. 

Accessing your pension early to fund a career change should be approached with caution. While pensions can usually be accessed from age 55 (rising to 57 in 2028) taking money out too soon could significantly reduce your income later.

*Auto-Enrolment applies to full-time and part-time employees who:

• work in the UK;
• are at least 22 years old, and haven’t reached State Pension age;
• earn more than £10,000 a year; and
• aren’t already a member of a suitable workplace pension scheme.

If you earn less than £10,000, but above £6,240, your employer doesn’t have to automatically enrol you in their scheme. However, if you ask to join, your employer will be unable to refuse you and must make contributions on your behalf.

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Preparing for a change in employment status

Many career changes later in life involve a shift in how you work, rather than just how much you earn.

For example, you might move from being employed to self-employed. This will mean being responsible for paying your own tax and National Insurance (NI). Lots of self-employed workers (and buy-to-let landlords) will have to adhere to Making Tax Digital (MTD) rules from April 2026. So make sure you’re prepared for the new regime and take advice from an accountant if necessary.

Moving from employment to freelance or contracting can also mean:

• irregular payments;
• gaps between contracts; or 
• lower earnings in the early stages.

Creating a realistic income forecast can help you prepare. Stress-testing your finances in this way can highlight whether you have enough savings to support you - and whether any adjustments are needed before you make the move.

Some people choose to transition gradually rather than making a clean break. This might involve reducing your hours or taking on freelance work before leaving altogether. These approaches could provide valuable breathing space and allow you to adapt financially and emotionally to a new way of working.

The role of ISAs in a career reset

Individual Savings Accounts (ISAs) can be a powerful source of support when you’re planning a career change. Unlike pensions, savings in most ISAs can be accessed at any time without tax consequences. This makes them well-suited to:

• bridging gaps in income;
• funding retraining; or 
• smoothing out irregular earnings during a transition.

You could use money in an ISA to supplement income without increasing your tax bill or committing to long-term withdrawals. For those still working before a career change, building ISA savings alongside pension contributions is another way to build a strong financial position.

Looking at the bigger picture

Changing your career later in life often sits alongside other major life considerations. For example, you may be supporting adult children, caring for elderly parents or managing health issues. These factors all influence how much risk you can afford to take.

If you have a partner, it’s important to talk openly about the financial side of a career change. Shifts in income, savings, or working hours can affect both of you. Sharing your plans helps avoid surprises and ensures you’re making decisions together. 

Making change with confidence

For many people, changing careers later in life is a proactive move to finding work that aligns more closely with their values, health, and lifestyle. 

With careful financial planning, this transition can be managed with confidence and clarity.

Listen to episode 38 of The Pension Confident Podcast to learn more about switching careers. You can listen to the episode, read the transcript or watch our guests in the studio.

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Emma Lunn is a multi-award winning Freelance Journalist. She’s written about personal finance for 20 years, with a career spanning several recessions and their consequences. Her work has appeared in The Guardian, The Telegraph and MoneyWeek. Emma enjoys helping people learn to manage their money well, in both the short and long term.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. Tax rules can change and benefits depend on individual circumstances. This information shouldn't be regarded as financial advice.

A letter arrives in the post. It looks important. Maybe it’s from your bank, or a pension provider. Instead of opening it, you put it to one side and tell yourself you’ll come back to it later.

But over time, those unopened letters can build up. And so does the low-level worry that sits in the background.

That feeling can start to affect your focus, your sleep, and your overall wellbeing.

If this sounds familiar, you’re not alone. According to the Mental Health Foundation, 31% of UK adults feel anxious about their financial situation. That worry cuts across income levels and career stages. But it has little to do with how responsible or capable you are. 

That matters, because understanding the root of your anxiety is the first step to breaking the cycle and moving forward. 

The brain treats ‘not looking’ as protection

Psychologists call this the ‘ostrich effect’. It’s when we avoid things that might make us feel uncomfortable.

You can see it in everyday life. People avoid awkward conversations, delay appointments, ignore messages or distract themselves instead of facing something worrisome. Dealing with pensions can trigger the same reaction.

For one, looking at your pension and seeing a number that feels ‘too low’ can be discouraging. In those moments, it’s important to remember that there’s more going on beneath the surface.

Author of Money on Your Mind, Vicky Reynal says: "Our relationship with money is rarely just about the numbers. It's shaped by our earliest experiences, our sense of self-worth, and the stories we've inherited about who gets to have financial security."

With pensions, there can be an added layer.

If you’ve avoided your pension for a while, checking it might feel harder. Seeing that gap between where you are and where you thought you’d be can make you want to avoid it even more.

Why pensions can feel hard to engage with

Pensions don’t always feel like something you can easily relate to. And there are a few simple reasons why. 

They're connected to the future

It can be genuinely difficult to picture yourself 20, 30 or 40 years from now. Research suggests we think about our future self almost like a stranger, someone separate from who we are today. So saving into a pension doesn't always feel like saving for you. It can feel like sending money to someone you've never met.

Pensions can feel like a loss

When money goes into your pension, it comes out of your take-home pay. The benefit builds over time, rather than straight away.

Research suggests people feel losses more strongly than gains. So your brain may focus on what you’re giving up now, rather than what you’re building for later.

It’s a natural reaction - and one many people share.

Losing track is easy

The average person has around 11 jobs in their lifetime. Each one can leave behind a pension pot that you might forget about.

There are an estimated 4.8 million lost pension pots in the UK, and nearly one-in-ten people think they may have lost one worth around £10,000.

When you're not sure how many pots you have, where they are, or what you're paying in fees, it can start to feel too complicated to deal with.

And once it feels hard to understand, putting it off can seem like the easiest option. But it’s worth noting that delaying addressing your pension has its own cost too. 

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The cost of looking away

PensionBee’s Cost of Disengagement report shows how small decisions can add up over time.

The research shows that around 12.5 million people may not be saving enough for retirement. Disengagement plays a big part in that gap and could leave you up to £500,000 worse off by age 68.

But while increasing your contribution by just 1% or 2% might not feel like much month-to-month, over decades, it can add up.

Most people start on the Auto-Enrolment minimum - this means contributing 8% of qualifying earnings into your pension each month. For someone aged 21, increasing their contribution by just 1% could mean around £24,000 more by retirement.* 

The report also found that people who check their pension regularly tend to build larger pots than those who don’t log in at all. Not because checking alone grows your money, but because it keeps you connected to the decisions that do.

Checking your balance won’t change things overnight. But staying engaged makes it easier to take small steps that add up over time.

5 ways to make pensions feel more manageable

Everyone’s situation is different, and so is how we feel about money. The important thing is to start somewhere.

Here are five simple things that could help. 

Everyone’s situation is different, and so is how we feel about money. The important thing is to start somewhere.

Here are five simple things that could help. 

1. Name what you're feeling

Feeling anxious about your pension is common. Saying it out loud, even just “I feel anxious about this,” can take some of the intensity out of it and make it easier to start.

2. Separate looking from doing‍

You’re allowed to look at your pension without fixing it straight away. Start by gathering the information. Open the letter or app, look at the number, and come back to it later if you need to. 

3. Set a time limit ‍

Rather than blocking out a whole afternoon during your weekend, start with just ten minutes. Think of it as a quick check-in. Keeping it short can make it easier to tackle.

4. Reduce the number of tabs you need to open

Pensions can feel harder to deal with when they’re spread across different providers and logins. Bringing old pots into one place can simplify things and make it easier to see where you stand.

5. Talk to someone

‍Research shows that financial anxiety isn’t solved by more information. For many people, it’s talking it through that helps. That could be a free, impartial service like MoneyHelper or Citizens Advice, an Independent Financial Adviser (IFA), or even a trusted friend. For some, an online community can help too.

Do one thing today

You don’t need to feel confident about your pension to get started. The goal is simply to make it feel manageable enough to take a small step.

If you’re not sure where to start, PensionBee’s Pension Calculator lets you put in what you have and see a projected retirement income. And if you’ve lost track of old pots, the government’s free Pension Tracing Service can help you find them.

If you’ve been avoiding your pension for a while, try not to be hard on yourself. That often just makes it easier to keep putting it off.

While there isn’t a quick fix for money anxiety, small, consistent steps can help. That might mean setting aside ten minutes to go over your finances once a week, talking things through with someone you trust, or just getting a clearer picture of where you stand.

Over time, those small actions can make it feel less overwhelming, and a bit easier to face.

*Assumes a starting salary £25,000 at age 21, 2% annual salary growth, 3% annual investment growth, 0.7% annual management charges, contributions to age 54, no withdrawals. 
‍
Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. Tax rules can change and benefits depend on individual circumstances. This information shouldn't be regarded as financial advice.

This is part of our monthly series. Catch up on last month’s summary here: Your March 2026 market update: the financial fallout from the Middle East conflict

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What a difference a month makes.

Stock markets dipped notably in March as the US and Israel’s joint military action in Iran spooked investors.

You might’ve seen the impact of these moves reflected in your pension balance over the last couple of months. PensionBee’s plans saw low growth or slight falls in the first quarter of 2026, as markets came to terms with this period of uncertainty.

Yet fast forward to the end of April, and markets are seemingly unscathed by those dips at all.

Major world stock indices bounced back up last month, with some even returning to above their pre-war levels. Despite the conflict in the Middle East continuing, investors seem to be behaving as if everything is back to normal. At the very least, they're being remarkably calm as events unfold.

However, while markets look steady, economic data might show signs of potential headwinds to come this year.  

Here’s what happened to investment markets in April.

The headlines: record highs amid global uncertainty

Having fallen 5.1% in March, the US’s S&P 500 reached yet more all-time highs, on both 27 and 30 April.

It was a similar story in Asia. Japan’s Nikkei 225 also hit a record high on 27 April. 

Likewise, Korea’s KOSPI closed at an all-time high on the 29th. That’s a continuation of stellar performance so far in 2026, finishing April up by more than 50% year-to-date. 

Meanwhile, China’s economy beat growth expectations, with its economic output expanding by 5%. 

Combined with Korea's remarkable rise, this has helped the MSCI Asia Ex Japan to climb above its pre-war level too, reaching a record-high on 27 April.

UK and European markets were less buoyant. The FTSE 350 and MSCI Europe Ex-UK finished up from where they started in April. However, both remain down from pre-war levels.

That’s despite positive economic news in the UK, with the economy growing by 0.5%, a faster rate than expected. Plus, January growth data was revised from 0% to 0.1%.

The Iran war and energy prices push inflation to top of mind

April market performance was perhaps more positive than expected across the board. However, the war in Iran and the risk of rising inflation remain a concern.

You’ll no doubt have seen energy prices rising. The cost of heating oil, petrol, and diesel have all increased, as the Middle East conflict has led to oil and gas supplies constricting. 

We saw these price rises reflected in the latest inflation data in some of the world’s largest economies, as shown in the table below:

The problem is that so many industries rely on oil and gas, at least in part. So, rising energy prices tend to have a knock-on effect on other areas.

There’s a wider concern that these figures don’t yet fully represent the conflict’s impact on prices, and inflation might yet climb higher.

Higher inflation could harm consumer spending as individuals look to tighten their belts. We might see a lack of activity filter through into markets moving forwards, limiting business’s income and their growth as a result.

Central banks respond to inflation concerns

Inflation concerns also influenced various central banks’ interest rate decisions.

Before the start of the Iran war, most markets had priced interest rate cuts into their expectations. 

Central banks usually increase rates when inflation is too high, and cut them when it’s lower to encourage spending.

But the Middle East conflict and restricted energy supply has changed that. The war has forced up energy prices and taken inflation with them.

This led central banks to abandon those expected rate cuts. Instead, we saw holds at:

• 3.75% from the UK’s Bank of England;
• 3.5% to 3.75% from the US’s Federal Reserve;
• 2% from the European Central Bank for its main deposit rate; and
• 0.75% from the Bank of Japan.

Markets are now pricing in interest rate rises in 2026. These decisions could affect markets throughout the rest of the year.

A mixed bag for US big tech earnings reports

Analysts kept a close eye on Q1 earnings for six big US tech firms. 

First, Tesla reported on 22 April. Amazon, Meta, Microsoft and Alphabet then all reported on 29 April, with Apple following up on 30 April. 

These are six of the so-called ‘Magnificent Seven’, with the last one, Nvidia, reporting in May.

This group of companies is particularly important. Their valuations make up more than 30% of the US market, and a considerable part of the world markets as a result.

Most earnings reports are an interesting indicator of how a company is performing. But this set of results can influence entire markets.

Broadly speaking, results were positive. Alphabet, Amazon, Microsoft, and Apple all topped earnings and revenue expectations. Tesla’s earnings beat expectations, although revenue came in below.

Meta, the parent company of Facebook and Instagram, was the outlier which saw the most mixed reaction. 

Revenue and net income both increased. However, the company also announced expensive spending plans - largely for AI infrastructure - and mass layoffs of around 10% of its workforce.

AI seemed to be the big takeaway from this round of earnings reports. These companies are at the forefront of building AI products and infrastructure. Investors understandably want to make the most of that trend.

However, concerns about an AI bubble - in which these businesses are overvalued - persist. And, with so much of the market concentrated in these companies alone, there are concerns that markets could fall if the bubble were to burst.

Whether that comes to pass remains to be seen. Even so, April will go down as a strong month for tech and the US market as a whole.

Gold continues to defy expectations

Amid uncertainty in geopolitics and AI, gold has moved unpredictably.

Gold is traditionally seen as a ‘safe haven’ when markets are volatile. Yet, that hasn’t happened this time. 

Since reaching a record high in January, investors haven’t reacted to bad news by flocking to the metal as we’ve seen in the past.

Instead, we saw prices fall since the start of the war. When the US-Israeli strikes began on 28 February, gold traded at £3,981.24 per troy ounce, a weight measure specifically for precious metals. 

But by 1 April, prices had softened to £3,549.83. With a few peaks and troughs along the way, they finished the month even lower, falling to £3,399.10 on 30 April.

It could be that the previous rally has made these prices seem comparatively lower - 12 months ago on 30 April 2025, gold was trading at £2,450.39.

Even so, it’s interesting to see that gold hasn’t performed as it historically might’ve done.

Risk warning

As always with investments, your capital is at risk. Past performance is not an indicator of future performance. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

If you’re 40 and haven’t started saving into a pension yet, you’re not alone. 

Data from the Department for Work and Pensions (DWP) shows that more than a third of adults aged between 40 and 75 have no savings at all. 

That puts potentially millions at risk of approaching or arriving at later life with no money stored away.

Fortunately, there’s still plenty of time to put money away for a comfortable retirement when you stop working.

Can I start a pension at 40?

Yes, you can start a pension at 40. In fact, you can pretty much start a pension at any age. But the earlier you do it, the longer you have to build a nest egg for retirement.

There’s no set retirement age in the UK. Some people see the State Pension age as a benchmark. In 2026/27, this is 66 (rising to 67 from 2028), though many people choose to work beyond this age. That means if you start a pension at 40, you could still have around 30 years to build a pension pot.

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Do I have a pension already?

You may already have a pension and not know about it. It’s estimated that there’s over £50 billion in forgotten pension pots - where the owner has changed their contact details and the pension provider isn’t able to find them.

This could’ve happened for various reasons. For example, that might be from moving house to simply not knowing you had a pension with a previous employer.

Auto-Enrolment legislation introduced in 2012 means employers must automatically enrol eligible full-time and part-time employees in the workplace pension scheme if they:

• work in the UK;
• are at least 22 years old, and haven’t reached State Pension age;
• earn more than £10,000 a year; and
• aren’t already a member of a suitable workplace pension scheme. 

You’ll usually be auto-enrolled every time you move to a new job, unless you opt out. That can result in lots of pension pots if you work for more than one employer.

The more pots you have, the easier it can be to misplace them. In turn, you might forget about some of your savings. Or, it may lead you to holding a pension that isn’t performing as well as it could because you aren’t reviewing it regularly.

It’s free to check for previous pensions you may have using the government’s Pension Tracing Service.

It could be worth combining (also called ‘consolidating’) these into one pension. That might help you keep track of your retirement savings and make it easier to manage. You could also potentially save on fees.

 There are a few things to think about before you consolidate, including:

• keeping pension scams in mind, especially if someone contacts you out of the blue;
• checking for exit fees with your current provider, as these could eat into the value of your pot; and
• considering special or safeguarded benefits, such as an enhanced annuity or early pension access before the standard age (55, rising to 57 from 2028).

What are the benefits of starting a pension?

There are many benefits of saving into a pension. 

Firstly, you may get tax relief. For most UK taxpayers, eligible personal contributions will be topped up by the government. That means you could get:

• 20% tax relief if you’re a basic rate taxpayer;
• 40% tax relief if you’re a higher rate taxpayer; or, 
• 45% tax relief if you’re an additional rate taxpayer.

You can receive tax relief on personal and third party contributions up to 100% of your salary, capped at £60,000 per year (2026/27). Tax relief isn’t applied to employer contributions.

Basic rate relief is usually claimed by your pension provider and applied automatically. For higher and additional rate relief, you can claim this via Self-Assessment.

Over time, this extra money can make a big impact on your overall pension pot. Any returns you make on your pension investments can also earn interest, a process called ‘compounding’. These snowballing returns can help your pension grow over time.

If you’re employed and eligible for Auto-Enrolment, you’ll also benefit from employer contributions. 

Under Auto-Enrolment, 8% of qualifying earnings must be paid into your pension. Of this, your employer must contribute at least 3%. Usually the remaining 5% comes from you (4% from your salary, 1% from tax relief).

Some employers also pay higher amounts or match the amount you put in.

Making the most of employer contributions to your pension can also help you boost your retirement savings.  

Note that you can usually tax-efficiently contribute to your pension up to the annual allowance. This is the limit on the gross amount that can be saved into a pension each tax year without incurring tax charges.

The current standard annual allowance for pension contributions is £60,000 (2026/27) - this includes personal, employer and any third party contributions.

What income do I need in retirement?

The question to ask yourself is how much money you’d like when you stop working. Or rather, what income would you ideally like every year when you retire?

To give you a rough idea, the Retirement Living Standards from Pensions UK give examples of what kind of lifestyle you can expect with different income levels.

The table below shows what you’d need for different standards of living, and whether you’re single or a couple (2026/27):

Of course, these are just estimates. Your actual income needs will be personal to you, based on your goals and ideal lifestyle.

You can think about this based on the current amount of money you live on, with a few changes. 

When you retire, some of your outgoings may go down. For example, if you’ve paid off your mortgage  or if you’re no longer having to commute, you’ll no longer have these expenses.

On the other hand, you might spend more in early retirement as you start doing the things you really want. That might be travelling or buying expensive items.

You’ll also no longer be earning your salary once you retire, and depending more on your pension savings. So, working out your ideal income can help guide how much you need to have in your pot.

Remember to factor in the State Pension. If you’re eligible for the full new State Pension, it pays £241.30 a week, while the basic State Pension pays £184.90 a week (2026/27). You can check how much you’re set to receive on GOV.UK.

You may also have other savings or investments you plan to use in retirement, which you can put towards your overall budget.

Use PensionBee’s Pension Calculator to see how much you might need to save to afford your desired retirement lifestyle.

How much do I need to save if I start a pension at 40?

If you’re starting a pension at 40, you’ll have to put more money away than someone starting at an earlier stage. 

That’s because there’s less time to go until you stop working. Simply, you have a smaller window to save and benefit from any potential investment growth.

That said, it’s still possible to build a pot that could support you and your desired lifestyle in retirement.

For example, imagine that you want to retire at 66 with enough in your pot to draw an income of £20,000 a year.

In that case, to build a pension that would last until you turn 85, each month you’d need to save around:

• £270 from 30 years old;
• £410 from 40 years old; and
• £710 from 50 years old.

These figures are calculated using the PensionBee Pension Calculator. They assume no employer contributions, that you receive the full new State Pension (£12,547 in 2026/27), and that you don’t take the first 25% of your pension tax-free from 55 (rising to 57 from 2028).

While you’d need to pay in less from 30, your contributions at 40 are far lower than they’d need to be at 50. So, the sooner you start paying into a pension, the more time you’ll have for it to grow. 

How to boost your pension pot

If you think the amount you’ll have to live on when you retire isn’t the amount you’re predicted to save, don’t panic.

There are lots of ways to boost your overall pot and to make up the shortfall.

• Making the most of your contributions - consider increasing the amount you’re paying in if you can. Even 1% or 2% can make a big difference over time and your employer may also match your contributions.
• Catching up on missed years - if you haven’t used your full annual allowance in the past, you might be able to make tax-efficient pension contributions going back to the previous three tax years, as long as you were signed up to a pension scheme during those years.
• Looking for forgotten pensions - use the government’s Pension Tracing Service to see if you have any savings from previous jobs. You can leave these where they are if you’re happy with that provider. Or you can combine them into a new pension.
• Earning an extra income - there are lots of ways to earn money, on top of your job. That might be renting out a room or driveway, selling your old stuff, or taking on a new career such as teaching online classes or tutoring.
• Working for longer - this might not be the number one option. But if you can work for longer, you’ll have more time to earn money and contribute to your pension. That gives your pension more time invested, benefiting from compound returns before you start taking it, too.  

Summary

If you’ve reached 40 with no pension savings, it isn’t too late to start.

The best time to start is as early as possible. The second-best time is today.

If you’re considering starting a pension, or want to combine old pots into one, PensionBee could help.

With a range of investment plans and tools to help you plan, you can get back on track towards the retirement you want.

‍

Rebecca Goodman is a freelance Personal Finance Journalist. She regularly writes for several national newspapers including the Independent, the Mail on Sunday, the Sun, and the Guardian along with a number of specialist publications.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Making the leap into self-employed life can be exciting. More freedom, flexibility, and the chance to work on your own terms. But there’s a lot to juggle too. From finding clients to sorting your taxes, your to-do list may already feel like it’s overflowing. But there are ways to make sure saving for your future retirement doesn't fall to the bottom of that list.

Just because you don’t have an employer paying into a pension for you doesn’t mean your future self won’t thank you for setting one up. It’s more important than ever to take charge of your own retirement savings, with people living longer and the cost of living continuing to rise. The good news is, it doesn’t have to be overwhelming.

If you’re working as a sole trader, whether you’re freelancing or running a small business, here are six tips to help you get started with pension saving.

1. Start where you are

You don’t need to be earning six figures to begin saving for retirement. One of the benefits of being in control is that you can start small and scale up when you’re ready. If you have a pension with PensionBee, there’s no minimum contribution. So you can save any amount, as often as you like.

If cash flow is tight, getting into the habit of saving regularly into a pension, even just a little, is better than doing nothing at all. Pensions are typically invested in a range of assets like shares, bonds, property and cash. The earlier you start, the more time your money has to benefit from potential investment growth and compound interest (this is the interest the bank will pay on top of your original amount and any interest it’s already earned combined).

2. Take advantage of the tax perks

When you contribute to a pension, the government usually tops it up with tax relief. Most basic rate taxpayers get a 25% tax top up. This means for every £100 you contribute, HMRC adds £25, bringing your total contribution to £125.

If you’re a higher or additional rate taxpayer, you can claim further tax relief through your Self-Assessment tax return.

Just remember, there’s a limit. You can only receive tax relief on personal and any third party contributions up to 100% of your relevant earnings. This is capped at £60,000 per year (2026/27).

Use our Pension Tax Relief Calculator to see how much tax relief could be added to your pension pot. It’ll also tell you whether or not you may need to file a Self-Assessment tax return to claim a portion of it.

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3. Automate it

Set up a monthly Direct Debit or standing order. It’s one of the simplest ways to stay consistent. When contributions go out automatically, you won’t have to think about it each month and you’re less likely to skip payments. It’s like paying your future self first.

Listen to this special bonus episode of The Pension Confident Podcast for more tips on how automation can help with your personal finances. 

4. Get expert help if you need it

Personal finance can feel complicated, especially when you’re managing your own workload and admin. Explore free online resources and podcasts for more support and tips. Government-backed sites like MoneyHelper offer clear, unbiased guides that break down the basics. There are also excellent platforms tailored to support self-employed women managing their personal finances, including Vestpod and rainchq.

If you feel as though you need specific advice, a qualified Independent Financial Adviser (IFA) can help you:

• understand your options; 
• choose the right pension product; and
• tailor a plan that works for your income and goals. 

There will be a cost involved, but it could save you stress (and potentially money) in the long run.

5. Make the most of good years

As a sole trader, your income can fluctuate. If you’ve had a strong year and have some extra cash in the business, consider putting a lump sum into your pension. It’s a smart way to use surplus profits and reduce your tax bill at the same time.

Just don’t forget your limits. For 2026/27, the total amount you can contribute to your pension is £60,000 - this is known as the current standard annual allowance. Remember, pension contributions that you can receive tax relief on are capped at 100% of your relevant earnings.

High earners may have a reduced annual allowance, as well as those who’ve already flexibly accessed their pensions.

If you’ve not used your full allowance in the previous three tax years, you could make use of the pension carry forward rule. Watch the video below to find out more about how to use carry forward.

6. Think long term 

As pensions are invested they can be impacted by stock market fluctuations. But your pension is a long-term investment, so volatility in the short term isn’t the end of the story. If retirement is a long way off, starting a pension pot as early as you can is beneficial. Keeping up with pension contributions, however modest, can make a big difference over time. 

Whatever your age and stage, it makes sense to keep track of the progress you’re making towards your future retirement. You can use the PensionBee Pension Calculator to see how long your current pension could last and how contributions might impact your savings over time.

Whether you’ve just launched a small business or have been working for yourself for years, contributing to a pension is key to securing your financial future. The sooner you begin, the more opportunity your savings have to grow.

Risk warning

Please note that tax rules change regularly, and the actual tax benefits you receive will depend on your individual circumstances. If you’re not sure, please seek professional advice.

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

The following is a transcript of a bonus podcast episode of The Pension Confident Podcast. Listen to the episode or scroll on to read the conversation.

PHILIPPA: Welcome back. Today’s bonus episode is all about pension contributions. And specifically how much you’ll be allowed to pay into your pension this tax year and what that could mean for your retirement finances.

With the start of the 2026/27 tax year, there are important rules and limits to understand when it comes to those contributions. So, whether you’re already saving for retirement or maybe you’re trying to maximise your tax relief, you might just be starting to think about your pension. This episode will get you up to speed on all the key need-to-knows.

I’m Philippa Lamb, and if you’ve not already subscribed to the podcast, why not click that subscribe button right now before we start? Joining me today, to break it all down, is Maike Currie, VP Personal Finance at PensionBee. Welcome back.

MAIKE: Thanks for having me.

PHILIPPA: Let me just give the usual disclaimer before we start. Please remember, anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice, and when investing, your capital is at risk.

What’s the annual allowance?

PHILIPPA: OK, let’s start with the basics. There’s a limit to how much you can contribute into your pension each year, isn’t there?

MAIKE: That’s right. The annual allowance for how much you can put into your pension each year is £60,000 for the current tax year and then still receive tax relief on that.

The maximum you can put in is whatever’s the lowest between your annual salary and £60,000. So let’s say if, for example, someone’s salary is £30,000. That’s the maximum they can put in [their pension] and still receive tax relief. Let’s say someone’s salary is £80,000. They can only put in £60,000 and receive tax relief. Does that make sense?

PHILIPPA: Yeah. Got it. So does this limit apply to everyone?

MAIKE: Good question. If you’re a really high earner - and we’re talking [about ‘adjusted incomes’] exceeding £260,000 a year [and ‘threshold incomes’ over £200,000] - that annual allowance is tapered. It’s known as the ‘tapered allowance’, and it comes right down to £10,000 [for incomes of £360,000 or more]. So, for very high earners, the amount they can put into a pension is limited to a maximum of £10,000 [each tax year].

And if I’m talking about ‘tax relief’, I think the easiest way to think about tax relief is to think about it as free money. Now, who doesn’t like the sound of that, Philippa?

PHILIPPA: Sure, sure. Best thing about pensions.

MAIKE: Absolutely. So, the free money in this case is coming from the government. If you’re a basic rate taxpayer, the government will top up everything you put in [with] 20% [tax relief]. So, let’s say I’m putting £80 into my pension. By magic, in a few weeks’ time from HMRC, an additional £20 will come from the government, taking that [contribution] to £100. If I’m a higher rate taxpayer, I can get even more in tax relief. But I need to fill out my Self-Assessment in January, which those very high earners need to do, and they get more in the form of tax relief.

PHILIPPA: So, we’ve talked about ordinary people and we’ve talked about higher earners. What if you don’t earn anything at all? Can you still save into a pension?

MAIKE: You can, and this is really, really important, especially for those people taking a career break, maybe to raise a young family or to care for a sick or elderly relative. You can put in £2,880 into a pension [each tax year]. Now you might say, “Well, I don’t have the money lying around”. You could get someone else to pay into a pension for you. The tax relief you’ll receive will be in line with your basic rate of tax, which will be a basic rate taxpayer. So, you could then put in £2,880 or get someone to put that money in for you, and the government will top that up with tax relief to the value of £720, which will take the full amount to £3,600.

PHILIPPA: OK, so as you say, great for, I mean, particularly great for maybe young women at home with kids not working right now.

MAIKE: It’s so important. It’s something that people don’t think about. It’s also really useful for young children. Now, we never think about pensions and children. But if you put that money away for a young child, £2,880, you get the tax relief and you do that every year until a child is age 18 and then you stop contributing, there’s a very good chance with the power of ‘compound interest’ that that young child, they’ll be pension millionaires [at retirement] because of the long-term power of leaving the stock market to do its work and the beauty of compound interest.

PHILIPPA: It’s amazing. Obviously, [there are] no guarantees there. We did do a podcast episode about this, didn’t we? But it’s possible.

MAIKE: There’s no guarantee, but the key point here is when they’re in their 50s, those contributions will have grown to almost £1 million because of the power of time. Time being the most powerful ingredient when it comes to compound interest. I always say this is the ultimate gift that grandparents can give to young children. You won’t be around for them to thank you, but they might be pension millionaires, and in the meantime, you can reduce your Inheritance Tax (IHT) bill.

PHILIPPA: Yeah, and I’m sure they’ll think about you very fondly, especially if they do turn out to be millionaires.

Pension Lifetime Allowance scrapped

PHILIPPA: Now look, we’ve talked about the annual allowance. There used to be a Lifetime Allowance, didn’t there? Is that gone now? How did that work?

MAIKE: Yes. So, the ‘Lifetime Allowance’ was quite a contentious allowance and basically this meant a cap on how much you can save into your pension over your lifetime.

PHILIPPA: OK, so this is higher earners?

MAIKE: This is really higher earners, and it varied, but think about it as standing at around the £1 million mark [specifically £1,073,100]. Now that was abolished [on the 6 April] 2024, so there’s no longer a Lifetime Allowance. So, you can put as much as you want over your lifetime into a pension, which is really crucial. The key thing that’s still in place is the tax-free amount you can withdraw from your pension. There’s a cap on that [at £268,275].

Exceeding your annual allowance

PHILIPPA: Now, I have a question. What if, I mean - we talked about the limits to how much you can pay in, what if you pay in more than you should?

MAIKE: Well, I wouldn’t panic, but the key thing is you’ll face a tax charge. So, it’s really important to keep track of what you’re contributing. The tax year is a long time, 365 days. You might make a contribution, an ad hoc contribution. It’s really important that you keep a record of that so that you don’t exceed your annual allowance.

PHILIPPA: OK, so this is fine. Most people, if people are employed, their employer is going to do this for them. But if they’re not, it’s really something to watch.

MAIKE: Yes, that’s right. So, keep a record of that because when it comes to January and you’re filling out your Self-Assessment, you need to put those details into your Self-Assessment.

PHILIPPA: I’m guessing there are tools and resources people can use to do this?

MAIKE: Oh, there are brilliant tools around. I’d point to the great tools we have on the PensionBee website, things like the PensionBee [Pension] Calculator. All of that can help you make decisions.

PHILIPPA: And you don’t need to be a customer to use that, do you?

MAIKE: No, it’s available freely on the website and it’s a brilliant calculator, if I say so myself.

Using your carry forward allowance

PHILIPPA: So, let’s imagine then, in the happy event that you come into some money, I mean, maybe [you] get an inheritance or a gift or a big pay rise. So you’ve got some spare cash, a lump of cash. Can you make a kind of bumper contribution into your pension?

MAIKE: You can, and this is a really good way to supercharge your pension. We all reach our 40s often and we look at our pension pot, and we have this moment where we think, “Oh my goodness, do I have enough?”. Now, this is the time, if you come into that lump sum by whichever means, to make the most of ‘carry forward’ rules.

Now, it’s highly unlikely that most of us will put in the full £60,000 or our full salary into a pension every year. The unused allowance we can carry forward. And you can carry forward the unused allowance from the previous three tax years.

PHILIPPA: OK, that’s really worth knowing about, isn’t it?

MAIKE: Yes. So technically, if you think about it, let’s say for the previous three years you didn’t use any of your annual allowance, that could give you £180,000 carry forward allowance, assuming that you earned in line with that [£60,000] amount.

PHILIPPA: Yes, because as you say, you can only put in as much as you earn.

MAIKE: This’s the key thing. So, let’s say you’re an earner and your annual salary is £25,000. That’s the maximum you can put in that year and that’s the maximum carry forward from that specific tax year.

PHILIPPA: There’s just one fly in the ointment with all this, isn’t there?

MAIKE: There is. And this is a really important point. To make the most of carry forward, you have to have been an active member of a pension scheme. You have to have been in a pension scheme in that year.

PHILIPPA: During the years you’re trying to carry forward?

MAIKE: Yes.

PHILIPPA: Yeah, OK. That’s a key point.

Final thoughts

PHILIPPA: So, it sounds a bit complicated. How can people check if they’re eligible to use carry forward?

MAIKE: Well, the key thing is to look back at your P60 because that’ll give you an idea of how much you earned in that specific tax year. And then look at your pension, whether you’ve got a personal pension or whether you’ve got a workplace pension, and look at what your annual [pension] contributions were. And then do the Maths.

PHILIPPA: Well, that’s everything you need to know about pension contribution limits for this [tax] year. Thank you, Maike.

MAIKE: Thank you.

PHILIPPA: If you’re enjoying the series, why not let us know by giving us a rating or maybe a review? And if you’ve missed an episode, don’t worry, catch up anytime on your favourite podcast app or on YouTube, or if you’re a PensionBee customer, in the PensionBee app.

Just that final reminder: anything discussed on the podcast shouldn’t be regarded as financial advice or as legal advice. And when investing, your capital is at risk. Thanks for joining us. We’ll see you next time.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Money habits often take shape earlier than we might expect. Long before a first payslip, children are already forming beliefs about money, shaped by what they see, hear and experience at home.

But financial confidence is often treated as something that starts later, in classrooms or formal lessons. In reality, much of it is built through everyday moments.

Even decades after financial education was introduced into the curriculum, gaps remain. Research from Santander UK suggests millions of young people still leave school without a clear understanding of how money works in practice.

As a result, many are left to figure things out when the stakes are already high, managing bills, borrowing or taking on student debt without much preparation. Without clear guidance, children fall back on what’s around them, picking up habits by observation alone.

The good news is that these patterns aren’t fixed for life. The same everyday moments that shape money habits can also help build confidence and better choices over time.

Why early lessons matter

Financial literacy is about more than knowing how to budget. It covers spending, saving, earning, borrowing and planning for the future. Children don't need a formal lesson on compound interest to start building healthy money habits. What they often need is practice.

Research from Cambridge University found that by around age seven, children are already developing attitudes towards saving and spending. By nine, patterns around delayed gratification are often taking shape.

And research from the National Literacy Trust found that children with strong reading skills are four times more likely to have strong financial skills too. What happens at home with language and conversation shapes financial capability as much as any lesson in a classroom.

If schools aren't filling the gap, something else will

Where clear guidance is missing, children and teenagers often look elsewhere. For many young people, that means social media. According to TransUnion research, 29% of young people in the UK have followed financial advice from a social media influencer, with almost a third admitting they didn't check the influencer's credentials before acting on it.

There's an obvious appeal. Online content can make money feel less intimidating. But short-form content has clear limits. It's rarely tailored to someone's real financial situation. It can oversimplify complex topics. And in some cases, it blurs the line between education, opinion and promotion.

The Financial Conduct Authority (FCA) has warned that many ‘finfluencers’ aren't authorised to give financial advice, and promoting financial products without proper approval can breach financial promotion rules.

That's why everyday conversations at home matter. They can offer something social media can't: context, repetition and trust.

The challenge of raising children in a cash-light world

There's another reason these early lessons matter. Money is far less visible than it used to be.

For many children, money doesn't look like coins, notes or a piggy bank. It looks like a phone tap, an online checkout or a card payment that takes a second to process. When money moves invisibly, it's harder to understand its value.

That makes practical learning even more important. Seeing money come in, be divided up and gradually disappear helps children connect choices with outcomes. Whether that's through cash, a prepaid card or a child-friendly app, the real lesson is visibility. 

The topic that often gets left out

Even in families that talk openly about money, the focus is usually on the immediate or medium term. Pocket money, allowances, budgeting or saving up for something.

Long-term savings rarely get a mention. Pensions can feel too distant to bring up. But that distance is part of the problem. If retirement saving enters the picture for the first time in adulthood, it already feels complicated and easy to put off.

The financial cost of that delay is real. PensionBee research found that disengaging with pensions - for example, leaving contributions at the minimum level or never reviewing your investment plan - could cost savers up to £500,000 over a lifetime.

Children don't need a technical explanation of pensions. But they can start to understand that some money is for today, some is for later, and some choices grow in value when time is on your side.

What families can do now

The good news is that financial confidence doesn't depend on parents being experts.

A survey by Young Enterprise found that 61% of Generation Z look to their family for financial advice, compared to 13% who name school or college as a trusted source. The influence is already there. It's more about knowing how to use it.

Ages 3 to 6: making money tangible

Young children can't grasp abstract concepts like interest rates. But they can understand that money is finite and that spending it on one thing means not having it for another.

You can try:

• playing ‘supermarket’ with coins and notes so money feels real;
• letting them hand over cash at a till; or
• using two jars labelled spending and saving, and letting them decide how to split their pocket money.

Ages 7 to 11: introducing goals and consequences

At this age, children can start connecting effort with reward and decisions with outcomes.

Good starting points include:

• linking pocket money to household tasks so they understand money is earned;
• helping them save towards something they really want; and
• involving them in everyday spending, like comparing prices at the supermarket or working out whether the bigger pack is better value.

Asking whether something is a need or a want, and why, builds financial thinking without feeling like a lesson.

Ages 12 to 16: real tools, real decisions

For teenagers, money can become more practical.

You can help your teen by:

• opening a bank account together and showing them how to track spending;
• looking at a household bill and explaining what it covers;
• talking through what a payslip means, including what gets deducted before the money arrives; and
• discussing financial content they're seeing online, where it comes from and whether it can be trusted.

Ages 17 and over: the bigger picture

As young people approach adulthood, the conversations can go further by:

• explaining how credit works and what a good credit history looks like;
• discussing Auto-Enrolment and why opting out of a workplace pension, even briefly, has real long-term costs; and
• walking through a student loan together so the numbers feel real rather than overwhelming.

The key is to make sure that when they face these decisions for the first time, they don't feel like they're starting from scratch.

The bottom line‍

Adults who were exposed to money conversations as children often save more into their pensions each month. Over a working life, that gap can add up to around £70,000 in additional savings. It reflects a behavioural shift: greater consistency and more confidence in financial decision making, rather than simple cause and effect.

But this isn’t about getting everything right from the start. It’s about feeling comfortable making decisions, asking questions, and building habits that last.

For many children, that starts long before any formal education. It’s shaped in everyday moments at home, in how money is talked about, shared, and understood. Over time, those early cues can build a sense of confidence that makes managing money feel more natural, not overwhelming.

You can learn more about talking to your kids about money in episode 8 of The Pension Confident Podcast, where our expert panel unpack how to raise financially confident children. Listen to the episode or read the transcript.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

This blog is part of our quarterly plan performance series. Catch up on last quarter’s summary here: How PensionBee’s plans are performing as at Q4 2025.

Q1 2026 began with market momentum from 2025, buoyed by AI-related gains and strong corporate earnings. However, as the quarter progressed, escalating inflation concerns amid Middle East tensions led to a cautious investor outlook, a sharp market sell off, and increased volatility. This made defensive sectors like energy and utilities see positive gains, along with gold as a safe haven.

Global equity markets varied, with developed markets declining and emerging markets seeing only modest growth. The energy sector performed strongly with surging oil prices as the conflict in the Middle East escalated. Technology and growth stocks underperformed as investor sentiment shifted, with value stocks outpacing growth stocks. UK fixed income (also known as bonds) faced pressure, as rising yields and renewed inflation concerns during the quarter impacted the bond market.

‍Performance data covers Q1 (1 Jan - 31 Mar 2026), sourced from money managers. Figures are before fees; past performance is not a guarantee of future performance.

PensionBee's default plans

4Plus Plan 

The 4Plus Plan is managed by State Street with an equity proportion of 31.9%^ (Q4 25: 81.7%). It’s the default plan for our customers over 50 years of age. The plan is actively managed for volatility in times of market turbulence, whilst targeting an annualised 4% return above the Bank of England base rate over a minimum five-year period. It aims to balance growth with stability for those approaching retirement or making regular withdrawals.

^Equity % at 31 March 2026, asset allocation can change on a weekly basis due to the plan’s actively managed component.

Global Leaders Plan 

The Global Leaders Plan is managed by BlackRock with an equity proportion of 100%. It’s the default plan for our customers aged under 50. The plan invests in around 1,000 of the largest public companies globally. It aims to maximise the growth of pension savings in the years before retirement. 

^ The plan was launched in February 2025, so the year-to-date figure isn’t available and has been replaced by since inception. Additional performance data for the 3-year and 5-year periods is also unavailable.

PensionBee's specialist plans

Climate Plan

The Climate Plan is managed by State Street with an equity proportion of 100%. The plan follows a Paris-Aligned Benchmark and aims to reduce the total carbon emissions produced by the plan’s companies by at least 10% each year.  

^ The new Paris-aligned strategy was launched in September 2024, so performance data for the 3-year and 5-year periods is currently unavailable.

Shariah Plan

The Shariah Plan is managed by HSBC and traded by State Street with an equity proportion of 100%. The plan invests in the 100 largest stocks traded globally that also comply with Shariah investment guidelines, as set by an independent Shariah Committee.

PensionBee's other plans

Tracker Plan

The Tracker Plan is managed by State Street with an equity proportion of 80%. The remaining 20% is allocated to fixed income. The plan offers a cost effective way to follow global markets as they move.

Preserve Plan

The Preserve Plan is a money market fund managed by State Street. The plan makes short-term investments in highly creditworthy companies to preserve money.

Learn more about how your pension is invested

Your pension is invested in a range of assets like company shares (equities), bonds, property and cash. Your pension balance fluctuates depending on how these assets perform. See below for a summary of global markets and the performance of key asset classes in Q1 2026. 

Global market summary in Q1 2026

It’s been a choppy quarter for markets, both stocks and bonds. Optimism around AI and resilient corporate earnings has been offset by rising inflation concerns and renewed geopolitical tension in the Middle East. Investor sentiment became more cautious as the quarter progressed.

January started on a positive note with the better-than-expected US and UK inflation rates, coming down from December 2025. But the sentiment quickly weakened through February into March when the US and Israel launched “Operation Epic Fury”, a joint strike on Iranian military sites and its leadership, which caught the market off guard. Equities fell sharply and Brent crude price spiked following a supply disruption in the Strait of Hormuz. Bonds sold off as rising oil prices fuelled inflation fears, pushing yields higher as investors anticipated prolonged elevated rates.

Geopolitical tensions escalated dramatically in March following Iran's retaliatory missile strikes on a US base, Israel, and the UAE. This surge in conflict, coupled with the Strait of Hormuz blockade causing severe oil supply disruptions, led to a sharp increase in Brent crude oil prices. As a result of these oil shocks and heightened geopolitical risks, global stock markets declined and UK government bond yields rose, shifting investor focus onto inflation data.

How did global stock markets perform in Q1 2026?

Please note that the performance figures above are reported in local currencies, except for the MSCI Asia ex-Japan, which is reported in USD due to the use of multiple currencies among its constituents.

Global equities experienced quite a volatile quarter, although some regions posted higher returns than others. Among developed countries, the UK gained the highest return during the quarter. The commodity-heavy UK FTSE 350 (an index that tracks the performance of 350 large and medium sized UK public companies) returned 2.5%. This was directly linked to the oil supply shock in the Strait of Hormuz, which boosted the revenues and profitability of mining and energy companies.

Another positive gain was Japan, with the Nikkei 225 (an index that tracks 225 of Japan's top blue-chip companies) posting 2.2%. Japan led the equity market when Prime Minister Takaichi’s Liberal Democratic Party (LDP) secured a majority of seats from the February general election. This is because many investors view this as a boost for supporting Takaichi’s pro-business policies. A weaker Japanese Yen further boosted growth in the export-oriented economy.

Other Asian and European markets also saw negative performance. The MSCI Asia ex-Japan (an index that tracks the performance of large and mid-size public companies across Asia, excluding Japan) and MSCI Europe ex-UK (an index that tracks the performance of large and mid-size

public companies in Europe, excluding the UK) indices fell by 1.1% and 2.2%, respectively. Although both regions had performed relatively strongly earlier in the quarter, their decline in March was largely due to the conflict in the Middle East. This downturn was focused on the consumer discretionary (also known as ‘Non-essential consumer goods’) sector, which is highly sensitive to inflation. The surge in oil prices, following the disruption in the Strait of Hormuz, led to uncertainty regarding short-term interest rate changes by central banks, including the European Central Bank (ECB)

US equity, measured by the S&P 500 (an index that tracks the performance of 500 of the largest public companies in the US), saw the weakest gain, falling 4.3% due to significant volatility, making it the worst quarter since Q3 2022. This was driven by two factors. The Middle East conflict in March, which dramatically deepened losses due to a sell-off and a surge in oil prices, caused a sharp tech sector pullback and investor fears surrounding mega-cap tech stocks' soaring spending on AI investments, which was a concern even before the war broke out.

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Q1 2026: From broad momentum to selective sector growth 

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As of 31 March 2026, data source from FE Analytics and EC Markets. 

The equity market in Q1 2026 was marked by a shift from broad-based market momentum to a more selective environment. As the geopolitical risk intensified and inflation concerns emerged in March, equity investors rotated away from sectors that are inflation-sensitive to sectors with higher company valuations, such as information technology and communication, leading to increased dispersion across sectors.

How did UK bond markets perform in Q1 2026?

UK bond markets struggled in the first quarter of 2026. This was because expected interest rate cuts from the Bank of England (‘BoE’) were delayed due to ongoing inflation with a stronger-than-expected economy. This caused bond yields to rise and led to overall negative returns, with performance mainly driven by its sensitivity to interest rate update expectations.

As of 31 March 2026, the 4Plus Plan’s bond allocation was 19.1% and the Tracker Plan's bond allocation was at 9.9%. Index Source: MSCI and Bloomberg. 

UK government bonds (also known as ‘gilts’) performed the worst, dropping 2.0% because rising yields caused their prices to fall, especially for longer-term bonds. UK investment-grade corporate bonds also struggled, falling 1.9%. This was mainly because rising gilt yields and the long duration of the bonds pushed their prices down, even though interest payments remained stable.

From rate cut optimism to caution

The chart above shows the daily changes in UK 2-year gilt and 10-year gilt yields and BoE rate updates over three months. At the start of 2026, investors expected the BoE to cut rates in the near term, which kept UK gilt yields low. This optimism kept two-year yields particularly low. However, by February, sentiment began to shift as inflation remained persistent and economic data proved more resilient than expected.

In March, the markets started to expect rate cuts later than anticipated. This was particularly noticeable after the BoE held its rate on 20 March, moving the general outlook from expecting early cuts to a more cautious view.

Conclusion

Overall, the first quarter of 2026 reflected a broad repricing of market expectations rather than a single shock, as investors adjusted to a more cautious outlook on valuation risk, interest rates, and geopolitical risk. Equities saw increasing dispersion across regions and sectors, while UK bonds weakened as gilt yields rose on delayed rate cut expectations.

For pension portfolios, diversification remained key in managing volatility, but performance was ultimately shaped by a mixture of evolving valuations, policy updates and geopolitical events across global markets.

Have a question? Get in touch!

Do you want to know more about your pension plan with PensionBee? Learn more about the top 10 holdings in your pension fund on our blog, which is regularly updated. You can also look at our Plans page to learn how your money is invested in different assets and locations, or log in to your BeeHive to see your specific plan. You can always send comments and questions to our team via engagement@pensionbee.com. 

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invested. This information should not be regarded as financial advice.

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We’re adding a personal rate of return metric (also known as internal rate of return, or IRR)  alongside your current simple return metric in your BeeHive’s  ‘My Pension’ tab. Simple and personal rate of return metrics calculate performance differently. But a personal rate of return provides a clearer reflection of your pension's performance. 

We're gradually rolling it out to customers. So, if you check your account through our website or an Android device, you’ll soon see this new metric. We’ll then start making it available to customers using iOS devices.

The benefits of a personal rate of return

A personal rate of return provides a more accurate picture of your personal investment performance. It also presents performance in a way that’s more consistent with standards across the broader financial industry, making comparison easier.

Pension balances change over time in a variety of ways: transfers in, ongoing contributions, withdrawals (currently available from age 55, rising to 57 in 2028), as well as the impact of fund performance and fees.

The personal rate of return takes all this into account.  It’s the most effective way to measure your personal investment performance. Unlike other metrics, it factors in both the size and timing of your contributions and withdrawals. This provides a much clearer and fairer picture of how your account has performed over a specific time period.

It’s different from the return you’ll see on a fund factsheet or external fund site, which doesn’t reflect your personal cash flows (contributions and withdrawals). The more you contribute or withdraw from your pension, the more important it is to look at a metric that reflects your personal investment journey over time.

Current return metric: simple return

A simple return compares your current pension balance to the total net amount (net money in) you’ve paid in.

In basic terms, it looks at:

(Pension balance - net money in) / net money in

This calculation works well for a single lump-sum contribution, where no money is added or withdrawn. It’s shown as a percentage (%) return.

But, if you regularly contribute, transfer a pension, or withdraw from it, the simple return can distort your actual performance because it doesn’t consider the exact timing of those transactions.

Additional new return metric: personal rate of return

The personal rate of return gives a full picture of how your money has actually performed over time.

It takes into account the size and timing of:

- transfers in;

- contributions;

- HMRC tax top-ups;

- referral rewards; and

- withdrawals.

It also reflects:

- fund performance; and

- fees charged.

Factoring in when and how much money you added or withdrew gives a fairer reflection of your personal investment performance.

To calculate it, we use an internal rate of return (IRR) formula to give a percentage (%) return for a given time period. This approach works well for calculating investment returns involving multiple cash flows, which is common with pensions, given their long-term nature.

Example: last-minute end-of-tax- year top up

In the UK, the tax year ends on 5 April. It’s common for savers to make a final pension contribution just before the deadline to use up their annual allowance, which may be lost after tax year end.

The scenario for tax year 2025/26

• 6 April 2025 (start of tax year): You contribute  £10,000 to your pension.
• 6 April 2025 - 31 March 2026: Markets perform well, and your investment grows by 20%, increasing to £12,000 (net of fee).
• 1 April 2026: With the tax deadline approaching, you contribute an additional £40,000 (including the HMRC tax top up).
• 1 April 2026 - 5 April 2026 (end of tax year): Markets remain flat during those final few days. Your total balance is now £52,000.

What a simple return shows

A simple return compares your ending balance to the net amount you invested.

• Total contribution: £50,000 (£10,000 + £40,000).
• Ending balance: £52,000.
• Simple return: 4%.

Now you log onto your BeeHive and see a 4% return. You think, “The market went up 20% this year, why did I only make 4%?”.

The reason is that the simple return treats your full £50,000 contribution as though it were invested at the start of the tax year. It dilutes your 20% gain because it spreads it across £40,000 that wasn’t actually in the account until 4 days before the end of the tax year.

What personal rate of return shows

A personal rate of return looks at how long your money was actually invested.

• Original contribution: £10,000 (invested for the entire year, 365/365 days).
• Recent contribution: £40,000 (added a few days before the year ended, 4/365 days).
• Personal rate of return: 19.2%.

Now you log onto your BeeHive and see a 19.2% return. The market went up 20% this year, and the return on your original contribution better reflects that.

The personal rate of return doesn't let a last-minute contribution skew your return performance because it’s based only on the money that was actually invested.

Let us know what you think

You’ll soon see both performance metrics in your BeeHive’s ‘My Pension’ tab. This update doesn’t affect your pension balance or how your money is invested in your chosen plan.

As mentioned, we’re rolling out this feature gradually, so you may not see it in your PensionBee account immediately, but it’ll be available soon.

Got any questions or comments about this change? Email us at feedback@pensionbee.com.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

If you’re a landlord in England, there are some upcoming changes worth knowing about. From 1 May 2026, new rules under the Renters' Rights Act will bring changes to the sector, with much of the focus on banning no-fault evictions.

But the reforms go much further than the end of Section 21, the law that currently lets landlords evict tenants without giving a reason. They’ll also affect how tenancies are set up and managed.

Whether you rent out a former family home or rely on a property portfolio for retirement income, it's important to understand what's changing.

Here are seven things you need to know.

1. A new information sheet for tenants

This is one of the more straightforward new requirements, but also easy to miss. Landlords (or their agents) must give every tenant a government issued Renters' Rights Act Information Sheet before 31 May 2026.

The document covers topics such as evictions, tenancy changes and rent reviews. It must be given to each tenant named on the agreement, either as a hard copy or digitally (although live-in landlords don't need to provide it to lodgers). You can find more guidance on GOV.UK.

2. Tenancies must be in writing

Many long-standing landlords, particularly those renting to friends or long-term tenants, may rely on verbal agreements. But from 1 May 2026 every new tenancy must include written details covering key terms such as:

• rent;
• deposit; 
• length of tenancy; and 
• who's responsible for maintenance.

If you currently have a verbal agreement, you'll need to put it in writing when the tenancy next changes. While it may feel like extra paperwork, a clear written agreement helps prevent misunderstandings and protects both sides if issues arise.

3. The end of fixed-term tenancies

Fixed-term tenancies will be replaced with rolling agreements that renew monthly. Any existing end dates will no longer apply, and tenancies will continue until either side chooses to end them, or both agree.

At the same time, assured shorthold tenancies (AST), will be abolished, with existing agreements automatically moving across to a new type called an assured periodic tenancy (APT), which has no fixed end date.

4. New eviction rules

One of the biggest changes for landlords is the end of no-fault evictions, also known as Section 21, under the Housing Act 1988.

You'll still be able to end a tenancy where there's a genuine reason, but you'll need to follow the Section 8 process instead. This means you'll have to give a clear, legal reason when you serve notice.

Valid reasons may include:

• selling the property;
• needing to move in yourself;
• significant rent arrears; or
• anti-social behaviour.

If the case goes to court, you'll need to provide evidence, and it'll be up to the judge to decide whether you can take back possession.

The government said it'll strengthen the court process to help make sure legitimate evictions are dealt with more quickly.

5. Limits on rent increases

Under the new rules, landlords can't increase rent more than once every 12 months, and must give at least two months' notice. This applies even if your tenancy agreement currently allows for more frequent increases.

The change is designed to prevent sudden or repeated rent hikes. It means you'll need to plan ahead, especially if your costs, such as mortgage payments, insurance and maintenance, are rising.

6. Stricter rules for rental adverts

Rental adverts will have to meet stricter rules around fairness. Listings can't exclude groups such as families with children or people who receive benefits. Blanket bans on pets won't be allowed either, and any request must be considered on its merits.

Adverts must also be accurate and include a clear, fixed asking price, with no misleading claims.

For landlords who advertise on social media or local noticeboards, this is especially important. Informal adverts must meet the same standards as those on major property websites.

7. The end of rental bidding

In recent years, sought-after properties have often attracted multiple applications, with tenants offering more than the advertised rent to secure a home. This let some landlords achieve higher-than-expected rents through informal bidding wars.

That won't be allowed under the new rules. You'll need to set a clear asking rent and can't invite, encourage or accept offers above it, so phrases like ‘offers over £x’ will no longer be legal.

There will also be tighter limits on upfront payments. You can ask for up to one month's rent before the tenancy starts. Once it's begun, you can't ask for rent before it's actually due, which puts an end to the practice of asking for large payments upfront.

Keeping up to date

Many landlords in their 50s, 60s and beyond perhaps didn't plan to become professional landlords. You might've inherited a home, held onto a former family property, or invested in Buy-to-Let as part of your retirement plans.

These new rules don't require you to become a legal expert, but you'll need to keep up to date with what's happening. You can do this by signing up to government alerts about changes to the private rented sector.

There are significant fines for landlords who break the rules:

• up to £7,000 for less serious breaches (for example, not giving tenants the Renters' Rights Act Information Sheet); and
• up to £40,000 for more serious violations (for example, unlawfully evicting a tenant).

You can find the full list of fines on GOV.UK.

Once you've got your head around the new rules and updated your processes, the day-to-day running of your rental shouldn't feel any more complicated. In fact, clearer rules could hopefully mean fewer disputes and smoother relationships with tenants.

What's coming next

Further changes are expected later this year. A new Private Rented Sector Database (PRS) will be introduced in stages across England, creating a register of landlords and rental properties. Alongside this, a free complaints service called the Private Landlord Ombudsman (PLO) will give renters a straightforward way to resolve disputes without going to court.

In episode 49 of The Pension Confident Podcast, our expect panel unpack whether you can still make money as a Buy-to-Let landlord. Listen to the episode or read the transcript.

Emma Lunn is a multi-award winning Freelance Journalist. She’s written about personal finance for 20 years, with a career spanning several recessions and their consequences. Her work has appeared in The Guardian, The Mirror, The Telegraph and MoneyWeek. Emma enjoys helping people learn to manage their money well, in both the short and long term.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 49 or scroll on to read the conversation.

‍Takeaways from this episode

• The narrative of North vs. South valuations is changing - property valuations in the North East is set to outpace growth in London and the South East over the next five years.
• The Renters’ Rights Act ends no-fault evictions from 1 May - the Renters' Rights Act abolishes no-fault ‘Section 21’ evictions, replacing them with a fault-based ‘Section 8’ system.
• Buy-to-Let mortgages work differently from residential ones - Buy-to-Let mortgages typically require at least a 20% or 25% deposit.
• Around one-in-three landlords are planning to exit the market - a combination of the Renters’ Rights Act, the loss of mortgage interest tax relief, extra Stamp Duty, EPC upgrade requirements and Making Tax Digital has created a regulatory snowball for Buy-to-Let landlords.

PHILIPPA: Welcome back. Now, becoming a landlord with Buy-to-Let properties, well, that’s long been seen as a way to build long-term wealth. But with brand new rules, higher taxes, and more paperwork, it’s becoming harder to turn a profit. Did you know that since 2022, the rental sector is the only area of the housing market to have lost value? So are Buy-to-Lets still a good bet? And where does this leave existing landlords trying to make sense of a changing market. Today we’re breaking down the story behind Buy-to-Lets and what you need to know before you think about jumping in.

I’m Philippa Lamb. If you’re new to the podcast, hit that subscribe button and you’ll catch every episode as soon as it airs.

Now with me today to talk about Buy-to-Lets, I have Anna Pearce. She’s a Buy-to-Let Landlord, she’s a Content Creator. You might know her as “Property Empress” on [social media] and she has a lot of experience guiding aspiring Buy-to-Let landlords through this shifting investment landscape. Michael Annis, he’s a Mortgage Broker with more than 10 years’ experience. He’s been helping people achieve their home ownership dreams for over a decade, including [for] more than a few new and old Buy-to-Let landlords.

Hi both.

ALL: Hello.

ANNA: Hi Philippa.

PHILIPPA: Thanks for coming in.

MICHAEL: You’re welcome.

PHILIPPA: Here’s the usual disclaimer before we start. Please remember [anything] discussed on the podcast shouldn’t be regarded as financial advice or as legal advice, and when investing, your capital is at risk.

What’s happening to the property market?

PHILIPPA: So Anna, you’re a really experienced landlord, landlady?

ANNA: Oh crikey, I don’t mind, to be honest. Landlord, landlady.

PHILIPPA: How many properties do you have?

ANNA: Well, at the moment we have around 10 properties, but we’ve scaled back because we’re actually reinvesting in the North [of England]. So my original portfolio was in the Midlands and actually now we’re investing in the North for a very good reason, which I’m sure we’ll come on to today.

PHILIPPA: Interesting. Yeah, we’re going to talk about location. Obviously we’re going to talk about location. That’s interesting. What got you into doing it in the first place?

ANNA: Oh well, so 15 years ago I was working in pensions. Funny enough, I was a Pension Actuary.

PHILIPPA: OK.

ANNA: And I knew that my job was at risk and my now husband was out of work and we kind of stumbled across some property training. And I said to my husband, “Wow, this sounds great for you”. And then we did some training and I just - it just opened my eyes and I just thought, “Wow, this looks fantastic”. I got three offers accepted in my first three months and then I was made redundant. I kind of went from there.

PHILIPPA: That was bold. I mean, most people would’ve been looking for another job and you’re starting in a whole new industry.

ANNA: I thought, why not? What a great opportunity to throw myself into it.

PHILIPPA: Yeah, I guess you kind of edged into it and it’s gone well.

ANNA: Yes. Yeah. Thank goodness!

PHILIPPA: So Michael, I mean, obviously you advise people doing this, but have you ever dabbled yourself?

MICHAEL: Might dabble soon. I sort of know what I’d dabble in, if I find the right place.

PHILIPPA: So Anna, I was thinking we might start with a bit of an overview about what’s been happening in this market over the last, I don’t know, say five years? 

ANNA: Well, that’s a really interesting timescale because property has always been relatively predictable. And then when we went into lockdown in 2020, it just threw everything in the air. A lot of people started leaving London because obviously everyone was working from home. What we found was that the government threw a lot of incentives at the property market because they were worried that prices were going to crash when we went into the first three months of lockdown.

And what we actually saw was that the market boomed, particularly outside of London. And what we found was actually London didn’t do very well in terms of house prices. And what we started seeing was in the North, prices started skyrocketing. So there has been a really interesting journey over the last kind of five, six years where historically, if you’re investing in property, you invest in the South. Because prices go up really well, particularly [in] London. There’s a ripple effect. So it starts in London, it ripples out. And then you’d invest in the North because [of] its cheap property prices. You could buy £50,000 houses [and] get really strong rental yields.

PHILIPPA: Yeah.

ANNA: So you’d invest in the North for [a] nice monthly income. You’d invest in [the] South because prices go up in value. And what we’ve had since lockdown is actually the North now has the cheapest prices, the strongest income and rental yields, but also they’re going up in value significantly. So actually, there’s, in my opinion, besides convenience, there’s no reason to invest in anywhere but the North.

PHILIPPA: Interesting. OK, and I’m going to have to ask you, I mean, do you agree, Michael?

MICHAEL: Sort of, yes. I mean, unfortunately, if you invest in London at the moment, you’re competing with all the private equity firms that are buying up a lot of the London houses as well. London could be the next wave of growth, especially as unfortunately the UK economy is very centred on London. But certainly, I agree, if I was buying a place tomorrow, I’d probably look for a university town so you could rent it out as an ‘HMO’ to students. And probably in the North or the North East, particularly Middlesbrough, Sunderland, Newcastle, that kind of area.

PHILIPPA: Just explain what a ‘HMO’ is, Michael.

MICHAEL: ‘House [in] Multiple Occupation’ (HMO). So where you’re not renting out the house as a whole, but you’re renting it out by the room. You have to have a special licence for that.

PHILIPPA: From the local authority?

MICHAEL: From the local authority. Each room has to have its own lock on it and things like that. And usually the kitchen, or maybe even a living room, as a shared space.

The Renters’ Rights Act explained

PHILIPPA: I’m going to ask you about the new Renters’ Rights Act, because this is the thing that - there’s been a lot in the press, hasn’t there, about it. That this is supposedly the thing that’s going to make it very hard for landlords to make a living. Tell us what’s going to change under the Renters’ Rights Act. 

ANNA: The key changes, I mean, the big change is the abolition of the Section 21. So prior -

PHILIPPA: well, this is evictions.

ANNA: This is evictions, yes. So before, what has historically happened is if a landlord wants their tenant to leave, they can serve what’s called a ‘Section 21 notice’. So they’re basically saying “You’ve not done anything wrong, I just would like the property back”. And if the tenant has done something wrong, if there’s a reason for eviction such as: they’ve not paid their rent, or they’ve not followed the terms of the tenancy -

PHILIPPA: yeah -

ANNA: or they’ve caused issues with the property, they can serve a ‘Section 8’, which is a fault-based eviction. So the big change under the Renters’ Rights Act is they’re getting rid of the no-fault-based eviction. And the reason being that some landlords were using it as a way of taking out tenants from their properties that they considered to be difficult tenants. And actually the reality was that a lot of tenants, if the landlord wasn’t maintaining the property, for example, if the heating system wasn’t working and they were getting kind of frustrated with the fact that the landlord wasn’t fixing it, they would get more and more frustrated with the landlord. And the landlord could just serve a Section 21 and say, “Well, I just want you out of the property”.

So now what you have to do, if you want a tenant out of the property, is you have to serve a Section 8 and give a reason. So you just can’t ask someone to leave for no reason. For context, I’ve been a portfolio landlord for 15 years. I’ve served two Section 21 notices -

PHILIPPA: OK -

ANNA: and that’s because unfortunately we’re having to sell the properties. I’ve never served a Section 8 notice. I’ve never had to ask a tenant to leave. So for me, it doesn’t make any difference because under the new rules you can still serve a Section 8 -

PHILIPPA: yeah -

ANNA: if you want to sell the property or if you want to move back in yourself. We’re also moving to periodic tenancies, which I think is quite interesting. So rather than locking in your tenant, we’re going to be on a kind of ongoing rolling tenancy. As a landlord, you can’t ask your tenant to leave within a year, but the tenants can basically serve notice a little bit earlier. So it’s to give more flexibility to the tenants and to not be locked in.

PHILIPPA: OK, there’s a few other benefits sprinkled in there for tenants, isn’t there, Michael? 

MICHAEL: Rent review can only be once a year. You have to give two months’ notice.

PHILIPPA: You can bring a pet now, can’t you? 

MICHAEL: Yes.

ANNA: You can’t unfairly decline a request for a pet. 

PHILIPPA: OK. 

ANNA: You also can’t [as] standard say “No families, no pets, no -

PHILIPPA: children -

ANNA: no benefits” -

PHILIPPA: That’s been an issue, hasn’t it?

ANNA: One of the issues that a lot of landlords have is they feel that they’re being forced to rent to certain types of tenants. You’ll still have autonomy over your property. You can still choose who you put in your property. But if it’s a small studio flat and it’s not appropriate for a family, then just find a tenant that it’s appropriate for. But you just can’t say “No families”.

PHILIPPA: Michael, what do you recommend? Obviously better protections for tenants against unscrupulous landlords.

MICHAEL: Yes.

PHILIPPA: I mean, that’s obviously going to be a good thing. Landlords need protections against unscrupulous tenants too. And that’s the thing that’s not often discussed, isn’t it?

MICHAEL: Yes, you could still evict somebody for not paying the rent. So that’s OK, I guess. And then if they do any criminal damage to the property, obviously you can call the police and things like that. I guess what this will help is scrupulous landlords, because if some of the slum landlords leave the industry, there’ll be less Buy-to-Lets and then rents will go up actually. So rental prices going up will only be better for the landlords that are doing the right things.

PHILIPPA: This legislation kicks in in May, is that right?

MICHAEL: 1 May.

ANNA: It starts being implemented on 1 May. There are other measures that are coming in later. For example, there’s a [Private Rented Sector] (PRS) database, so you’re going to have to register all your properties and yourself, but that’s coming in later.

Are landlords really leaving the market?

PHILIPPA: As I say, there has been a lot of talk about this in the press. It’s been a long time coming. Are you seeing it move market prices? Is it being perceived as a bad thing for landlords or a good thing for landlords?

MICHAEL: I’d say it’s stopped market prices moving -

PHILIPPA: it has? -

MICHAEL: is what’s really the thing.

PHILIPPA: Oh, really? A massive effect.

MICHAEL: Market prices were going up 20% a year in terms of house prices in some areas up until about [1 April] 2016, which was when they brought in the 3% second property Stamp Duty [on purchases over £40,000]. And since then, and especially since 2023-ish, house prices have been flat for large amounts of the country, especially the South East. So I wouldn’t say it’s moving the market, it’s stopped the movement that was already there.

ANNA: See, I personally don’t agree that it’s changing the prices. The difference I’m seeing is there’s a lot of landlords, particularly who have been in the been landlords for years and years, who are now very upset about the - because it’s not just the Renters’ Rights Act, there’s a lot of other regulation coming in, there’s tax changes that are hitting landlords. Specifically landlords. There’s extra taxes and it just keeps coming over the last, certainly since I’ve been doing it, 15 years. There’s additional taxes, then there’s Making Tax Digital, then there’s the Renters’ Rights Act, then there’s [Energy Performance Certificate] (EPC) regulations.

So it’s this kind of snowball effect and people, what I’m seeing particularly through my social media content is that landlords are very unhappy with the complete - with landlords feeling like they’re being targeted. So what I’m seeing is people are leaving the markets. 100% agree. Rents are phenomenal now. The people who are being ultimately affected the most are the tenants. There’s not very many houses. So I think it’s one-in-three landlords are currently planning to sell.

PHILIPPA: So that’s going to drive rents up even further? 

ANNA: 100%. And it’s the tenants that suffer. 

PHILIPPA: I mean, well, OK, well, let’s talk about investment returns then, because as you say, it’s a mixed picture, but it certainly isn’t a ‘don’t-touch-it-with-a-bargepole’ investment market. It’s fair to say it’s messy compared to other investments because there’s all this paperwork. You’re dealing with tenants, real people. Maybe you’re dealing with pets and kids and all that sort of thing as well. You don’t just buy it and forget about it, do you? There’s a lot of work.

MICHAEL: Depends. You can get a lettings agent to do all the work for you if you want.

PHILIPPA: It costs you, doesn’t it, though?

MICHAEL: Well, yes. Or if you’re - a lot of people are tradesmen maybe, and if they go into it themselves, they might know how to fix things themselves and then that sort of saves a lot of their costs.

Understanding rental yields

PHILIPPA: We should talk about rental yields, shouldn’t we?

MICHAEL: Yes.

PHILIPPA: Because we’re kind of getting ahead of ourselves. Landlords talk about their investment in terms of ‘yields’, ‘property yields’. Just run us through exactly what that means. 

MICHAEL: Well, [a] yield is usually calculated as a percentage of the total house price in terms of the amount of rent you get per year. So for example, and for easy maths, if you’re buying a £100,000 house and it’s going to get £500 rent a month, £500 times 12 is £6,000. £6,000 is 6% of £100,000. So that property would have [a] 6% yield.

PHILIPPA: But obviously it’s not really what you pocket, is it? Because you have all the costs of: owning the property, and managing the property, and letting the property, to come out of that calculation.

MICHAEL: Yes, yield is usually calculated before costs.

PHILIPPA: How do you accurately assess the return on your investment?

ANNA: For me personally, and what I find works best for my clients, is investing in the North, areas like Liverpool and Newcastle. Because we’ve talked about the fact that in London, property prices are potentially going down, I think, in the last year. Whereas in the North [West], they’re going up by, I think it’s like 3%. But when you look at specifically places like Liverpool and Newcastle, I think Liverpool went up by 7% in the last year. So if you had invested in Liverpool a year ago, you’d potentially get a 7% increase in house prices.

MICHAEL: It’s also about sort of predicting where the next set of growth is going to come. So a lot of people at the moment are maybe buying in places where, for example, High Speed 2 (HS2) is going to stop. Or places where there’s expected to be a surge in house prices, for example, around Bedfordshire, they’re building a new sort of Disney World, Universal Studios theme park.

So people are buying near there because they’re thinking, “OK, I could use that as an Airbnb”. So it’s predicting where the next set of growth is coming. Then also looking at how you can maximise the returns in terms of - you could buy it in a limited company nowadays. If you’re definitely sure “I’m never going to move into this property, it’s always going to be a Buy-to-Let”, you could buy it in a limited company name. And then even if you’re a higher rate taxpayer, you’re only paying tax on the rent you, or the money, that you take out of the business.

ANNA: Yeah, in Corporation Tax. But yeah, 100%. You’ve got to, and this is the thing, you’ve got to be strategic in how you’re investing. So you’re absolutely right. You’ve got to be looking at buying in a limited company. You’ve got to be buying in areas that you know there’s going to be long-term growth. So again, the North East and the North West has been predicted to go up the most in value over the next five years. For me, you talked about the hassle. I’m very kind of lazy. I want as much return for as little effort as possible. So I want to buy a nice cheap property in Liverpool. I want to renovate the property. Any money that goes into the property, I want to recycle, like refinance, pull my money back out. So no money’s in the deal. Put a beautiful family in, let it run long term, go up in value, forget about it.

PHILIPPA: So you get income and ideally growth?

ANNA: Exactly. 

PHILIPPA: Capital growth. So the value of the property goes up. This is the joy supposedly, isn’t it, of property investment?

ANNA: Yeah.

PHILIPPA: How long do you tend to keep your properties, Anna? Because you said you’re about to, you’re divesting in the South so you can invest in the North, but how long would you normally hold one?

ANNA: Forever, basically. We’re keeping some of our better properties, like our stronger returning properties. And what we’re basically doing, any properties as the tenants move out that maybe aren’t performing so good, we’re kind of letting those go. And then we’re then investing in the North.

PHILIPPA: So that’s the other thing to remember, isn’t it? It’s a very illiquid asset -

ANNA: yes -

PHILIPPA: property. You can’t just get your money back when you want it.

ANNA: It’s, for us, we, the properties is the primary business, the primary income, but we also do other things. So I do social media, I do my mentoring, my husband does some property management, he does service accommodation management. So I think when we started we only had the properties and it’s tricky -

PHILIPPA: yeah -

ANNA: when you’re starting. But I actually personally think if I was starting again, I’d probably do it slightly differently. I would’ve built my portfolio, not pulled any income out of it, built it to a point where it could then support me, and then I’d start drawing down. And that’s what I recommend my clients do. Sometimes it’s just not possible. Like, we weren’t in a position that was possible. We had to draw down straight away. 

PHILIPPA: Yeah, you’ve got to live on something, right -

ANNA: exactly -

PHILIPPA: while you’re doing it. Yeah. 

ANNA: But certainly if I was advising someone who’s interested in doing property, I’d be saying Buy-to-Lets in the North, make it very passive, hands-off. But build enough of a property portfolio because two or three [properties] isn’t going to be life-changing. If you can recycle your money, pull money out of the properties and keep building. You don’t need 100 properties, you just need a good kind of 10 properties would be enough, 20 maybe.

PHILIPPA: OK.

ANNA: And then you can draw down, if you’re investing the right properties in the right area, you can then draw down an income and it’s passive property income. If they’re the right properties with the right tenants in, it’s very hands-off. So we homeschool because we’re able to do so because the properties support us.

Eligibility rules for Buy-to-Let mortgages

PHILIPPA: This all sounds very nice, doesn’t it? I’m going to talk about the difficult stuff. I’m going to talk about mortgages. So tell me, because obviously for newcomers to this, the mortgage you’re going to get for a Buy-to-Let isn’t the same as one you get from property you’re buying for yourself. How does it work?

MICHAEL: Well, you can go interest only at least, unlike with a lot of residential buyers who, if you want to get an interest-only mortgage on a residential property, they’ll often demand things like a suitable investment strategy in the background that’s going to pay it off eventually, or at least a certain amount of deposit, or some lenders won’t do it at all.

Whereas with Buy-to-Let, you can go interest-only. OK, which will lower your monthly payments quite a lot. And then if you do make a decent profit and you want to pay down your mortgage, there’s nothing to stop you overpaying. Usually you can overpay 10% of the [mortgage] balance per year. It does depend on the lender though.

PHILIPPA: Interest rates?

MICHAEL: There’s a bit of a conflict going on in the Middle East and as a result -

PHILIPPA: it’s all a bit unpredictable, isn’t it? 

MICHAEL: Interest rates have shot up. You’re not getting a lot less than 5% without a fee nowadays. So yeah, at the time of recording, hopefully it will calm down soon.

PHILIPPA: So Anna, you fix everything, do you? 

ANNA: Yeah. So yeah, we typically, so we’ll buy the property, we’ll refinance. If we’re able to pull all of the initial funds back out, we’ll refinance - it depends on what’s going on with the market. We obviously speak to a good mortgage broker. We’ve got a very good mortgage broker. And we’ll, if we’ve pulled all our money up, we’ll fix for five years. If for any reason there’s, I don’t know, the rates have gone up, we’re expecting them to possibly come down, or if something, if we’ve had to leave any money in the deal, then we’ll just do it for two years to make sure.

PHILIPPA: Deposit, you need a bigger deposit.

MICHAEL: Yes, at least 20% - 

PHILIPPA: So this is a serious barrier for most people, isn’t it? Because that’s a lot of money -

MICHAEL: quite often 25%. Really, you get much better rates at 25% than 20%. But 20% you might get away with it, if it’s a small flat and it’s going to get enough rent to cover the rest. And then even the rest of the money, the other 75% or the other 80%, it’s down to how much rent the surveyor agrees it’s going to get. And surveyors are very prudent and very mean at times.

PHILIPPA: Well, of course, that’s true.

ANNA: It’s true. It’s true!

PHILIPPA: They’re acting for the lender, right? They’re not acting for the purchaser -

MICHAEL: of course -

PHILIPPA: so they’ve got to be cautious -

MICHAEL: of course. Of course. And it has to be in a lettable condition at the point when you apply for the mortgage. There’s a type of mortgage called ‘Refurbished-to-Let’ where that doesn’t apply. But most Buy-to-Let lenders, especially most of your high street lenders, it has to be in lettable condition. So it can’t have damp, mould, fire damage, anything like that. A lot of the sort of places that tradesmen think, “Well, I can fix this up”, you won’t just simply get a Buy-to-Let mortgage on it at all, to be honest.

ANNA: No -

PHILIPPA: so you have to do that when you have the capital to do that yourself -

ANNA: so, well, ‘bridging’ is usually [part of it, particularly if you’re wanting to pull your money back out, like anything you put, like if you’re structuring to recycle your money, then usually you’d use bridging and then you’d go to Buy-to-Let mortgage once it’s rentable.

PHILIPPA: Well, I mean, so many costs to think about. Solicitor, obviously you’re going to need a solicitor.

MICHAEL: Yes. 

ANNA: A good solicitor, especially. 

MICHAEL: You’re probably looking at about £400 upfront and then £2,000 at the end. More if it’s leasehold, more if it’s a more expensive property. 

PHILIPPA: Can you do your own conveyancing? Is it a bad idea? It’s a bad, bad idea? -

ANNA: did you know -

PHILIPPA: you should see your face! 

ANNA: I actually looked into this not too long ago. You can technically. 

PHILIPPA: You can?

ANNA: Highly wouldn’t recommend it.

MICHAEL: I think if a client said that, I’d start crying.

PHILIPPA: OK. The general suggestion here is that that’s something you need -

MICHAEL: unless you’re a conveyancer yourself -

PHILIPPA: to be very careful about. 

ANNA: A tip I’d also say is that look at finding a solicitor in the North because they’re cheaper. In this day and age, you can have a solicitor anywhere.

MICHAEL: But unfortunately -

PHILIPPA: - it’s an interesting thought because you don’t naturally think that, do you? You think local, don’t you? But you don’t have to -

MICHAEL: but unfortunately, conveyancers tend to compete on how cheap they are rather than how good they are -

ANNA: yeah -

MICHAEL: which is why it often takes six months to go through nowadays from the point you put your offer in to the point you get the keys, because you’ll send your conveyancer an email and you won’t get a reply for a week - if you do at all!

ANNA: Exactly.

PHILIPPA: Yes, responsiveness of lawyers has become something of a talking point, hasn’t it?

MICHAEL: So check out the reviews and make sure they’re half decent. Maybe pick a reputable firm rather than just the cheapest one you can find.

Stamp Duty on second properties

MICHAEL: And then there’s all kinds of other costs, the 5% second property Stamp Duty, or 3% -

PHILIPPA: yes, I wanted to ask you about Stamp Duty. Stamp Duty is the kicker, isn’t it? Talk us through how that works. Not the same as buying somewhere for yourself. 

MICHAEL: OK, well, how long have you got?

PHILIPPA: Long enough for this one because it’s a very big factor. 

MICHAEL: It’s 0%, everything between £0 and £125,000, 2% on everything between £125,000 and £250,000, and then 5% of the amount above £250,000. If you go above £1.5 million, there’s even a higher Stamp Duty, if you’re that rich. But there’s an extra 5% surcharge on the whole purchase price.

PHILIPPA: So this is really a lot of money to find, and you have to pay it straight away, don’t you?

MICHAEL: For example, on a £100,000 property, because it’s below the £125,000 threshold, it’d only be £5,000. But on a £250,000 property, it’d be 5% of that £250,000 figure as the additional property surcharge. So £12,500, plus 2% of everything between £125,000 and £250,000. So plus an extra £2,500. So you’re looking at £15,000 total Stamp Duty.

PHILIPPA: It’s a lot of money.

ANNA: It’s also probably worth noting that if you’re owning, if you’re buying the property in your own name, it’s actually slightly different if you’re buying in a limited company.

PHILIPPA: In a company, yeah. Understood. Presumably this is creating artificial thresholds in terms of the value of properties because people don’t want to nudge over the next -

MICHAEL: no, because -

PHILIPPA: no, not a problem? -

MICHAEL: you’re only paying the next threshold on the amount above that price. 

PHILIPPA: It’s psychological, isn’t it?

MICHAEL: Yeah, but if you bought for £126,000, for example, you’re only paying that extra 2% Stamp Duty on that extra £1,000 above £125,000.

PHILIPPA: Just to nail this point home, if you’re a UK resident, you’re buying a residential freehold property for £292,000, so there or thereabouts average. It’s your second property, Stamp Duty: £19,200. It’s a lot of money.

MICHAEL: Yes. You’re basically paying 10% on that. 10% on that extra £42,000 above £250,000.

PHILIPPA: Do potential Buy-to-Let landlords always know this when they come to you and talk about it?

MICHAEL: 90% of them aren’t in for a shock when I say, “By the way, you have to pay second property Stamp Duty”. 10% jump out of their chair!

Building a property portfolio

PHILIPPA: Anna, another reason for holding onto your properties for a long time? 

ANNA: Yeah, absolutely.

PHILIPPA: Because the more you turn them over, obviously every time you buy a new one. So what you’re doing right now, divesting things in the South, buying in the North, that’s going to be a big thing for you to factor in.

ANNA: All the costs, they do rack up. They definitely do. And particularly if you’re then buying using bridging as well, that’s very expensive finance as well. But yeah, the legal fees, the finance fees, the Stamp Duty. For me, I very much approach this like a business. So it’s not me paying, it’s the house paying. But I think this is why so many landlords are upset at how things have gone, because it’s this extra Stamp Duty that’s only payable for landlords and obviously second homeowners.

But then you have things like the mortgage interest rates used to be, and it should be a tax deduction, because it’s an interest on a business loan. But because it’s a landlord, it’s like, “Oh no, now it’s not”. But when you have all these additional taxes specifically for landlords, and then you have the Renters’ Right Act that’s very much pitched as “We’re going to make it better for tenants”, and there’s no kind of talk about helping the landlords. This is the snowball effect and this is why people are very unhappy.

PHILIPPA: There is a kind of narrative about landlords being ‘the bad guys’, isn’t there?

ANNA: Yeah.

PHILIPPA: And that it’s kind of OK to give them a bit of a kicking. Is that the sense in the market now, that landlords are slightly being victimised with some of this stuff? Because I was looking, some local authorities, they do landlords’ licences as well, don’t they? Which is an additional thing you have to pay. How does that work?

ANNA: Yeah, you have it in Liverpool. So basically, it - and again, it’s - I think that the reason I’m OK with a lot of the changes is I understand the reason behind the changes. Because when you have areas like Liverpool where you used to be able to, not that long ago, buy a £50,000 house and rent it out for a really good rental yield - people would just buy them up. They would be so far from where they lived, and it was kind of out of sight, out of mind. So they didn’t look after them. And there are a lot of landlords who just don’t maintain the properties [and] don’t treat the tenants properly. So in some areas they bring in the licensing to make sure that it’s a certain standard.

PHILIPPA: And how does that work then?

ANNA: So basically when you buy a property, it’s kind of renovated, rented out, you get a licence with the council.

PHILIPPA: What sort of money are we talking about?

ANNA: It’s a few hundred pounds usually -

PHILIPPA: OK, so nothing too crazy -

ANNA: it depends. Yeah, but the thing is when you factor in all of the different costs, it adds up a lot. 

MICHAEL: I mean, the honest intention of the powers that be bringing in these rules is to make it easier for first-time buyers by making it more difficult for landlords. Because before [1 April] 2016, when they brought in the 3% second property Stamp Duty, most - well, a large amount of properties were simply going to landlords. But an easier way to make it easier for first-time buyers would simply be to build more houses.

PHILIPPA: And there’s still the affordability, isn’t there, for first-time buyers? 

MICHAEL: Yes.

PHILIPPA: It’s not like it’s making it - and I mean, it may be, I suppose the argument is it might marginally suppress prices, but not enough to make it affordable for people to buy.

MICHAEL: Yes. And as Anna said, it does in some cases make it more difficult for renters, because you’re just renting for more money because there’s less Buy-to-Lets out there.

PHILIPPA: I think the other cost we haven’t really talked about, and that is letting agent commissions, management fees. What sort of numbers are we talking about? 

ANNA: 10% plus VAT typically for the management side of things. And then depending on the area and the property and the letting agent, you’d pay a tenant find fee as well. It’s really, really important when you’re talking to letting agents and you’re asking their fees, find out exactly what is included and what’s not.

So the letting agent I use in Liverpool, one of the reasons I love her, is because she used to work for a letting agent and what they were doing was they were just taking more and more out of that. They would offer a ‘fully managed service’ and they were taking more and more out of that, to the point where she was like, “What does the fully managed service actually cover?”.

PHILIPPA: So fully managed wasn’t really fully managed. 

ANNA: So exactly. So she started her own letting agency and now everything is included and she’s just very fair and very, and she’s great with the tenants as well and managing the properties. So -

PHILIPPA: Because those fees can go high. They can go up to 15%, can’t they? 

ANNA: Yeah. 

MICHAEL: Some letting agents even give you guaranteed rent. So we’ll give you ‘X’ amount even if there’s no tenant. But obviously it’s not what you would get, it’s well below the market value.

PHILIPPA: And not an open market value. 

MICHAEL: Yeah, exactly.

The risk and reward of buying at auction

PHILIPPA: I’m just going to ask you both one thing, which is, do you ever buy at auction?

ANNA: So yeah, I would. I 100% would. Again, there’s - it’s understanding how they work. There’s two different types of property auction: there’s modern method of auction, then there’s a traditional auction. The modern method is more of a hybrid. It’s a little bit - so you can use mortgages, for example. You can’t use mortgages through traditional. I personally would do traditional because you can get better prices.

MICHAEL: You can do mortgages through traditional auctions. It’s just a big risk. It’s a big risk because if it gets downvalued, well, you’re committed to paying that 10% and you can’t back out of it.

ANNA: But the timing as well, because normally you have like 28 days to complete and it’s very hard to complete in 28 days with the mortgage.

MICHAEL: That’s quite often [when] people come to me and say, “I’ve already had my bid accepted, can you get me a mortgage?”. At which point I get another couple of grey hairs.

PHILIPPA: You roll your eyes. 

MICHAEL: Yeah.

PHILIPPA: I mean, there’s so much to think about with all this. I suppose, yeah, if we were wrapping this up, what I’d ask you is, it’s relatively complicated. You have to think about it quite hard. It can be a bit management intensive depending on which way you do it. But income growth, if you’re smart about it, it can be great. I mean, Anna, you’re obviously still keen. None of this has put you off.

ANNA: No, I think, I think the thing for me is I’m a real numbers nerd. I’ve got a maths degree and I love numbers and puzzles. And I think that’s why I love property, because I love the business of property. But I definitely think if you don’t have a clear plan and you’re not kind of educated on what you’re doing, I suppose it’s like with any kind of investment, you have to do it the right way. There’s a right way of doing it and a wrong way.

PHILIPPA: Is it ever going to stack up just having one or two? 

ANNA: Oh, it’s a good question. I - oh, it’s a really good question. I don’t think so. I kind of, I mean, sometimes I talk to people and they just say, “I just want one property. I want to be on a repayment. I want to pay it down and that’s going to be my pension”.

PHILIPPA: I think most people think that. They don’t imagine themselves owning 10, do they?

ANNA: For me, it’s the risk. If you have one property, one tenant, one income from that, because even if you just have three, I’m like, “don’t get one, get three ideally, because it just diversifies the risk”. Because if a tenant moves out and you need to renovate the property, that’s all your income gone. So for me, it’s a really good investment vehicle done in the right way.

PHILIPPA: Let me just tie this off by asking for your best tip on picking a property. What is it when you see it you think, “Nope”. And what is it when you see it you think, “Oh yeah, that one might work for me”.

ANNA: So for me personally, it’s a mid-level renovation. So [it] looks worse than it is. So if we go into a property and it needs, say it’s worth, kind of done up £110,000 and it’s on for £100,000 - it’s just the costs are just going to - you’re just not going to make any good return on that.

PHILIPPA: Yeah.

ANNA: If it’s a full renovation, needs £50,000 worth of work and it’s discounted by £50,000, again, you might as well just buy one that’s done up. If you go for a property where it looks really dated and old-fashioned, but the owner has rewired it, it’s got a new heating system -

PHILIPPA: nice -

ANNA: all the big stuff’s done, but it’s priced like -

PHILIPPA: cosmetic -

ANNA: yes. But it’s priced like it needs a load of work done. So for me, the mid-level looks worse than it is, is the best kind of property.

PHILIPPA: Do you agree with that, Michael?

MICHAEL: Yes, I think the sort of house that makes a good Buy-to-Let isn’t the same as the sort of house you want to live in. The perfect three bedroom semi-detached house in a suburban area isn’t usually bought by a landlord. The property in the cheap location that’s three bedrooms might sell for £100,000 less than the property in the nice location, that has three bedrooms, but you won’t get that much less rent.

PHILIPPA: Yeah. So it’s a completely different mindset.

ANNA: Yeah.

PHILIPPA: Really fascinating conversation. Thank you both very much. 

MICHAEL: Thank you for having us.

PHILIPPA: So much to talk about.

ANNA: Thank you.

PHILIPPA: If you found this episode valuable, subscribe to The Pension Confident Podcast so you never miss an episode. Curious whether it’s ever too late to start saving for retirement? Well, next month we’ll explore what it takes to begin with £0 pension savings at 50 years of age.

And just a final reminder, anything discussed on the podcast shouldn’t be regarded as financial advice or as legal advice, and when investing, your capital is at risk. Thanks for being with us.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Did you know that your pension makes you a shareholder in companies around the world? 

UK pension funds hold around £2 trillion in assets, and pensions are often one of the largest financial assets people own in the UK. That money belongs to millions of savers and is invested in companies around the world - from household names in technology and retail to global energy and financial firms. As a shareholder, you have a voice in how most of these companies are run. And your voice is important for long-term value creation in these companies. 

Companies that prioritise stakeholder engagement also perform better in the long term. One study found that when shareholders successfully engage with a company on environmental or social issues, it reduces the chance of that company losing value. This in turn protects the investments your pension depends on. 

Your money is at work in the world

When you have money in a pension, it doesn't just sit still. It's pooled with other savers' contributions and invested in shares, bonds, and other assets. That means your retirement savings are at work right now, funding the day-to-day operations of real businesses. That’s companies that employ people, manufacture products, and make decisions that affect communities and the environment.

Because your pension holds shares in these companies, you have an ownership stake in them. It may be small, but collectively, pensions can have a huge power in influencing how businesses are run.

Shareholders have a voice

Being a shareholder comes with certain rights. One of the most important is the right to vote on key decisions at a company's Annual General Meeting (AGM).

AGMs happen once a year. They're the formal setting where shareholders can vote on matters such as executive pay, the appointment of directors, and increasingly, proposals related to environmental and social issues. These are called shareholder resolutions.

If you've ever heard about investors pushing a company to set climate targets or improve working conditions, this is often how it happens. Shareholders submit or support resolutions, and then they vote.

A recent example shows how this works in practice. At Next's 2025 AGM, a coalition of investors filed a resolution asking the retailer to disclose how many of its staff are paid below the real Living Wage. Even without being legally required to act, Next committed to expanding its disclosure on pay in its next annual report.

The gap between savers and their voice

Most pension savers don't vote directly. Their pension provider, or the fund manager looking after the money, votes on their behalf. 

In practice, this could mean that tens of thousands of votes are cast every year on behalf of pension savers without them being consulted. Most savers have no idea how their pension provider voted, or whether their views were reflected at all. The Financial Conduct Authority's (FCA) Financial Lives Survey found that only 24% of all UK adults are highly engaged with their pension.

This disconnect means that even savers who care deeply about issues like fair pay, climate change, public health or sustainable business practices often have no practical way to make their voices heard through their pension.

How PensionBee is listening to customers

At PensionBee we believe that companies that focus on their contribution to society and the planet:

• have a better long-term chance of being financially sustainable; and 
• will bring stronger returns for our customers. 

That's why we survey our customers each year to understand their views on the topics that matter the most to them. We then use this feedback to shape our approach to voting and engagement with the companies held in our plans.

In our most recent surveys, customers in our Climate Plan told us that reducing greenhouse gas emissions was their top climate-related priority. It was ranked first by 34% of respondents, with credible net-zero transition plans close behind. On social issues, customers in our Tracker Plan ranked ending child and forced labour in supply chains first (chosen by 35% of respondents). Followed by ensuring workers are paid a real living wage (24%).

We published these findings in our Engagement & Voting Choice Report, so customers can see how their views are being reflected. 

We don’t just act alone. In fact, individual investors have more influence when they act together, which is why we work collaboratively with other investors through coalitions focused on specific issues.

PensionBee is a member of ShareAction's Good Work Coalition, pushing for companies to pay the real Living Wage, provide workers with secure hours, and close ethnicity pay gaps. We’re also a signatory of ShareAction's Long-term Investors in People's Health initiative. This encourages companies to prioritise the health of their workers, consumers, and communities.

Why shareholder engagement matters to your pension

The way companies are run has a direct impact on the value of your pension, and shareholders have more influence over that than most people realise. When investors actively engage with companies on environmental, social and governance (ESG) issues, it leads to measurably better outcomes.

The companies that are pushed to improve tend to perform better financially too. Sustainable funds posted a median return of 12.5% in the first half of 2025, compared to 9.2% for traditional funds. 

In simpler terms, the analysis shows that investing a hypothetical $100 into a sustainable fund in December 2018 would equate to $154 after about seven years. While investing $100 into a traditional fund over the same period would equate to $145.

This is why your voice matters. By channelling your views into our voting and engagement strategy, we can encourage the businesses you own through your pension to be better run and more sustainable, leading to better financial returns. That's good for the planet, good for society, and good for your retirement. 

Risk warning

As always with investments, your capital is at risk. Past performance isn’t a guide to future performance. The value of your investment can go down as well as up, and you may get back less than you invest. This information shouldn't be regarded as financial advice.

This blog is in support of FinTech Week 2026.

When was the last time you checked your pension? If you answered ‘recently’, you’re in the minority. Most people in the UK probably know their current account balance to within £50, yet have no idea about their pension. Apps like Starling and Emma have been at the forefront of using technology to make daily banking and budgeting easier.

Fintech has made those things simpler, faster, and cheaper and changed how we think about payments, banking, and investing. But there’s one financial product most UK savers have that’s lagging behind in its technological innovations. Their pension. 

Pensions remain underserved in fintech

Fintech has done some amazing things for everyday finance over the past decade. Payments between digital accounts can be made instantly. Switching your current account is now a seven-day right under the Current Account Switch Service. Opening an investment account takes minutes, not weeks.

When it comes to pensions, though, it’s something that happens to many people rather than something they take control of themselves. Often, their only interaction is receiving annual statements. And frequent job changes can create multiple pensions scattered across providers.

Outside of a home, a pension’s often the next biggest financial account most people will own. Yet keeping on top of this important part of their financial life is stuck in the past with slow, manual processes. Many people simply don't know where their money is, how much it's worth, or what fees are being charged, with billions in pension savings potentially at risk of being ‘lost’ in the UK.

That's not necessarily a retirement planning problem. Taking control of your pension has been left as a difficult and opaque process. But it doesn’t have to be like that. PensionBee was born when CEO Romi Savova faced great difficulty switching pension providers. She encountered archaic systems, excessive fees and complex paperwork.

The cost of not taking control of your pension

Our Cost of Pension Disengagement report found that choosing the right investment strategy can boost your pension by up to £500,000 compared to doing nothing. Consistent contributions could add around £190,000 on top of that. Consolidating scattered pots and cutting unnecessary fees could contribute another £40,000.

These differences aren’t due to not making complex decisions, but largely not giving their pensions the attention they need. But the system makes it hard: transfers take weeks, fees are opaque, and managing multiple pots is difficult.

Until recently, there was no way to see your pension balance in real time, no app or dashboard, just a paper letter once a year at best. 

Pensions should be fit for the 21st century

Personal bank accounts have been around for a long time now, yet the way they’re managed has changed dramatically over the years. It’s not as though fintech companies invented the current account. Instead, they innovated the experience around what people actually needed: visibility, control and simplicity. The same logic should apply to pensions.

Much of the pension industry continues to lag behind the kind of transformation traditional financial services have seen. However, PensionBee’s been at the forefront of bringing pension management into the 21st century with features, including:

• access to your pension balance 24/7;
• flexible contributions and withdrawals (from the age of 55, rising to 57 from 2028);
• plan performance information; and
• retirement planning tools to help show your pension projections.

And all in a few taps or clicks from our mobile app or website. Plus, every customer gets a dedicated UK-based ‘BeeKeeper’ to help consolidate pensions, switch plans, and manage their account.

Unfortunately, not every pension provider offers the same visibility and flexibility over your pension. But the barriers are institutional, not technological.

Flying the flag for innovation in the pension industry

UK Fintech Week offers a chance to discuss fintech’s future and celebrate achievements like faster payments, open banking, and consumer-first products that didn’t exist a decade ago. That progress is real, and it deserves recognition.

At PensionBee, we’re building a simpler, more transparent pension service. But we’re also a voice for broader industry changes, like a 10-day Pension Switch Guarantee. 

Effectively saving into and managing your pension, however, remains a big gap in the industry. Most UK workers will spend decades contributing to a pension, and the quality of the experience they have while doing so can affect the size of their pension pot when they retire. That experience needs to dramatically improve across the industry. Fortunately, making that happen is exactly the kind of problem fintech exists to solve.

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Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice. 

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Most people know they should be saving more for retirement. But actually increasing pension contributions can feel surprisingly hard when there are more immediate costs like rent and bills to pay, and maybe a holiday you’ve been saving up for. 

Recent PensionBee research highlights another challenge. Nearly a third of people aren’t aware of the tax benefits that come with making pension contributions. And almost nine-in-ten don’t know the rate of tax relief they’re eligible to get. 

That matters because tax relief is one of the most valuable incentives available to UK savers. It means the government effectively tops up your pension savings. Yet many people miss out simply because they don’t know how it works.

If this sounds familiar, you’re not alone. But there may be a simpler way to make progress without it feeling like a sacrifice.

Increasing your pension contributions by just 1% of your salary could make more of a difference than you might expect. And understanding how tax relief works can help you feel more confident about taking that step.

Why increasing contributions feels so hard

Behavioural research shows people tend to feel losses more strongly than gains. Psychologists call this loss aversion. 

We also tend to prioritise present income over future benefits. A smaller amount of money now can feel more valuable than a larger amount later.

Savings accounts often feel easier to understand. They’re accessible and familiar, and the benefits are immediate. Pensions can feel more complex and distant. According to PensionBee’s research, 42% of savers admit that they don’t feel like engaging with their pensions, which includes checking their balance and making contributions, because it’s too complex.

But there are ways to make increasing contributions feel easier.

What does 1% actually mean in practice?

A 1% increase can sound abstract, so it helps to translate it into everyday numbers.

First, it's worth understanding how tax relief works. Most UK taxpayers get tax relief on their personal pension contributions, which means the government effectively adds money to your pension pot. Basic rate taxpayers usually get a 25% top up - HMRC adds £25 for every £100 you pay into your pension.

This means you don't pay the full cost of your pension contribution yourself.

If you earn £25,000 a year, a 1% increase means an extra £21 per month going into your pension. Thanks to tax relief, it costs you less than that - around £17 per month from your pay (if you're a basic rate taxpayer).

For someone earning £40,000, it's £33 per month into your pension, costing you around £27 after tax relief.

For many people, that's roughly the cost of a few takeaway coffees each week or one less meal out each month.

It isn't nothing. But it can be manageable.

The trade-off is between slightly less spending today and aiming for a more comfortable retirement.

Making increases more manageable

One way to make pension increases easier is to time them with a positive change in your finances. This could be when you receive a pay rise or a bonus. It might also happen when a regular expense ends, such as finishing repayments on a loan or when childcare costs reduce.

If you increase your pension contributions when your income rises, your take-home pay can still increase overall. You’re simply directing part of that extra income towards your future rather than spending it all today.

Another option is to start small and increase contributions gradually. Increasing by 1% today and adding another 1% in six months time or a year later can feel more achievable than making a large jump all at once.

Sometimes steady progress can work better than waiting for the ‘perfect’ moment.

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Why time matters more than you think

The real power of increasing contributions early isn’t just the extra money you put in.  The extra time means more opportunity for your money to benefit from potential investment  growth. 

Plus, pension investments can also benefit from compound interest. This means your money earns returns, and those returns can then generate returns of their own.

Over long periods, this compounding effect can become significant.

Imagine you're 21 years old, just starting your career with a £25,000 salary. You're auto-enrolled into a workplace pension and contribute 5%, while your employer contributes 3%. That means around £165 per month goes into your pension in total.

If you increase your contribution by just 1% of salary, that adds about £21 per month from your contribution (around £17 after tax relief).

Here’s where time makes the difference. With around 47 years until age 68, and assuming modest salary growth and investment growth of 3%, that extra 1% could increase your pension pot from roughly £194,000 to £218,000 - an extra £24,000.*

The earlier you make this change, the more time and opportunity your money has to grow. 

How small increases add up over time

The impact of a 1% increase depends on factors such as salary, investment returns and how long the contributions continue.

The examples below illustrate how small increases can grow over time.

A few things to keep in mind

Increasing pension contributions can strengthen retirement savings, but it may not always be the right step for you.

If you have any high-interest debt, it may make sense to prioritise paying that down first. If money is tight, even a small increase might not feel manageable right now.

Financial decisions depend on individual circumstances. If you’re unsure whether increasing contributions makes sense for you, it may help to use PensionBee’s Pension Calculator to explore different scenarios or speak to an Independent Financial Adviser (IFA).

Small steps can still make a difference

Improving retirement savings doesn’t always require dramatic changes. Sometimes the most effective steps are the ones that feel manageable.

You might choose to increase contributions when you receive a pay rise. Or you may simply decide to start today.

Either way, the important step is just starting.

The best time to increase pension contributions might have been years ago. But the second best time could be now.

*Assumes a starting salary £25,000 at age 21, 2% annual salary growth, 3% annual investment growth, 0.7% annual management charges, contributions to age 54, no withdrawals.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice. Tax rules can change and benefits depend on individual circumstances. This information shouldn't be regarded as financial advice.

The following is a transcript of a bonus podcast episode of The Pension Confident Podcast. Listen to the episode or scroll on to read the conversation.

PHILIPPA: Hi, welcome back to another ‘Behind the Pensions’ bonus episode. This time we’re going to hear from David.

This year we’ve been enjoying hearing listeners like you tell us their pension stories. Today we’re going to hear from David and how an unexpected medical diagnosis brought his financial planning into really sharp focus.

I’m Philippa Lamb, and if you haven’t subscribed to the Pension Confident podcast yet, why not click that subscribe button right now? So you never miss an episode.

But just before we hear from David, here’s the usual disclaimer. Please do remember, anything discussed on this podcast shouldn’t be regarded as financial advice or as legal advice. And when investing, your capital is at risk.

Meet David

PHILIPPA: Now let’s meet David.

DAVID: My name’s David Barrow. I’m 48 years old. I live in the Northwest, so kind of South Manchester. And I own my own limited company. So my first time saving and thinking it was for retirement was when I was in my teenage years and my grandfather put me onto savings accounts and so on. I forget which account it was, but the ceramic pigs, if anyone remembers those. And then, yeah, so he was always very focused on future planning, my granddad. And I started off with a little pension then, but the reality is that actually I was in full-time employment, you know, employed until 10 years ago, 11 years ago now. And so I had a number of pensions that I was contributing to within the employment without really knowing what I was doing. So actually the reality is the first time I consciously started thinking about saving for my retirement and looking at what was in those pensions and then contributing towards my own, probably only about seven or eight years ago.

PHILIPPA: Now, pensions expert Dani Skerrett from PensionBee, she’s with me and she was listening along. Hi Dani, nice to see you. What struck me was that even though David learned about saving from his granddad early on, he only really started paying attention to his pensions around age 40, didn’t he?

DANI: Yeah.

PHILIPPA: Why do so many savers have this resistance around retirement planning, do you think? I mean, they’ll save for a holiday, they’ll save for a house, but not the income that’s going to keep their lifestyle up to scratch in their later years.

DANI: Yeah, we see this all the time when we hear people’s retirement planning stories, you know, that they start later in life and [it] tends to come from a conversation, maybe from an older relative. So this is a very, I think, relatable story. But we know that in the UK, people rather save than invest for various reasons. But the Financial Conduct Authority (FCA), their Financial Lives Survey shows that 90% of adults have cash savings and 35% had investments. That was in 2024.

PHILIPPA: We should just clarify, what is the difference exactly between saving and investment?

DANI: Yeah, so saving is much more straightforward to understand, which is probably why many more people have a savings account and tend to save rather than invest. So when you’re saving into a bog-standard savings account, you’re putting money away. There’s usually an interest rate attached to that. You know, that could be fixed or that could be variable. There are sort of different types, but you have this interest rate and your money’s tucked away, [it] might accrue interest over time, and then it’s there when you want to take it out and spend it.

PHILIPPA: So this is just like the bank or building society account lots of people have.

DANI: Exactly, yeah. And with investing, you’re putting, so say £100, you’re putting that same £100 into an account, but it’s not just sitting there waiting for you to withdraw it. It’s then invested into various things. So again, there’s lots of different types, but it’d likely be invested in stocks and shares, maybe bonds, maybe a bit of cash, could be property as well. So it’s sort of invested in a mix of things.

PHILIPPA: And the bottom line here is with investing, there’s going to be risk, right? I mean, you might get higher rewards, you might do, you might not, but there’s risk.

DANI: That’s what puts people off. Yeah, I think it’s that you could put your money into an investing account and the balance [goes] down, the sum [goes] down, whereas with saving, you know that you can withdraw that £100 that you stuck in when you need it.

Assessing his investments and consolidating

PHILIPPA: Let’s hear a bit more from David about exactly where he chose to put his money and why he made the choices he did.

DAVID: So I’ve definitely done plan switches, mainly based around the fact that I’d like to see my investments going into greener pots and maybe taking a little bit more risk than I would have done before. So the pensions that are with - I worked for some very large companies that invested really well. I’ve kind of left them where they are because I can see the growth. And then with the smaller companies where they weren’t working too well, I’ve taken control of them and put them into PensionBee. I like to have a little bit of risk or pseudo-risk, and then just a little bit of hands-off, it’ll look after itself. So that’s kind of my theory now on pensions and savings. But then my granddad’s thoughts come back for the other. Which is [to] keep it safe and let it grow on its own.

PHILIPPA: So, David, he’s thought about this quite hard, hasn’t he? He’s got these little pot sickles over his career, and he has consolidated some of them, he said. So just explain for us, what exactly does that mean?

DANI: Yeah, so consolidating or combining your pensions is basically just pulling them into one pot with one provider. So like David mentioned, he’s had multiple different jobs for, you know, different lengths of time and has accrued these small pots. Loads of people will have this, especially when they get to David’s age, because you’ve naturally -

PHILIPPA: different jobs, different pensions?

DANI: Yeah, had lots of different jobs, probably with different providers. So consolidating is just transferring those, bringing them all into one place. The benefits of that are you can see all of your savings in one place. You can keep track of them much easier. You can potentially save on fees you might be paying across, you know, having five different pots.

PHILIPPA: And paying fees on each of them.

DANI: Exactly and paying different fees. I think the benefit is you’re better able to manage from, from sort of one place. And people tend to do that at David’s age because you’re thinking about it a lot more. So when you’re in your 20s and 30s, maybe you’re thinking, I’ve got two or three pensions, but don’t really mind what’s in them, don’t really need to know where they are. But when you’re in your 40s or 50s, you might be thinking, well, actually, how much is that all together? So it’s just far easier to see in one place. With that, I’d say that it’s not always best to combine.

PHILIPPA: And he’s done both, hasn’t he?

DANI: He’s left some of them where they are, like he mentioned, having bigger pots with providers where he’s left where they are. That’s probably because, you know, there could be benefits tied to it, special benefits. There might be exit fees.

PHILIPPA: So you need to do your homework before you do that.

DANI: Yeah, definitely. You know, you carefully check with the provider what the terms would be around transferring, but it’s something to consider, especially if you’ve got lots of small pots.

PHILIPPA: Yes, got it. Now, David has also rethought where he wants to invest his money and how much risk he’s prepared to take with it. These are obviously important things to think about.

DANI: Yeah, so like we said earlier, investing always involves risk. There’s going to be higher-risk investment accounts and higher-risk pension plans that you can be in and lower-risk risk. The higher risk ones essentially mean that your money will be more invested in the stock market, and a lower risk pension plan or investment account could mean that you’re more invested in cash and bonds, which are less volatile.

PHILIPPA: Yeah.

DANI: So throughout your life, you’re going to be comfortable with different levels of risk. At David’s age, you know, you’re approaching retirement or you’re thinking about retirement a bit more, so you might want to change your risk profile and move away from higher risk investments. When you’re younger, you might want to be exposed to higher-risk investments because you have much longer to save and for your investments to ride out the ups and downs of the stock market.

PHILIPPA: Got it.

DANI: So age is definitely a consideration, but I’d also say that, you know, it’s not just age because what are you doing with your life? You might be starting a family, you might be changing careers. All of these things are going to factor into risk too. So it’s not just age. You need to consider the stage you’re at, your dependents, how much you’re earning, all these things.

PHILIPPA: There’re all sorts of plans for all sorts of risk levels.

DANI: Yeah, there is. So with your pension provider, you should be able to see clearly the level of risk attached to the plan that you’re in. With PensionBee, our default plans are tailored to ages. So we have a default plan for customers under 50, and we have a default plan for customers 50 and over. So the under-50s, the Global Leaders plan, is invested more in the stock market.

PHILIPPA: So higher risk? 

DANI: Higher risk because people have longer to save and to ride out the ups and downs. And then the over-50s plan is slightly more lower risk because we’re assuming that people are going to be coming to access those savings soon, and so they don’t want to be exposed to as much risk.

PHILIPPA: And people can move between them?

DANI: Exactly, yeah. You can switch plans as you like. And like I said, your provider should be making it very clear what you’re invested in whatever plan you’re in.

PHILIPPA: That’s the key thing, isn’t it? It’s knowing where your money is.

DANI: Yeah, exactly.

PHILIPPA: Now, David also, he said he does wish that he’d understood his workplace pension better when he was working, you know, when he was an employee. And of course, at that time, his company was contributing regularly into his pension, which is great. Yeah, I think a lot of us feel that way.

Hindsight on workplace pension contributions

PHILIPPA: Let’s hear exactly how he explained that.

DAVID: So I think with those pensions that I mentioned that were with the large organisations, I wish I’d have understood and acted more around the contributions. So as an employee [my] contribution and it being matched by the employer, I didn’t grasp, understand, or choose to understand that, I guess. I chose to spend the money. And whilst I don’t regret spending the money, going back, I’d probably say to myself, maybe just take an extra percent or 2% and add it on to your employer pension because that’s going to help you so much going forward.

PHILIPPA: This makes me smile because I think the truth is, you know, lots of us know almost nothing about our workplace pension schemes. How do you actually go about finding out about it?

DANI: Yeah, agree, this is very relatable, and not understanding terms like matched by employer and things like that.

PHILIPPA: Yeah, and drawdown and all the kind of jargon around pensions.

DANI: Yeah, so with most workplace pensions, you should be able to just ask your HR department or your employer to share those details. You’ll likely be enrolled in a workplace pension if you work full-time or part-time, you’re over 22 years old but you’re not yet at State Pension age, you’re not already enrolled in a different workplace scheme, and there’s an eligibility criteria around how much you need to earn.

PHILIPPA: OK.

DANI: So if you earn, it’s just over £10,000 and under £50,000, that’s the bracket.

PHILIPPA: So if you don’t know if you’re actually, you know, enrolled in your company pension scheme, ask.

DANI: Yeah, definitely ask. And the thing is, you likely are, because there was something called Auto-Enrolment which came into play, I think, in 2012 that kind of made sure that a lot of people were enrolled in that workplace pension. I think the key thing to understand is, if you know that you’re auto-enrolled, that means some of your salary is going into the workplace scheme via your own contribution, and some of it’s going in from your employer. That should amount to 8% - that’s the minimum that your workplace should be paying in for you.

PHILIPPA: So this really matters, doesn’t it? Because, you know, it’s your hard-earned cash going in every month and it gets taken out before your money arrives, you know, in your monthly salary. Your employer’s paying into it, so that’s free money. And if you don’t know how it’s working, well, they should explain it to you, right?

DANI: Exactly. And like I said, your employer has to contribute that 8%. So it’s 3% from them, 5% as a personal contribution from your salary, and that just comes out to 8% together, but ask them. This is what David mentioned, employer-matched contributions. So if you say, I’m willing to put in 6% of my salary, can you also increase the employer percentage by 1%, they might do that.

PHILIPPA: Yeah, because some are really generous, aren’t they? And that is a thing worth looking at before you take a job, I’d think?

DANI: Yeah, definitely. Not just about holiday entitlement and salary.

PHILIPPA: Another question I never asked when I was job hunting when I was younger. Yeah. Now, you’re talking about 1%. you know, maybe 2% contribution, does it really make a big difference financially?

DANI: Yeah, we have done a study on increasing pension contributions. This was a report called the Cost of Disengagement Report. So 8% is the auto-enrolment minimum.

PHILIPPA: So your employer has to be paying that much for you?

DANI: Yes, exactly. To just get a few caveats out of the way, we’re assuming you’re on a starting salary of £25,000 at 21 years old, the average annual salary increases are 2% of the pension contributions, and that’s from age 21 to 54.

PHILIPPA: OK.

DANI: We’re talking about 3% annual investment growth and a 0.7% fee that your provider’s going to take, and you’re not withdrawing over this time between 21 and 54, which is -

PHILIPPA: OK, so that’s the scenario.

DANI: Yeah, so the 8% contributions, your pot size by the time you get to retire at 68 would be just under £195,000.

PHILIPPA: OK.

DANI: If you increased by 2%, so the total percentage contribution is 10%, you would get just over £240,000.

PHILIPPA: OK.

DANI: So the difference in the pot size over that lifetime is £48,500.

PHILIPPA: So serious money. Yeah. And if you pushed your contributions even higher?

DANI: Yeah, you can increase again to 13%, and your pot size at 68 would be £315,000, and the difference between that and the original 8% is over £120,000.

PHILIPPA: So that is a radical improvement.

DANI: Really, really stark.

PHILIPPA: It lays it out, doesn’t it?

DANI: And I think, you know, sometimes these numbers can just sound quite abstract, and it’s quite hard to put your own circumstances into it. But there’s lots of tools online where you can use calculators and forecasting and stuff like that. So I’d encourage people to go and do that for themselves. Put in what you’re starting with, put in your age, put in your contributions and see that projection. And we’ve got one on the, on the PensionBee website, our Pension Calculator.

PHILIPPA: And then you can play with pushing the numbers up and down and see what the difference would be when you actually retire?

DANI: Yeah, exactly.

PHILIPPA: Yeah, OK.

The diagnosis that changed everything

PHILIPPA: Now, getting back to David, for him, he had this diagnosis and that changed his whole outlook.

DAVID: I had a life-changing diagnosis a couple of years ago around a cancer. Which I’ve come out the other end of, but that really refocused me on my beneficiaries and understanding that if I wasn’t going to be around, would they be looked after? So again, when you’re 21, you’re not thinking about that, but I’d probably say to myself, think about not just your future, but the future of those that depend upon you and contribute a bit more now, and they’ll be in a better position if or when you’re not around in the future.

PHILIPPA: So, David’s talking about pension beneficiaries. These are the people who benefit from the pension if you’re not there to enjoy it yourself. Just explain how all that works.

DANI: Yeah, so your pension beneficiaries are exactly like you said, Philippa. It’s who’s going to get that pension money if you pass away, either before you’ve even accessed it or after you’ve accessed it and there’s still some money in the pot. You know, people don’t like talking about death and people don’t like talking about pensions, and this is a topic that combines the two. So it’s really difficult to kind of have that front of mind. People don’t want to have these conversations with family, but you need to. People are a bit more used to maybe talking about wills and things like that, but pension beneficiaries are maybe slightly forgotten about. So you could also write in your will who you want to receive your pension, but for the vast majority of providers, you need to specify the beneficiary with them.

PHILIPPA: OK, so you actually need to formally tell them who you want your beneficiaries to be.

DANI: And certainly with PensionBee, and I think that it will one, make the process much easier should that happen. It will, it will make your life easier, your family’s life easier. And if you’re with a provider that has an app or an online dashboard, it should be very obvious where you can just jot those names down. With PensionBee, you can just do it on the app. So it’s super, super easy, and we always encourage people to think about it quite frequently as well. So it’s not something at 30 years old that you put someone’s name in as your beneficiary and you don’t look at it again.

PHILIPPA: Well, yeah, life happens, doesn’t it? I mean, relationships, you know, unfortunately break down. You know, you may still have a former partner as a beneficiary and have forgotten all about it.

DANI: Yeah, and then you might expand your family and have children, they might have children.

Preparing his family for the worst

PHILIPPA: Yes, so as well as thinking about beneficiaries, David started overhauling the financial admin that his family would have to manage if he didn’t get through that cancer.

DAVID: That was the first thing that struck me actually when I had the diagnosis was what is the future for those that are going to be around when I’m not. Before my diagnosis, they were, here’s a folder, go and look in this if I get run over tomorrow, and you’ll find everything you need for all my savings and all my pensions. Then with that diagnosis, it was much more, we’ve got to sit down and go through this, so you understand who to contact, how, and all the addresses that come with it and the amounts that sit there. Yeah, sat down with my wife and gone, this is what you need to do. If I’m not about.

PHILIPPA: So, Dani, it’s like he said, isn’t it? It’s not the most joyous conversation, but he’s making a really important point here, isn’t he, about record keeping and keeping your loved ones in the loop about your arrangements. They need to know, don’t they?

DANI: Yeah, definitely. I’d say David is the A-star student in this. The Excel spreadsheet is impressive.

PHILIPPA: Yes, I’ve got to say, I don’t have one of those.

DANI: With all the passwords and what you need to know. So that is ideal, but at the very least, you need to be just having conversations. If you don’t have the Excel spreadsheet, I think it doesn’t mean that you’re sort of disorganised, but, you know, do your - does your partner, do your children even know where your pensions are, the providers that they’re with, your bank details? So as much as you can, [keep] it really clear. And I guess that supports the point of combining, if that’s right for you, combining your pensions, because then there’s only one lot to remember. There’s only one provider you need to contact. There’s only one provider you need to keep up to date with your details and your beneficiaries’ details. So yeah, I think the message there is around open conversations with your family, even if you’re in perfect health. What an important conversation to have with your spouse.

PHILIPPA: Yeah, food for thought.

David’s dream retirement

PHILIPPA: So happily, David gets through that cancer. So what about his retirement plans now?

DAVID: My retirement in the perfect world looks at me being 55, wherever I want to be in the world, with people who need me to do a bit of work for them. For half a day or a day or a week or a month only means saying, can you be somewhere at this time or can you jump on a call? And me having the choice as to whether to say yes or no. And that choice might be, I just want to do ceramics, throwing pottery and stuff, and that’s my retirement. So I don’t ever want to be fully retired, but I want to be in the game, so to speak, on my very own terms and having obviously you need finance to have that. So I’ve got money tied up in pensions, property, a few shares, and I’m just hoping that, you know, at some point they give me that ability to work at my own pace wherever I want to work.

PHILIPPA: So David is looking at a future where he’s in control of his own time and he’s throwing pots. It sounds good, doesn’t it?

DANI: Yeah, definitely. It’s lovely to hear about what people aspire to be doing in their retirement. I know. The hobbies that they want to continue that they might not have time for at the moment. So I think semi-retirement is something he’s sort of referring to. And we hear that so much from people now, especially people that work for themselves or work more on their own terms. So whether you’re consulting or you’re a freelancer, because you’ve already got that flexibility in your working life, so no wonder you want that to continue into your retirement years.

PHILIPPA: Yeah.

DANI: And less and less people are seeing it as a hard stop.

PHILIPPA: I mean, obviously there’s the money, which is helpful, but it’s just like, you know, using your skills and keeping in touch and just, yeah. I mean, I wouldn’t want to do a hard stop. I think you’re right, a lot of people really like the idea of a bit of both.

DANI: I think the bottom line here as well is you can only have that flexibility and carry on a bit of work and doing the things you love if, if you’ve planned definitely properly, because you’re still going to need the money, right?

PHILIPPA: So yeah, exactly.

DANI: Yeah, the pot throwing sounds lovely if you’ve got the retirement fund to fund it.

PHILIPPA: Possibly not going to pay all the bills with the ceramic pots. Yeah, I mean, it’s like you say, Dani, I always think it’s so interesting hearing people talk about this because even though everyone’s circumstances, they’re different, lots of the issues and the questions and the decisions that David talked about, they’re going to be on the table for lots of other listeners, aren’t they?

DANI: Everybody’s trying to find that balance of having a nice life and also make sure they have enough later in life.

PHILIPPA: Thanks, Dani, and thanks too to David for sharing his story with us. We really loved hearing it. If you’d like to find out more about pensions and retirement planning, just head to the show notes on this episode. We’ve shared a tonne of resources there for you to explore and use for yourself. Now, here’s a final reminder just before we go that anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice, and when investing, of course, your capital is at risk. Thanks for being with us. We’ll see you next time.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

You might’ve already heard about the motherhood penalty. It’s the financial hit women take from stepping back from work to raise children. But there's another penalty that doesn't get as much attention - the ‘good daughter’ penalty.

And if you're a woman in your 40s or 50s with ageing parents, it might already be affecting your finances.

What is the 'good daughter' penalty?

When a parent gets older and needs more support, caring responsibilities are rarely shared equally. Research from Taking Care found that two thirds of people believe it should be daughters, not sons, who take on the caring role. Society, family expectation, and a sense of obligation tend to place the responsibility on women's shoulders.

This often leaves women reducing their hours, turning down promotions, or leaving work altogether. They're often the ones reorganising their lives around someone else's needs, fitting care around everything else. And while it's rarely a choice anyone makes lightly, it comes at a real financial cost. That's why it's sometimes called the 'good daughter' penalty.

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Who's doing the caring?

According to Carers UK, 59% of unpaid carers in the UK are women. The Trades Union Congress (TUC) has found that women are seven times more likely than men to be out of the labour market because of caring commitments. 

The average age of a female unpaid carer in the UK is 55-59 years old. That's exactly the window when most people should be in their highest-earning years, making pension contributions, and preparing for retirement.

This isn't a uniquely British problem. UN Women reports that in no country in the world do women and men share unpaid care equally. Globally, women carry out 76% of all unpaid care work, and they spend 2.8 more hours every single day on unpaid care and domestic work than men.

A double whammy

What’s often missed is how this fits into the bigger picture. The ‘good daughter’ penalty isn’t happening in isolation. It’s an extra pressure on women’s pensions, which are often already lower to begin with.

The motherhood penalty typically strikes in a woman's 30s, when time taken out for children interrupts contributions. Five years after the birth of a first child, mothers’ monthly earnings are on average 42% lower than men’s. Just as that gap begins to narrow, the good daughter penalty often follows, creating a second one.

That’s two contribution gaps, often decades apart, hitting the same pension pot.

What about Carer's Allowance?

If you're caring for someone for more than 35 hours a week, you may be entitled to Carer's Allowance, currently £83.30 a week. You can also claim National Insurance (NI) credits, which can protect your State Pension entitlement while you're not in paid work. Both are worth claiming if you're eligible, and many carers don't realise they qualify.

It won’t replace a full salary, but it’s there to support you, and it can help keep your finances moving in the right direction while you’re in a caring role.

What needs to change?

The good news is that the conversation is changing. The Carers Trust is pushing for Carer's Allowance to be significantly reformed, including a higher weekly payment and a less restrictive earnings threshold. 

And the Women's Budget Group is calling for a fully funded, universal adult social care service, free at the point of need, so that women aren't left to fill the gaps themselves. For now, however, much of the responsibility still sits with families. That makes early conversations more important than ever.

A survey from the National Institute for Health and Care Research found that 62% of adults aged 40-65 had thought about their parents’ future care needs. Yet 75% hadn’t discussed it with them. Another 68% hadn’t raised it with other family members.

Starting that conversation, even if it feels awkward, can help share responsibilities more fairly and avoid everything falling on one person by default.

What can you do?

You can't always avoid a caring role, and many people wouldn't want to. But you can take steps to protect your finances while you're in one.

1. Keep contributing to your pension

Even if you've reduced your hours or stopped work entirely, you can still make contributions to your pension. If you're a non-earner or earn less than £3,600 annually, you can contribute up to £2,880 net to your pension. You’ll also benefit from tax relief - this is a free government top up. With tax relief added, your total annual contribution is £3,600 (2026/27). 

2. Plan for care before it’s urgent

The biggest financial hits often come from last-minute decisions. If you can, talk through care options early. That might include how care will be funded, whether professional support is an option, and how responsibilities could be shared. Even a loose plan can stop everything falling on one person by default.

3. Don't lose sight of your own retirement

Caring for someone else can take up a lot of time and energy. But your financial future still matters. Framing your pension as something that supports both you and your family long term can make it easier to prioritise. Keeping track of what you’ve saved, and using tools like PensionBee’s Pension Calculator to see how contributions could grow your future pot, can make it easier to stay on track.

Summary

The ‘good daughter’ penalty is real, and it affects many women. But it doesn’t have to shape your retirement.

Recognising it is an important first step. It means you can plan around it, stay proactive with your finances, keep your pension in view during caring periods, and question expectations before they become obligations.

Caring for someone else can shift your focus. But your financial future still matters.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.