Expert advice on retirement income planning

This BBC podcast is supported by ads outside the UK What if a marginal gain unlocked greater performance What if an insight in data could change everything at A RAMco Our focus on detail helps us deliver reliable energy to millions across the world Because margins aren't marginal There' where we can truly push the limits of what's possible A RAMco. an integrated energy and chemicals company Learn more at aramco. com The ultimate cookout starts with the ultimate ingredients. At Whole Foods Market, no antibiotics ever burgers and kebabs are prepped and ready to throw on the grill Fire up a juicy ribeye, grab creamy potato salad and savory flatbreads from the prepared foods department, and round it all out with three hundred and sixty five brand condiments, chips and dips at everyday low prices. Whole Foods Market, Make Y summer sizzle Hello, welcome to this Money boox podcast A switch in time can save, well no, not nine, but up to two hundred pounds A million of us switched our bank account last year, but why don't more of us do it when tax free cash is up for grabs? And as the UK's favorite broadcaster joins more than sixteen thousand centenarians, will your money last as long as you do But first, the Financial Conduct authority is launching an inquiry into the claims management industry. These are firms which help people get compensation when they've been misssold financial products, but they take hefty fees for doing that And the FCA says consumers are being failed by poor practices, aggressive marketing, misleading advertising and unfair exit fees. The investigation will cover the entire multi billion pound claims management industry, though the inquiry has been triggered because claims managers are trying to take nearly a third of the estimated seven point a fivealf billion pounds owed to people who were missold car financed from two thousand seven to twenty twenty four. Moneybox listener Caroline from South Wales shared her experience of one of these firms I was Trading through something on the iPad. And somebody was asking, didn't know who it was, wasas I interested in claiming money for a car deal I'd had? I thought yes, what I'd be interested to know So I looked at this and sent off hoping they'd send me details. And what they did was rather than sending me details, keep peppering me with things asking me to give them all my details, send them copies of my passport and driving license so that they could put in a claim. and my son tells me, just dump it, mum. but I'm eighty three. You know, you don't really know if they're going to try and take all your money or something. It's worrying. It's very worrying I played that clip to Alison Waters, She's director of Consumer Finance at the FCA, and asked if it was experiences like Caroline's that had led her to launch the inquiry Absolutely. These are just the types of poor practices that we have been seeing. aggressive marketing, misleaning advertising unsolicited calls and texts to check if you've got a car finance. It's led to issues that we're seeing like multiple representation where consumers have been signed up without their consent or unknowingly that they are signing up. to these types of services. So it's these types of behaviours and the drivers of these poor behaviours are exactly what we want to try and examine as part of the review that we announced on Wednesday You've regulated claims management companies for six years. You wrote them nearly eighteen months ago, telling them how to behave Then you announced a joint task force in March And now you've announced a review that will begin on idn't you just let people down by waiting so long Well, some of the practices that we have seen and we've been calling out, as you said, for the last eighteen months, have been brought into sharper focus by the Ma finance Rdress scheme. And this is why we've formed the task force, as you've called out, joining with our regulatory partners to try and tackle some of these poor behaviours. We have seen some improvements in some of the standards the levels of poor practice have only been increasing. So hence why we are looking to review the market as a whole and understand exactly what are the drivers behind some of these poor practices. Now you've announced your scheme in March, they're still trying to take thirty percent of the money you've told the banks to give back to customers Why can't you stop them doing that? There's no need to use a claims management company, is there You know, you're absolutely right consonsumers can complain for free. and In terms of what we've been doing about some of the actions've the issues that we've seen, we've taken down and asked for amendments to over eight hundred financial promotions over the last two years We have asked firms to change some of their practices and unwind agreement. twenty eight thousand consumers have benefited We've asked firms to change how their charging structures. anotherother half a million consumers have also benefited for that. So you know we're not standing still and trying to tackle this problem, but we said we want to get at some of the root causes of some of these poor practices, but we also have to recognise that many consumers want to use them for convenience. But what we're saying is they've got to get good outcomes, they've got to get good services from those firms and those firms need to act in their best interests your inquiries, the FCA inquiries typically take what, eighteen months, two years to report and then you promise that robust action after that, possibly changes in the law. So we must be looking at twenty twenty nine at the earliest Before things will change We will set out in the terms of reference when we publish the timing of that work and that will give you a clear roadmap to what we will be doing and any action is that we take at the end of it Sure, but it's not going to be quick. I mean, your motor finance redress scheme that the one you launched a month or so ago covers twelve million deals between twenty oer seven and twenty twenty five That faces delays But you expect that to be completed by twenty twenty seven This will be before you've made the changes from this report. Well as I said, we're not standing still. At the end of March, we publish the task force. so that's us taking assertive supervision, increasing the intensity of taking down those misleading financial promotions. We're not waiting for the review to deliver the change also intervening now as they to stop some of those poor practices. What you mentioned earlier, people don't need to use the claims management company, which of course they don't, they can claim free by themselves through your scheme. But in a way, because your scheme has been criticized for not giving people enough, it doesn't give them the whole amount they've lost in some cases Haven't you in a sense brought this on yourself that these companies are there saying, well, come with us. you'll get more is it worth using in your view, is it worth using a claims management in some cases to go to court and get more than your standard scheme might provide. Well, the choice is there for consumers if they want to use cl a claims management company. What you have said is that you don't need to use one. You can claim for fe for free. You don't need to give away that thirty plus percent to a claims management company or a law firm Consumers do have the choice if they want to use one, they do have the choice to go to court if they want to get further address But we still think that The redress scheme that we've put in place is the quickest way for consumers to get that money that they are owed. We think it will put that money back in their pockets and it will also bring certainty for the market. And finally what's your message for people like Caroline who may see something on social media or get an email or hear something or see an advert. what's your message to them about what they should do about these from claims management companies Our message to Caroline and others is complain If you have received an unsolicited text, email or call, please do complain to either the Ombudsman or the Information Commissioner's offfficer or the advertising Sandarders agency If you're unsure about If the person you're dealing with is legitimate and you want to check, you can use our firm checker. If you feel that you have had car finance or you want to complain to your lender, you can do so and you can do that free of charge and there are resources on the FCA website That will help you Allison Waters from the FCA. The number of people switching their current account to another bank has fallen. Out of seventy three million personal current accounts in the UK, only around a million were switched in twenty twenty five, and that's down from one point two million the year before statistics seem to show that we're more likely to get divorced than leave our bank. But are we seeing the first signs, perhaps of an upturn? In the first three months of twenty twenty six, there was a rise in the number of accounts switched. Well, Felicity Hannah has been looking into why people switch and indeed why they don't Banks and buildilding societies offer a lot of incentives for people to switch their current account, from grocery vouchers to cash payments of hundreds of pounds But despite being a nation that usually loves a freebie, switches are still in a minority. So what's putting us off I visited a shopping center in Birchwood, Cheshire to find out. I've looked into it because they have these offers in, but then I've also heard stories of people that's messed everything up and then when they've been, you know trying to get paid, everything's gone wrong, so I've just left it. Have you ever switched current account? Not for about twenty years. About twenty years Why not I'm just settled, I don't really sort of look into it. So you're switching as we speak? Yes, I am What made you do it? Better interest rates, better savings accounts and a good outlet for my young children as well J sames again How long have you had your current account? Since I was about eighteen, and'm thirty nine now, so yeah. What if I said you could get two hundred ququid for switching? Would you think about it then It'd have to be a substantial amount of money for me to change over like talking like a thousand pound rather than two hundred pound. a thousand pound. Whise wouldn't bother I' definitely switch for grand. Yeah I'd switch for a gnd That fear of fAF or errors is clearly a major reason people don't make the jump Even though ninety nine point eight percent of switches are completed within seven working days But while most customers don't change accounts, and many stick with their bank for decades There is another extreme, the serial switcher People like Moneybox listeners, Steve. I did eight switches in a year. I did my first one sort of mid december twenty twenty three and by mid december twenty twenty four I'd completed eight switches taken eight bonuses totaling in excess of thir three hundred pounds Was it about the money for you or was it almost a game? Was it a challenge to see how long you could make it work? I must admit it was as much the latter as as it was about the bonuses, to be honest in the end. I got to the end of my eighth and then realized I wasn't allowed to then go back and repeat the process that all the banks generally have something in their terms that says once you've had one bonus, You're not eligible for another. I think each switch, I would say it was probably fifteen to twenty minutes each time. For the sake of essentially what ended up as being probably three hours work, I ended up with an extra thir thousandteen hundred pounds.ot a bad hourly rate. to be sniffter Most of us are never going to be serial switches Perhaps some people are starting to think that moving for better rates, better perks, or even a better app is also not to be sniffed at Thanks for Lis. Well, I couldn't quite work out there if L was going to try switching or not. But one personal finance writer who definitely does do it is Holly Meade. She's been deputy money editor at the Times and the Sun, and is now a freelance financial journalist who changes her bank account more often than most of us will change our toothbrush, I think Tolly Made, you're in the age group most likely to switch the under forties. How often have you moved your current account I am one of the serial switchers. and I've been switching, I'd say for about ten or twelve years. So I usually move about every twelve to eighteen months. But in the last year, I've done it three times and made six hundred and fifty pounds for myself Right, well six hundred and fifty pounds for a short amount of work. As Steve said, he made thirteen hundred from eight switches. It took him three hours Why do you do it? Is it just the money I'd like to do it as part of my job as well, I'd like to test out different current accounts and different bank features. so it helps me with that. But also I think this is true of the under forties is we don't have the same loyalty to a high street bank that perhaps our parents and grandparents did. didn grow up going to meet the bank manager and go in branch. So we don't have that same feeling of loyalty. So switching feels like less of a problem. Yeah, but it is those fears, isn't it? You know, Will my direct debits get lost? Will my wages or other regular payments actually arrive in my new account? Will I have to do a lot of work? Are those fears justified I've never had any problems. and the good thing about the current account switch service, which is this service that promises to move your money within seven days and it also take care of any direct debits. so you don't have to do that legwork is you can pick a date as well. So if you know, for example, you've got a bunch of direct debits or the mortgage payment coming out on a certain day of the month choose that for your switch date just in case something goes wrong. Give yourself a bit of breathing space. And what about the disadvantages? There must be some things that you think, well, that's a bit awkward or that's a bit annoying So I would say not so much when I've only moved every year or so, but having done three in a year, I don't know what my pins are anymore. It's definitely made me feel less in control in that sense. And it has impacted my credit score. and Steve will have definitely had this from moving eight times in a year. So if you're someone who's going to be taking out a mortgage or needing to remortgage in other situations such as taking out a loan where a credit a credit score important is going to be important for you, then I would say don't be a serial switchter in the run up to that. It hasn't killed my credit score, but it has taken a little bit of a knock So I presume banks do this because they want new customers and then hope they won't be serial switchers. That's why they do it. But how do they stop people being serial switchers? Do they put barriers? Steve was suggesting there were some barriers to him switching again Yes, and they're getting harder. So when I first started doing this, the requirements was very slim. So you probably just needed to guarantee that you were paying in one thousand pounds a month to qualify for the account. The hurdles are just coming thicker and faster now. So I think on the last switch I did you needed to deposit a minimum of fif five hundred pounds within thirty days. You had to have at least three direct debits coming out of that account. And I think you had to make twenty debit card transactions within the first month, which is quite a lot really, if you're not out and about and tapping away all the time. So it really is important to read those terms and conditions. And as Steve says You can't just going on doing this forever. Once you've had a switching bonus off a bank, the likelihood is you won't be able to get anything off that bank again in the future. Yes, Yes. I mean, I saw one that was saying you had to have an income of one hundred thousand pounds before they'd accept you into their account where they're going to give you five hundred quid to do it, but you had to be fairly very well paid to do it. And very briefly Hollagy The million switch is a slight increase Is it worth it? do you think? Is it worth it for the incentives just briefly It depends on how nervous you are, but I would say don't let fear about switching bank make be the reason not to do it. Holly Meade, thank you very much What if a marginal gain unlocked greater performance What if an insight in data could change everything at A RAMco Our focus on detail helps us deliver reliable energy to millions across the world Because margins aren't marginal There' where we can truly push the limits of what's possible. A RAMco an integrated energy and Chemicals company Learn more at arramco. com The ultimate cookout starts with the ultimate ingredients. At Whole Foods market, no antibiotics ever burgers and kebabs are prepped and ready to throw on the grill. Fire up a juicy ribbeye. Grab creamy potato salad and savory flatbreads from the prepared foods department, and round it all out with three hundred sixty five brand condiments, chips and dips at everyday low prices Whole Foods Market, Make your summer sizzle eed. Now it can't have escaped your notice this week that one of the most recognizable voices in broadcasting has just celebrated his one hundredth birthday Then up it fluttered onto the nest, and as it did so, the other parent flew across and drove the first one away This was a great thrill for us For as this happened, we became the first Europeans ever to see the white necked Picathartes on its nest Hamersmith Station, an excellent breakfast spot for peckish pigeons. Pigeons use the sun and magnetic fields to find their way. David Atttenborough, of course, in nineteen fifty four on ZooQuest and in twenty twenty six, on Wild London, as interested in city pigeons as that rare white necked Picathartes who enthralled him seventy years ago. So David's the latest is a growing number of people in the UK to reach one hundred. There were more than sixteen thousand centenarians in twenty twenty four, a number that's doubled in twenty years. and there were more than six hundred thousand people in their nineties. But how do you make sure your money last as long as you do Our reporter Joe Krasner asked these shoppers in Liverpool about their plans to live long and prosper Crently turn sixty six, so obviously I'm receiving my state pension now I've always paid into a pension, so I've got a good pension pass and I will be comfortable if I live to a hundred. I'll be sixty four in September. I had the opportunity to retire four years ago, which I did do Again, sat downm, worked out, paid full pension all the way through my work in life and whenever I had chance to put in VSa. so a lot of it is to do with planning. For the future, I do have a financial advisor and so we look at that every year So to see how the stocks are doing what money we've got And at the moment, he's not telling me to cut back or anything I'm sixty four. I've been retired since I was fifty nine I think a constant review our income all the time. My husband still works, he works for himself So that can be a precarious situation. So we do look at that and we look at the future. I think you have to plan ignoring it,'s not going to make the situation go away. I'm seventy five now and I retired when I was sixty nine. The basic state pension It's just not enough to live on basically. because you know, you've got to tip into your savings, you know, even if it's only like twentyw thirty sids a week or something like that. Well, I'm sixty seven and so I could be retired, Buddy, I'm working part time at the moment But yes we've got pension set aside and everything, but we do hope that they last long enough because we're all going to live longer oughtful responses there in Liverpool, and it is worth remembering that at state pension age sixty six, you have a better than a one in four chance of living into your nineties So how much do you need for that long life you might live li've now to talk to Lee Gardner. He's an independent financial advisor from Gardner Financial Management. And he's also Lee the Pensions guy on Instagram, where his useful videos have had several million views, Lee Gardner Welcome to MoneyBox. You've been advising clients for thirty years. Are people realistic about how long they might live Hi Paul, Nice to talk to you. My experience is that people tend to be very pessimistic when it comes to how long they think they're going to live. But the reality is As you've already stated those figures, most people live well into their eighties and And most people, I don't think are planning for for the life and the age they're going to live to. But how do we plan? Because none of us knows how long we might live it. We might drop down tomorrow. We might live like said David Lon, but it be a hundred. How can you work out what you need and how to manage the money you've got over that uncertain period Well, so one of the things you can do, there's a survey that's carried out each year by the Pensions and Lifetime Savings Association. and they give people an indication of the level of incomes that they might need to live different lifestyles, And once you have the number that you think you're comfortable with taking and making good plans, talking to financial advisors and just working out how much money you're going to need to support yourself is absolutely key. Yeahes, I mean, putting more in if you can, though, I mean we have had a tweet today from someone who's a carer, Jim who says, you know, I can't afford to save. If I save more than six thousand pounds, I start losing my benefits. so not everyone can save But if we've got the money, that people have the opposite fear, don't they that if they overestimate what they need and die with substantial savings or from next April, a big pension pot, the heirs may have to pay inheritance tax. How do you deal with that Yeah, I think I think it's a good point. something you know the changes that are coming in next year are going to impact on some people. But I think realistically, because people are likely to live longer than they expect. I think naturally your pots will run down. I think peopleeople also massively underestimate are things like potentially when later in life they might need care and the cost of care in particular will Nat actually take care of the inheritance tax problem because your pots will start to run down. Yeah, that certainly will run the money down. But you know you do need different amounts at different ages, don't you? I mean sixty six or seventy, you know you want to go to raves and festivals, don't you and long holidays. But when you reach ninety or one hundred, things start wearing out a bit. So should you plan for an uneven income more when you're younger, less when you're older Absolutely. I mean, we talk about your go go years. So Paul, when youre going into your raves, that's in your go go years Go yearso years. and then you have your slowo years where maybe you start to slow down a little bit. and then you have your no go years where maybe it's more about health and looking after yourself. So I absolutely believe that you should plan Not just for that healthy period of your retirement, but you should also consider what will happen further down the line. Yes, and of course not everybody has healthy retirements, do they? The duration of a healthy old age can be very short in some parts. How do you plan for an unhealthy old age, not necessarily a care home, but coping with as your body does wear out I think it's a really tricky one. I think just generally if you have enough money that you've accumulated. And I think the important thing is is not just to rely on pensions. you should be, you've obviously got state pensions, savings. and I just think having enough money in different places you in retirement, I think is really key Yes. And so in summary, quite briefly