October 9, 2024 • 14 mins
In this episode we’re focusing on pension savings again, to help you make the most of this important investment.
This time we’re covering where your money can be invested. Here to help explore this is Jesal Mistry. He works in asset management at Legal & General and is part of the team who decide the best places to invest people’s pension savings.
Jesal chats with our host Kia Commodore about what types of organisations pensions are invested in and the choices you have if you want to get more involved and how you can align your pension investments with your values.
Paying your pension some attention now can help to make future you a little bit richer.
You can play the podcast and find other useful content on Legal & General’s website:
https://www.legalandgeneral.com/podcasts/a-little-bit-richer
You can find out a little bit more about saving into a pension on Legal & General’s website:
https://www.legalandgeneral.com/retirement/pensions/
Kia and her guests share their own personal thoughts and opinions in this podcast. These might be different from Legal & General’s take on things. They give financial guidance for a UK audience that’s relevant at the time of recording. It’s general best practice, not the kind of personalised advice you’d get from a financial adviser.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Kia (00:02):
Hey, this is Kia. We love paying our pensioners some
attention on this show. I want to make sure you're
as passionate about pensions as I am, because it's so
important to look after future you. Hopefully, spending your retirement
on a sunny beach. Welcome to another episode of A
Little Bit Richer, brought to you by my friends at
Legal & General. We've done a few episodes on pensions. And
today we're going deeper on investment choices, what types of
(00:25):
organizations they're invested in, and the choices that you have.
Anyone looking to align their investments with their values, this
is the episode for you. Joining me to guide us
through this is Jesal Mistry. He works in asset management
at Legal & General, so he's part of the team who
decides the best places to invest people's pension savings. Welcome,
Jesal.
Jesal Mistry (00:45):
Hello, Kia.
Kia (00:46):
How are you?
Jesal Mistry (00:47):
I'm good, thank you.
Kia (00:48):
Good. I'm excited. As you heard, I love talking about
pensions. One of my favorite topics, because it's not spoken
about enough. Let's get into it. First thing's first. Could
you explain what happens to pension savings and where the
money actually gets invested?
Jesal Mistry (01:03):
The good news is that if you're in a pension
scheme already, then you're actually an investor. There are a
number of different investment options available. But if you haven't
already made a choice, then the pension provider is probably
doing that for you. In a workplace pension, that's called
a default option. They do this to grow your money
over time. It's really important that we grow your money,
because you need that at retirement to be able to
(01:25):
live off when you get to that point in time.
Now generally, the provider will invest your money in maybe
more higher risk investments earlier on. It's because you've got
a lot longer to go until you get to the
point of drawing your money out. It means that you
can see through all the ups and downs in investment
returns. Then in the default fund, what tends to happen
is that, as you get close to retirement, we reduce
that risk so that when you get to the point
(01:45):
of drawing your money out, your money's not moving around
in terms of its value. That means you can get more
certainty around what sort of value you might get at
retirement. But also, in the earlier years, there's lots of
different options available in where to invest your money. Some
of that might be in line with different risk profiles.
Some of that might be in line with more around
how you view investments and your own views.
Kia (02:04):
How does an investment manager like Legal & General decide what
types of companies the money goes into? Are there specific
industries or areas that you will avoid all together when
it comes to pension funds?
Jesal Mistry (02:15):
There's lots and lots of different things that we have
to think about when we're looking to invest money on
behalf of savers that we look after. Things like regions
or countries to invest in. Whether that's in the US, whether
that's in emerging economies, those sorts of areas as well.
But also, we're thinking about savers' personal views. Many of
these are focused on things like investing responsibly. You might
hear the term ESG, which stands for environmental, social, and
(02:39):
governance issues. These are key things that we look at
with companies. You asked me about whether there are certain
things we avoid. Some of the options that we have
will avoid different types of companies, and that's called exclusion.
We apply exclusions to the funds that we have. These
might be companies that manufacture weapons, like land mines and
cluster munitions, for example. Companies that manufacture tobacco, those sorts
(03:00):
of areas. Companies involved in animal testing. And those that
commit human rights abuses. There's lots of other things that
we think about when we're removing companies. But different types
of funds have those different types of exclusions. It's really
important that you have a look at what types of
funds you've got, and really try to say whether they're
in line with your particular views, because each one of
us has a different way of thinking about our own
(03:22):
values and what we feel is appropriate for us. Now,
whilst exclusions might be considered to be a good thing,
in that you aren't supporting companies. In some ways, actually,
the flip side to that, because we own parts of
companies, we actually can influence how they operate and what
they do. By bringing all of that money together, we
have a greater influence on those companies. We can engage
(03:43):
with them, we can write to them, we can talk
to their management teams. And be able to say to them, "
Look, you need to operate more responsibly." You can have
a real influence on day- to- day activity within some
of these companies that really helps to move things forward.
By investing in companies, you can actually have a positive
influence over them. The other aspect to, I think, the
(04:03):
types of investments that we make is really trying to
invest in line with beliefs or particular faiths as well.
For example, we've arranged a Sharia compliant investment fund, so particularly
focused on supporting Muslims to save in their pension scheme.
Having those funds available means that they can actually join
the pension scheme and invest in line with their own
personal beliefs as well.
Kia (04:23):
Hearing that explanation about different things that pension providers are
doing to make change, and the things that you can
do as an investor by putting your money into companies
to make changes, it makes you feel quite empowered.
Jesal Mistry (04:35):
Yeah.
Kia (04:36):
I feel very empowered right now, knowing that I've got
pension savings that are being invested, and I'm actually making
a difference. I think people knowing that and understanding that
can really empower people to say, " Do you know what?
I want to make a change, and I want to
make an impact, and I want my money to go
into things that I believe in," which is great, and
I think that everyone should know and be aware of.
Coming off the back of a little bit what you've
(04:56):
touched on, what impact do pension fund providers have on
organizations? I know you touched on it a little bit.
But other impact do they have on organizations that they
invest their money into?
Jesal Mistry (05:08):
We take our responsibility to look after people's savings very,
very seriously, and make sure that we're looking after them
in a responsible way. That means two things. That means
delivering the types of returns that people expect. But also,
investing in the types of companies that are investing responsibly,
run in a responsible way, and therefore then working with
them in that respect. We set some standards. That could
(05:30):
be anything from environmental or climate change type of standards,
all the way through to equality, gender equality, diversity within
organizations, and to how they should be run. We set
some standards with them. Then if they don't meet our
standards, we will vote against them. It's not all just
about voting. We actually then try to engage with them
a little bit more and support them. We have what
(05:50):
we call a Climate Impact Pledge. This is where we
are focused on the worst- offending companies across the world
from a climate perspective. We'll try to engage with those
and identify those that are most influential, that are maybe
not hitting the right areas, and work more closely with
them. We set up very clear minimum standards as to
what we expect from them, and where we expect them
(06:11):
to go moving forward. Within the Climate Impact Pledge, if
companies don't meet those minimum standards, we will remove them
from some of the funds that we invest in, and
we will vote against their management for everything else where
we can't remove them. It's not just smaller companies. These
are quite big, large, well- known names. ExxonMobil, the oil
and gas company. And the miner, Glencore, as well.
Kia (06:30):
I think often, we don't hear what things are going
on behind the scenes, when it comes to our money and
where it's going. There is a massive topic when it
comes to investing, and I'll be remiss to not mention
it. We see crypto everywhere.
Jesal Mistry (06:46):
Absolutely.
Kia (06:46):
Right. Everyone's all talking about crypto. A couple of years
ago, we had a massive boom, where everyone was insistent
that you'll become a millionaire overnight if you put money
into crypto. When it comes to pension savings then, why
isn't our money invested into crypto?
Jesal Mistry (07:00):
Yeah, that's a great question actually. It is exactly that
point, is that crypto investments have become really, really popular,
so we see lots of demand for them. But it's
also worth saying that crypto is very speculative, and actually
very risky. For those of you that have some experience
with it, will have seen how risky they can be,
and go up and down. It also means that because
they're not what we call regulated, so they're not overseen
(07:23):
by professional bodies out there, like other types of investments.
It also means that they're more open to things like
fraud and to criminal activity. What we want to ensure
is that the money that you put into your pension savings
are looked after and is there for you when you
need it, at the point of retirement.
Kia (07:38):
Off the back of that, we've mentioned a lot about
different companies that your money can go into. How does
someone check what companies and businesses they're money is being
invested into with their pension?
Jesal Mistry (07:47):
Yeah. The best place to check any information about your
pension is actually to go online. Log in online, register for
your account, and check the information that's available. You can
do lots of great stuff on there. You can change
your address. You keep track of your pension, and you understand
how much it is, and you can see it grow.
Then within that online account, you can actually go to
the investment section and learn a little bit more about
your investments, and see where they're invested. There's also some
(08:10):
other further help that's there, in terms of the types
of investments you have. We talked about investing responsibly, and
I've covered some of the areas there, but there's more
detail on that side of things as well. Then within
that, there's what we call a Fund Fact Sheet. A
really good place to go and see all of the
information about your investments, all in that one place. It
lists out the top 10 investments, for example. It lists
out where it's invested, whether that's around the world, or
(08:33):
in the types of investment that it holds. You can
look at things like how well it's doing. And compare
it against what we call a benchmark, where you can
see how it's performing relative to other similar types of
funds or similar types of investments in that space. The
idea behind that fact sheet is a great starting point.
It also gives you some information about what the fund
is trying to achieve. Also online, you might see a
(08:53):
link for a thing called Tumelo. Now that's a tool
where you can see where you're invested, but it also
allows you to go and see what sort of votes
or what sort of resolutions are there that are available for you to
express your views on. When they're talking to those companies
or when they're voting, they can actually take into account
your views and then vote on your behalf as well.
Log in online and have a look at that, because
that is the best place to get the information from.
Kia (09:15):
I make it part of my financial habits. Every six
months to a year, maybe, to check in on my
pension.
Jesal Mistry (09:19):
Yeah.
Kia (09:20):
I find it quite interesting and quite fun. I know
people don't always find those things fun, but I think
it is quite fun just to see what's going on
and keep on top of it.
Jesal Mistry (09:27):
Yeah.
Kia (09:27):
You mentioned that, when you get your pension, workplace pension,
we often get put into the default fund.
Jesal Mistry (09:34):
Yes.
Kia (09:35):
If there is someone whose listening who says, " You know
what, I've heard everything that you're saying, it sounds great.
But I want to actually make a decision as to
where my money goes," how easy is it for someone
to choose their own investment funds for their pension savings?
Jesal Mistry (09:47):
It's actually relatively straightforward to actually choose your own investment
funds. The funds you have available to you will depend
on the type of pension savings that you have. In
a workplace pension, you generally have a range of funds
that are often overseen by your employer, or a group
of individuals called trustees who look after your interests in
a pension scheme. If you have your own personal pension,
(10:07):
then you tend to have a wider range of funds
that are available. Quite often, hundreds of funds, so it
can be more challenging to try to work out which
of them are most appropriate for you. But again, there
are tools available to help you understand different levels of
risk, or different types of investments. You can go in
there and filter that down, and start to look at
the ones that might matter to you the most. Then
finally, people who might have a SIPP, a self- invested
(10:28):
personal pension. That is something that offers an even wider range
of investments and can get quite complex in that respect.
There's different types of investment that's available to you. Workplace
pensions tend to include options designed to manage your savings
for you as you get close to retirement, as well
as individual funds. You've got the funds that are there in line
with your own personal beliefs, but also there's some ready-
(10:50):
made, for want of a better word, type of investment
options that are available to you. There are target date
fund range that change your investments as they get closer to
retirement. A little bit like a default, but you can
choose between different ones more in line with your own
beliefs. Look at the types of investments that are available
to you, and really go into that. I think it's
worth just saying that some of those types of investments
(11:10):
have different risk profiles. That's the most important thing to
think about is where you are on your journey. As
I mentioned earlier, the further you are away, the more
risk you can potentially take because you've got a long
way to go until you get a hold of your
money. But as you get closer to retirement, really think about
the risk you're taking because at the point you want
to access your money, you don't want to be taking
too much risk because it could fall in value.
Kia (11:29):
I feel like we've all got some homework to do today. We're all going to go,
and log in, and check on our pension, and decide
what you want to do with your money, if you
did want to make a change.
Jesal Mistry (11:37):
I feel like a teacher giving you homework.
Kia (11:38):
Yeah, I feel like it's a teacher. But it's great. I feel like
this homework is good for us to really engage with
our pension and pay it some more attention. Jesal, you
have shared some incredible tips. But just to round up
this episode then, what are your top three tips for
anyone who wants to be more proactive with their pension
investment?
Jesal Mistry (11:53):
More homework, I think.
Kia (11:54):
More homework.
Jesal Mistry (11:56):
Yeah, absolutely. Get yourself up to speed with your pension,
understand how it works. Log in online, understand how much
money you've got, where you're invested, and what your options
might be. That's a great way to start to think
about where you can move. You can get lots of
information on websites and in your own accounts. Pension providers tend
to also produce things like annual reports and statements that
(12:17):
you can read, and it gives you a bit more of a
sense as to what's going on with your pension scheme.
So have a look at that. Secondary, just think about
the impact of moving your investments around. There is a
cost of buying and selling investments that just naturally happen.
You just got to think through that, in terms of
don't move it around too often. And also, just think
carefully around when you start to move your money, don't
(12:38):
make any jerk reactions. If you see the falling value
of your money in the short term, then don't panic.
Think carefully about how long you've got to wait until
retirement and how your money's moving. Because if you sell
at the bottom, you actually lock in those losses. We
want to avoid that. Really thinking about how you move
around your money and the options that you make. Finally,
(12:58):
if you're not sure, if you're in a workplace pension and you're
in a default option, that is something that tends to
be looked after for you on the longterm. But you
can actually go out there and get financial advice, and
there's lots of support, as I said earlier, to help
you with that. Saving into a pension is a really
good thing to do, a really positive thing to do.
Don't panic, stick with your pension, and really think about
the types of decisions you've got to make, because actually
(13:19):
this is a great saving vehicle for the longterm.
Kia (13:21):
That's a great way to end it. Don't panic, asses
how much time you've got. And investment cycle waves, they
can go up but they can go down, so just
see if you weather out that storm, depending on how
long you have until you draw down on your pension. Jesal, this has
been an incredible episode. Thank you so much for sharing
those gems, when it comes to pensions. I feel like
every episode that we have on pensions, I become a
little bit richer and a little bit wiser.
Jesal Mistry (13:46):
Thank you. It's been great.
Kia (13:47):
Thank you so much, Jesal. Lots of great information to help us understand
pensions that bit more. Next time, we're talking weddings, how
to manage the cost and be creative with budget with
Ellie Austin Williams from This Gal Talks Money. I'd love
it if you could review the podcast, spread the word,
and help others get a little bit richer, too. Keep up
with the show on TikTok and Instagram at @legalandgeneral. Thank you for listening.
(14:09):
See you soon!
Hey, this is Kia. We love paying our pensioners some
attention on this show. I want to make sure you're
as passionate about pensions as I am, because it's so
important to look after future you. Hopefully, spending your retirement
on a sunny beach. Welcome to another episode of A
Little Bit Richer, brought to you by my friends at
Legal & General. We've done a few episodes on pensions. And
today we're going deeper on investment choices, what types of
(00:25):
organizations they're invested in, and the choices that you have.
Anyone looking to align their investments with their values, this
is the episode for you. Joining me to guide us
through this is Jesal Mistry. He works in asset management
at Legal & General, so he's part of the team who
decides the best places to invest people's pension savings. Welcome,
Jesal.
Jesal Mistry (00:45):
Hello, Kia.
Kia (00:46):
How are you?
Jesal Mistry (00:47):
I'm good, thank you.
Kia (00:48):
Good. I'm excited. As you heard, I love talking about
pensions. One of my favorite topics, because it's not spoken
about enough. Let's get into it. First thing's first. Could
you explain what happens to pension savings and where the
money actually gets invested?
Jesal Mistry (01:03):
The good news is that if you're in a pension
scheme already, then you're actually an investor. There are a
number of different investment options available. But if you haven't
already made a choice, then the pension provider is probably
doing that for you. In a workplace pension, that's called
a default option. They do this to grow your money
over time. It's really important that we grow your money,
because you need that at retirement to be able to
(01:25):
live off when you get to that point in time.
Now generally, the provider will invest your money in maybe
more higher risk investments earlier on. It's because you've got
a lot longer to go until you get to the
point of drawing your money out. It means that you
can see through all the ups and downs in investment
returns. Then in the default fund, what tends to happen
is that, as you get close to retirement, we reduce
that risk so that when you get to the point
(01:45):
of drawing your money out, your money's not moving around
in terms of its value. That means you can get more
certainty around what sort of value you might get at
retirement. But also, in the earlier years, there's lots of
different options available in where to invest your money. Some
of that might be in line with different risk profiles.
Some of that might be in line with more around
how you view investments and your own views.
Kia (02:04):
How does an investment manager like Legal & General decide what
types of companies the money goes into? Are there specific
industries or areas that you will avoid all together when
it comes to pension funds?
Jesal Mistry (02:15):
There's lots and lots of different things that we have
to think about when we're looking to invest money on
behalf of savers that we look after. Things like regions
or countries to invest in. Whether that's in the US, whether
that's in emerging economies, those sorts of areas as well.
But also, we're thinking about savers' personal views. Many of
these are focused on things like investing responsibly. You might
hear the term ESG, which stands for environmental, social, and
(02:39):
governance issues. These are key things that we look at
with companies. You asked me about whether there are certain
things we avoid. Some of the options that we have
will avoid different types of companies, and that's called exclusion.
We apply exclusions to the funds that we have. These
might be companies that manufacture weapons, like land mines and
cluster munitions, for example. Companies that manufacture tobacco, those sorts
(03:00):
of areas. Companies involved in animal testing. And those that
commit human rights abuses. There's lots of other things that
we think about when we're removing companies. But different types
of funds have those different types of exclusions. It's really
important that you have a look at what types of
funds you've got, and really try to say whether they're
in line with your particular views, because each one of
us has a different way of thinking about our own
(03:22):
values and what we feel is appropriate for us. Now,
whilst exclusions might be considered to be a good thing,
in that you aren't supporting companies. In some ways, actually,
the flip side to that, because we own parts of
companies, we actually can influence how they operate and what
they do. By bringing all of that money together, we
have a greater influence on those companies. We can engage
(03:43):
with them, we can write to them, we can talk
to their management teams. And be able to say to them, "
Look, you need to operate more responsibly." You can have
a real influence on day- to- day activity within some
of these companies that really helps to move things forward.
By investing in companies, you can actually have a positive
influence over them. The other aspect to, I think, the
(04:03):
types of investments that we make is really trying to
invest in line with beliefs or particular faiths as well.
For example, we've arranged a Sharia compliant investment fund, so particularly
focused on supporting Muslims to save in their pension scheme.
Having those funds available means that they can actually join
the pension scheme and invest in line with their own
personal beliefs as well.
Kia (04:23):
Hearing that explanation about different things that pension providers are
doing to make change, and the things that you can
do as an investor by putting your money into companies
to make changes, it makes you feel quite empowered.
Jesal Mistry (04:35):
Yeah.
Kia (04:36):
I feel very empowered right now, knowing that I've got
pension savings that are being invested, and I'm actually making
a difference. I think people knowing that and understanding that
can really empower people to say, " Do you know what?
I want to make a change, and I want to
make an impact, and I want my money to go
into things that I believe in," which is great, and
I think that everyone should know and be aware of.
Coming off the back of a little bit what you've
(04:56):
touched on, what impact do pension fund providers have on
organizations? I know you touched on it a little bit.
But other impact do they have on organizations that they
invest their money into?
Jesal Mistry (05:08):
We take our responsibility to look after people's savings very,
very seriously, and make sure that we're looking after them
in a responsible way. That means two things. That means
delivering the types of returns that people expect. But also,
investing in the types of companies that are investing responsibly,
run in a responsible way, and therefore then working with
them in that respect. We set some standards. That could
(05:30):
be anything from environmental or climate change type of standards,
all the way through to equality, gender equality, diversity within
organizations, and to how they should be run. We set
some standards with them. Then if they don't meet our
standards, we will vote against them. It's not all just
about voting. We actually then try to engage with them
a little bit more and support them. We have what
(05:50):
we call a Climate Impact Pledge. This is where we
are focused on the worst- offending companies across the world
from a climate perspective. We'll try to engage with those
and identify those that are most influential, that are maybe
not hitting the right areas, and work more closely with
them. We set up very clear minimum standards as to
what we expect from them, and where we expect them
(06:11):
to go moving forward. Within the Climate Impact Pledge, if
companies don't meet those minimum standards, we will remove them
from some of the funds that we invest in, and
we will vote against their management for everything else where
we can't remove them. It's not just smaller companies. These
are quite big, large, well- known names. ExxonMobil, the oil
and gas company. And the miner, Glencore, as well.
Kia (06:30):
I think often, we don't hear what things are going
on behind the scenes, when it comes to our money and
where it's going. There is a massive topic when it
comes to investing, and I'll be remiss to not mention
it. We see crypto everywhere.
Jesal Mistry (06:46):
Absolutely.
Kia (06:46):
Right. Everyone's all talking about crypto. A couple of years
ago, we had a massive boom, where everyone was insistent
that you'll become a millionaire overnight if you put money
into crypto. When it comes to pension savings then, why
isn't our money invested into crypto?
Jesal Mistry (07:00):
Yeah, that's a great question actually. It is exactly that
point, is that crypto investments have become really, really popular,
so we see lots of demand for them. But it's
also worth saying that crypto is very speculative, and actually
very risky. For those of you that have some experience
with it, will have seen how risky they can be,
and go up and down. It also means that because
they're not what we call regulated, so they're not overseen
(07:23):
by professional bodies out there, like other types of investments.
It also means that they're more open to things like
fraud and to criminal activity. What we want to ensure
is that the money that you put into your pension savings
are looked after and is there for you when you
need it, at the point of retirement.
Kia (07:38):
Off the back of that, we've mentioned a lot about
different companies that your money can go into. How does
someone check what companies and businesses they're money is being
invested into with their pension?
Jesal Mistry (07:47):
Yeah. The best place to check any information about your
pension is actually to go online. Log in online, register for
your account, and check the information that's available. You can
do lots of great stuff on there. You can change
your address. You keep track of your pension, and you understand
how much it is, and you can see it grow.
Then within that online account, you can actually go to
the investment section and learn a little bit more about
your investments, and see where they're invested. There's also some
(08:10):
other further help that's there, in terms of the types
of investments you have. We talked about investing responsibly, and
I've covered some of the areas there, but there's more
detail on that side of things as well. Then within
that, there's what we call a Fund Fact Sheet. A
really good place to go and see all of the
information about your investments, all in that one place. It
lists out the top 10 investments, for example. It lists
out where it's invested, whether that's around the world, or
(08:33):
in the types of investment that it holds. You can
look at things like how well it's doing. And compare
it against what we call a benchmark, where you can
see how it's performing relative to other similar types of
funds or similar types of investments in that space. The
idea behind that fact sheet is a great starting point.
It also gives you some information about what the fund
is trying to achieve. Also online, you might see a
(08:53):
link for a thing called Tumelo. Now that's a tool
where you can see where you're invested, but it also
allows you to go and see what sort of votes
or what sort of resolutions are there that are available for you to
express your views on. When they're talking to those companies
or when they're voting, they can actually take into account
your views and then vote on your behalf as well.
Log in online and have a look at that, because
that is the best place to get the information from.
Kia (09:15):
I make it part of my financial habits. Every six
months to a year, maybe, to check in on my
pension.
Jesal Mistry (09:19):
Yeah.
Kia (09:20):
I find it quite interesting and quite fun. I know
people don't always find those things fun, but I think
it is quite fun just to see what's going on
and keep on top of it.
Jesal Mistry (09:27):
Yeah.
Kia (09:27):
You mentioned that, when you get your pension, workplace pension,
we often get put into the default fund.
Jesal Mistry (09:34):
Yes.
Kia (09:35):
If there is someone whose listening who says, " You know
what, I've heard everything that you're saying, it sounds great.
But I want to actually make a decision as to
where my money goes," how easy is it for someone
to choose their own investment funds for their pension savings?
Jesal Mistry (09:47):
It's actually relatively straightforward to actually choose your own investment
funds. The funds you have available to you will depend
on the type of pension savings that you have. In
a workplace pension, you generally have a range of funds
that are often overseen by your employer, or a group
of individuals called trustees who look after your interests in
a pension scheme. If you have your own personal pension,
(10:07):
then you tend to have a wider range of funds
that are available. Quite often, hundreds of funds, so it
can be more challenging to try to work out which
of them are most appropriate for you. But again, there
are tools available to help you understand different levels of
risk, or different types of investments. You can go in
there and filter that down, and start to look at
the ones that might matter to you the most. Then
finally, people who might have a SIPP, a self- invested
(10:28):
personal pension. That is something that offers an even wider range
of investments and can get quite complex in that respect.
There's different types of investment that's available to you. Workplace
pensions tend to include options designed to manage your savings
for you as you get close to retirement, as well
as individual funds. You've got the funds that are there in line
with your own personal beliefs, but also there's some ready-
(10:50):
made, for want of a better word, type of investment
options that are available to you. There are target date
fund range that change your investments as they get closer to
retirement. A little bit like a default, but you can
choose between different ones more in line with your own
beliefs. Look at the types of investments that are available
to you, and really go into that. I think it's
worth just saying that some of those types of investments
(11:10):
have different risk profiles. That's the most important thing to
think about is where you are on your journey. As
I mentioned earlier, the further you are away, the more
risk you can potentially take because you've got a long
way to go until you get a hold of your
money. But as you get closer to retirement, really think about
the risk you're taking because at the point you want
to access your money, you don't want to be taking
too much risk because it could fall in value.
Kia (11:29):
I feel like we've all got some homework to do today. We're all going to go,
and log in, and check on our pension, and decide
what you want to do with your money, if you
did want to make a change.
Jesal Mistry (11:37):
I feel like a teacher giving you homework.
Kia (11:38):
Yeah, I feel like it's a teacher. But it's great. I feel like
this homework is good for us to really engage with
our pension and pay it some more attention. Jesal, you
have shared some incredible tips. But just to round up
this episode then, what are your top three tips for
anyone who wants to be more proactive with their pension
investment?
Jesal Mistry (11:53):
More homework, I think.
Kia (11:54):
More homework.
Jesal Mistry (11:56):
Yeah, absolutely. Get yourself up to speed with your pension,
understand how it works. Log in online, understand how much
money you've got, where you're invested, and what your options
might be. That's a great way to start to think
about where you can move. You can get lots of
information on websites and in your own accounts. Pension providers tend
to also produce things like annual reports and statements that
(12:17):
you can read, and it gives you a bit more of a
sense as to what's going on with your pension scheme.
So have a look at that. Secondary, just think about
the impact of moving your investments around. There is a
cost of buying and selling investments that just naturally happen.
You just got to think through that, in terms of
don't move it around too often. And also, just think
carefully around when you start to move your money, don't
(12:38):
make any jerk reactions. If you see the falling value
of your money in the short term, then don't panic.
Think carefully about how long you've got to wait until
retirement and how your money's moving. Because if you sell
at the bottom, you actually lock in those losses. We
want to avoid that. Really thinking about how you move
around your money and the options that you make. Finally,
(12:58):
if you're not sure, if you're in a workplace pension and you're
in a default option, that is something that tends to
be looked after for you on the longterm. But you
can actually go out there and get financial advice, and
there's lots of support, as I said earlier, to help
you with that. Saving into a pension is a really
good thing to do, a really positive thing to do.
Don't panic, stick with your pension, and really think about
the types of decisions you've got to make, because actually
(13:19):
this is a great saving vehicle for the longterm.
Kia (13:21):
That's a great way to end it. Don't panic, asses
how much time you've got. And investment cycle waves, they
can go up but they can go down, so just
see if you weather out that storm, depending on how
long you have until you draw down on your pension. Jesal, this has
been an incredible episode. Thank you so much for sharing
those gems, when it comes to pensions. I feel like
every episode that we have on pensions, I become a
little bit richer and a little bit wiser.
Jesal Mistry (13:46):
Thank you. It's been great.
Kia (13:47):
Thank you so much, Jesal. Lots of great information to help us understand
pensions that bit more. Next time, we're talking weddings, how
to manage the cost and be creative with budget with
Ellie Austin Williams from This Gal Talks Money. I'd love
it if you could review the podcast, spread the word,
and help others get a little bit richer, too. Keep up
with the show on TikTok and Instagram at @legalandgeneral. Thank you for listening.
(14:09):
See you soon!
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