Retirement isn’t often associated with boosting your activity and fitness levels. But remaining in good health is important and can help you get far more out of life. We’ve got nine tips for embracing an active lifestyle after you’ve given up work.
When you think of retirement, it’s probably relaxation and kicking back that first comes to mind. However, with more free time on your hands, you’re in a position to get active and improve both your physical and mental wellbeing. It’s not just the general benefits of exercise the make keeping active a good idea, it might also help you tick off things on your bucket list or meet new people.
But, even with the best intentions, it can be easy to slip into a more sedate way of life. These tips can keep you on track for a happy, healthy retirement.
1. Find a new activity that you’re interested in
With more free time on your hands, retirement is perfect for turning your hand to new hobbies. Perhaps you’ve always thought about going to a yoga class or have a challenge that’s been in the back on your mind. Dipping your toes into numerous activities means you can find something you’re passionate about.
2. Revisit old hobbies
Whilst trying something new in retirement is a great idea, it’s also an opportunity to revisit the old. Did you enjoy playing a sport in your younger days before work and family became a priority, for example? Getting active through a hobby you’re interested in makes it far less of a chore and something you look forward to.
3. Get dog walking
Dogs are the perfect companion for those that want to increase their activity level. Long walks are great for getting your blood pumping without it feeling too overwhelming. If you don’t have a dog, you probably have family, friends or neighbours that do and are busy working during the day. Offering to walk a pup now and again can be great for both you and the dog.
4. Spend time with young family members
Younger family members are often full of energy and can keep you on your toes. From simply playing in your own home and garden to taking a trip out somewhere, this option can mean spending quality time with grandchildren whilst boosting activity levels too.
5. Sign up to a class
There’s a huge range of exercises available to choose from these days. If you find you struggle to stick to exercise plans, a class can help. Plus, there’s a chance to meet new people and build friendships with those around you. From gentle yoga classes to those that are high energy, a quick online search should bring up something that catches your eye. Many gyms and other facilities also run classes dedicated to retirees too.
6. Try a walking group
Getting active outdoors delivers an excellent boost to mental wellbeing as well as improving physical health. But walks can feel dull if you’re alone and you may lack inspiration on where to head. Luckily, there are hundreds of walking groups around the country. It’s a great way to explore new locations and meet people along the way. Be sure to check how long the walks are and level of difficulty, many groups will offer a range of different options to cater to everyone.
7. Spend time working on your garden
If you’ve got green fingers, spending time in your garden can boost your activity levels too. It might not feel like it if you enjoy pottering around, but it can count towards your daily exercise. It can be easy to lose a few hours in your garden if being out there is something you like to do anyway. If you’ve never been a horticulturist before, perhaps retirement is an opportunity to give it a go.
8. Volunteer for a good cause
There are plenty of charities and organisations out there that would welcome some extra support. Donating your time to a worthy cause can help you maintain some of the routines you had whilst working and provide activity too. Whether you’re working in a shop representing a charity or maintaining local areas, there are lots of opportunities for finding something that reflects your personal outlook and the lifestyle you want to achieve.
9. Make it part of your routine
When you don’t have to do something, it’s easy to put it off. Making activity part of your routine can mean it quickly becomes a habit. Whatever activity you want to pursue, make time for it each week and try not to let other plans get in the way. It’s advised you get 20 minutes of moderate activity each day.
Volunteering can be incredibly rewarding. If it’s something you’re thinking about getting involved in, there are thousands of charities in the UK to choose from, as well as numerous organisations that rely on donated time to run efficiently. So, how do you choose a volunteering opportunity that’s right for you?
Whether you want to volunteer at one-off events that fit around work or make a bigger commitment as you enter retirement, volunteering has plenty of benefits. As well as the feel-good factor of helping a good cause, it can be an excellent way to meet new people, develop skills and enhance your CV. But with so many different opportunities, it can be difficult to find a position that’s right for you. Diving into why you want to volunteer and what you hope to get from it with the seven questions below can give you direction.
1. What causes are you passionate about?
Thinking about the causes you’re interested in supporting with your time is a great place to start. Choosing something close to your heart means your passion and efforts have an even bigger impact. There are probably more than a couple of areas that you’re interested in, and some may be deeply personal to you. From working closely with animal charities to selecting an organisation that’s pioneering treatments for a disease that has affected your family, there are numerous options. The diversity of the charity sector means you can choose to back a cause that you’re passionate about.
2. What are you interested in doing?
Within a single charity or organisation, there’s likely to be more than a few roles they hope to fill with volunteers. As a result, taking some time to consider what you’d like to do in a volunteer role can help. For example, a charity that’s dedicated to providing services for young people may need volunteers to run a shop to raise funds, complete admin tasks and work directly with children.
3. What commitment can you make to a charity?
How much of your time do you want to commit to volunteering? Do you want to volunteer on a one-off basis or regularly? Whatever free time you have to donate, there are likely to be options in your area. Events in your local community, for instance, may require just a few hours of your time as a one-off to ensure they’re accessible for all. On the other hand, charities will be grateful to those that can offer support on a long-term basis. It’s important to factor in other commitments you may have here and be realistic with the amount of time you’ll be able to offer.
4. How can your skills add to an organisation?
Having thought about the type of charity and role you’d like to offer support in, it’s worth assessing how your skills can enhance this further. This includes both soft skills, such as customer service and networking, as well as hard skills or technical knowledge. Thinking about what your experience and skill set can bring to a charity can mean your donated time can have a far greater impact. You may also be able to bring invaluable connections too, helping the organisation expand its work and reach a greater audience.
5. Are there any new skills you want to develop?
On top of what you can bring to an organisation, you may also want to develop your own skills. Whether there’s something you’ve wanted to try for a while or you’re hoping to develop skills that will boost your career progression, there are usually multiple opportunities. Taking the lead on a charity project could, for example, help demonstrate leadership skills when you’re seeking a promotion. Learning new skills should always be welcomed, whether you’re retired or just starting out on a new career path.
6. What else do you want to get out of volunteering?
In addition to enhancing your skill set, there’s plenty of other benefits of volunteering that may be part of the reason for deciding to get involved. Thinking about what these are can help you pick out a charity that’s right for you. Among the benefits that you may prioritise are meeting new people, improving activity levels or taking on new challenges.
7. Do you want to focus on your community or further afield?
Finally, do you want to work with a charity that has a local, national or international presence? Each option has benefits to weigh up. A local charity often means you can see the efforts of your hard work and gives you an opportunity to meet more people in your community. Whilst national and international charities are likely to tackle wider issues that could improve lives across the country or globally.
Thanks to the internet, searching and comparing mortgages has never been easier. However, the market is huge with a range of providers, from those with a high street presence to specialist lenders. As a result, it can be challenging to find the right mortgage product for you, whether you’re a first-time buyer or remortgaging to secure a better deal.
So, what areas should you focus on? There are six key factors to keep in mind when you want to take out a mortgage:
1. Type of mortgage
Which type of mortgage is best will depend on your personal situation and goals.
First, do you want an interest-only or repayment mortgage? An interest-only mortgage will be cheaper, but you’ll still owe the amount borrowed at the end of the term. So, you should make plans to build up capital to pay off this amount. A repayment mortgage, on the other hand, means you’re paying both interest and a portion of the sum borrowed.
Next, you should consider how you want your mortgage rate to be calculated. A fixed rate mortgage will mean your repayments are fixed for a defined period of time, usually two, three, five or ten years. This provides security, but you won’t benefit if interest rates fall. Repayments with a variable or tracker mortgage can change and are affected by the wider market. A tracker mortgage will follow the Bank of England base rate, whilst a variable mortgage is linked to your lender’s rate.
2. Loan to value (LTV) ratio
The LTV refers to how much money you want to borrow in comparison to the value of the property. As a general rule, the lower the LTV the more competitive the interest rates available to you.
If you’re remortgaging, it’s important to do some homework here. The first step is to find out exactly how much you still owe on your current mortgage. Next, it’s likely that the value of your home has changed too. As house prices have increased over the last five years, albeit at a slower rate than in the past, your LTV could be lower than expected.
3. Interest rate
Interest rates are often the first thing people look at when searching for a mortgage. It’s easy to see why as it’ll have a direct influence on your monthly repayments but it’s not the only factor to consider. However, it is worthwhile searching providers to find those offering lower interest rates. Even a small difference can save you thousands of pounds of the full term of your mortgage.
How long do you need to pay off your mortgage? Traditionally, the standard term for first-time buyers has been 25 years, but there are now numerous products that allow you to spread payments over 40 years. If you’re remortgaging, you’d usually reduce the term, but there may be some instances where you choose to extend it, for instance, to release capital.
Choosing a longer mortgage term means lower monthly repayments but will result in a higher amount of interest being paid in total. One key factor to keep in mind is retirement, the majority of lenders will have an age that they will want you to have paid off your mortgage by, usually linked to when your working income is likely to stop.
5. Overpayment charges
Overpaying your mortgage means reducing your term and paying less interest. As any overpayment goes towards directly reducing the capital owed, rather than covering interest, even a small amount can have a large impact over the long term. You can either increase monthly payments to consistently overpay or pay off a lump sum.
However, providers may charge you for overpaying above a certain amount. Typically, lenders will allow you to pay an additional 10% of the capital owed without charging you, after this, you may face high fees. If you intend to overpay, be sure to check the potential cost of doing so.
6. Exit fees
It’s important to think about how long you’ll be staying in your home and whether there’s a chance that you’ll need to switch mortgage products sooner than you thought. Exit fees can be hefty and make moving home even more expensive. If you think there’s a chance you’ll want to move before the intended mortgage deal runs out, it may be worth opting for a different product, even if interest rates are higher.
Even if moving isn’t on the cards, it’s always important to check potential fees, you never know when your circumstances or plans might change.
How a professional can help
When you’re looking for a mortgage, you may be tempted to go it alone. However, working with a professional mortgage broker can be valuable. Whilst there will be fees to pay for the service, they can help you identify the best deal for you. There are hundreds of mortgage providers in the UK, many without a high street presence. A mortgage broker can focus your search, streamline the process and hopefully save you money too.
If you’re looking for a new mortgage product and would like our help, please get in touch.
Financial protection probably isn’t something you often think about, but it should be part of your financial plan. What would happen if your income were to unexpectedly stop for a period of six months for example? Many people dismiss financial protection as something that isn’t suitable for their situation. However, if losing your main source of income would have an impact on your lifestyle, it’s worth looking at your options.
According to research from Canada Life:
- Just 17% of people believe in the value of group income protection provided through their employer
- Only 13% see the benefit of critical illness cover being offered as a work benefit
Of course, some of those failing to see the benefit of group cover may have taken out personal protection products. However, given that past figures have indicated that 81% of UK homeowners don’t have any form of protection, this seems unlikely.
Financial protection is often triggered by life milestones
The above findings indicate there’s a lack of awareness around how financial protection can enhance security and provide peace of mind. According to a Royal London report, it’s often significant life milestones that trigger the decision to look into how these products can form part of a financial plan. Buying a house or starting a family are recognised as the biggest triggers for taking out protection, followed by a salary increase. However, these milestones are often happening later in life.
So, if you’ve not ticked off the traditional milestones, does that mean you don’t need any form of financial protection? In many cases, it can still be valuable.
Jennifer Gilchrist, Protection Specialist at Royal London, said: “Traditional triggers such as buying a house are happening at a much later stage for people, but younger consumers still need protection such as income protection. The research shows there’s an opportunity for advisers to have protection conversations with younger clients to help them get the right cover for their needs.”
For example, you might not own your home and be paying off a mortgage, but if that’s the case, you’re likely paying rent. Falling into arrears with rent can be just as devastating and stressful as missing mortgage payments. Unexpectedly losing your income can have a long-term impact on your lifestyle and wellbeing if you don’t have a back-up plan in place. As people are often not purchasing their first home until they’re in their thirties, it’s important to start thinking about financial protection before this milestone occurs.
It’s a similar issue with waiting until you start a family. Having a child often means parents think about how their family would cope if their income were to stop or they passed away. However, losing the income of the breadwinner may have just as big of an impact on your partner and other loved ones even if children aren’t involved. Taking out some financial protection can give you peace of mind about your security and theirs.
Do I need financial protection?
When assessing whether or not you need financial protection, you should focus on your ability to pay for at least the essential outgoings should your income stop, rather than life milestones. If your income were to stop, how long could you cope financially? It’s an answer that’s tied to two factors:
- Savings: As a general rule of thumb, it’s advised that you have between three and six months of expenditure accessible to cover financial shocks, including being unable to work. This provides you with a financial safety net. As well an emergency fund you may have other savings and investments that you could dip into should your income stop for an extended period of time.
- Sick pay policy: You should also consider whether you’d receive any pay if you were unable to work due to illness or injury. Statutory Sick Pay is just £94.25 per week for up to 28 weeks and is unlikely to cover the basic costs of living for many families. However, your employer may offer an enhanced sick pay policy that will provide a greater level of financial security.
Remember, it’s not just the bills you pay out that should be considered, but where costs may rise if you were to become ill. For example, you may not be the breadwinner in your family, but are the main carer for children. Should you become too ill to continue looking after children as you do now, you may find that childcare costs rise significantly, placing pressure on your finances.
If with the above two factors considered you think you’d struggle if income were to stop, taking out an appropriate financial protection product could provide you with peace of mind. If you have any questions about financial protection products or want to understand which policies may be right for you, please get in touch.
When you’re investing your money through a fund, there are two main strategies: passive and active. The debate around which is the most effective way to invest your money has been raging for years. So, which should you opt for?
As with all investment decisions, it will depend on your goals and personal attitude to investing. However, it’s important to understand the difference between the two options when you’re making investment decisions. Both terms refer to how an investment fund is managed. There are more active funds available to choose from, but passive alternatives have been increasing in the last few years.
Actively managed investment funds
Actively managed funds are led by either a professional fund manager or investment research team. They actively make investment decisions on your behalf, such as when to buy into a specific company or sell certain types of assets. Those running the fund will conduct extensive research to inform their decision-making.
Different funds will have varying investment principles and focus, which you should read about before investing in an actively managed fund. However, they all aim to deliver higher returns than the market. Of course, this can’t be guaranteed, and the returns delivered will depend on those running it to make the right call.
Passive investment funds
Passive management of a fund, on the other hand, simply tracks the market. Rather than a team of people making decisions, a computer essentially runs a passive investment fund. The fund will hold all or a significant portion of assets of a particular market. As a result, the returns delivered should reflect how the overall market has performed.
Comparing the two options
When deciding between the two options, there are a few key comparisons to make that can help you make the right choice.
- Fees: First up, what fees are you likely to pay for a passively or actively managed fund? As an active fund requires people to carry out a lot of hefty research, they naturally cost more to run. As a result, expect actively managed fund options to cost you more in term of fees. In some cases, this may be worthwhile, but it’s something you should factor into target returns.
- Potential returns: What is your target return from your investment? As actively managed funds aim to beat the market, there is the potential to make a greater profit. However, relatively few managers can consistently beat the market. So, if this is what attracts you to an active investment strategy, it’s important to do your research. Whether you choose passive or active funds, returns can’t be guaranteed.
- Historic performance: Whilst historic performance isn’t a reliable indicator for future performance, it can be a useful metric when comparing different options. Looking at historic performance can help you see if the investment strategies align with your personal outlook. For example, would you prefer relatively stable, but lower returns over potentially higher returns with increased volatility?
- Responsiveness: Investment markets are affected by a huge range of issues, from geopolitical negotiations to consumer demand. A passive portfolio doesn’t react to the news to change how you’re invested. In contrast, an actively managed portfolio aims to do so. This hopefully allows the team running it to seek opportunities and avoid risk, though this relies on them making the right decision.
- Area of interest: Are you thinking of investing in a particular industry? This is an area where expert insight can add value. However, for most investors spreading investments across multiple sectors, geographic markets and risk is an approach that suits their goals and financial position when looking at an investment portfolio as a whole.
Which option is right for you?
There’s no right or wrong answer when asking which is better: passive or active investing? It comes down to your own financial situation, goals and attitude. Much like the rest of the investing decisions you make, it’s one that should consider your wider financial situation too.
For some, the potential to achieve higher returns will mean that the higher fees associated with actively managed funds will be worth it. For others, a passive fund will be more attractive. If you want to review your current investment portfolio or start investing, please contact us.
Please note: The value of your investments can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Planning your retirement can be a challenge. There are multiple areas to think about and you may not have a clear idea of what you want it to look like. However, whilst putting off planning until the retirement date arrives might seem attractive, it can mean missing out. Taking a proactive approach in the run-up to retirement can provide focus.
If you’re at a loss about where to start with retirement planning, bringing the spotlight back to you should be your first step. There’s no single type of retirement that suits everyone. A key part of your planning should be about understanding what your ideal retirement looks like and building a fulfilling lifestyle once you give up work. Over the last few decades, work has probably played a significant role in your life and it can be daunting to step away from that and embrace the freedom retirement offers.
The five questions below can help you start to think about the type of retirement that you’ll want to look forward to.
1. When do you want to retire?
The first thing to set out is when you want to retire. For some, retiring as soon as possible is the dream, but others will want to work well past the traditional retirement age. You don’t have to set a date in stone if you’re unsure. However, having a rough idea of when you’d like to embark on retirement means you can make informed decisions. As well as your personal outlook, your job and the flexibility it affords will play a role too. If you were to carry on working for another ten years, would adjustments need to be made, for example?
Remember, the State Pension age is now gradually rising for both men and women. If you’ll rely on the State Pension to supplement other sources of income, be sure to check when you can start claiming it.
2. Would you like to take a phased approach to retirement?
Does the thought of giving up work completely worry you? You’re not alone, more retirees are choosing a phased approach. This may mean cutting down your hours at an existing position or looking for a new job that will provide you with more flexibility. Phased retirement may be the right choice for you if you don’t feel quite ready to jump into retirement. Work offers numerous benefits, such as social life and keeping your mind active, that you may still want to hold on to whilst enjoying some freedom. Phased retirement can also enhance your income and help preserve pensions and other provisions you may have made.
3. Do you plan to make any one-off purchases to kick-start retirement?
When we first start to think about retiring, it’s often those big one-off plans that our attention is drawn to. Do you hope to begin retirement with a once in a lifetime holiday? Or, perhaps you’ve been thinking about renovating your home once you have more time on your hands? This is a time to celebrate the next chapter of your life and you may want to mark the occasion with a grand gesture, now is the perfect time to think about what you’d like.
4. How will you fill your time day-to-day?
Whilst the above point is often the focus, the day-to-day is just as important too. What’s important to your life now or driving your decision to retire? It may be a desire to travel the world, spend more time with loved ones or focus on a hobby that you’ve not been able to dedicate as much time as you’d like. Without work, how will you spend your time? Whilst you might simply plan to spend more time at the golf range or relaxing, without plans it can become dull quickly. Thinking of several hobbies, aspirations and passions you can pursue in retirement can create a lifestyle that’s enjoyable and fulfilling.
5. Do you want to move or stay where you are?
Finally, it’s time to think about where you’d like to spend retirement. You may be comfortable in your own home. If this is the case now is an excellent time to think about whether any adaptions would be needed to ensure it’s suitable throughout retirement. Alternatively, you may have plans to downsize, move closer to family or even take the plunge to live abroad. Whatever your plans, you should consider how they’ll affect the lifestyle that you want to achieve.
Taking a look at your retirement finances
Setting out the retirement lifestyle you want is important. However, so is ensuring it’s realistic and in line with your financial provisions. Taking the time to review your retirement finances can help you see where adjustments may need to be made or where you can think even bigger.
When people start looking at all the sources of income open to them in retirement, such as pensions and savings, many find they’re in a better position than they first suspected. As a result, they may choose to expand plans, help family or simply proceed with confidence about their financial situation. Of course, some planning for retirement may find there’s a shortfall. If this is the case, don’t panic. Realising there’s a gap in your finances before reaching retirement means you’re in a position to make changes where necessary or look at alternative sources of income.
Calculating income in retirement and understanding a sustainable level to access assets can be complex. This is an area we’re happy to help you with. We work with a range of clients planning for retirement to help them understand what they want to achieve and how assets will allow them to do so.
Please note: A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.