In this Meaningful Money Q&A episode, Pete Matthew and Roger Weeks answer six listener questions on UK personal finance - from gifting money to children using the 'normal expenditure out of income' rules to whether ISA withdrawals can support one-off big spends. They also cover pension consolidation and FSCS protection, investing while living abroad, how DB pension accrual affects SIPP annual allowance, and how to bridge the gap to State Pension without over-relying on AVCs. Finally, they tackle the practical steps to opening a Stocks and Shares ISA - and how to get started with confidence. Practical, jargon-free guidance for UK savers and investors navigating pensions, ISAs, tax and retirement planning.

Shownotes: https://meaningfulmoney.tv/QA53 

02:35  Question 1

Hi Pete and Roger,

I have followed meaningful money for around 6 years now and it has been an invaluable source of sensible advice which I have followed. This has left my wife and I in a very good situation for retirement as you will see below. You deserve an MBE at least!.

Love the double act with Roger as well. I am 62 and my wife is 60 years young. Our total pensions will be around 35K a year which is all we need for our basic living cost and general going out etc. We have a house worth £750K with no mortgage and no debts. I have a DC pension around £920K and my wife around £650K and our two boys have just moved out of our house and so we are now retiring and relearning life B.C. (Before Children).
I have begun looking into gifting them money out of excess income. I like the idea of giving with warm hands - and strangely so do my boys!

Putting our scenario into google gemini, using UFPLS with regular drawdowns and keeping within the current 20% tax band we could each have around 50K income after tax over the next 30 years. Really cannot see us spending more than 40K/year travelling and this will certainly reduce in time as we get older and so will give the increasing excess to our kids.
To keep HMRC documentation simple (hmm) we plan to use our joint account to give gifts to the boys but I am guessing that we will need to prove to HMRC that we have equal income to do this? So my wife will take 8.5K less from her DC pension than I from mine. I hope this all makes sense. I presume if our incomes were not balanced we would have to pay out from our individual accounts and document both for HMRC purposes?

In addition I have 200K and my wife around £150K in ISAs and savings . I know we can each gift 3000/year from the ISA as well as using excess income from our pension. Again, I asked google gemini about this and apparently I can use the ISA for certain capital payments. Eg
a) to buy a new car
b) redo bathroom/bedroom
c) a large holiday 

Not sure what would be the position if we said our largest holiday each year is paid from an ISA and any other holidays are from our pension income and we still gift excess to the kids? - seems a very grey area. I am sure in time HMRC will look closer into this area.

So I think it will be sensible to still use the ISA in the next few years and not take everything from the pension and possibly change to funds from accumulation to income as well?

One last thought as all this is based on the current tax rates. The IHT rate NRB has not changed since 2009 and would be worth around £530K today and I am presuming there will be increasing pressure to raise this given house price growth and especially after 2027 when pensions are included in the estate for IHT?

Best Regards, Bill

 

09:37  Question 2

Dear Pete and Roger,

I can't thank you enough for the excellent free content you put out into the world. I recently got diagnosed with a degenerative condition which will affect me and my family down the line. Your podcast has inspired me to take control of my finances including putting the right protections (insurances) in place and using investing to help navigate a more uncertain future - THANK YOU! The information is accessible and you guys make me chuckle as I go about my day!

My question...

I am keen to make my life easy when it comes to managing my finances but I have hit a wrinkle in my plan. My preference would be to consolidate my pension into as few pension accounts and underlying funds as possible. 

To me the levels of protection available through the FSCS seem too low to be compatible with keeping a pension all with one provider. Am I missing something? How do you think about balancing this risk, without ending up with lots of pension accounts with different providers? Additionally, I have been selecting the same low cost All-World tracker ETF across my family's ISAs and SIPPs, is this inherently risky too and should I aim to use different fund providers (perhaps that aim to achieve the same investment objective).

Anyway, I may be being overcautious here or be misunderstanding the level risk but any reassurance would be greatly appreciated.

Thank you again Andy

 

18:24  Question 3

Hi Roger and Pete,

I'm 32 and I've been listening the podcast for a few years and the advice (particularly about investing) has helped me immensely.

I have a question about investment portfolios when moving abroad. I moved away from the UK 2.5 years ago, at which point I stopped investing into Vanguard and moved to Interactive Brokers. I still have a decent amount invested in Vanguard, but I'm not sure whether it makes sense to consolidate everything into one platform or keep it split over two.

I don't have any immediate plans to return to the UK, although I imagine I will eventually.

Do you think it makes any difference in how the investments are split, or am I worrying about nothing?

Thanks for sharing any of your *thoughts* and perhaps clearing this up for me.

Keep up the amazing podcast,

Michael (originally from Cornwall!)

 

21:23 Question 4

Hi Pete and Roger

I recently discovered your podcast and am working my way though the back catalogue! I am finding it extremely informative and it is helping me demystify a subject I have found confusing for a long time, so thank you.

My question is how do I calculate the amount I can contribute annually to my SIPP whilst also contributing to a DB pension and AVCs (£200/month)? My annual gross salary is £25744.

I opened the SIPP to give me flexibility to retire earlier than 67 when I intend to access my DB pensions (as well as my current local government DB pension I have a deferred University DB pension from previous employment), ideally between 60-62, and access the SIPP along with my S&S ISA to bridge the gap.

Thanks, Melanie

 

27:28 Question 5

Hello Pete & Roger,

I'm a long time listener and as a result in far better financial shape than I was for many years, thank you.

In work I am often akin to the Shawshank Redemption character Andy Dufresne as I find myself offering financial or pension scheme advice to colleagues. This advice ends with recommending your good selves and the knowledge repository that is the Meaningful Money archive and books!

I am 56 and just over 4 years from my planned early retirement at 61,  when I will have 36 years contributing into a company DB pension.

I plan on taking this in a stepped format (with PCLS) to offer a higher initial payment until my state pension starts 6 years later at 67.

To maintain basic rate income tax, I am paying my maximum matched pension contributions plus AVC's through salary sacrifice (until 2029) to keep just under the 40% tax limits.

My wife will be solely reliant on her (full) State Pension having not contributed to a personal pension, she will receive this when I am 64, meaning our combined funding danger zone will be around 3 years during which we may need funds to top up our income either from the PCLS pot or ISA savings to this final combined total, "our figure".

So my question:

You repeatedly talk about retiring with options such as having pensions, ISA's and savings etc. but I am concerned my pension and AVC fund will be totally concentrated with little else.

After maximising the pension and AVC contributions it looks likely I will not contribute enough to fund a savings pot that could comfortably cover the 3 year danger zone.

Will this pension / AVC concentration matter?

Should I continue paying the AVC's to avoid higher rate tax on my income and recovering tax rebate into the AVC pot?

To me this makes sense, but would funding a savings pot give us flexibility to fund our pension gap somehow that I am missing, and do I need to target an ISA or other savings pot in my remaining working years. This prospect would feel like not living for today, but retirement is in touching distance so might it be worthwhile?

Many thanks & best regards, Tim

 

34:52  Question 6

To the Bruce Springsteen and Little Steven of the financial world! Hi guys my name is Cam, I'd just like to say you guys are absolutely fantastic at what you do, the knowledge you provide is genuinely incredible and immensely helpful. I think I speak for all your listeners when I say without your podcast there would be a lot of people struggling with personal finance! Keep up the good work Pete and Rog!

I am 27 years old, 17 months ago I quit my 9-5 and started my own dog walking business, I have since trained to become a dog trainer too. My business has gone from strength to strength and I'm very proud. However the change from going from a wage structure to a varied income per month has been a tough adjustment especially when saving and wanting to invest and so on.

I contribute to my pension each month, I pay into a LISA each month (for a first time home) the only thing I don't do is pay into a stocks and shares ISA. Firstly how do I open one? I have listened to your podcast for well over 2 years now and have listened to the majority of the back catalogue, I feel like I know what to do but it's a genuine fear that's stopping me from opening one.

I don't know how to explain it - it's almost like my head is telling me 'don't open one you'll mess it up.' Is it literally as simple as sign up to a provider, open an account, add money in each month? I feel stupid saying I'm fearful of opening one but I genuinely am!

The last part of my question is simply is there anything else I should be doing that I'm currently not?  Insurance wise I have income protection and the necessary insurances for my business.

Thanks once again you absolute legends!
Cam

Boring Money ISA Comparison: https://www.boringmoney.co.uk/compare/stocks-and-shares-isas/