Brian Byrnes: When to Save and When to Invest

This transcript is auto-generated and lightly edited for readability, it may contain errors.

[0:00] Sammie Ellard-King: Hello and welcome to another episode of the Money Gains podcast. This is your host, Sammie Ellard-King. And today my guest is Brian Byrnes, head of personal finance at Moneybox, who have over a million users across the UK. They’re an award-winning app. Some of their products are amazing, their lifetime ISA, their approach to investing. And our chat today really dives deep into both the cash savings rates and how to take advantage of them, the balance between savings and investing, the current mortgage landscape, tracking down lost pensions, the current future of ISAs. Honestly, this was one of the best and most informative episodes that we’ve ever done. And I’m really looking forward to unpacking this one. If you’re listening on YouTube, please do whack that subscribe button. And if you’re listening on Spotify or Apple Podcasts, hit the follow. And this week, if you enjoy the episode, please do share this with a friend. It really does help the show. But for now, let’s get started on the Money Gains Podcast. So, Brian, welcome to the Money Gains Podcast, man. How are you doing? You well?

[1:16] Brian Byrnes: Yeah, very good. Very good. Thank you very much for having me. Big fan of uh everything that you’ve been doing and an avid listener. Uh so yeah, really happy to be here. Oh, thank you. No, uh yeah, no. Uh likewise, you know, um, we’ve been following each other for a while, I think, now on LinkedIn. And uh yeah, the stuff you’re doing with Moneybox is is pretty cool, man. And you know, from a from a top-level personal finance perspective, one of the best brands out there in the business for me. Um so yeah, an absolute pleasure to have you on. But if you wouldn’t mind introducing yourself to the audience, yeah, absolutely. Uh so my name is Brian Byrnes. I’m a head of personal finance at Moneybox. Uh, my personal background is a financial advisor by trade. So I did that for about 12 or 13 years, advising individual uh clients. Um, and now I’m taking that work into basically the financial education work with the Moneybox customers. So half of my role is uh educating our customers on how to make better financial decisions, all of the products and options that are available to them in the wider financial universe, um, and also engaging with kind of industry uh doing uh things like this, um, and also with the the regulator, the rules makers, all this sort of stuff, just trying to make the financial universe kind of simpler for all of our customers, basically. So that’s my role. Um, and then Moneybox for anyone that’s not come across it is a saving and investing app. Um, our mission is to help people build wealth with confidence, and we’ve done that by bringing together saving, investing, home buying, and retirement all into one app. And we’re now very happy to serve well over a million customers.

[2:50] Sammie Ellard-King: That’s incredible. What a journey. The code the I first came across Moneybox back when uh I think the Lifetime ISA had just been launched, and that was kind of the big it was a big step, and it went on to win some awards, is that right? Yeah, absolutely. So Moneybox was founded uh back in 2016, and it was founded on the the premise of the roundups, um which are now pretty ubiquitous. Uh so it’s the sincerest kind of form of uh flattery, is the imitation side of things. So we don’t mind that uh at all. And since then, yeah, it’s absolutely developed into this whole kind of financial ecosystem where, as I say, with saving, investing, home buying, retirement all in one app. Uh Lifetime ISA is a huge product for our customers. Uh, we can delve into kind of what that is and how it works and who it’s suitable for and all that sort of stuff uh in a bit. But stocks and shares ISAs, we’ve recently launched a cash ISA pensions consolidation, we do full mortgage advice. As I say, it’s really uh you could basically live the majority of your financial life in the app if you want to.

[3:51] Sammie Ellard-King: That’s amazing. I mean, the only company that I know in the world that really kind of gives that kind of 360 approach is perhaps SoFi in the US. They’re uh doing very similar work to you guys in the UK. And that but holding someone’s hand and having that trusted brand that they can go to for any of their personal finance decisions for me, especially um, you know, for the perhaps those that aren’t as confident with their finances, having someone trustworthy like you guys is amazing. And, you know, as you expand your products, the quality that goes into not just the actual product, but equally as well the visual aspect of the brand, you know, is very approachable. Um is that on purpose? Have you done that side of the visual a the visual um you know, the UX of the apps, etc.?

[4:39] Brian Byrnes: Yeah, absolutely. Uh it’s it’s all designed to be as welcoming as possible because as as you and I know, everything about finance is like it can seem very, very complex and very inaccessible. Um so as I say, Moneybox is designed basically to the opposite of that, to try and make it as kind of comforting and welcoming and give you as much guidance as we possibly can and as much comfort that you are doing the right thing and you’re you’re on the right track. So yeah, that’s uh that’s absolutely intentional. And we try and make it as human as possible as well. So as I say, I’ve been with Moneybox for the last 18 months as well. And you and I well know trying to put a kind of human face to these sorts of things and interactions, it makes a massive difference um to the customer experience as well. Um, so yeah, it’s it’s exactly what we all think about our personal finances, trying to make them as simple and as human as we possibly can.

[5:29] Sammie Ellard-King: Yeah, and 100%, man. I mean, if you go on the website, just you know, it’s such a nice experience. And I suppose what I’d love to know though, you know, you spend a lot of time in this. What is actually like your favourite thing about the brand? What’s something that you know perhaps you wouldn’t see that’s immediately presented to you? But what you know, what would you say is your favourite thing about it? I think there was two things. One is less about the brand, but one thing that surprised me about Moneybox when I came in was the scale. Um, we hadn’t at that point announced that we had hit a million customers. That happened at the start of this year, and I think people are kind of surprised by that. And again, it does give people comfort to know that there’s a million people kind of in the same place that they are using using the same provider. So I was kind of surprised by that when I came in. I think that puts us only second in terms of customer numbers as a retail platform in the UK, uh, which is incredible. And the other thing that surprised me was just the focus on the customer as well. Um, so we, as I mentioned, we’ve recently launched a cash ISA. And basically from day one of inception of that cash ISA, it was what do customers want from a cash ISA? They want something that’s very, very simple. They want something that has uh the best rate possible, um, and they wanted to be somewhere where, as you say, they can live their financial life within the app. It was just relentlessly focused on the customer throughout the cash ISA development.

[6:56] Sammie Ellard-King: Because you’ve offered the fixed rate savers for a while. What was the cash ISA step? Was that really just for the tax benefits for your for your customers? Yeah, again, it was the responsiveness to the macro environment, basically what’s going on with interest rates at the moment. So customers were asking us for it. And as you mentioned there, the kind of tax situation where you really don’t have to have that much in a savings account unwrapped, uh, not in an ISA to hit the personal savings allowance these days. So it felt like a little bit of a no-brainer to add that one into the product set. And that kind of leads us very nicely into one of the big sections of today, really, that I wanted to talk about because you’re seeing these like 8% savings easy access in some where in some in some bank accounts at the moment. I’m you know, I’m there’s new ones every day, I can’t keep up with it. Um you mentioned there about the personal savings allowance. What what are you seeing? Like, what’s what’s the benefits of coming over? And perhaps when should someone be in a cash ISA? When should someone look to be in a fixed, like, what’s the what’s your approach and what are you advising people at the moment?

[8:50] Brian Byrnes: Yeah, so there’s a few things that we would advise. And like, number one, when somebody comes up to me at an event or whatever it might be and says, like, what’s the thing that I should be doing with my finances? What do people ignore? All that sort of stuff. I always say that you should be dedicating time to your finances. I recommend like 30 to 45 minutes a week should be completely ring-fenced for one aspect of your finances. So, say I like to do it on a Sunday morning with a with a coffee. If you’ve got kids, you wake up super early, you can have that little bit of time to to yourself. And a really good use of that time at the moment is kind of shopping around for your cash savings. We’ve come from a world where interest rates were just absolutely on the floor uh for 10 to 15 years, so there really wasn’t that much benefit to shopping around. There’s so much competition in the savings marketplace now. You could, if you wanted to, not recommending you change your account every week or anything like that, but these tables where people are offering the best rates are changing weekly, if not daily, uh, in some cases. So, like, number one thing that you can do is know where your savings are and what interest rate you’re getting. There’s still lots of people on legacy interest rates getting one or two percent, whereas pretty easily now you can get four or five percent uh on your savings with a uh with a known uh brand uh like ourselves or high street banks or that sort of that sort of stuff as well. So as I say, first thing people should be doing is kind of regularly shopping around. The second thing in terms of knowing kind of which product to use and when is basically just matching each of your savings accounts to what they call the time horizon of your goals, which, as you say, just breaking out the jargon basically is right, okay, I’ve got my cash bank account. That is something that I need instant access to. So what’s the best instant access current account that that’s out there? I’ve got my emergency fund, which I also need instant access to. So I’m trying to find the best savings account out there that I can get my hands on the money if an emergency comes up. And then maybe you’ve got money that you don’t need for 12 or 18 months, so like a wedding deposit, or uh you might be wanting to go on a really nice holiday in 12 months’ time. That’s something where you can potentially lock those funds away for a little bit longer and get a better interest rate. So you might have one, two, three pots of kind of cash money, basically. And those are the things that you should be uh shopping around with, and as I say, making sure that each of those is getting the best interest rate uh possible uh at any given time.

[11:14] Sammie Ellard-King: Yeah, things, the landscape’s moving so quickly right now, you know, locking in a rate as well is always good. I, you know, I think for people out there being on a variable rate is an opportunity for those rates to come flying down on you. Um what you know it’s quite difficult to know. You you mentioned the three pots there. If someone’s looking at this and they’re perhaps starting from ground zero today, what’s the sort of first steps you would sort of take would normally with someone um looking to start really kind of putting money away? So I think step one number one is always to make sure that you’ve paid off any high interest debt. Um basically what you mean by that is things like credit cards and loans, because even with savings rates at 5-6%, you can even get 8% on regular savers now. Probably still not going to match the interest rate that you’re paying on credit cards or loans, which can easily go up to 20 or 25%. So you should make sure you’ve paid off those first. And then next step is your emergency uh account. So that should be somewhere around three to six months worth of expenditure that you just pop aside, um, you build that up over time. And really, it’s something that you hope that you never have to use. It’s something that you hope you get frustrated by uh over time that it’s just sitting there and you’re not spending it on X, Y, or Z. It’s a good thing if you never spend your emergency pot because it means an emergency has has not come along. And as I say, for 10 years where people had emergency pots, they were sitting there, they were earning half a percent interest if you were lucky. You can now get 5% interest uh on that emergency savings pot without locking it up because that’s the kind of crucial thing. So, yeah, two first uh steps on that side, making sure that you’ve paid off your high interest debt first and then building that emergency pot. And then you can move on to other kind of small, medium, large goals after that.

[13:06] Sammie Ellard-King: And there you’re kind of syncing funds and your different goals, essentially. And for what we talk about, you know, we I always say you like have a very short-term goal, and you know, that’s after your uh emergency fund, by the way. We clear that emergency fund, like what’s your one, two, you know, five and then ten plus and anything for me over five years is invested. What are you seeing uh at the moment? And any, do you follow something similar to that? Yeah, absolutely. And I think it’s like it’s important to say that like even financial advisors, people in the personal finance space, like don’t really have their goals completely nailed down all of the time. Like, I’m reasonably sure what’s going to happen, hopefully, with our finances for the next three, six, or or twelve months and what we’re saving towards and all that sort of stuff. Anything kind of beyond that is is quite grey and things do change fairly, fairly rapidly. Um, so as I say, don’t think that financial advisors, financial planners, people that are really hopefully quite good and knowledgeable about this stuff, like they do not have the next 10 years of their life kind of mapped out, as I say. Oh no. Very, very few people uh that that have that. So as I say, I can often think sometimes as well, this is how it can feel inaccessible in these areas because you think people are doing things that you’re not or so much better planned than than you are. As I say, if you’ve got the next three to six, even twelve months figured out, you’re in a pretty good place, and everything beyond that is is um is relatively uh grey, I think.

[14:33] Sammie Ellard-King: Hey guys, Sammie here. Just a quick one. If you wouldn’t mind heading over to upthegains.co.uk, hitting the subscribe button in the top right hand corner, and entering your email into the box for your troubles. You will receive a free net worth calculator worth £25. Now, this net worth calculator, if you enter your assets and your liabilities, will tell you exactly how much you are worth today. Now, what you can also do is set yourself some financial goals and track your net worth along the way using this tool. It’s totally free. So head on over to upthegains.co.uk, hit the subscribe button, pop your email in, and you’ll be sent straight to your inbox in a matter of minutes. Now, back to the podcast. 100%, man. You know, it’s nice to have that goal, but there’s bumps across the road, you know, there’s things things come out of the blue, left, right, and centre. You never know. You know, you don’t understand you don’t you don’t know that you know an emergency might happen in that period, and then you suddenly you’re back to square one, building back up that emergency fund instead of your savings pot. So suddenly things or the goalposts will shift. It’s just the natural course of life, unfortunately. You know, nothing is linear as much as we wish it was, but um, you know, that’s something that we’ve all got to kind of get our heads around. So let’s say we’re, you know, I’m this person now. Great, I’ve built up an emergency fund, I’m slowly tucking some money away. I’m really interested in investing. What’s the next steps that and how do I kind of get myself into that, especially when using an app like Money Box?

[16:01] Brian Byrnes: Yeah, it’s uh it’s important to remember that even where interest rates are today, um, you should still be conf considering investing in the in the right circumstances. You mentioned there a kind of five-year time horizon. That’s a really good line in the sand to think, look, I don’t need these funds in the next five years or so. You should be considering investing. Really, anything zero to three years, you should be taking no risk with that, really, whatsoever. You can look at cash savings accounts, you can look at locking the funds up for a year or two and get a better interest rate, but you shouldn’t be looking at investing those funds at all. Three to five years is a little bit of a gray area. You could invest quite defensively, cautiously, things like money market funds, bonds, if if you wanted to. But really, as I say, it’s kind of five years plus that that you should be thinking about investing. And that doesn’t change based on where interest rates are. So just because you can get 5% on your savings now doesn’t mean that you should just be investing in cash and cash only. Over the longer term, cash has consistently been shown to be a bad long-term investment. And as I say, by that mean anything kind of over five years. Really, investing is the only thing that’s going to help you build wealth uh after inflation over the longer term. So while 5% interest rates are absolutely great now, inflation is still running at 6.7% at the moment. So you are still going backwards if you’re just using cash savings. So we do see now, like there is the the argument or the question mark out there, why would I be taking risk when I can get 5% risk-free? And the answer is still the same as it was when you were getting basically nothing on your interest rate. Zero to three years, look at cash. Anything over five years, you should look at investing because that’s the thing that’s going to help you build your wealth over the long term.

[17:43] Sammie Ellard-King: 100%. We just did a video on exactly this topic, whether it was save or invest, and we uh looked deep into it. And actually, there was a graph that came out by Schroders that said basically after 18 years, um, it was 97%, and 20 years was 100% that stocks would be cash investments. Obviously, that you know, there are uh that that and that’s over a 20-year period in any form of history in the stock market. So it just goes to show that if your goals are long term, then investing that money is always going to win out. Yes, you know, we’re in uh especially last year, stocks underperformed, interest rates rose, and so did cash would have beaten stocks within that environment. But when we scan out and look at the big picture, you know, we’re we we always know that that stocks historically have performed better. Um, so you mentioned money market funds and bonds there. That’s the safe approach. Um, what’s some what’s some of the other uh approaches that you can take, especially with sort of using Money Box as an example here?

[19:51] Brian Byrnes: So I think with Moneybox, with your funds uh that are designated for over five years, we basically we offer some off-the-shelf options. So we call them starting options. So you’ve got a cautious, you’ve got a balanced, and you’ve got an adventurous uh you’ve got an adventurous portfolio uh of funds that you can choose, as I say, based on your own individual risk appetite, and then also kind of how long you’re going to be investing for. So you can either buy one of those fund bundles off the shelf and and invest in those, uh, or we also offer a range of funds, ETFs, and then recently, well, I say recently, it’s probably about 12 months ago now. At this point, we uh offer a range of uh 20 US stocks for companies that you might be interested again investing for the for the long term. Moneybox is absolutely not a uh trading platform. We design everything for regular contributions, long-term investing, pound cost averaging, all of that stuff that has proven to be beneficial to investors, retail investors uh over the long term. So everything that we do and the way that we deliver all of this stuff is based on the evidence that helps provide kind of good outcomes for people from investing, as you say, rather than necessarily day trading.

[21:03] Sammie Ellard-King: How are you finding that balance with adding those sort of 20 stocks? Has that sort of come from sort of customer requests that they want to access? Or yeah, absolutely. Um, so even before that we offered those stocks, we had customers coming to us saying, Can I invest in in individual companies? So it was something that we added in. When we added them in, we did it in such a way that made it really easy for people to invest in them via what we call the weekly contribution cycle. So going back to that roundup thing that Moneybox was founded on, you can invest in your big kind of US companies uh like Amazon, Apple on a weekly basis or on a monthly basis from your paycheck, basically making it as easy as possible, as I say, for people to benefit from pay on cost averaging. If the market is down a bit, you get a bit more for your for your contributions. You’re just investing in these things, uh, as I say, for for the longer term.

[21:52] Sammie Ellard-King: One of the big things that we find, especially when we talk to people like on these on these types of calls, but equally as well on a day-to-day basis, is that they just want to set it and forget it. They just want to get on with the their lives and occasionally check in, you know, you know once a week or once a month, see how these things are progressing. But actually, they just want to contribute to the rising of the entire market as a whole rather than sitting there analysing financial reports, etc. stuff that you know that that actual stock pickers do. It’s not for most people, and so it’s I suppose it’s it’s a good thing that you’re offering that now, because I imagine that was probably a difficulty for some people that wanted to try and sort of wet their beak a little bit or have a little bit, or they really you know just were Apple. I love Apple, I want to buy Apple. So being able to do that is a is a good thing. Is there plans for more uh expansion in that area, or is it is it definitely sort of sticking with those 20?

[22:50] Brian Byrnes: Yeah, potentially. Um, we’re always uh looking out for a customer demand. Um, and as I say, we do get uh some customers asking for the odd kind of additional stock here or there. So it is always something that that we’re looking at. I think it’s important to say, going back on your point there, when I sit down for the 30 or 45 minutes a week with my finances, like it’s actually quite rare that I’m doing something with like pressing a button to make a trade or move my savings account or whatever it might be. Those types of things typically happen once a quarter, three or four times a year. Um the rest of the time is just educating myself on kind of what’s going on, what are the best savings rates uh that are out there. Certainly with my kind of pension or ISA or anything like that, that is all invested, as I say, for the long term. That is something very rarely touch, very much kind of set and forget. So, as I say, it is very much when I sit down for that 30, 45 minutes, just making sure that know where everything is, uh know what’s going on with various different, as I say, savings markets or or whatever it might be. And the great thing when you kind of work in The space is like it helps you on the day job massively as well. So as I say, I’m sure that’s something that you find too.

[23:59] Sammie Ellard-King: Yeah, absolutely. You know, I suppose probably me and you are quite aware in this regard that we probably geek out over that sort of stuff. So it’s uh yeah, that’s our look, you know, that 30-40 minutes for us is probably quite enjoyable. But um, you know, for other people, it’s uh it’s harder to get into the habit of it. You know, some people do those moments differently. And you know, I always say to people, make yourself as comfortable, whatever that is, whether that’s morning and your coffee uh or it’s evening, kids are in bed, glass of wine, you and your partner having that chat. Um, you know, I do the uh we often do them now together. And uh actually it’s it’s been a g it’s been a game changer. You know, our our sinking funds are now better than before. We have lots of different things set up. We’re working towards, you know, goals together, which is really, really nice.

[24:49] Brian Byrnes: Um Yeah, and it’s amazing how quickly that time adds up as well, because if you’re saying, look, I’m gonna do 30 minutes a week, that’s 26 hours over the course of a year, if you get into that really good habit. And amazing how quickly that you learn, okay, about savings accounts, about ISAs, about pensions, whatever it might be from a personal finance perspective that scares you, or you bury your head in the sand about completely under completely understandably, because as I say, it can seem quite inaccessible. But if you just get into that 30-minute habit, by the end of the year, you’ll be in such an amazing position when it comes to your personal finances. And everything that I do and we do at Moneybox is just trying to get rid of that nagging doubt that people that have that like keep them awake at night of should I be doing more X, Y, or Z? Like, how am I getting on with my savings? Do I have pensions littered all over the place? What happened with that pension with my old job? All this, all these sorts of things. We’re just trying to help people get rid of that nagging doubt in the back of their mind that we all have when it comes to money because it’s such a taboo subject.

[25:46] Sammie Ellard-King: A hundred percent. You mentioned it there. Great transition. You’re doing this for me, Brian. I like it. Um the um I read a stat the other day. Is it something like just under 20 billion pounds is missing from pensions? Is it is is that figure right? There’s there’s 26 billion of lost pensions uh basically within uh within the UK, which is which is absolutely mad uh when you think about it. And actually that figure is probably a bit bigger now because I think it’s about 18 months old. Excuse me. Um that’s that now. So this is basically people who have moved from job to job, uh, and the way that it’s set up in the UK at the moment, you have a pension fund per job, it doesn’t follow you around. And people have just lost track of those old pensions, and that all adds up to 26 billion um across, I think it’s nearly three million pension pots at the moment. So if you do them maths, it’s like nine or ten grand, an average pension pot that is effectively just lost down the back of the sofa. And it’s absolutely mad. Like we would not do that with any other type of account, any other bit of money. We would not lose track of a savings account that has 10 grand in it just because we’ve lost the paperwork or we’ve moved jobs or whatever it might be. It’s just the way that the pension industry has been kind of set up in the UK has just made it very, very easy for this to happen. And the government and the regulator are trying to find ways to fix it and reunite people with their pensions. Um, you may have heard about the pensions dashboard, which has been kind of long delayed. Um, but the good thing is that customers uh and anybody listening don’t need to wait uh for the government for help to find out if one of these pensions is yours. There’s plenty of people out there, Moneybox included, who have a teams of individuals that’ll help you reunite you with any pension pot that you have. And going back to that 30 minutes a week, a really good thing to do uh with one of those 30 minutes is just write down every job that you’ve had and then just cross-reference that with a pension pot. Say, look, okay, I work for this company in 2012 to 2014. Where’s my pension pot? Where is my money? Because since auto enrollment came in, and we can touch on that, how to say what that is, but it basically means everybody has a pension pot per job. You almost certainly will have a pension pot for every job that you’ve been in, and you need to keep track of where that is. Um, as a bare minimum, you need to know because you just don’t want to be one of those that’s lost a pension pot down the back of uh down the back of the sofa, effectively.

[28:08] Sammie Ellard-King: I was that person, you know, I did it, um, I did it with a uh you know a different company, um, but they found three and a half thousand pounds of pensions that were sitting there just completely untouched. And that was actually from jobs that you know when when I was in the early 20s, you know, you bounce around a little bit and you don’t realise that you, you know, you’d had a you know, you’d had three, six months here, seven months in a different place before you found actually, you know, oh, I stayed in a place for five years and I’ve got that pension. But all of that other money was just, I would have never remembered it. And they dug it out. Um, and also it’s quite difficult as well. Like companies like your Nests, etc., they especially for people like myself who it’s not the most complicated name to spell, but it’s a double-barreled name, and one little character here or there meant that they didn’t find my pension. So next time then I was speaking to Nest, I didn’t have to go back through and they have to sift through hundreds of thousands, and actually it’s a two, three week, then you’ve got to sign all these forms. It’s a ridiculous bureaucratic process, which is really difficult to find. But actually, this company just went and did it all for you and just pulled everything out and just went, here you go, like yeah, there’s an extra three and a half thousand pounds, which I pulled out and put into a personal pension, which is now, you know, I know where it is, and it’s it’s now ticking over and making you money. It’s insane. Um, how how many people are you know are you seeing that you know what what’s kind of the average? You mentioned nine, ten grand in those pension pots, but yeah, there’s basically there’s a there’s a full range.

[29:37] Brian Byrnes: Um, and your story reminded me there. I was on the train a couple of weeks ago and I bumped into somebody that that I know and they’re like, oh, I’ve seen you doing the personal finance stuff at Moneybox, that’s great. Uh it always triggers me that I um that I’ve lost track of my pensions, uh basically. And he was uh a Moneybox customer, so I got to the office and I was able to go in. We’ve got a team of pension detectives basically who will help you track down your pensions. They basically just went out to my friend and we’re just like, Look, where did you work over these kind of periods? Um and they went and they did all of the work for him, and as you say, track down these old pensions. Um, and then as I say, it’s up to him whether he kind of consolidates those or not. But first step is just making sure that you know, know where they are, which is the important part. Yeah, 100%, 100%. And people forget as well that one thing I was talking to a guy called Kevin Cahill actually about this, and um the interesting stat he had from his clients. Um, he’s a wealth coach, he had 70 something percent, I think 72% of his clients didn’t know that their pensions were invested. So they thought it was actually a pot, like a savings pot that just grew. And that blew my mind and made me think we’ve got a serious job on our hands to teach people about their pensions and and and where they sit. Um, with Money Box, what what’s your approach to pensions and how are you sort of uh helping people grow those pots and understand how they work?

[31:04] Brian Byrnes: Yeah, I’m I’m not surprised by that statistic, to be honest. And I was thinking earlier when we were having the saving versus investing conversation, we do have a huge job in our hands in the UK in order to uh change people’s minds, frankly, about the benefits of investing over the longer term. We are in the UK completely wedded to cash and cash returns. And the fact that cash is now yielding 5% is not going to help us, frankly, in the in those conversations. At least, as I say, for the 10 years where interest rates were on the floor, there was no opportunity cost of investing. As I say, it was basically, look, I need to do, I know I need to do something more with my money. So the conversation was kind of relatively easy. And actually, like there’s a there’s a lot of problems with the pensions industry uh over the last kind of 30 years. But the way that that has worked, almost with people being invested without almost knowing about it, you wouldn’t design it by that, but it’s not a bad outcome at the end of the day, where people they don’t check their pensions on on a daily basis, they leave them invested for the longer term for 10, 20, kind of 30 years. So there’s there’s something in that in terms of, as you say, people almost being invested with without without realising it. So there is something there. And as I say, we do that with Moneybox in terms of the financial education piece. We say, look, okay, you should be investing for the longer term. So we’ll set you up with a good investment option from the outset. And this really shouldn’t be something that you touch for the next 10, 15, uh, 20 years. So you make sure that in your 20s, 30s, even your 40s, your pension can be invested really aggressively, which again is kind of counterintuitive. You think pensions, you think safe, all this sort of stuff. But as you say, you can invest pretty aggressively with your pension in your 20s, 30s while you’ve got plenty of time. Um, and then as you come closer to retirement age, that’s where it starts to get a little bit more kind of complex in terms of how you should be investing and then drawing down money out of your pension. But typically with the Moneybox customers, they are at the early earlier stage of their pensions journey. So we just try and set them up with that financial education. Again, going back to that set and forget, is you say, if you can almost replicate forgetting that this is here, you set it and forget it, you get your contributions, it’s invested, all that sort of stuff. Forget about it for 10 years, you’ll be pretty happy when you check back in on it in 10 years’ time.

[33:18] Sammie Ellard-King: Exactly, exactly. And and for me as well, then taking that same approach with the pension, you know, once you understand that your pension’s invested, then also taking that exact same approach that you know, you’re happy to contribute, you know, into your workplace pension or even your personal pension if you’re self-employed. And you’re that’s ticking away for you, you’re you’re more than happy doing that. But then when it comes to stocks and shares ISER and following the exact same approach, people get this whole like, whoa, no, no, no, no, no, can’t do that because it’s active money. And it’s really, really interesting to see that. But what we’re what I feel like we need to do a better job of uh uh personally, myself, and you know, some educating people that that process is exactly the same, however, the money is just available to you a bit sooner. Um, so that’s something that I’m really, really seeing at the moment. You mentioned rising interest rates, uh, and um I’m sorry, Gwen, you were gonna say something about that.

[34:14] Brian Byrnes: I was just gonna say I kind of have that struggle as well with my pension versus ISA. Like I’m incredibly happy, as I say, setting and forgetting uh the pension. Um, I’ve got it set up in index funds, I make my regular contributions on a on a monthly basis. Um, and it just it just goes in. I’m actually, if markets are down, I’m quite happy because I know I’m gonna be getting more for my regular contributions. And as I say, if I make it to 60, I’ll be pretty pleased at that point that I was able to buy more for my contributions in in my 30s. I do find it more difficult, as I say, even with my eyes, knowing everything, as I say, that we know from a financial advice and a long-term investing perspective. We’ve gone through a period now of about 18 months where investments have been okay. Last year was pretty bad, this year is a kind of a little bit better. But the temptation to do something just because it’s funds that you can get your hands on, and the the temptation to kind of meddle with what was a good strategy kind of a year ago, I have that challenge as well with my ISA kind of versus versus pension. So um completely understandable, as you say, that even as you say, knowing everything could have that we know that you shouldn’t touch these things, you should keep them invested for the long term. When conditions change or markets go down, it’s very difficult psychologically to just sit back and say, no, I’m just gonna kind of let this uh let this ride and let things recover. So yeah, um very much empathize uh with with all of our customers when they message saying my portfolio is down, should I do this? Should I do something with it? Um, as I say, it’s completely natural to figure that you think, okay, I should take some action here.

[35:45] Sammie Ellard-King: Oh yeah, no, no, just to be clear, by the way, I’m exactly the same. Like I I just think it’s mind-blowing that that that we have that mindset um when actually it’s it’s a very similar process. So um, you know, even educating yourself and controlling your triggers in those situations, as you mentioned, you know, sh markets are down. Oh my god, I need to sell. Actually, understanding that about yourself, if this was the first time you’ve ever gone through it without any kind of formal financial form of uh not formal for form of financial education, um you know, you’d be pretty worried, I would be. Um, you’re watching your money go down. It’s not a nice experience. And so, but if you’re understanding the history of the stock market, you understand that these things come and go and there’s cycles, etc., you get you’re you kind of feel better about weathering that. And then having a support system there, like with Moneybox being able to message someone or speak to a real person about this in the industry, really does change change everything. And you know, you can often get over those difficult times just by um just by doing nothing. And actually, I read a stat, um, it was actually part of the the uh the video we did recently as well. Um so I keep banging on about this video, but it’s just all coming up now. Um if you if you took your market out the and and missed the top 10 days of the last 30 years, you uh if you had 10,000 at the start, you’d have $74,000. And if you let if you missed the top 10 days, you’d you’d have 154,000. So um that just goes to show. Sorry, the other way around. So if you if you’d held on, basically, so you’d if you’d miss those days. So it’s just a crazy amount, and often uh, you know, weathering the storm is is the best solution here.

[37:30] Brian Byrnes: Um I often I I I struggle with that market timing thing uh sometimes because all of the data is right there in terms of how hard it is to time the market. If you think that it’s something that you want to do, you have to have your timing right twice, basically. So say you are invested and you think that there’s something coming around the corner, you di you disinvest, you sell down to cash, you then have to get your timing right again about when’s the best time to get to get in. And again, the opportunity cost, as you say, if you just miss one of those really good market days, uh, it has such a big impact on your returns. And the kicker is those really good market days tend to happen when the market is very, very volatile. So the really good days tend to happen just after the really, really bad days, which is when you’re going to be tempted to sell. We saw that in a microcosm during the COVID crisis. Um, uh I was advising clients at that time in March 2020, and markets were just an absolute complete bloodbath at that time, like things that we had just never seen before, where you didn’t think that the US market could go down 10% in a day, and and regularly that happened like over the like five or six times over the course of two or three weeks. And we were on the phone to customers the entire time, as I say, just reminding about the long-term investing plan. And I think we were all relatively fortunate with the way from an investing perspective that that all transpired and that the recovery was incredibly quick off the back of massive market downturns. We saw huge turmoil in in March, and by I think it was June or July, the market was back above where it had been before the pandemic had had started, and that was down to the support of various kind of governments and and central banks kind of uh around the world. But it just shows goes to show how difficult it would have been to time anything around that. And frankly, if you had lost the login to your investing accounts in February and found them again in January, in July and logged back in when it was all done, you would have just shrugged your shoulders and been like, okay, fair enough. Uh yeah, I’m back above where I was like four or five months ago and saved yourself all sorts of kind of heartbreak and turmoil of being like, should I sell, should I buy, all that sort of stuff. So it just goes back to that long-term investing behaviour.

[39:37] Sammie Ellard-King: Yeah, 100%. And also if you’d have pound cost averaged and into that, you’d have bought some really, really fantastic points. And actually the money that you’d put in in those months would be doing very well for yourself. And also, you know, after that, the markets performed extraordinary well. It was in it was an incredible year uh all round, really, if you if you were holding individual stocks, especially like your um speculative tech stocks, shall we say. Um so you mentioned, yeah, I was gonna say you mentioned interest rates a few times, and uh, you know, something that I do feel like it’d be really great to get your opinion on um being in the industry and seeing these things every day. Um, you know, mortgage rates are a nuts. I’m actually due for a remortgage next month, unfortunately. Um you know, I’ve been battling and basically toying with myself about what to do, whether or not we’re gonna go on a variable for a bit, or whether we’re gonna go into a fixed, but we don’t want to go on a fixed at 5.9%. And it’s just a wild time. Um so I’d really love to get your opinion on the way things are in the landscape right now.

[40:43] Brian Byrnes: Yeah, absolutely. And I think it’s it’s worth starting with uh saying that yeah, remortgages are just incredibly uh painful at the moment. We were fortunate enough to be able to get onto the uh property ladder in November 2020. So, like yourself, we’ve got a remortgage coming up in the the not too distant future, and it’s definitely look, it’s going to be extremely painful. Um, we’re all told about um kind of stress testing these things. What if interest rates get to five or six percent? And you see it all there in the kind of documentation. Um, but given where interest rates were for 10 years or so, I’m not sure many of us gave a really kind of strong consideration to what would happen if we’re in the situation that that we’re in now. So it is extremely painful when it comes to remortgaging. The things I would say to people in that in that situation, such as yourselves, is just speak to a good mortgage broker as soon as possible. You can lock in a rate uh up to six months before uh your remortgage is due. And if a better rate comes along within that six months, you’re not tied to the one that you’ve been locked in. You can drop that one and you can you can move to uh you can move to another one. And again, on that kind of variable variable versus fixed, like a really good mortgage broker will be able to talk you through that and say, look, this is the impact on you and your personal finances, your income, your expenditure, um, and model out kind of different circumstances as what happens if interest rates do kind of X, Y, or Z under those circumstances. At the other end of the scale is people trying to get onto the housing ladder for the for the very first time. Uh and we have a huge amount of Moneybox customers in that position. We are the market leader when it comes to the lifetime ISA. Lifetime ISA is an absolutely fantastic product. You can deposit up to £4,000 a year and get a thousand pound government bonus that you can either use uh to purchase your first property or you can also use it to supplement your retirement income as well. So we have a huge number of customers at that end uh of the scale. And I the messaging that we’re sending to them kind of at this time and the conversations that we’re having is saying, look, interest rates are definitely high, and your mortgage payment is probably going to be higher than you than you thought it was. But there’s a number of other things that are actually more in your favour than they were for the 10 or 15 years where interest rates were low. So you’re still getting your 25% bonus on your your lifetime ISA. Uh lifetime ISA rates are as high as as they’ve they’ve ever been since the inception of the product. So we pay 4.25% at the moment on your deposit within the lifetime ISA. And also uh housing prices are coming down, or at worst, they’re kind of staying still. So we came through a period where you were getting no return on your house deposit savings. So you were saving and saving and saving as much as you possibly could do, getting no interest rate return on it whatsoever, all the while house prices were going up by 10% a year. So you’re constantly trying to find yourself on this treadmill of just trying to keep pace and trying to get on the property ladder at some point. So a lot of that has reversed now, which is going to make your, as I say, your initial mortgage payment is gonna be more expensive than it was. But actually uh saving up for a deposit is getting uh a little bit easier with interest rates kind of where they are, and house prices are no longer just on this huge upward trend where it’s almost impossible to try and keep pace with them. So there are still thousands of people getting on the property ladder each month, where, as I say, our mortgage brokers are as busy as they’ve they’ve ever been, as I say, giving hundreds of pieces of advice, getting people their their first keys. So I would always say to people at the moment, like, look beyond the negative headlines when it comes to interest rates and say speak to a broker that can think about your individual situation because it’s still very realistic to get uh to get those first keys to your your dream property.

[44:22] Sammie Ellard-King: I love that advice. Really, really good point there. Thank you very much for that. Because it’s uh you know, it’s something that we get asked all the time. Lifetime ICE is you know, it is you know, it’s replaced to help to buy ISA really in in relative terms. And so it’s it’s so important, it’s such a great thing to have. It’s a if you’re utilizing it well. Um what uh what interestingly, we get asked this question. So I wondered what your thoughts were uh about this. You know, obviously there are um um I don’t not sure. Doesn’t does the Moneybox have the stocks and shares lifetime ISA available to the yeah, yeah. Yeah, we’ve got the stocks and shares and the cash life. So what uh you know it it’s a tough one really for me. I always I I have to defer to to other experts on this because people ask me, well, well, do I invest it? And I I’m always very hesitant to say yes because it’s very difficult to answer that question. Like when you get this question, what what what do you kind of say to people?

[45:22] Brian Byrnes: Just goes back to that time horizon point that we were talking about at the start. If you think you’re gonna purchase a house really within the next five years, should be the cash lifetime ISA, you’re getting a decent return on it now, you’re getting your 25% bonus on your contributions. So you don’t you’re not gonna miss out uh by not investing it. And as I say, certainly for anything less than three years, you shouldn’t be investing. If your house uh purchase is potentially a bit further away, so five years plus, or if you’re using the lifetime ISA for its retirement purpose. So we have a lot of self employed uh customers. Who use the lifetime ISA for that purpose? That’s probably somewhere where you should look at investing it. So it’s the same as the previous conversation in terms of cash versus investing. Very much down to your uh time horizon of how long you think the funds are going to be there. Yeah, no, 100%. Uh yeah, I always find it very difficult to answer that one. And you know that that that’s what I would say. But then it’s playing with someone’s money and then their dreams too. And that together is uh is is a bad conjunction if you get if it goes wrong. And so yeah, you’re always in that situation, play the safeguard because you’re in control with a cash ISA. And um, you know, that’s that’s the way I see it.

[46:33] Brian Byrnes: You know, I think the thing uh just on that kind of safety point, one on like the actual safety of your your funds. We’re we’re very fortunate in the UK to have a financial services compensation scheme, which is amazing, protects people up to 85,000 pounds if if anything kind of underwards happens with their savings, and thankfully it’s it’s relatively rarely been been called kind of into action. And both kind of the cash ISA from zero to five years, kind of very very safe in terms of its kind of cash deposits. Um, you get a decent interest rate, all that sort of stuff. And then as we know, investing for five years plus is a lot safer than what people kind of might think think it is. Investing over one year, yeah, basically a little bit of a kind of flip of a coin. Markets can be very volatile over that sort of stuff. Once you get out to five years plus, investing is very consistent and kind of consistently positive. So either of those options is the safe option. It just depends on, as I say, what your time horizon is and when you need those funds.

[47:30] Sammie Ellard-King: Yeah, brilliant. No, I absolutely agree with you there. It’s a great point. Last last sort of question here, and it was a it was a point that you threw in lastly. And uh, I was very interested by what you said because you said the future of ISAs, and I wonder what you mean by this, and uh, I’d love to know hear your thoughts. Yeah, how how long do we have? Uh so we are recording this now uh first week in October. Um and there is an autumn statement coming in the UK on the 22nd of November, so it’s about six weeks out. Um the front uh the front page of uh a lot of the newspapers of the last couple of weekends has been speculation about the future of ISAs and potentially that the the government and uh the Treasury and HMRC are looking at what will probably be the biggest shakeup of ISAs since they were introduced and they’ve been around in some way, shape, or form for the last 25 uh 30 years. So there’s a lot of speculation um at this point about kind of what’s what’s going to happen. Um, and I would just say to your listeners, it’s something to keep an eye out for in that autumn statement on the 22nd of uh November. It’s unlikely that they will uh make any changes to ISIS that will be immediate, as in, take place at that at that point. But I would say going into the tax year next year, highly likely uh that the ISA universe uh will look quite significantly different potentially uh to what it does now. So some things that have been mooted, uh speculation is kind of merging of the cash and the stocks and shares ISAs. So currently you have to choose between one or the other. Um apparently the government is looking at uh at moving those together. So within the same ISA, you can say put 10 grand of your contributions into cash, you can invest the other uh the other 10 grand into stocks and shares without taking out two separate ISAs, um, which which kind of broadly makes sense. And then from our side of uh things, when it comes to the lifetime ISA, things that we have been pushing the government and the regulator to do for quite some time, we’re hoping um that it will potentially be be looked at in the the autumn statement when it comes to things like the 450,000 pound uh house price cap um that is uh there for the the lifetime ISA, which is not a problem for the vast, vast majority of money box customers and people, but it is something that has remained completely static since the Lifetime ISA came in in 2017. As we know, house prices have increased significantly since the Lifetime ISA has been introduced. So, in effect, it’s a real terms cut in terms of what you can purchase with the Lifetime ISA. So we would like to see that future-proofed in some way, shape, or form, so that the £450,000 limit it increases by some measure of inflation. Um and we have also been pushing for some sort of emergency release valve from the lifetime ISA. So, as you know, um there is a penalty if you use your funds for something other than purchasing your first home or for your retirement. Um, and we don’t feel that that’s particularly fair, that you should be penalized if you’ve got a medical emergency or something like that. Um so that’s again something that we’re pushing the government and the regulator to consider.

[50:43] Sammie Ellard-King: Interesting. So interesting. Yeah, it’s uh it’s certainly um needed. I mean, if you really want to buy a flat in London these days, good luck parting with anything less than half a million quid at the moment. So it’s yeah, and it’s it’s honestly it’s becoming a a non-London problem as well. And say if you imagine that the 450k stays completely static for another 10 years, so many other cities and areas are going to be dragged into that net where it does uh become a problem. So it’s not a London-centric problem today, and it’s as I say, going to become a problem for the rest of the country over time. And it feels like to us a relatively kind of quick fix to just say, look, this is going to gradually increase. So at least it stays the same as it was intended kind of when it was brought in. We do a thing called our uh Lifetime ISA hotspots every year, so the most popular places uh to buy. Um, and number one on that list for the last couple of years has been Bristol. Um, and that people in Bristol now, as I say, they will very quickly tell you that that £450,000 is rapidly becoming an issue. So as I say, we just don’t think you would from the outset kind of design a product like this where it on an annual basis, in effect, the the cap is coming down every year because house prices have been increasing rapidly and probably will start to increase again in the not too distant future. So it’s just there’s an opportunity now to fix some of these small areas around ISAs that are that are pain points. So it’s something that we’re pushing for. And again, as I say, for your for your listeners, sometimes these budgets and auto-statements can be little bits of non-event um or or quite dull. Um, but it does look like, as I say, from a lot of the coverage that’s happening at the moment, it’s it’s something to keep an eye on on the future of ISAs.

[52:23] Sammie Ellard-King: Definitely, for sure. And we had exactly this problem when we moved house. It was like uh when we we were going to buy in London, we were just over the threshold. So we had to buy outside of London just because we didn’t reach the threshold in London. They had a different type of threshold and a different contribution amount as well that uh that you could get. Um so yeah, I do think it’s it’s time for an overhaul. That you’re exactly right. Brian, thank you so much. Um, you know, I wanted to throw that last question in there because uh you you you you sent it through. I’ve seen all these headlines have company, um, but a man on the ground like yourself, I wanted to get it, you know, your opinion on it for sure. So I really appreciate you coming on today. What where can people sort of connect and what’s the best way of sort of jumping on if they’re interested in signing up to Moneybox? Yeah, absolutely. So you can just log on to the website. Um, so just pop it Moneybox into Google, it will come up. Um, and then also just download the app. Uh just log on to the app store uh and absolutely everything uh will be in there in terms of what we talked about saving, investing, retirement, and home buying. And unfortunately, if you do that, you’re probably not going to be able to avoid my face or my voice uh on there because we do hell of a lot of financial education stuff. Uh so yeah, for better or for worse, I’m in there quite a bit as well.

[53:28] Sammie Ellard-King: Yeah, thank you so much. And we’ll leave links as well to Moneybox in the in the description below. And um, yeah, if uh you do get a chance, follow Brian Brian on LinkedIn. He’s always posting some really cool stuff and uh good man to follow if you want to keep your finger on the post for personal finance in the UK. So thank you very much, Brian, and yeah, speak to you soon. Brilliant. Thanks, Sammie. Thanks for having me.