AD | IT'S NOT TOO LATE TO START SAVING WITH THE NOTTINGHAM

Wife? Yep. Kids? Two of ‘em. House? Somehow. Supermarket loyalty card? Sixty-three of the darn things.

There’s so much of my life that I’d consider ‘grown up’. Indeed, as my 40th birthday approaches faster than a hearing aid pamphlet dropping through the front door, I’m pretty content with what I’ve achieved as a more mature gentleman. You’re picturing me in a smoking jacket right now, aren’t you?

However, there’s one part of these more settled years that I’ve never really got to grips with, and that’s my finances.

I’M DEFINITELY NOT VERY GROWN UP WHEN IT COMES TO MY MONEY MANAGEMENT

I’M DEFINITELY NOT VERY GROWN UP WHEN IT COMES TO MY MONEY MANAGEMENT

I’m the kinda guy who runs up credit cards with the best intention of paying them off at the end of the month, but when pay day comes, that fancy new jacket isn’t going to buy itself is it? The multiple pensions I’ve contributed to over the years are minimal, my savings, erm yeah, let’s not go there and my current account flirts so god damn hard with my overdraft each month it should have a restraining order.

But the thing is, I’m not alone. Social media paints this filtered picture that everyone is absolutely LOADED and on-top of modern adult life, but when I speak to people, it would seem so many of us are in the same financially sinking boat. In fact, in a survey of 2,005 people* conducted for savings and mortgage provider The Nottingham, a third of respondents said that their money management stopped them feeling like a ‘proper adult’.

For Millennials and Generation X, life is expensive, there’s no getting away from it. Rent, mortgages, commuting, lattes, utility bills, those fancy jackets I can’t say no to, kids, avocado on toast, it all adds up, so it’s no wonder that come the end of the month there’s little to put away for the future. 33% of the people questioned for The Nottingham said they had no savings and 21% said not owning property made them feel like they hadn’t grown up yet. 

But, and it’s a BIG BUT (not like a ‘you’ve-clearly-done-way-too-many-squats’ big butt, but a let’s-sort-our-finances-out but), it’s never too late to start saving.

A few simple steps can be all that’s required to start saving, realign spending and importantly enrich our relationship with money. Apps are available to track spending and a trusty old Excel spreadsheet is always a good starting point to know what can realistically be saved each month.

For long-term savings, such as planning for retirement or buying your first house, a Lifetime ISA could be the perfect investment, because, in its very simplest terms, the Government contributes loads of dosh to help you on your way – basically free money! Wahey! Now, who am I to tell you where to put your money, after all, as I mentioned earlier my money management has been terrible over the years but with the big 4-0 fast approaching, it’s time I started getting on top of my money management and saving for the future, so I for one am seriously considering The Nottingham’s product.

I’m no Martin Lewis, but I should just explain some of the details of The Nottingham’s Lifetime ISA;

·         The LISA can be opened with £10, only between the ages of 18 – 39 (phew, I have a year!)

·         Maximum savings £4,000 per tax year and the Government will pay you a 25% bonus of up to £1,000 per tax year

·         The Nottingham are the only Lifetime ISA provider to offer the account in their 60+ branches and online.

·         You can save in the account until you are 50 but won’t be able to withdraw for retirement until 60 without incurring a 25% Government charge, but the account will continue to gain interest until it is closed.

·         The maximum you can save each tax year is £4000. The Govt will pay a 25% bonus of up to £1000 each tax year. You can withdraw money from a Lifetime ISA to buy your first home, or at age 60. Other withdrawals will usually mean a 25% Govt charge, so you could get back less than you put in. Full terms and conditions are available at thenottingham.com.

So, what do you reckon? Click here if you fancy looking into joining me and starting to feel a little more grown up. Smoking jacket optional…

Just to finish off, you might have seen I posted an Instagram story a few days ago, asking for any questions, financial or non-financial, that The Nottingham might be able to help with. Well, here are the questions from you guys and the answers from the experts at The Nottingham. I hope they’re useful.

I must say, I particularly like the ‘penguin’ typo (I’m assuming it’s a typo or that person has some weird expectations of his retirement)…

1.       Should I invest in an ISA for the kids or buy shares in LEGO?

A Junior ISA is an option for kids savings if you’re planning on saving for them for the longer term. If you want somewhere to pop their Christmas and birthday money to save up for their own LEGO supplies that they’d want to buy this year, an ISA isn’t the best idea. But, if they want to save up for a big purchase in a few years the Junior ISA could work. A Junior ISA is a long-term tax-free savings account for children and you are able to save a maximum of £4,368 for the tax year 2019/20. Once the child is 18 the money in their Junior ISA is 100% theirs. 

Here at The Nottingham we have some interesting examples of saving scenarios for funding university life which you may find useful in our Junior ISA guide.

If you are interested in shares of LEGO then speaking to an independent financial adviser would be beneficial.

2.       How much money do you spend on clothes?

We don’t know how much Jamie spends, but according to his description above we reckon he doesn’t need another fancy jacket. If you have spending habits that you’d like to kick, our 6 everyday #SavingSwaps may give you a bit of incentive to reduce your latte or trainer habit and save some pennies. 

3.     Why Nottingham and not just my regular bank?

In 1849, The Nottingham was founded by abolition Quaker, Samuel Fox, with the purpose of helping people buy their own home and put a roof over their head. Although many banks and building societies offer similar services, unlike banks, building societies adopt a mutuality model. This means we balance the needs of savers and borrowers alike. Profits are invested back into the Society and local communities unlike banks who have shareholders to satisfy. 

The Nottingham have over 60 branches in their heartlands and also offer the Lifetime ISA online and Nottingham Mortgage Services online and over the phone. This is where mortgage advisers will find you the right mortgage by searching over 60 lenders and 1000s of different mortgages.

4.       I’ve paid £1500 per month rent for around 5 years. Why is it so hard to get a mortgage when I’ve proved I can afford expensive monthly payments?

Senior Manager for Mortgages at The Nottingham, Ben Osgood says – “Mortgage lenders assess your affordability during the good times and the bad and so will not just look to see what you can afford now, during a period of low interest rates but also ‘stress’ your ability to meet payments if interest rates were to significantly increase. Landlords rarely apply such affordability assessments and take a much more short term view of an applicant’s affordability. Mortgage advisers at Nottingham Mortgage Services will search over 60 lenders to find the right mortgage for you, give them a call to see what they can do on 0344 4810 013.”

5.     Is an ISA basically a savings account?

ISA literally stands for Individual Savings Account so the short answer is yes. But an ISA is different to other savings accounts and one of the main reasons is that there's a tax-free allowance on what you save in ISAs. We explain the difference with our jargon busting glossary and you can also check out our ISA guide for an in-depth look into these accounts.

6.       What’s the best savings account for my first home deposit?

Of course this all will depend on your circumstances, however if you qualify, there are two options to gain Government help for your first home deposit. Both the Help to Buy: ISA and the Lifetime ISA give a 25% Government bonus on your first home savings. That’s 25% bonus on top of your savings on top of your savings plus both accounts accrue interest, too! The accounts are quite different and we lay out all of the differences in our page -  Which First Time Buyer ISA Should You Choose which will explain the full details of the accounts.

Please note that the Help to Buy: ISA will only be available until November 30th 2019. See Lifetime ISA details at the end of Jamie’s blog post.

7.       How do I save for my first home faster?

Savings for your first home is probably one of the first really big amounts of money that you will want to save and it can seem like a huge amount but we would recommend to start saving as soon as you can, even if it’s just opening an account with £10! As soon as you start, it begins to add up. Check out our savings swaps to see what you can live without and save the money towards your deposit – we’re talking savings for example over £700 a year on coffee and over £1000 a year spent on trainers. Finally, investigate the Government bonus accounts such as the Help to Buy: ISA and the Lifetime ISA which both give you boosts to save your deposit faster. See Lifetime ISA details at the end of Jamie’s blog post.

8. What happens if I get to retirement age without a private PENGUIN? (pension)

The state penguin, sorry, pension is designed to cover basic needs once you have retired and is based on your National Insurance contributions, you can claim this if you have at least 10 years’ worth of contributions. Your workplace pension will also contribute to your later life savings and you can boost your own contributions but there is also the option to open and contribute to your own private pension. All of these pensions will add up to give you your funds to live on when you retire.

To answer the question bluntly, what would happen if you reached retirement age without a private pension? You would have to live on your state and workplace pensions. What would happen specifically to you would depend on how much your pensions are worth and how much you want or need to live on in later life.

It’s never too late to start contributing to a private pension if you think you will need more money in later life but if you are under 39, like our Jamie, you can still open a Lifetime ISA. The Lifetime ISA which, as well as helping first time buyers onto the property ladder, gives a 25% Government bonus on savings for retirement too. You still receive the 25% Government bonus - up to £1,000 a year and you can save up to £4,000 a year until you are 50. You cannot save between age 50 and 60 but your savings will accrue interest over this time. A Lifetime ISA is a complimentary product to a pension. See Lifetime ISA details at the end of Jamie’s blog post.


* The Nottingham commissioned Atomik Research (4 media) to run an online survey of 2,000 adults in the United Kingdom. The national representative sample is GB residents 18+ and based on age/gender/regions quotas that match the ones that are applicable to the adult population of the UK – from data released by ONS. The survey has a confidence interval of 95 percent. The fieldwork took place between 11th - 17th June 2019. Atomik Research is an independent creative market research agency.