If, like me, you were born in the late 60s, you would have been a teenager in the 1980s - and what a great time it was to be a teenager!
The music was fab. Disco had disappeared to be replaced by the “new romantics” like Duran Duran, there were great movies in the cinema such as Top Gun, Highlander and Ghostbusters, and on TV we enjoyed delights such as Battlestar Galactica and Worzel Gummidge.
There was political and social change too. By the mid-80s the Conservative government had pushed ahead with the privatisation of several state-owned businesses including British Telecom, British Gas and Rolls-Royce and the Housing Act gave five million council house tenants in England and Wales the right to buy their home from the local authority.
Technology was moving at an incredible pace and in 1983 Motorola introduced the first commercial mobile phone – which looked and weighed the same as a brick – and boasted 30 minutes talk-time, six hours standby time, and cost £2,639!
This, along with the Filofax, was a favoured tool of the newly-christened “yuppies” – young upwardly mobile professionals - working in well paid jobs in the city, whose lifestyle was applauded and ridiculed in equal measure.
I entered the workplace in 1985 and joined a national high street bank who provided a non-contributory final salary pension scheme, as well as death-in-service benefits. Fast forward nearly 40 years and, in common with many of my peers, I have now worked for many different employers (six in my case, although I believe the average is higher) and also had a period of self-employment.
Over the years, these job changes are also woven into significant life events; first home, marriage, second home, divorce, second marriage, new home, kids, bigger home, death of a parent.
So, when you look back and take stock of everything that life throws at us, no wonder financial planning can be low on the list of priorities. But if you are “child of the 80s”, and in your late 40s or early 50s, what should your financial priorities be now?
“You gotta fight for your right to party!”
You may well have an eye (or even both) on retirement. You might have a number of different pension “pots” and would benefit from reviewing these to ensure you have a strategy in place leading up to stopping work, to make sure you can fund the sort of retirement you are hoping for. Having reviewed and assessed your pension funds, you may be interested in looking at investment opportunities that are not available through mainstream pensions, such as direct equities or commercial property, and that is where a Self-Invested Personal Pension (SIPP) might be able to help.
“I am your father”
Your children may be a little older and less dependent, but they might still be in education and need some help with the expense of completing their studies. Or they may already be looking for a first home and you want to assist with getting them on the first rung of the property ladder. There are a variety of savings vehicles available to help including Junior and Lifetime ISAs, and did you know that you can even fund a pension for a child or grandchild?
Your mortgage may not be as high as it was when you were younger – or you may even be lucky enough to have paid it off already. If so, maybe you could be using the monthly savings to build up a savings pot, for example by using your ISA allowances each year (as this is a “use it or lose it” tax allowance) or using investments such as offshore bonds that could supplement your income in retirement in a tax efficient way.
“Never gonna give you up, never gonna let you down”
Protection such as life assurance and especially critical illness cover becomes more relevant as, sadly, you are more likely to claim as you get older. Cancer Research UK state that one in two people will develop cancer at some point in their lives, so with those odds it makes sense to ensure you and your family are protected.
I would encourage you to work with a holistic financial planner, such as the Wealth Management Consultants at Mattioli Woods, to help identify and prioritise your own objectives. By doing this, and developing a flexible financial planning strategy, you are more likely to be able to achieve these goals.
Although many things have changed since the 1980s, it is perhaps worth noting that all of the movies and TV shows listed above are being rebooted as we speak while in November 2021 Duran Duran’s “Future Past” album was in the top 30. Unfortunately, no employer offers a non- contributory final salary pension anymore.
I still have a Filofax.