6 small changes to improve your finances in 2025- Financial advisor Lisa Conway-Hughes
Jan 9, 2025
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In this engaging discussion, financial advisor Lisa Conway-Hughes shares expert insights on improving retirement savings. She highlights the impact of small, practical changes in budgeting and insurance that can lead to substantial financial growth. Lisa also delves into the complexities of pension plans, emphasizing the significance of understanding options at work. Additionally, she addresses common fears about pensions and stresses the importance of having an emergency fund, advising listeners on proactive financial management for a secure future.
Incremental changes in financial habits, like increasing pension contributions by 1%, can significantly enhance long-term retirement savings.
Understanding the intricacies of pension schemes, such as employer contribution matches, is crucial for maximizing retirement investments and avoiding missed opportunities.
Insurance plays a vital role in financial stability, offering necessary protection against income loss due to health challenges and emergencies.
Deep dives
The Importance of Trust in Business
Trust is a fundamental element in business, and establishing it can significantly impact a company's success. Businesses must demonstrate trustworthiness through robust security programs such as GDPR compliance. Tools like Vanta facilitate the centralization of program requirements while automating evidence collection for compliance frameworks such as SOC 2 and ISO 27001. By utilizing these resources, companies not only save time and money but also build stronger customer trust.
Small Changes Lead to Big Financial Gains
Small incremental changes in financial habits can have a profound impact on long-term financial security. For instance, increasing pension contributions by just 1% can lead to significant sums of money saved by the time of retirement. Specifically, a 25-year-old earning £28,000 annually can add £72,000 to their retirement savings with a mere £6 weekly adjustment. Understanding the long-term effects of these small actions is crucial for better financial planning and stability.
The Role of Inflation and Salary Growth
Discussing financial forecasts, the importance of accounting for both salary growth and inflation in retirement planning becomes evident. Growth assumptions in pension contributions typically consider a modest 5% annual increase while salary increases are estimated at 3.5%, though many individuals find these projections overly optimistic. In reality, consistent salary increases may stem from promotions rather than annual increments, highlighting the variability in income growth over time. These factors should influence decision-making around pension contributions and savings strategies.
Employer Contributions and Pension Awareness
Many employees remain unaware of the potential financial advantages within their pension schemes, specifically employer contribution matches. Research shows a significant percentage of workers do not fully utilize matching contributions, missing out on free money that can double their investments. Educating employees about these potential benefits is essential, as many are not familiar with their pension options and defaults. Taking time to understand the terms and conditions of workplace pension plans can optimize retirement savings.
Understanding Insurance and Financial Security
The discussion of insurance reveals it as a necessary component for ensuring financial stability, especially as most people have little saved for emergencies. Terms like income protection insurance can provide a critical safety net for individuals facing health challenges that prevent them from working. Many mistakenly perceive insurance as a scam, yet the right cover can protect one's income and provide peace of mind. It's essential for individuals to assess their current policies, understand the coverage they provide, and consider additional protection based on life circumstances.
Looking to sort your financial life out in 2025? Financial advisor and podcast favourite Lisa Conway-Hughes shares a bunch of small changes that could make a big difference to your financial future.
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This is not financial advice. The reason it’s not financial advice is because it’s not tailored to you. We explain the principles of building wealth but if you want personalised advice, it’s worth speaking to a financial advisor. As with everything financial, please do your own research. We really encourage that because no one cares more about your money than you and if you learn the basics then it will change your life.
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