Meet Jacob. He’s 22 and works as a Project Manager in the architecture industry. Jacob went straight into the working world aged 18, so is already ahead of his peers on his retirement savings. He’s also following the Financial Independence, Retire Early (FIRE) movement.
What led you to be interested in FIRE?
I’ve seen first hand the impact of not having enough saved for the retirement you want. My grandparents worked in the armed forces so had a final salary pension. That meant they were able to retire at age 55 and got to spend lots of time with their grandkids. Unfortunately my parents didn’t get the same final salary, just defined contribution, which means they’re unable to retire as early and so miss out on more time doing what they want to do.
I think the topic of pensions and saving for retirement is glossed over a lot. I started working aged 18 and opted into a pension straight away. I followed my dad’s advice to make use of the workplace pension employer matches. After I started looking into pensions, it led me into looking at other ways to grow money through things like ISAs. Then a series of YouTube videos introduced me to the Financial Independence Retire Early (FIRE) movement. I was really intrigued by the idea you could step away from working whenever you want.
I’d like to retire around 45-50. To me it’s about having the option to retire when I want to – not when I have to.
What kind of sacrifices do you have to make?
I’m the youngest in my team at work and most pro-pension in my friendship group. A lot of my friends have just finished uni and are looking for their first proper jobs, and aren’t really thinking about pensions. Lots of them have opted out of auto enrolment into workplace pensions and view it as something to think about later. But they’re losing out on five plus years of compound interestThe return you earn on top of your investment gains by reinvesting your profits instead of withdrawing them..
I do feel like I am sacrificing some things – I’d like to go on lots of holidays and have a nicer car but I’d rather have less nice things now and only go on little trips away so that in 30 years I can spend my time however I want – almost a delayed gratification. I don’t go without, I just buy lots of things from charity and thrift stores.
What does your ideal life after work look like?
Financial independence, control over my own time, I can go wherever I want, there’s no one to answer to, autonomy, spontaneity – if I fancied going to Paris that day I could up and go, I could take my kids or grandkids off to Disneyland.
I joined Moneybox in 2019 and have been really pleased with it. I chose them as they’re really friendly, offer a competitive range of fundsFunds, also called ‘tracker funds’, are financial instruments that have been set up to match or ‘track’ the price of a market index. Investing in a fund lets you get exposure to different financial assets like shares and bonds, without having to buy them directly. including the BlackRock LifePath pension fund. I consolidated an old workplace pension into my Moneybox Pension. Moneybox made it super easy – all I had to do was fill out some questions and they did the rest. That made me want to stay with them, so I opened up other accounts including the Lifetime ISA.
My partner is wholly onboard and shares my FIRE aspirations. She’s also saving with Moneybox. Committing to FIRE and early retirement is a team effort. It necessitates that you are on the same page and have aligned goals with your significant other.
Meet Mo. He’s 31, living in Hampshire and working as a Software Support Specialist. His money motivation comes from his dad, who built his own business from the ground up.
I think I have a good handle on my finances. I’m very interested in investing and finding new avenues to grow wealth. I’m largely self-taught in that area and had a really great role model in my dad – who moved to the UK with just the clothes on his back and built a business from nothing. So I learned a lot about business and managing money from him.
Being a 90s kid, I grew up to witness the financial crash in 2008 and learnt about what that means and the real life impact it had. I really delved further into learning more about personal finance during Covid. The dream is of course to retire early but who knows what will happen! Maybe I’ll move into consultancy and just work one or two days towards my retirement years.
I hadn’t really considered or known about pension consolidation until I found Moneybox. I transferred an old workplace pension over to Moneybox – the provider was being quite difficult and held up the process, but the team at Moneybox helped things go smoothly as possible and kept me informed.
I’m invested in an ESG fund. It speaks to me more than others as I’m quite an environmentally conscious person. I chose Moneybox over other choices because of how easy it is to use and that it’s app focused.
When deciding whether to transfer your pension, it’s important to compare the charges, investment options & benefits between Moneybox and your old provider. Moneybox cannot accept a transfer from a pension your employer is currently paying into.
If you’re not sure whether the Moneybox Pension is right for you, you may want to contact a suitably qualified financial adviser for help.
By consolidating your pensions, you may miss out on potential ‘small pot’ pension benefits such as not triggering the Money Purchase Annual Allowance on withdrawal
