This podcast isn’t personal advice. If you’re not sure what’s right for you, seek advice. Tax rules can change and benefits depend on personal circumstances.
This podcast isn’t personal advice. If you’re not sure what’s right for you, seek advice. Investments rise and fall in value, so investors could make a loss. Tax rules can change and any benefits depend on your personal circumstances.
Full podcast episode transcript
[0:09] Susannah Streeter: Hello and welcome to Switch Your Money on with me, Susannah Streeter – Head of Money and Markets here at Hargreaves Lansdown.
[0:14] Sarah Coles: And me, Sarah Coles – Head of Personal Finance – and we’re back for a fresh New Year, full of cheese and good intentions. Susannah, have you made any New Year’s resolutions?
[0:24] Susannah Streeter: Yes I have. After charging around so much in 2024 – with trips to eight different countries and countless miles around this country – my new year’s resolution is to do less and say ‘No’ more. That is gonna be difficult, but I am trying – I’ve already turned down a role in my local panto! – and have scrapped a trip to the States this year. Just like investing, some opportunities look too good to be true – especially with teenagers in tow!
[0:58] Sarah Coles: I’ve also got teenagers, so my resolution has to be to try to worry less about the things I can’t control – which is never easy – and it should free myself up to focus on the things I can something about.
[1:11] Susannah Streeter: It is gonna be a big year ahead for both of us – and we are not alone. So, we decided to explore the changes worth considering at the start of the New Year, in an episode we’re calling ‘New Year, New You!’
[1:26] Sarah Coles: We’ll look at the valuable steps we can take with our investments and broader personal finances, and Helen Morrissey – our Head of Retirement Analysis – will be outlining the key New Year jobs to do when it comes to your pension.
[1:35] Susannah Streeter: Plus, we have Emmanuel Asuquo with us – a Personal Finance Expert and Financial Adviser who founded The Eman Effect – an educational company providing the knowledge people need. He’s the Author of ‘Get Your Money Right,’ which explores your money mindset and building good habits – both of which are key to starting the year right. And he’s a social media star, holding the coveted role of being the only person our 18-year-olds will listen to about money.
So, Emmanuel, I know we’re gonna speak to you more later, but can you start us off with what you think is the single biggest mistake people make when they’re considering financial resolutions?
[2:14] Emmanuel Asuquo: Great question – I think the biggest mistake people make is it being a resolution, but not actually having a plan to complete it.
Resolutions are great, but you probably already knew you had a problem – hence why it’s so easy to create resolutions – and I think the big thing people need to do is create a plan on how they’re going to achieve it.
[2:33] Sarah Coles: We’ll look forward to going through that a bit more later – but, before we get stuck in, we should draw our focus a little wider and look at what’s driving the markets at the start of 2025.
[2:41] Susannah Streeter: Yes – all eyes will be on Trump returning to the White House – and the first steps that he’ll take once he’s back there. There’s inevitably going to be a lot of focus on what the impact could be for the global economy when higher tariffs are introduced.
There is hope tariffs might be less aggressive than threatened – with some sources close to the Trump administration reportedly looking at plans to cover only so-called ‘Critical imports’ related to national or economic security – although it’s not yet clear what they would include. There are some hopes that hikes and duties might be more limited.
What is certain is that there is likely to be a lot of uncertainty going forward, especially with the path of interest rates not clear-cut – which might make for some volatile patterns of trading on the markets.
[3:34] Sarah Coles: For investors, it’s important not to focus too much on short-term changes. Susannah, I know you always say people should focus on building the right long-term portfolio – can you explain what you mean by that?
[3:47] Susannah Streeter: The last few years haven’t been easy for investors, and we’ve seen our fair share of stock market wobbles. Of course, there’s been the global pandemic, war in Ukraine, and the cost-of-living crisis. 2024 was certainly more clement – with some strong stock market performances – particularly in the US.
And, remember, the stock market has, historically, risen over the longer term – however, it’s never been a perfect line upwards. There have been – and will continue to be – plenty of ups and downs along the way – it comes with the territory of investing. Past performance is also not a guide to the future.
The aim of investing is to grow your wealth – and to do that you need a long-term approach. That means investing for at least five years – but, if you need the money before that, you shouldn’t be in investing and should be saving instead.
If you can keep it invested – with long-term goals in sight – that’s not to say you shouldn’t be reviewing your portfolio to make sure it’s right for your circumstances.
[4:51] Sarah Coles: How should people go about reviewing their portfolio in the New Year?
[4:56] Susannah Streeter: It’s important to check in on your investments from time-to-time to make sure they are right for you. There’s no hard-and-fast rule as to how often you need to review your portfolios, but twice a year is sensible – and once a year at the very least.
You should also check in when your circumstances or investment objectives change, or if there have been some big changes in the markets.
Reviewing your account once or twice a year should strike the right balance between taking control of your finances and it not becoming a burden or getting in the way of life. Making too many changes to your investments – and the possible costs of trading – can eat into your returns over the longer term.
[5:40] Sarah Coles: What should they be bearing in mind when they look at their portfolio?
[5:43] Susannah Streeter: When you invest in funds, it makes sense to check the performance against its benchmark in the sector that they invest in. This will allow you to compare the fund’s performance against the wider stock market.
Remember, there are two types of funds – actively-managed funds aim to outperform the benchmark they’re measured against, whereas index tracker funds aim to track a particular index or stock market. So then, it’s worth considering if your portfolio needs rebalancing.
To make sure you’ve got enough diversity across sectors, and geographies, and asset classes – like stocks, bonds, and gold, for example – to match the level of diversity and risk you planned on when you started out, it’s never wise to put all your eggs in one basket – even if one sector has performed significantly well.
You can rebalance by adding any top-ups or redirecting any regular investment instructions to areas that have become underweight.
Another way is to sell a portion from your investments that have done well, to top up investments that have performed poorly. It might sound counterintuitive, but top performers usually come in waves, and it should help bring the portfolio back into kilter.
You can also ask yourself if yourself if your personal circumstances or investment objectives have changed. So, ‘Have you had a change in those personal circumstances, such as an unexpected job loss or redundancy, ill health, or a significant change in income?’
Whatever changes you choose to make with your investments, it’s essential to stick to your long-term plan and avoid making those investment decisions based on short-term market movements.
You could consider if your attitude to risk has changed. This isn’t because it should necessarily change depending on the direction of the stock market, but because the level of risk that you’re comfortable with could change over time. For example, as you get within touching distance of your long-term goal – like retirement or buying your first house – it’s normal to get more nervous about your investments falling in value suddenly. If this resonates with you, it could be a good time to check you’re still invested in a way that matches your goals.
Of course, there’s a world of difference between knowing the right thing to do and actually doing it – despite all those best intentions – so let’s bring back in Emmanuel.
So, Emmanuel – before we get to the resolutions, themselves – you talked earlier about the lack of a plan being a barrier to people getting to grips with their money and actually sticking to those resolutions. What other barriers are there?
[8:43] Emmanuel Asuquo: A big barrier is education – so people don’t actually know what to do. We weren’t taught ‘Finances’ at school – so, when you talk about making change, people are in the habits that they’ve had throughout their lives, and they don’t know how to do things differently. They haven’t learnt ‘Money’ – it’s not something that they’ve gone to school and learnt. A lot of people are learning from the mistakes that they’re making. I think actually having the education to make those changes. I think confidence – I think a lot of people shy away from money – there’s an embarrassment.
There’s this thing, where people feel like, ‘I should know this at this age,’ but they don’t. And so, because they don’t know that, they now feel shy – and feel embarrassed by it – so they try to avoid it. They don’t open letters, they don’t reply to emails, they don’t want to have conversations about money – ‘cause they don’t want to show that weakness that they have in that area. And so, all of these things can lead to people making poor judgements and bad mistakes.
[9:33] Sarah Coles: D’you think the fear factor is a big deal – so people are worried about doing the wrong things, so they end up doing nothing?
[9:38] Emmanuel Asuquo: Definitely. I think we’ve seen it with a lot of men at the moment, where we’re seeing men finding their identity being the breadwinner – and now that we’re seeing women making a lot more money, a lot of men don’t know where their place is anymore – because that’s how important money is to us and society. We talk about buying homes – and, especially here in the UK, being a homeowner is something that people are really proud to do – but, actually, ‘How do I get there, when we’ve seen house prices rise and salaries not rise in the same way – is it still possible?’ And, if you don’t have that education, you almost think, ‘There’s no point in me trying’ – and so you give up. And, actually, there are a lot of people who could start investing, but they don’t know how – and it feels scary – so they just feel like, ‘Actually, let me stick to what I know.’ And savers accounts tend to not perform as well as investments over the longer term – so that’s something that people need to be thinking about.
[10:28] Sarah Coles: It’s really interesting because we associate the fear factor with something that is a more female trait – that we’re taught, as girls, that we can’t make mistakes – making mistakes is bad, so we have to do the safe and right thing. It’s interesting that this is something that’s affecting men as well.
[10:42] Emmanul Asuquo: When I do events, most of them are 80% women – that’s because women are much more open to learning in those environments – to come to a webinar, come to a seminar, come and learn. Whereas men feel like they are supposed to know already – society expects you to know how to be good with money, yet you’re not taught that. So, it’s almost you coming to an event – or you seeking education – is an embarrassment because, ‘Why don’t you know?’ But, if you’ve never been taught, you shouldn’t know.
There’s this unfair expectation that men put on themselves to understand and know ‘Money’ that they’ve never been taught about.
[11:16] Susannah Streeter: D’you think there’s a lack of confidence and a mindset shift that needs to take place, with people perhaps thinking, ‘I’m not an investor – that doesn’t strike a chord with me?’
[11:30] Emmanuel Asuquo: Yes – I think even words like ‘Investor.’ Actually, the biggest investment you can make is in yourself – so we’re all investors, at the end of the day. We all want to better ourselves, and that takes investment – whether that’s reading, whether that’s writing, whether that’s doing better at work. Whether that’s the network you have, you have to invest in yourself.
And that’s the same thing – we go out and work really hard to make this money – why wouldn’t we wanna look at ways to make money work for us? Sometimes, it’s the terms that are used – because you say, ‘I’m not an investor’ – ‘Attitude to risk’ – ‘The stock market.’ These things feel so hard and so far away – and they’re words that we’re not used to. But, if we’re talking about investments, we make investments every single day. Your decision to go to work on time – and put extra effort and energy – in the hope that your manager sees that – and you get a promotion – is you investing in yourself.
When we bring it down to a very basic level, it becomes more open for people to feel like they can become that.
[12:26] Sarah Coles: You talk about that people feel they should already know these things – is there a difficulty in actually knowing where to start? So, even if you are thinking, ‘I need to get to grips with this’ – that you just don’t know the first place to go?
[12:38] Emmanuel Asuquo: I think that’s two-fold. Yes, there is a difficulty in knowing where to start – but, as humans, things that we are interested in, things that we want, we’ll learn. No-one had to teach me how to be an Arsenal football fan – I did that all by myself, and I learnt all the players over all the years – I know all the games. I know that inside out because I decided to take an interest and make sure that, any time there was content online – anytime there was Match of the Day – I was watching.
Yes – there’s a, ‘Where do I start?’ – but, actually, there’s also, ‘Am I being intentional in the podcast that I’m listening to – in the things that I watch on television – in the conversations I’m having with my friends – in the rooms that I’m being in?’ And, if we also take that step, it’ll make it a lot easier to get started.
[13:24] Susannah Streeter: So, if people were to only do one thing in January, what would you advise it to be?
[13:30] Emmanuel Asuquo: I would say, the main thing is the mindset. We can set goals – we are very good at starting things. I like the parallel between health and wealth. We are very good at – in January – getting that gym membership – and maybe we go – but, typically, by February, gyms are quite hard than they were at the beginning of January.
So, if you really wanna do something, it’s really important to say, ‘What is the mindset – why am I actually doing this?’ ‘I don’t wanna just follow the crowd – I don’t just wanna invest became I listen to this podcast and they told me I should be an investor.’ ‘What is it for me?’ ‘What am I trying to achieve?’ ‘What’s my ‘Why?’ ‘What are the things I want for myself?’ – and really write them down.
Once you do that – and you understand what you want out of life – then investing becomes a means to what you want, as opposed to something you think you have to do. And you’re much more likely to do the things you want than the things you think you are forced to do.
[14:20] Susannah Streeter: D’you think you could combine other resolutions? It might be reducing the amount of alcohol you’re drinking – or going to the gym – to actually help you in your financial journey? A friend of mine has already noticed how much he’s saved by not going to the pub so much this January compared to last! So, perhaps you can use a number of resolutions to get you on your way.
[14:44] Emmanuel Asuquo: I think there are loads of different resolutions that you can use. It’s important to redefine ourselves. The best thing about a New Year is that you can say, ‘Who do I want to be this year?’
You might have had a terrible 2024 – and feel like last year wasn’t a great year. But the best thing about this year is... you can say, ‘Who am I today – and who do I want to be in 2025?’ – and that’s where things can change.
Like your friend did, you might be reducing your alcohol intake – but not just because you don’t like drinking anymore, but actually, ‘I’m gonna invest that money for my future-self.’ Or it might be, ‘I’m gonna spend less on clothes’ – or it might be, ‘I’m gonna go on one less holiday.’
If you think about it, we make financial decisions every single day. All we are saying is, ‘Don’t stop it, but what are the things that you can reduce or change that won’t affect your mental wellbeing – won’t affect your life – but might have a positive impact in allowing you to build a new life for yourself?’
One of the biggest things about us is that we’re creatures of habit. We like to do things that we’ve always done – but, somehow, we expect that, doing the things we’ve always done, we’re gonna get a different result. The best thing about a New Year is you can say, ‘I’m gonna get a different result this year because I’m gonna do ‘X, Y, Z’ different this year than I did last year.’
[15:58] Sarah Coles: So, it’s not just about having an objective – it’s about having a proper plan for how you get there as well?
[16:03] Emmanuel Asuquo: Yes – a plan and accountability. You’re something like 70% more likely to reach your goal when someone’s holding you accountable – and it’s so important that we share.
We keep so much to ourselves – and it’s that fear of, ‘If I tell somebody, now I have to do it.’ Or, ‘If I tell somebody I’m gonna start saving and investing – if I then decide I wanna book a quick trip to Dubai, someone’s gonna tell me, ‘Well, you said you wanted to...’ And, because of that, we hide away – and we don’t wanna tell people – but, actually, it’s important to have accountability.
So, don’t just have your goals – don’t just have a plan – have somebody that you’re gonna hold you accountable to your plans and goals that you set for yourself – and you’re much more likely to achieve them.
[16:45] Susannah Streeter: Thank you, Emmanuel – what is your big resolution for this year?
[16:54] Emmanuel Asuquo: Just to impact more people this year – I really want to have a further reach and make a bigger impact, and get more people doing the right things when it comes to their money.
[17:03] Sarah Coles: Where can people find you on social media?
[17:07] Emmanuel Asuquo: You can find me on ‘The Email Effect UK’ on social media – ‘Emmanuel Asuquo’ on LinkedIn – and Emmanuelasuquo.com is the website. Also, I’ve got two books – ‘Get Your Money Right’ for adults and ‘The Ultimate Guide to Money’ for young people.
[17:21] Susannah Streeter: Fantastic – thank you so much! Happy New Year!
[17:23] Emmanuel Asuquo: Thank you – Happy New Year.
[17:25] Susannah Streeter: That should get you inspired to keep those resolutions – and what was interesting is Emmanuel talking about how education is key. Our Head of Retirement Analysis, Helen Morrissey, joins us now – a big educator in pensions.
So, Helen – what d’you think is in store – and what should we be keeping an eye on when it comes to 2025?
[17:49] Helen Morrissey: First of all, a Happy New Year to you both. As you say, now is a great time to get cracking on retirement planning – and there is a lot that you can do.
First and foremost, take a look at the pensions that you’ve got and ask if they’re gonna give you what you need in retirement.
One major thing is to check whether you’ve lost track of any old pensions from previous employers. This is a huge issue, with the Pensions Policy Institute estimating that there are well over three million lost pensions currently in the system – and that’s money that could be making a major contribution to people’s retirement planning.
[18:29] Susannah Streeter: How can people go on the hunt and track them down?
[18:33] Helen Morrissey: I would recommend that you make a list of all your employers and then check to see if you have pension paperwork for them all.
If you haven’t, then you can contact the government’s Pension Tracing Service. You will need either the name of the employer or the pension provider. The service can’t tell you if you do have a pension with them – or how much it is – but they can give you contact details so you can go and find out.
[18:57] Sarah Coles: So, let’s say you found loads of these hidden pensions – what happens once you’ve found them?
[19:03] Helen Morrissey: It’ll give you a better idea of your overall pension wealth – which is really helpful – and the addition of lost pensions could make a huge different. So, once you’ve gathered these pensions together, it can be a good idea to consolidate them. Having an overarching view of what you have can save you a lot of time, admin, and even money. It can also improve your decision-making – and that, if you have a series of small pensions, you might be tempted to take them as cash. Whereas, if you have one larger pension, then you would be less likely to do that.
However, before you consolidate, do check to see that you aren’t incurring any expensive exit fees or missing out on any valuable benefits, such as guaranteed annuity rates.
[19:44] Susannah Streeter: Is there anything else people should consider doing to boost their pension potential this year?
[19:51] Helen Morrissey: Absolutely – it’s worth revisiting your contributions to make sure that you are on track for the retirement that you want.
Online pension calculators can model what you’re on track to build up – and what kind of income that could give you in retirement. You can also model the impact of increasing your contributions. Checking them in this way can give you an idea of whether you’re on track with your savings or whether you need to give it a boost.
It could be a really good resolution to increase pension contributions every time you get a pay rise or a new job – as that can increase how much goes into your pension. Doing it straightaway also means that you don’t get used to having the extra money to spend. You may also check to see if your employer will increase their contribution to your pension if you increase yours. This is what’s known as an Employer Match – and some employers do offer it.
It can be a great way of boosting your pension in a relatively painless way. I should add that money in a pension is not usually accessible until you’re 55 – and that is rising to 57 from 2028.
[20:57] Susannah Streeter: Thank you, Helen – and it doesn’t just start and end with pensions either, Sara. There are a handful of other jobs that we should all consider for our finances, aren’t there?
[21:09] Sarah Coles: Yes – the main aim at this time of year is to take stock of where you stand in each area of your finances, and then work out what you need to do – and then prioritise what’s important for you.
As Helen said, it means considering your pensions – and whether you’re on track for retirement. It also means assessing all your short-term debts, including things like credit cards and ‘Buy now, pay later’ – to see how much you owe and what interest you’re paying on it – and then you need to make a plan for how to pay it down.
[21:38] Susannah Streeter: What about savings? There’s a lot of uncertainty still ahead when it comes to where interest rates are gonna be, isn’t there?
[21:43] Sarah Coles: Yes – although, before you even get to the process of interest rates, you’ve got to think about how much you need in savings.
So, you need enough emergency savings in easy access accounts to cover 3-6 months’ worth of essential spending while you’re working age – and that rises to 1-3 years’ worth in retirement.
Some people won’t have enough, so they need to build their savings – and others will be holding cash in easy access accounts – so need to consider getting it to work hard for them elsewhere – and this is where the interest rate thing comes in. This could mean tying some up in fixed-term accounts, so they have a guaranteed level of interest – and it’s for money they don’t need for longer. Bear in mind that you can’t take money out of these accounts until the fixed term is up – so they’re only useful for money you don’t need in the interim. For other people, it could mean investing.
[22:26] Susannah Streeter: And there are other things to consider as well, aren’t there?
[22:29] Sarah Coles: There always is – it’s gonna depend on your circumstances.
So, for example, if you’ve got a mortgage, you need to look at whether a remortgage is looming, what that’s likely to do to your monthly payments, and how you’re going to afford them.
Try to look ahead to whatever’s coming up for you and consider what it’s gonna do to your finances.
[22:53] Susannah Streeter: There could be all sorts of things that spring to mind. What would you suggest that people should prioritise?
[22:58] Sarah Coles: Some things are more pressing than others. So, if you have expensive short-term debts – like credit cards – it makes sense to tackle them as one of your priorities. Similarly, if you don’t have enough emergency savings, it could be near the top of the to-do list.
Things like investment are far more exciting for a lot of people, so it can be really tempting to jump ahead to those and neglect the basics.
Don’t forget, you can tackle more than one priority at a time, so you don’t have to give up on the fun things – just consider them alongside your more pressing priorities.
And, if you’re committing to a new habit, you do need to work out where this money is gonna come from, or you’re gonna run into a financial dead end. It’s why so many resolutions need to start with drawing up a budget – so that’s looking at where you’re spending and identifying specific cuts that will free up the cash that you need.
[23:41] Susannah Streeter: Thank you, Sarah – we can move onto the stat of the week.
I’ve looked more broadly at resolutions – and YouGov looked into the most popular ones. So, which of these d’you think made the top five resolutions?
Was it: to become a better person, improving our attitude, to drink less alcohol, to spend less and save more – or was it to spend more time with the family?
[24:07] Sarah Coles: [Laughs] Speaking from my own personal experience with teenagers, I might have had my fill of families for a bit over Christmas – so probably not that one. I think we all want to be better people, so I’ll go with that.
[24:17] Susannah Streeter: No – it was ‘To spend less and save more,’ which was the top answer. ‘Being a better person’ only made it to number 7, ‘With family’ at number 8. ‘Drinking less alcohol’ only made it to number 14 – so ‘Dry January’ might be a case of dry white wine or London dry gin for people! [Laughs]
[24:36] Sarah Coles: [Laughs] I’m sure we’ll all be doing our bit to support the hospitality industry in January, which is another great resolution.
[24:41] Susannah Streeter: Yes – we are very supportive that way.
That’s all from us for this time. Before we go, we do need to remind you that this was recorded on 13th January 2025 and all information was correct at the time of recording.
[25:04] Sarah Coles: Nothing in this podcast is personal advice – you should seek advice if you’re not sure what’s right for you. Investments and any income they produce can rise and fall in value, so you could get back less than you invest, and past performance is not a guide to the future. Tax rules can change, and benefits depend on individual circumstances.
[25:17] Susannah Streeter: Yes – this is not advice or a recommendation to buy, sell, or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.
[25:28] Sarah Coles: So, all that’s left is for us to thank our guests: Helen and Emmanuel, and our Producer, Elizabeth Hotson.
[25:33] Susannah Streeter: Thank you so much for listening – we’ll be back again soon. Goodbye!