Some people may roll their eyes and yawn at the mention of financial planning. For Jo Dugdale it’s a passion that began when she was at university, studying for degree in financial services.

’That was when I had this eureka moment, when I learned about investing and realised how important compound interest was,’ she says.

She goes on: ’I was brought up to believe that in order to get money you go out and work, and I had worked from a young age. But I then realised that, if I had a big pot of money, I didn’t have to work. I could just live off the interest.

’The problem is nobody has a big pot of money so financial advice is what gets you to it and if you want a nice retirement you have to start allocating some money towards your pension.

’I think sometimes people just forget about pensions. It’s too far away on the horizon and I don’t think people can comprehend the enormity of the pot that you need, to provide you with a reasonable lifestyle.’

She’s right: the Retirement Living Standards which compiles data on how much people need to live on, suggests that £10,200 per annum is the absolute minimum that a single person would need to live, just to get by.

For a couple it would take an income in retirement of at least £50,000 to have a seriously comfortable lifestyle. And, for this, you would need a pension pot in the region of £1 - £1.2 million.

But that, insists Jo, is not an impossible goal if you start young enough.

She says: ’It sounds unrealistic but it’s not with compound interest. In order to build it quicker you have to take a little bit of risk and get a little bit more return and that can be incredibly significant.’

After many years’ experience in the industry, Jo now runs her own financial planning company, Chartwell. When you ask her why she went out on her own, she says simply: ’I just thought I could do a good job. And because I believe in the financial planning aspect of what we do and that it’s not just about products.

She goes on: ’Most people come to me saying: "I want a pension", but that’s just a label. What they really want to know is that they’re going to have a nice lifestyle in retirement and I help them to understand what that looks like.

’If there isn’t enough spare money, I encourage them to try and consider what makes them happy, what they value and whether they are using their money on things that make them happy and that they feel a sense of reward from.’

Jo herself lives with her partner, Chris Kewley, who is managing director of Agrimark, and says she has realised that she is happy with ’the really simple things in life: having a coffee and a cake, going for a walk on a Sunday, going away on holiday to a really lovely place.’

Add in a bottle of wine and a roaring fire in the winter and that probably sounds like most people’s idea of a comfortable retirement. And certainly worth making your money work towards.

A word about

women and pensions

Clearly there is going to be a difference in pensions contributions, for both state and private pensions, for women who take time out of the workplace to have children and this must be taken into account.

Jo also says there is a tendency for a woman in a happy relationship to imagine that things will always be that way but very often this is not the case. Jo’s golden rule when it comes to women and their financial planning is that they should treat themselves as a separate entity from their partner.

She says: ’The analysis of over four million people carried out by Legal & General demonstrates there is currently a gender pension gap which accelerates towards retirement.

’I would always encourage women and men alike to consider pension planning from an individual perspective with the aim to build a pension pot which will fulfil their personal needs at retirement.

’If you decide to take time out to raise children for a number of years it may be necessary to make up any missing pension contributions in later years. It is also important to consider that your circumstances now may not be the same in the future and especially if you consider one in four divorces occur after the age of 50.

Treat your pension provision as your own individual account.’

Five Key Pension Questions

How do you know if you have ’enough’ to fund your retirement? Jo takes us through a checklist which will arm you with the key pension questions you need to ask and answer.

1. Do you have any pensions you have forgotten about?

An average person will have 11 jobs* in their lifetime according to the UK Department for Work and Pensions which could potentially lead to £50 billion in dormant or lost pension pots by 2050 because people have lost track of their savings. If you have a UK approved scheme this can be located using the UK Pension Tracker service https://www.gov.uk/find-pension-contact-details if you are an IoM resident keep a list of all employers and whether you had a pension.

2. How are your pension investments performing?

It is important to review the funds your pension is invested in regularly to make sure they are performing well and remain appropriate for your risk profile. While past performance is not an indicator of how an investment will perform in future, it’s still worth checking whether your pension fund beats its benchmark detailed on the fund factsheet.

This is essentially the standard each fund measures itself against to enable people to assess how it is performing and whether rival funds are doing better.

3. How can you take your pension benefits, what will I get and when?

Your options will be dependent on the type of pension you have and whether it is UK or IoM approved so it is important that you understand what your pension offers when you reach retirement and the alternatives available. Older pension products will generally have less flexibility of access but there are other options. Also ask your provider for a pension forecast which will give you an understanding of how much you can expect to receive.

4. Have you nominated a beneficiary for your pension?

If you have a defined contribution pension, make sure you have nominated a loved one to receive your pension in the event that you die before you retire, whether it be a family member or close friend. This may change over time so it is advisable to review on a regular basis.

5. How much will the State Pension provide you with?

For most people who are reliant on defined contribution pensions it is more difficult to ascertain the exact amount you will receive in retirement until you get there. Your state pension may be the only known amount you will receive in retirement and you can find this out by obtaining a state pension forecast.

This can be obtained by completing a BR19 Form. https://www.gov.im/categories/tax-vat-and-your-money/income-tax-and-national-insurance/forms/

Don’t forget if you have worked in the UK you may also be entitled to a UK State Pension; always worth checking.

* https://www.gov.uk/government/news/thousands-more-make-contact-with-long-lost-funds