My midlife MOT

Like many people, I never really thought about savings or retirement until I reached my 40s. In my late 20s I used to go to a night out in London called Shinky Shonky hosted by Boogaloo Stu. Retirement? What retirement? I was going to stay young and live forever, club nights were all that mattered.

What is a midlife MOT?

It’s basically a health check for your finances. One of the easiest ways to do this is via the Money Midlife MOT on the MoneyHelper website. MoneyHelper is an independent website set up by the Government offering straight forward advice.

The tool helps you assess your current financial situation and helps you plan for the future. It produces a personalised report you can take away and signposts guidance on how to improve your financial wellbeing, and helps you identify ways to improve your finances. Take a breath. It might feel overwhelming, it certainly did for me.

Get motivated

By the time you reach your 40s, your finances are likely to be in full flow and it’s easy to lose sight of anything beyond immediacy. Despite my urges to pump out a pop trash tune and have a kitchen disco, I was genuinely eager to take control of what I earned, where it went and what I was going to do when I stopped working!

I took it a step further and blocked out a morning to list all the financial elements in my life. I found myself taking up the entire floor, laying out piles of paper from various banks, pensions and so on which I’d never properly read. I’m quite old school and still work with paper but it makes me feel comfortable and that was important.

Unless you’re in the top 10% of earners in the UK on over £59,200 , it’s unlikely that you’ve got your future financial security nailed. It's great if you have, but I suspect most of us haven’t.

How I sorted my pensions

I discovered I had 5 pensions. Two were defined benefit which provide me with a guaranteed fixed income. It wasn't much as I hadn’t worked in those positions long enough, but was still something.

It took me about a month to find out how to login or get letters with details the amounts of money that were in the remaining 3. That can be a real blocker. You’ve done all this work and find out what you have, the momentum is there. Then you find out you need to do some extra steps to get to the bottom of it all. Don’t give up. It’s worth the effort and the wait.

The gamechanger

The lightbulb moment came when my MOT report suggested I use the Moneyhelper pension calculator. You plug in your details and the magic starts to happen. By adding my pension pot values, my age and when I wanted to stop working, I could see what I needed to do to get the outcome I wanted.

It takes work, like applying for a new job, but there is something uniquely satisfying about knowing where you’re headed rather than drifting along.

Published 31 May 2024