In our Pension Diaries series, we speak to people of all ages in the UK to find out how much or how little they have saved for retirement and the realities of putting money aside for your future.
This week, we speak to Mike Samuels, 36, who lives in Southampton with his fiancée Victoria and runs his own marketing business.
Mike has always been self-employed and has paid into a private pension since he was 21. He loves his job, but is aiming for a £2m pension pot by 50 so he can have the freedom to semi-retire.
Tell me about your career and how you got into it
After school, I went to college to study A-Levels thinking that I wanted to be a lawyer. However, I got three months into my law A-Levels and realised I did not like it at all. It did not seem an active enough career for me and I didn’t want to be stuck in an office all day.
I ended up drifting through the rest of college not really knowing what I wanted to do. I had been on a bit of a fitness and weight-loss journey myself and suddenly realised it was possible to make a living helping other people do that.
So at the age of 18, I moved to London to do a personal training course and qualified as a personal trainer.
That was the start of my self-employed life. I loved helping people get fit and that was where my passion lay.
It was great fun, but it was also draining. I did it for about four or five years, but then I got fed up with the 4.30am alarms, 6am climbs, late finishes and weekend work that goes along with it.
I still wanted to stay in fitness so I got into online coaching and did training programmes and diet plans for people online. I built my online fitness business through blogging and email marketing. After a few years, I launched my marketing career.
What is your attitude to money?
I grew up with a fairly rounded view of money and investments. My mum worked for the local authority as a housing manager and my dad was in the Navy for most of his career.
They were always quite careful with money and taught me that there was not an endless supply.
I am lucky as when my parents knew I was going self-employed, they taught me that it is much riskier as I wouldn’t get sick pay or holiday pay. They drummed home the importance of building up an emergency fund and told me I should think about starting a pension.
At what age did you start a pension and what were your contributions?
I was about 21 or 22 when I first met with a financial adviser and started a pension. I had a very low risk tolerance to investing money at the time and I didn’t really understand it. I started off my pension with a couple of thousand pounds.
The financial adviser encouraged me to put more into my pension, but at the time, a pension seemed so far into the future so I didn’t want to tie up too much money into it.
I put £100 a month into my pension for around 18 months and then I realised that even with a fairly modest monthly investment, I was seeing the benefits of compound interest. I realised it was tax efficient to put more into my pension so when I was about 24 or 25, I increased my contributions to £400 a month.
After a few years of doing that, I went from being a sole trader to a limited company and as well as doing monthly payments, I started paying a lump sum once a year to help with tax efficiency. The biggest lump sums I made were £10,000 to £15,000.
Over the years, I increased my pension contributions and I now put £2,000 a month into my pension.
How many pension pots do you have and what is their estimated value?
I only have the one pension pot as I have always been self-employed and have never had any employer contributions. At the moment, the value of my pension pot is just over £192,000.
As the age to access private pensions is soon moving to 57, I have made sure I split my assets between my pension and other savings. I try to max out my ISA every year and have a general investment portfolio and have just started with premium bonds.
In all of my savings, I probably have another £600,000 so, including my pension, I have around £800,000 saved towards retirement.
What is your goal for retirement?
Even though I don’t plan to retire any time soon, I have a long-term safety net and if I am fortunate enough to keep putting money away like I am, by the time I access it, financial worries should not be an issue.
My fiancée and I feel that if we want to live the exact lifestyle we want, our goal number between us would be a £4m total pension pot. This would be our number to never need to work again – so my aim is to reach £2m myself by 50.
Do you have any pension regrets?
Even though I did the right thing by starting a pension early, I probably should have put more into my pension at an earlier age. I was far too risk-averse, which meant I missed out on some gains and I could have done things in a more tax efficient way if I had invested more into my pension earlier.
What is your idea of a dream retirement?
Even though I love my job and don’t have any grand plans to quit working any time soon, I would like to semi-retire around 45 and have the freedom to travel a bit more.
We are very fortunate that we go away four or five times a year anyway, but I am into ultra running and trail running so I’d love to be able to go away for four to six weeks at a time doing that in different places in the world.
Health is a big thing for me when it comes to money. We invest a fair bit on health with gym memberships and eating good food.
But I’d also like the funds there for more private healthcare or surgeries if either myself or a family member or loved one needed something healthwise or treatment-wise.
For me, that money is there for longevity, happiness and getting yourself out of a difficult situation – anything to try to bulletproof your health and that of loved ones.
Would you like to be featured in Pension Diaries? E-mail: Aasma.day@theipaper.com