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Jamie Mourant, a senior investment manager at Titan Wealth, sat down with Meg Winton to discuss pensions, retirement planning and futureproofing your funds
IF you’re a young adult, pension planning probably isn’t top of your mind rightnow.
Something that feels so far in the future won’t be a priority for some, but it should come as no surprise that getting organised ahead of time is the best way to set yourself up for the future.
Jamie Mourant has been at Titan Wealth for two years. His role as a senior investment manager is varied, with lots of client interactions and portfolio implementation.
A young person himself, Jamie was keen to emphasise that there was no better time to start planning for retirement than now so you could take advantage of compound interest.
“Compounding is basically interest on interest earned, so if you had £100 and earned 5% on that over a year’s period, you’d end up with £105,” he explained.
“Rather than taking that £5 interest gained, you would roll the £105 in total which gains another 5% that then goes to £110.25. The longer that goes on, the better it becomes.”
Having this approach to saving early in life, Jamie said, was a way to build financial discipline.
“It can help teach the younger generations to prioritise saving over the long term,” he added.
“The pension age is continually increasing, so I think youngsters really need to take that into consideration.”
Jamie listed three misconceptions he saw when it came to young people investing – lack of urgency, lack of funding and lack of understanding, to which he said: “I get it.”
“I’ve been in that same situation; I want to spend the money on a holiday to go and see the world, or buy some new clothes, or go out at the weekend.”
The best bit of advice, Jamie said, was to set up a direct debit into an investment vehicle around payday to prevent it being seen as “disposable income”.
This was because waiting to invest later in life meant you would be “playing catch up” to reach an amount you would be comfortable with.
“That also means you’re exposed to greater market risk, and you haven’t benefited from pound cost averaging,” he added.
Jamie cited US President Trump’s tariffs as something that “caused chaos” in the markets, leaving people with losses.
“If you add money slowly on a regular basis, it doesn’t matter what’s happening in markets. It’s designed to protect the investor against volatility within markets,” he explained.
Jamie said the misconception that individuals felt they needed more money to start investing “just wasn’t true”.
He credited this to the “rise” of exchange-traded funds and investment platforms that allowed people to invest in low-cost solutions and hold them at a “reasonable” cost.
“Many in the robo-advisers community accept investments from £10 to £15.”
Jamie did, however, recommend keeping an eye on the fee schedules these platforms offered.
“If you were investing £100, and there was a fee charged by the platform for £12.50, your investment would have to go up 12.5% before you even made your money back,” he explained.
Not understanding investing, or being afraid of the risk it offered, was also a barrier, Jamie said.
He said consulting a professional was always a good idea, and that investing in a “risk aware manner” was also an effective approach.
“There is risk in everything you do, but it’s important to aim to mitigate certain risks, whether that’s by diversifying your investments so you don’t have all your eggs in one basket or holding a variety of asset classes.”
Misconceptions can often lead to mistakes, one mistake being not accessing your employer pension scheme.
“It’s an absolute must,” said Jamie, “whether it’s the bare minimum; certainly, take advantage of your workplace pension scheme if you’ve got one.”
He said he had particularly noticed the younger generation believing they could make quick and easy returns through means such as cryptocurrency.
“I’m an investor in cryptocurrencies and have seen these 10%, 15%, 20% moves in a day, in an hour,” Jamie shared. “That isn’t normal in mainstream financial markets or normal behaviours from a percentage performance perspective.
“So, don’t go to try and shoot out the lights and take bigger risks,” he warned.
Not diversifying your asset base, so not spreading your investments across different industries and products, was another mistake people fell foul of, Jamie said.
“It isn’t necessarily advice for only young people, either. Not diversifying your investments can be just leaving money in a savings account,” he explained.
“Don’t hold your investments in one specific asset class. You want a broad range of assets to get exposure to.”
Inflation and rising living costs are affecting everyone and the younger generation are definitely no strangers to that.
Jamie explained that the inflation we had seen in recent years was caused by a few factors.
“If you look back at the last 30 to 40 years, the world, by and large, has benefited from this element of globalisation.”
Covid, he said, had had an impact on “everything”.
“Global supply chains broke down, different countries adopted different stances, demand increased and people had been locked away without spending.”
Then came the war in Ukraine, which affected energy prices and, more recently, President Trump’s tariffs.
“It’s no surprise that we’ve seen inflation become the buzz word for the last three to five years. It really has been chaotic,” Jamie said.
And it wasn’t going away any time soon, so he said the best way to plan around it was to not be “too over-leveraged”, or, not to take on too much debt that you can’t repay. From an investment perspective, Jamie emphasised his point on diversification and not having “all your eggs in one basket”.
“Have property, have some shares, have some bonds, buy some inflation-protected assets, such as treasury inflation-protected securities.
“Gold holds up well in an inflationary environment too,” he added.
With this in mind, what can young people do now to secure their future finances?Jamie said the best timing to do was to start as early as possible because of the “power of compounding”.
“Time flies. I’m not saying put all your disposable income into an investment overnight, but take small steps to start you on that right trajectory,” he added.
An emergency fund was also a good idea.
“It’s suggested you save three to six months’ worth of expenses to guard against things like your car breaking down, losing your job or mortgage repayments,” Jamie explained.He reiterated the importance of being “careful” when it came to debt.
“In the space of a year, we went from half a basis point to 5% interest rates,” he said.“If you’ve got high interest debt, pay that off quickly so you don’t have to pay interest constantly on that throughout your whole life.”
And, finally, don’t forget to keep learning.
“I would encourage people to try to educate themselves,” said Jamie. “You have to find ways you’re interested in to learn and educate yourself on the ways to do things.”
To listen to the full episode of the Money Talks podcast, scan the QR code.