A wedding wonder

Gavin Zaprzala-Banks, Principal, Punter Southall Aspire

On 19 May 2018, a significant proportion of the UK will once again pause and be glued to TV screens in front rooms and pubs around the country. Flags will be waved, corks will be popped and songs will be sung as neighbours come together in the street to celebrate.

And no, I’m not referring to what is expected to be a dour, defensive FA cup final where Manchester United and Chelsea face off for end of season honours after largely disappointing campaigns.

It is the wedding of a young British prince to a glamourous American TV star that will capture the nation’s attention. The 33 and 36-year olds will tie the knot in fairy-tale circumstances, far removed from those of the more than 1.5bn viewers expected to watch worldwide.

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£30,000!

According to research by Scottish Widows[1], an average person in their early thirties (not Prince Harry then!) will have a salary of nearly £30k.

Coincidentally, approaching £30k is the amount that was spent on average on a wedding in the UK in 2017.[2]

It has been estimated that Harry and Meghan will spend just under this amount alone on sausage rolls for the invited members of the public![3] If you were lucky enough to receive an invite, please drop me a line and let me know just how tasty the sausage rolls were.

In 2016, the average price for a first-time home in the UK was £210k. And the average deposit size to buy that first home? Yes, you guessed it – c£30k.[4] So, how should we be spending our money?

Planning the big day

A wedding is an event that focuses attention on costs as the price for everything seems to come at an absolute premium. Mention the very word wedding in negotiation and vendors’ eyes light up, knowing that they will be able to charge a special tariff for whatever service or product they are selling. Attention to every detail is required to ensure that the best possible outcome is achieved for the best possible amount of money. It is common practice for detailed spreadsheets to be maintained, itemising every option and monitoring every penny.

A huge amount of time and energy is invested in preparing for one incredible, joyous day. Bringing together family and friends to celebrate the start of what will hopefully be a long and happy married life.

Which to me is simply brilliant. Not only because I love a wedding. (Who doesn’t?!) But also, because it proves that all the supposed evidence and theories about young people’s financial competence is utterly wrong. You can find dozens of articles that will blame the UK’s massive savings gap on the fact the young people can’t save, that young people can’t plan and the UK has fostered a spend now, worry later culture and those assertions simply aren’t right.

Of course, the near £30k cost of a wedding could be worth much more if invested sensibly to be enjoyed 30 years later* but let’s be realistic. Life is about balance and planning for the long-term future can be secondary to living in the present and enjoying making memories.

However, what the wedding planning behaviour does demonstrate is that young people can plan. They can manage complex budgets and make balanced decisions based on value for money in line with a targeted outcome. It is these same principles that individuals need to apply to pensions to address the savings gap and change attitudes towards long-term savings. Auto-enrolment has begun the process of raising general awareness of the very existence of pensions.

Now we need to continue the good work by being creative and innovative to ensure that pensions work in a way that makes sense to all savers and gives a good reason to stay focused.

Whether or not you’ll get to enjoy a royal sausage roll on 19 May, let’s stay focused on the positives. We already have over nine million people saving into pensions who weren’t necessarily doing so five years ago.[5] We know that young people can and will save. Harry and Meghan (who is already retired from her acting career) will be beyond state pension age when they celebrate their ruby wedding anniversary – it’s never too late to open that spreadsheet and start planning your financial goals.

In the meantime, enjoy raising a glass with friends to celebrate whatever makes you happy.

Cheers!

*Approximately £53k at age 65, assuming £30k deposit with no further contributions and a 2.4% annual growth rate.[6]

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