Ep 517 - Savings rate traps & Why you might need to ditch the 4% retirement rule
The Money To The Masses Podcast
Damien Fahy
4.8 • 589 Ratings
🗓️ 24 August 2025
⏱️ 22 minutes
🧾️ Download transcript
Summary
On this week's podcast Damien explains how the rise of short-term 'bonus' rates are creating a price war amongst providers. He reveals how these types of rates can leave you worse off as a saver before explaining how you can calculate the effective annual rate to see what you’re really earning. Next, Damien looks at whether the classic 4% retirement rule is still fit for purpose. With potential inheritance tax changes on the horizon, new research suggests a much higher withdrawal rate for those who want to spend their pension pot in their lifetime.
Check out this week's podcast article on the Money to the Masses website to see the full list of resources from this week's show
(00:00) - MTTM Podcast Episode 517
(04:10) - Understanding Regular Savings Accounts
(06:24) - The Impact of Bonus Rates on Savings
(07:36) - Calculating Effective Interest Rates
(08:39) - Challenges with Short-Term Bonus Rates
(10:54) - Access Restrictions in Savings Accounts
(13:49) - The Impact of Low Rates on Savings
(14:30) - Understanding the 4% Rule and Its Origins
(16:32) - Potential Changes in Pension Taxation and Their Implications
(17:59) - The Spend It All Approach to Pension Withdrawals
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Links referred to in the podcast:
- Try our AI guidance tool 'DaMoney' - Ask it any money question
- Best Savings Accounts in the UK
- Is the 4% rule dead? - Article by Laura Miller
- Sign Up To The MTTM Weekly Newsletter
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Transcript
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| 0:00.0 | Hello and welcome to episode 517 of the Money to the Masses podcast with your resident expert as always, Damien Faye and me, Andy Links. |
| 0:07.6 | Damien, welcome back. How are you doing? |
| 0:09.4 | I'm good, Andy. We had a slightly different podcast last week. We've had lots of great feedback about it. |
| 0:14.9 | I know it does feel like our podcast has changed quite a bit in the last couple of weeks. |
| 0:18.9 | We went from three pieces down to a new |
| 0:21.2 | two-piece star where we took a little bit more than we had the special podcast we had last week, |
| 0:26.5 | which I was really excited about producing. It's something that is really close to my heart. |
| 0:31.6 | I do use that millionaire strategy with my own children, so I am putting money into a junior |
| 0:37.1 | iceer regularly for them |
| 0:38.4 | based upon that strategy. We'll put a link in the notes again this week if you want to go back |
| 0:42.4 | and listen to that podcast or follow that strategy. But we've had lots of good feedback about the |
| 0:47.9 | shift in the style of podcast where we've gone down to two pieces and we're just chatting that |
| 0:52.8 | little bit more. So we're going to keep going with that. |
| 0:55.7 | Now, while I'm doing the admin side of the podcast, one thing to point out, Andy and I are having |
| 1:01.0 | a well-earned rest next week. So we are spending time with our own respective families. |
| 1:06.0 | So we're not going to be recording a podcast next week, but we will be back as normal the week after. So there's plenty of past episodes, which you're going to be recording a podcast next week, but we will be back as normal the week after. So there's |
| 1:12.9 | plenty of past episodes which you can go back and binge on in the meantime, but there won't be |
| 1:18.2 | a podcast next week. Yeah. And so the last Sunday of the month, 31st of August, we will be having |
| 1:22.9 | a break. And I'll actually be having a birthday in between there. So when I come back, |
| 1:26.9 | Damien, I'll be a year older as well. |
| 1:28.9 | It's like schools. We'll be back in September, basically. You must have been one of the youngest in your year when you were at school. I think I was the second youngest in my year, yeah. And boy, did people know it because I was possibly the most immature in my year as well. I know parents have this debate about, I mean, no one can really second guess when they're going to have children, but you do have this weird scenario where people start looking at biological sort of clocks and calendars and thinking, right, can we time this right so that my child's born at the right time? There are definitely people who did that, Andy. I can tell you because when we did the NCT so it's that kind of |
| 2:02.5 | strange group some people do when they have children and you meet other parents there was definitely |
... |
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