Martin Lewis has shared his insights on building savings and investments for retirement, addressing a listener's question on his BBC podcast about when to access funds.
Listener's situation
A 47-year-old listener, who recently started investing through a stocks and shares ISA with Moneybox, contributes £50 monthly to an adventurous portfolio. He also holds cash savings and pays into a workplace pension. He plans to access his investments at age 60.
Martin Lewis's five-year rule
Lewis reminded listeners of his general rule: "If it's money you don't need and you're putting it away for more than five years, savings is the poor relation to investing, so you should consider investing." He explained that markets are volatile, and a five-year timeframe allows riding out short-term fluctuations. "You don't ever want to be in a position where you need the money today and today is a bad day to take the money out," he said.
Should contributions stop at 55?
The listener asked whether he should cease contributions at 55 to allow final investments five years to grow. Lewis responded that his five-year rule is cautious; some specialists suggest just three years. He advised against a blanket moratorium on investing near age 60.
Different ages to consider
Lewis outlined possibilities: "If you're going more cautiously, you could push it up to 57 or 58. You might also think, I might not take it all out when I'm 60, I might even put some more in at that point for it to grow later." He described the five-year guideline as "soft guidance rather than a hard rule."
Shifting to lower-risk portfolios
Regarding moving funds to less adventurous portfolios, Lewis said the decision rests entirely with the investor and is "perfectly reasonable" as the withdrawal date nears. He reassured the novice: "I think you will be a lot more educated about the situation then and more confident in making your own decisions."
ISA allowance changes
Currently, the annual ISA allowance is £20,000, usable across cash ISAs or stocks and shares ISAs. From April 2027, only £12,000 can be used for either account type, with the remaining £8,000 reserved for investment accounts. Those aged 65 and above are exempt from the new rules.
