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Should you take a ‘midlife MOT’ course?

Free online money course: Is it good value?

A free ‘midlife MOT’ course has been launched aimed at people who want to do a stocktake of their current finances, career and health.

This is an idea championed by the finance industry and government, which has previously offered a ‘toolkit’ to employers wanting to offer them to staff. 

The new online course, devised by finance giant Legal & General and the Open University, involves two to four hours of independent study, research and quizzes.

Does it reward the time and effort? The only way to find out if if this is worth recommending to This is Money readers is by taking it myself.

A money journalist is not the target audience, it must be said. On the other hand, despite spending my working life writing about finance, I have a serious aversion to practical ‘personal admin’.

(This isn’t a conflict. Money as a topic is endlessly interesting; the hassle of sorting out bills, faffing around with internet log-ins, and getting stuck in frustrating conversation loops with phone bots is most emphatically not.)

So, an unflinching confrontation with my own personal finances is overdue, and the chances are good I can get something useful out of the exercise to pass on to others considering giving it a go.

What does the ‘midlife MOT’ course involve?

It’s free, so you can simply create an Open University account and launch straight into it here. 

There are five topics: your finances now, where they are heading next, your wishes for the future, work and wellbeing.  

Once you start, you almost immediately have to fill in a monthly and annual income and outgoings table.

What's in the Midlife MOT course

What’s in the Midlife MOT course

I dreaded this, but knew it must be coming. At least you get it out the way at the start, and it does inform the rest of what you do and learn in the wealth section.

I managed to get through this with the aid of just a monthly bank statement and my annual mortgage statement.

Yes, some items like day-to-day spending, and the costs of presents and celebrations and going out were rough estimates. 

But I made genuine, educated guesses, and you have to add 5 per cent to your total expenditure figure at the end so that keeps you honest.

Of course, you could be diligent and calculate exact figures if you prefer to work that way, and think it will be more helpful to you personally, but I felt a general outcome was sufficient for my purposes.

This part isn’t a ‘test’ as such, it’s just a useful attempt to help you understand the state of your current finances.

For anyone who is concerned about giving away a lot of personal information to L&G and the OU, you download the blank income and expenditure table to your desktop, and then complete it independently before returning to the online course.

The next stage is working out your net wealth and wealth score.

Net wealth is basically the trade-off between your assets and your debts. To work out your wealth score, you divide your assets by your debt. 

This again helps illustrate to you where your individual strengths and weaknesses lie – and you don’t have to confess your result during the course.

There is a £500 a year challenge, where you work out how you would go about saving this sum out of your current spending.

The course notes point out that if you manage to do this you will find yourself with a helpful lump sum in a few years’ time, which you could put into your pension.

I could do this fairly easily by ditching my gym membership, which I’ve been pondering doing for some time. I put it on my post-MOT to do list – although my good intentions swiftly went awry. (See the ‘what I learned’ section below.)

Another exercise asks you to list your financial plans, which is also fairly easy. Mine is just a wishful rundown of holiday destinations that have reopened as the pandemic recedes.

There is a good explainer on pensions, which covered all the important areas in a decent amount of detail for the layperson in my view, as a specialist journalist.

I scored full marks on the pensions quiz on my first go, to my relief. This tests people on what they have taken in during the course regarding the state pension, defined contribution and defined benefit pensions, and pension tax relief. 

What are defined benefit and defined contribution pensions?

Defined contribution pensions take contributions from both employer and employee and invest them to provide a pot of money at retirement.

Unless you work in the public sector, they have now mostly replaced more generous gold-plated defined benefit – or final salary – pensions, which provide a guaranteed income after retirement until you die. 

Defined contribution pensions are stingier and savers bear the investment risk, rather than employers. 

If you get a question wrong in the quizzes you get a couple more tries, which makes it more likely you will absorb the correct information eventually.

The next big topic is work, and how thoroughly you complete this section probably depends on how satisfied you are in your career and current job. My editors, who will be reading this, will be unsurprised by my verdict I hope: Very happy, thank you!

I am one of the lucky ones, and those who aren’t will probably find this section of far more use.

There’s a chunky section for people who are thinking of setting up their own business, which encourages them to develop their ideas and formulate a plan of action.

The final topic is wellbeing, which is not designed to diagnose major health issues of course, but to probe how stressed you are and how to address the typical symptoms.

Drink the standard recommended amount of water, get enough sleep and take exercise, was the conventional wisdom I took away from this part of the course.

Clearly, I found the financial topics of most use and interest. However, I can imagine other people finding the work and wellbeing topics illuminating too, especially anyone looking to change career or feeling under pressure in their personal life. 

So what did I learn from my ‘MOT’?

1. I have a less hazy idea of my personal finances now, but as remarked above I find practical admin so profoundly boring this won’t last long.

I am well aware I’m in a privileged position, and many people have no choice but to engage far more closely with their finances.

For me though, it’s enough to keep on top of the most essential and inescapable admin, and skim my bank transactions once a month to ensure there are no strange payments or a shock plunge into the red. Otherwise, life is for living.

2. Forcing myself to confront my income and outgoings in detail for once showed I am saving a decent amount each month, but that is at pandemic rates.

As my spending on transport, going out and holidays gets completely back to normal, and energy bill rises kick in, I’ll be nearer to breaking even.

But treading water financially for a while doesn’t seem that bad a prospect, after everything I’ve missed out on doing during the past few years. It’s understandable to want to make up for that if it’s affordable.

3. My pension contributions and mortgage payments are in order and I have a rainy day fund, as suggested on the course.

Should I put my extra savings into my work pension or open an investment Isa?

This is Money pensions columnist Steve Webb replies to a reader here.

As we approach the end of the tax year, I could stash away more in a cash Isa, or open a stocks and shares Isa.

But, given my attitude to personal admin, rather than going to the trouble of setting up a separate investment Isa, I might as well just invest more through my pension fund.

The charges, negotiated by my employer, are relatively low and I will get the extra pension tax relief top-up from the Government.

Putting in a short series of lump sums – spaced out to avoid market volatility – seems to me a low hassle way to divert some cash savings into investments, which will hopefully then beat inflation, and boost my retirement fund. 

4. That said, I’ve now discovered putting extra sums into your pension isn’t as low hassle as I’d hoped.

There’s no explanation of how to do it or an easy tool that I could find on my online work pension account.

I had to ring up – I was cut off on the first try, but thankfully the phone menu didn’t go through too many phases, and the wait for a human to pick up on my second go was quite short.

It turns out it requires a credit check (time spent on hold), writing down a lengthy list of account details and reference codes, and giving a date and almost exact time when I intend to make a transfer into my pension.

And I need to ring back and pre-warn them every single time I intend to put in a further sum.

All told though, it took me about three quarters of an hour and the helpful man in the call centre assured me I’ll only need to have quick chat with them on subsequent occasions.

5. I went through with the plan to cancel my gym membership, but there is a one-month notice period so I started visiting again to make the most of the time I have left.

I’ve now got spendthrift’s remorse. I like my gym even though it’s excessively expensive. I don’t want to cancel my membership, but it took cancelling to realise that, and now I’ll have to uncancel again.

I hope it’s not going to cost me anything to do that.

6. The Open University has lots of interesting courses you can do for free. You can browse a list of course topics, recommended skill levels and hours they take to complete here. 

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