Inflation poses the greatest threat to retirement plans, new research from My Pension Expert has revealed.
In a survey of UK adults, all with £50,000 worth of investments, half (50%) consider rising inflation to be the greatest threat to their retirement strategy.
A slightly lower percentage (44%) said that low interest rates had prompted them to consider riskier investments that could provide greater returns and 48% are concerned about the ongoing impact on Covid on their investments. Just over a third (34%) claim to be in a weaker position with a view to their retirement since the beginning of the pandemic.
The research showed that 34% of retirement planners have placed more of their savings into investments to counteract the combined effects of rising inflation and low interest rates.
Andrew Megson, executive chairman of My Pension Expert, said: “Covid has afflicted retirement planners, not only through job disruption and turbulence across financial markets, but also by contributing to rock bottom interest rates and, more recently, soaring inflation. It is unsurprising, therefore, that so many wealthy Britons are feeling uneasy about the status of their assets.
“However, the fact that these people are now feeling pressure to place their money in riskier investments is cause for concern – particularly as only a small proportion are seeking financial advice or consulting a wealth manager before doing so. Indeed, making ill-informed financial decisions could result in irreversible losses and serious damage to their retirement strategies.
“Retail investors and pension planners must remain calm when faced with uncertainty; they must avoid making rash decisions. Instead, seeking regulated advice from an independent financial adviser or a wealth manager will provide invaluable advice and insight into the economic climate.”
The research found that only 25% of respondents have consulted a wealth manager regarding their retirement investments, while 32% have sought independent financial advice.
