Investments: A pension planner’s lifeline?

Investments have the potential to be lucrative sources of income, provided that an investor understands the various risks involved and consults an independent financial adviser before making a final decision.

As such, investments are growing in popularity amongst pension planners. In a recent survey of 550 adults with over £50,000 worth of investments (excluding property they own as their primary residency, or money in savings accounts), when addressing their retirement plans, over two fifths (42%) of respondents said they prefer to invest their money in assets outside of a traditional pension scheme. Additionally, 44% expect most of their retirement income to come from investments, rather than a traditional pension.

Given the potential for strong returns, this enthusiasm for investments is understandable. However, these assets are still not immune to the financial pressures driven by Covid-19. Indeed, almost half (48%) of pension planners are concerned about the ongoing impact of the pandemic on their investments.

So, what factors are driving these concerns?

Value concerns

Covid-19 had an almost immediate impact on people’s personal finances. As early as March 2020, before any national lockdown was announced, the Bank of England (BoE) announced that interest rates would be lowered to historic lows of 0.1%. Indeed, according to My Pension Expert’s aforementioned research, over two fifths (44%) of UK pension planners have been prompted to explore riskier investments to combat low interest rates.

Skyrocketing inflation is also a major concern amongst pension investors, with rates expected to reach 7% in April 2022 – its highest level since 1991. So much so, that half (50%) of wealthy pension planners consider it to be a major threat to their retirement strategy.

Evidently, there are widespread concerns about how investments can hold their value for one’s retirement. And under such circumstances, one would assume that savers would look to qualified financial advisers to help them adjust their retirement investment strategy – but this is not the case.

According to My Pension Expert’s research, just 25% of pension investors have consulted a wealth manager about their retirement investment strategy. Only slightly more (32%) have sought independent financial advice.

Such figures are concerning. After all, making a rash or ill-advised decision about one’s finances can have detrimental long-term repercussions.

Seeking professional advice

All investments come with an element of risk – and even retirement planners, who consider themselves to be experienced with investments are not immune to making a seemingly sound decision, which could backfire later down the line.

As such, savers must seek independent financial advice or consult a wealth manager before making any investment decisions. Their insight could prove invaluable to an individual’s investment strategy.

For example, clients of My Pension Expert’s new bespoke investment offering, Imperium Advice, was launched to provide an entirely personalised service to help pension investors achieve the best possible retirement income. From access to their own personal account manager and IFA, to regular market and portfolio updates, Imperium Advice ensures that investors have all the information they need to make informed decisions about their investments.

Investments have the potential to offer lucrative returns and transform an individual’s retirement finances, despite the economic turmoil. However, this is unlikely to be achieved without receiving regulated, independent financial advice. Investments will never be 100% free of risk. However, seeking bespoke advice ensures that people’s investments have the best possible chance at success.