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04 Oct 2017

Retirees willing to take financial risk, survey shows

The over-50s are increasingly prepared to take a degree of financial risk in order to grow their pension pot, according to new research by retirement specialists Retirement Advantage.

A survey of 1,005 over-50s who are yet to retire, and who have private or defined contribution pensions, revealed a positive shift in the attitudes of this group towards their finances.

Despite an uncertain outlook due to Brexit, the unexpected results of the UK general election and Donald Trump´s presidency, the proportion of people willing to take a reasonable amount of financial risk increased from 24% in August 2016 to 28% in June 2017.

The survey also showed a reduced gap between the desire for certainty and flexibility when people were asked about their priorities from retirement income. The proportion of those wanting certainty has fallen from 46% in 2016 to 45% in 2017, while the desire for flexibility has increased from 31% to 36%.

Commenting on the findings, Andrew Tully, pensions technical director at Retirement Advantage, said: “It´s been a tumultuous year, both politically and economically. We expected to see a significant decline in retirees willing to take financial risk — battening down the hatches and taking a more pessimistic outlook in terms of their aspirations for retirement. However, the opposite is true: retirees are looking for more flexibility in their retirement finances and are increasingly willing to take some financial risk.”

Elsewhere, the research highlighted how today´s over-50s are full of energy and determination. The majority (57%) of those surveyed want to use their time to learn a completely new skill or hobby, while one in four (27%) plan to turn their interests or hobby into a new business venture in later life.

“The mindset of retirees in the UK is both ambitious and adventurous — further illustrating that the shape of retirement is evolving at pace,” Tully said. “The need to understand an individual´s aspirations for the future is clearly key to creating a financial plan capable of delivering it. Financial Advisers are extremely well placed to provide guidance and products that will allow the right level of flexibility throughout retirement to allow people´s ambitions to change and grow. Advisers and product providers alike must strive to listen and understand what people want from later life in order to be successful in realising their vision of what it can be.”

Copyright © M2 Bespoke 2017

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