Older Brits avoid investing over fears of losing money
Older Brits are swerving the stock market over fears of losing capital despite growing warnings that people are approaching retirement without sufficient funds.
Baby Boomers and Gen X admitted that they avoided investing and kept money in savings accounts, claiming the potential risk of losing capital over rides boosting wealth, according to the latest survey from Charles Schwab.
Sixty per cent of retirees said they avoided investing due to this, while those aged 55 and over were also found to be the most likely to perceive it as too risky compared to other age groups, leaving them exposed to potential financial insecurity.
Richard Flynn, managing director at Charles Schwab UK, said: “Britain’s retirees and those close to retirement have built their financial habits around caution and security, which is understandable given the challenges they face.
“However, this also highlights a significant opportunity to empower this generation with the knowledge and tools they need to make more confident financial decisions in retirement.”
Pension woes
Despite the growing noise among industry figures that people need to prioritise their pensions, 29 per cent of respondents confessed that they did not have a state or private pension.
To be eligible for the state pension in the UK, people must generally make ten years of national insurance contributions, with 35 years of contributions required to receive the full pension.
Among them, Gen X and Boomers without pensions were found to be the least likely to be considering retirement plans compared to younger generations, at 49 per cent and 50 per cent respectively.
Among those saving into a pension, a quarter confirmed they save as much as possible, with others also prioritising saving into other vehicles including ISAs.
However, 16 per cent were unsure on how much they needed to save to achieve their wanted retirement, while two in ten said they do not contribute as much as they’d like to.
Over 35 per cent of Boomers confessed they didn’t know how much to save for retirement, with older generations struggling to decide how much is needed to secure a comfortable later life while also ensuring they have enough funds for current monetary needs, such as paying off mortgages.
Flynn said: “By addressing knowledge gaps and providing tailored support for older investors, we can help retirees achieve greater financial confidence and security as they enjoy their later years.”