According to recent research, more than 67 per cent of retirees said they would prefer to keep their money in investments, even after the recent downturn in market conditions. Moreover, 11 per cent of participants claimed they were in the process of reassessing their investment strategies.
The study also found that only 43 per cent of those polled said they were concerned about the impact of the markets and were merely considering if the amount of income they were taking was sustainable for the long term.
Not only that but 52 per cent said they had not decreased their rate of drawdown withdrawal as a result of recent market volatility and 58 per cent had not reduced their exposure to equities.
However, while the retirees themselves did not appear concerned, a separate study by the Financial Conduct Authority (FCA) suggested that those taking regular sums from drawdown policies have increased their rate of withdrawal to 5.8 per cent, up from 4.7 per cent in 2016/17. The FCA is concerned that this may not be sustainable against current market conditions.
More retirees are keeping their pension pot invested rather than buying an annuity and while this means that individuals have more control over their savings, it also means that they are at the mercy of stock market fluctuations.
As one commentator noted, the current instability of the market comes after a decade of strong gains and this, coupled with the introductions of pension freedoms, may put some retirees at risk of running out of money in later life.
To find out more about how Kirk Newsholme Financial Planning can help, please contact Richard Leonard at Richard.Leonard@knfp.co.uk or by calling 0113 204 4215.