Investors leaving it late to diversify from inadequate pension provisions

Despite growing concern over pension prospects, a massive 67% of those who have opted to invest in property are aged between 45 to 55, suggesting that those looking to diversify into this sector as an alternative or supplement to traditional pension provisions and poor returns from other investments, are leaving it later and later to take action to ensure financial security in retirement.

According to Nick Carlile of Platinum Portfolio Builder, whilst it is never too late to start planning how to achieve financial security for retirement, the earlier you take action the better.
 
‘We have found it is often at the point where would be retirees realise their pension fund doesn’t amount to as much as they had forecast, that they consider alternatives in the hope of making a quick buck, but this is a risky and unrealistic strategy,’ he explained.

A combination of cut backs in company schemes, private pension funds massively underperforming, the rising state pension age and ever declining annuity rates make for poor pension returns, whilst rock bottom interest rates continue to be to the detriment of savers. 

‘A large proportion of people in the UK have an inadequate pension provision and a recent survey by Scottish Widows found 20% are making no provision at all. Many of those that have built a decent fund do not monitor its performance until it is too late to do anything about it,’ said Carlile.

‘It is much more sensible to check how your pension is performing on an annual basis. The last few years have demonstrated that we cannot rely on traditional pension funds growing and being the sole vehicle to finance retirement,’ he added.

According to Platinum Portfolio Builder, over the last year, buy to let landlords have seen significant increases in their rental returns as young, savvy professionals accept they are not in a position to buy. ‘This is a growing and lucrative market open to investors, one which was not available at a time when it was taken as read that pension funds were the best option and should be left as late as possible to provide a higher pension through tax free growth,’ explained Carlile.

‘Times have changed and retirees are able to control finances and investments themselves rather than handing to a stranger who will decide their financial future. The simple fact is people must plan for retirement as early as possible, there is no quick fix but the earlier an investment strategy is in place and a clear breakdown of what income will be available, the better off retirees will be,’ he added.