ALMOST one in four (39 per cent) of baby boomers have admitted that they have zero risk appetite when it comes to their investments, while a further 28 per cent described their risk appetite as “low”.
Just three per cent of 55 to 73 year-olds said that they were confident that their investments would deliver strong returns over the next five to 10 years.
According to new research by Aegon, Brits aged 55-73 hold more than a third of the UK’s wealth, yet the majority still take a highly risk-averse approach to their investments.
44 per cent of people of baby boomers told Aegon that they prefer to avoid risk at all costs. By comparison, just 36 per cent of those aged 18-34 said that they were risk-averse.
Despite their caution, just one quarter of baby boomers have sought advice from a financial adviser.
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Aegon has warned that by avoiding risk at all costs, they are more likely to see their savings and investments lose value over time due to inflation, and urged over-55s to seek professional guidance to make the most of their money.
“Our research shows that, even though baby boomers have accumulated the most wealth, they are at risk of excessive caution and exposing their hard-earned money to stagnation,” said Nick Dixon, investment director at Aegon. “Not only will growth potential be reduced, but the impact of inflation on savings held in cash or very low risk investments means that what those savings can buy will fall over time.
“Those in this age bracket should consider how to make their money work harder into retirement and avoid the trap of holding excessive amounts in cash, which can create a false perception of risk control. The reality is that many baby boomers, in retirement or nearing that point, are ‘sleepwalking’ into poor financial decisions as a result of failing to seek financial advice.
“Taking measured risk is essential to generate decent investment returns. Good financial advice can build confidence and improve understanding of risk to inform investment decisions that best suit an individual’s life stage and goals.”