Stock market volatility puts pension savers off investing

Recent volatility in stock market has reduced appeal of investors among over 50s, according to new research. 

The Retirement Sentiment Index from Retirement Advantage found almost 39 per cent of pensioners (over 50s) are unwilling to take any financial risk with their pension savings pot. 

This was a substantial increase from last year’s figure of 26 per cent, suggesting recent stock market turmoil has reduced confidence in investing.  

At the same time, the findings showed that only 17 per cent were willing to ‘to take a reasonable amount of risk’ for the chance of seeing reasonable returns. This was down from 28 per cent the year prior. 

Those who claimed to be willing to take substantial risk remained roughly the same. 

Behind this decline in confidence to invest is likely the change in market conditions.

Since the start of the year, the global bull market in equities has cooled. So far this year, both the FTSE 100 and FTSE 250 have lost around 7 per cent in value. At the same time, the US market has seen some heavy drops and Japan and Europe, two regions hotly tipped at the start of 2018, have underperformed. 

According to Andrew Tully, pensions technical director at Retirement Advantage: ‘Savers have been spooked by the recent market volatility which shows no signs of abating. If anything, the volatility is likely to continue, with global uncertainties permeating major economies, the prospect of interest rates rising and quantitative easing programmes being unwound.

‘This is understandably not an ideal backdrop for anyone planning for their retirement, and our research paints a picture of the over 50s being ill-prepared but wanting to take risk off the table when looking at their finances.’

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