Logic dictates that younger investors have more disposable income, and time, with which to recoup any losses they may incur from bad investment decisions or market downturns – while older investors have reduced earning power, and less time, with which to absorb and recover losses.

So, as you approach retirement age, you should gravitate away from riskier investments towards safer vehicles.

However, with rates on all so-called ‘safe’ savings and investment vehicles so low and people living longer and needing more money in retirement, could it be time to turn conventional wisdom on its head? Is now the time to increase exposure to investment risks in retirement?

Martin Bamford, financial planner at Informed Choice, points out that fixed interest securities are no longer a safe haven – years of non-existent interest rates and quantitative easing mean money stored in them at best stagnates, and at worst depreciates due to inflation.

As a result, for retirees who wish to maintain and grow their funds such vehicles could in fact present a risky prospect.

“Moving towards a more cautious portfolio as you got older also made sense when annuity purchase was the default retirement option,” says Bamford.

“With more pension freedoms, keeping your pension pot invested and drawing an income from it during retirement is a more common option.”

Patrick Connolly, chartered financial planner at Chase de Vere, agrees. He notes that historically, retirees got their investment strategy wrong when they took on too much risk, exposing their investments to increased volatility and potentially to sizeable capital losses.

“Today, it’s far more common for retirees to take on too little risk, resulting in limited growth potential and the danger that inflation will eat into the long-term value of their investment,” he says.

For Adrian Lowcock, head of investing at AXA Wealth, the traditional approach of drastically reducing risk exposure in retirement  is already an outdated concept. This is in part attributable, he believes, to increased life expectancies – and an increasing awareness among retirees that they will live longer.

“In the modern era, it’s entirely possible that somebody aged 65 could live for another 20-30 years – and they may need to remain invested for much of that period,” Lowcock says.

“They therefore need to take on higher degrees of risk if they want their money to perform in the long-term. This almost certainly means investing in riskier assets, such as equities.”

Lowcock’s belief that retirees are already upping their risk profiles is supported by the growth of peer-to-peer (P2P) lending. According to the 2014 UK Alternative Finance Industry Report, 57 per cent of peer-to-peer business lenders are 55 and over.

Kevin Caley, co-founder of P2P lender ThinCats, states that his firm’s investors are typically aged between 50 and 80, with an average age of 57.

He notes that P2P is especially attractive as investing does not necessitate taking “expensive” investment advice.

“Prior to P2P, you could put your money in a bank account, buy shares on the stock market, purchase an ISA or gamble on spread betting,” he observes.

“Now, P2P has provided an entirely new ‘asset class’ which returns a fixed, predictable income not subject to fluctuations in the financial markets. P2P platforms offering returns of 9 per cent are now popular investment propositions. A £100,000 pension fund invested in the traditional way would allow you to draw down a pension of £3,000 per year before you start eating into your capital – P2P can pay a pension three times greater without reducing your capital.”

With the recent institution of pension freedoms, coupled with the prospect that current rates will be maintained by the Bank of England for the foreseeable future, P2P could grow in popularity with older investors.

For Connolly, however, the current environment does not call for significantly heightened risk appetites among all retirees.

“Despite the state of interest rates and longevity trends, the principle of reducing risk as you age isn’t totally invalidated,” he says.

“For most, the best retirement income approach will be a portfolio of savings and investments, incorporating equities, fixed interest, cash and property, which is reviewed on a regular basis. What form that mix takes will vary from retiree to retiree.”

Bamford concurs, noting that if a retiree won’t benefit significantly from having more money in their retirement, but would suffer if the funds available to them were significantly depleted, “a classic approach focusing heavily on fixed interest products and easy access savings vehicles could still be the optimal one.”

“Capital protection should never be neglected in favour of capital growth. The two may always perhaps be equally important for retirees,” he adds.

While not subscribing to a complete rewriting of prevailing wisdom, Lowcock does believe that the informal rule of thumb in investment, which states an investor’s equity allocation should be 100 minus their age – for instance, a 60 year old might invest 40 per cent of their portfolio in company shares, with the balance in non-risk assets, such as fixed interest securities – may need to be revised.

“Naturally, how much that ‘100’ figure should be increased by depends on a retiree’s means and needs – it could be 10, it could be 20, it could even be more,” he says.

“But it does need to be revised.”