You are here: Home - Investing - Experienced Investor - News -

Older people being tempted into ‘risky’ investments

0
Written by:
28/04/2021
One in five retirees has considered putting their money into riskier investment products due to the higher rate of interest on offer, a new study from the Financial Services Compensation Scheme (FSCS) has revealed.

The research was conducted among those aged 55-75 and found that retirees are finding products that they would not usually consider more tempting, due to the UK’s prolonged low interest savings environment.

Despite finding these riskier assets more alluring, a small fraction of retirees thought about making use of a financial adviser to help them get the most from their money. Just 12% said they had taken advice from an independent adviser to see how they could make their money go further.

Is it safe?

The FSCS study found that more than one in three older people had invested money after retiring. While more than two-thirds said they knew all of their investments were protected by the FSCS, there was not such wide understanding of how much FSCS protection was available for their money. 

The FSCS warned that the riskier attitudes to investing highlighted the importance of checking if new pensions or investment products are FSCS protected, which you can now do through a checker tool on the FSCS website.

Caroline Rainbird, CEO of the FSCS, said the scheme was seeing increasing numbers of people looking for compensation due to failed pension and investment products, or poor advice.

She added: “The real danger is that if consumers choose to put money into high-interest pension and investment products that are not FSCS protected, they could lose life-changing sums of money from their retirement pots if the product provider fails.”

It’s not just older people turning to riskier assets though. Last month the Financial Conduct Authority, the main financial regulator, warned that younger people were being tempted into backing risky investments like cryptocurrencies which may not be suitable for them.

The FSCS is a safety net scheme designed to support customers of financial businesses should they go bust. When it comes to investing, the FSCS protects the first £85,000 you have invested with a particular firm should it collapse, though it offers no protection against poor performance of any asset you invest in.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

Low-income pensioner? You could gain £3k top-up

Hundreds of thousands of retirees struggling with a low income are missing out on Pension Credit worth £3,300...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week