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Only 5% of UK savers invest for the long-term

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UK investors are putting their retirement saving ambitions at risk by focusing on short-term investment horizons, according to a report by Schroders.

The asset management company found that while more than half of UK investors see retirement as their key goal, only 5 per cent invest for a 10+ year timeline.

When asked how they would allocate investments in 2014, UK investors said they would place just 13 per cent of their money into higher risk assets (such as equities), while 38 per cent would allocate funds to medium risk assets (such as bonds).

The majority of investors (49 per cent) would place their investments into low-risk assets such as cash.

Schroders warned the divergence between investment goals and the reality of how people are investing could jeopardise their ability to build the retirement pots they hope to achieve.

“The reality is the additional flexibility announced by George Osborne [during last month’s Budget] is not on its own enough to guarantee a comfortable retirement,” said Robin Stoakley, head of UK intermediary at Schroders.

“Investors should ensure they structure their portfolios to deliver the returns they need over the relevant time horizon and review the assets they invest in to ensure they are achieving an appropriate balance of risk, growth and income to suit their needs.”

The report also revealed that almost half of UK investors anticipate they will need to financially support their children during the next five years, with one-in-seven anticipating their grandchildren will need some financial support and 9 per cent expecting to have to support their parents.

Less than half said they seek professional advice before making investment decisions.

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