You are here: Home - Retirement - Retirement planning - How to -

You don’t have to be a risk-taker to be a pension millionaire

Written by:
You don’t need to stick your money in high risk investments to become a pension millionaire, research shows.

People who’ve built up a million-pound pension pot are in fact not big risk takers when it comes to investing their money, instead favouring tried and tested approaches.

While pension millionaires appear to prefer individual shares, they don’t seem to take big risks, with large UK businesses that have stood the test of time proving most popular.

Both pre and post retirement, they seem to opt for blue chips such as BP, Vodafone and Unilever.

Pension millionaires’ preferred shares – listed alphabetically
HL shares

Analysis of 1,500 pension millionaires by Hargreaves Lansdown found they favour investing in the stock market, with direct shares accounting for almost half of all assets invested. The other half is invested through funds, with less than 10% invested passively.

Income funds are popular among pension millionaires, with four of the top 10 most popular picks of pre-retirees invested in search of income. Post-retirement, this jumps to seven of the top 10.

Top choices include Artemis Income, Fundsmith Equity, Woodford Equity Income and Newton Global Income.

Pension millionaires’ preferred funds – listed alphabetically
HL funds

Hargreaves said a £1m pension fund could provide an income of around £40,000 a year.

“Becoming a pension millionaire may not be possible for everybody, but taking hold of the investment reins can provide the chance for a bigger retirement income, greater flexibility when leaving the workplace, or both,” says Hargreaves’ senior analyst, Nathan Long.

The two key ways of giving yourself a fighting chance of building up a million-pound pension pot is start early and improve your investment returns, says Hargreaves.

“Getting started can be easier than you think with many investment brokers providing their list of the top funds available. If you are still unsure, paying for financial advice could reap handsome rewards,” says Long.

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.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Everything you need to know about the pension triple lock

Retirees are braced to receive another bumper state pension pay rise next year due to the triple lock mechanis...

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.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

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?

Money Tips of the Week