A lifetime of investing
As we move through life, our plans and goals will inevitably change. This also goes for our investment strategies, which need to flex and adapt as we move through the decades.
Your twenties and thirties
The financial decisions we make in early adulthood set the foundations for the rest of our lives. At this stage, one of your key goals should be to start saving. Retirement may seem a long way away but getting into good financial habits now could mean the difference between a comfortable retirement and having to work well into your later years.
Due to the timescales involved, now is the time to take on a little more risk – you’re more likely to recover any losses in the long term. So, it makes sense to put most of your savings into equity investments, which offer the highest potential for growth. Remember, you’ll also need some easily accessible savings for unexpected expenses, or to put down a property deposit.
Turning 40 and 50
Often considered the peak earning years, your forties and fifties should be dedicated to bolstering your pension and investment portfolio. It is also vital to have a sound, tax-efficient financial plan in place at this stage, with regular reviews to ensure you remain on track to meet your goals. As you approach retirement, a more conservative approach may be appropriate, with funds switching from equities to more stable asset categories.
Steady on in your sixties
With the State Pension Age continuing to rise, many people are now working and investing until well into their sixties. Your attention will now be shifting to income-generating products, and ensuring your income remains in line with your living expenses. You’ll also likely be considering the best and most tax-efficient ways to protect and transfer your wealth.
The value of investments and income from them may go down. You may not get back the original amount invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.
It is important to take professional advice before making any decision relating to your personal finances.
Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.
Information is based on our understanding of taxation legislation and regulations.
Tax treatment is based on individual circumstances and may be subject to change in the future.