Keeping pensions advice pure and simple

If you’re a reader of interviews with celebrities discussing their finances, you’ll have seen it many times: a public figure discloses how they manage their money. Many will say that they do not invest in shares because they don’t understand the vagaries of the stock market.

They will then go on to explain that they make regular contributions to a pension that was recommended by an advisor and is a safe way to save for their retirement. The contradiction is often lost on them – investing in a pension automatically means having exposure to stocks and shares, as well as other forms of investment.

That can be a good thing, because it offers the prospect of a comfortable retirement. Holding a large proportion of the savings pot in cash is one way to minimise the risk of fluctuating values. It is, however, not necessarily the best way to escape the impact of inflation. Indeed, at the moment, negligible interest rates mean the returns may not be enough to offset that.

There is a wide range of investment options spanning all levels of risk and return. It’s important to have holdings that carry different degrees of volatility so that some are safe but steady, while others have greater potential but might fluctuate a bit more.

However, it is important to understand what you’re investing in and, with that in mind, it’s vital to ask questions before committing any money. If you’re seeking advice on retirement planning in Shropshire, we’re here to explain it in plain English.

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