Whether you’re nearing retirement age or still have many years to go, it’s always important to be focused on your financial future. With individual state pensions amounting to just £5,881 a year, and some analysts predicting a steady decline in state pensions over the coming decades, thinking of other ways to prepare for later life is essential. So why not try investing? It can be a great way to give your income a boost and although it’s often deemed riskier than opening a cash ISA or using a traditional savings account, there’s also no doubt it can potentially yield much higher returns.
Choosing individual stocks and shares
Only if you’ve got a high tolerance to risk and can stomach the volatility of the stock market should investing in individual shares be considered the right option for you. You’ll need the time and energy to follow the twists and turns of the market in detail and be fearless of the sums and research involved. But if that’s your bag, you’ll most probably love doing it. Just be cautious that by putting all your eggs in one basket you may be running a high-risk strategy.
Buying a mutual fund
Want to spread your risk? Then buying a mutual fund could be more up your street. A fund pools together money from individual investors and then buys a wide range of assets. A fund manager will manage the fund and use their knowledge and expertise to try to grow it.
It’s a preferred option for many people because it spreads risk, to some extent, and means you have someone else managing the investments for you. One downside is that it’s not necessarily a set of investments tailored to your needs and a fund that performs well one year may not do so the next.
Take out a personal pension
One of the best ways to prepare for the future is to start a personal pension. You can manage it yourself, much like you might when picking individual company shares, or you can have an investment manager do it all for you. Here are three companies that do exactly that…
Nutmeg is an innovative online investment manager that takes the hard work out of investing by building and managing a globally-diverse portfolio on your behalf. Simply answer a few basic questions about your attitude to risk and they’ll ensure your money is suitably placed according to the type of investor you are. They constantly monitor the financial markets and regularly make trades on your portfolio as they seek out new investment opportunities and to help protect it from downturns in the economy. They also manage stocks and shares ISAs in much the same way and you can have all your investments in one easy-to-use online account.
Here’s what some of their customers had to say:
- “Inspiring, interesting. A good concept to thrash traditional private banking.” — @sumaygia
- “Refreshingly new approach to #investment by @thenutmegteam – definitely the ones to watch out for!” — @chveiga
- “I don’t see the value in independent financial advisers. I don’t have time to stay on top of the markets. So Nutmeg is the perfect solution.” — @jilldesmo
Aegon is an international provider of life insurance, pensions and asset management helping millions of people prepare for their financial future. With approximately £542 billion assets under management and businesses in over 20 countries across the world, they’ll provide you with all the investment help you could need and offer a wide range of funds you can rely on.
They’ve been key figures within the financial world since 1831 and have recognised the need to encourage Brits to save for retirement (as we’re currently lagging behind many other world countries in terms of retirement funds), so let’s take a look at what their customers had to say:
- “Excellent and responsive to my personal pension needs.”
- “Hassle-free service that will help secure your future life.”
- “Great customer service and an impressive selection of funds. I feel my money is in safe hands.”
Aviva is a leading provider in the UK or life and personal pensions. So, if you’re thinking the state pension won’t be enough and are looking to increase your funds in later life, this British multinational cooperation will be there to help you every step of the way. An Aviva personal pension plan can help you live life just as you want to when you retire offering a choice of over 250 funds from some of the biggest names in investment. You can choose from regular and/or one-off payments and can choose to stop, restart or change your payments to suit your circumstance.
Here’s what some of Aviva’s customers had to say:
- “I have all my pension savings with Aviva who provide up to the minute valuations and also good modelling that allows me to understand how much I can expect to receive when I retire. The website is easy to use and access from any secure site. They offer all the top investment companies to invest in without giving any particular advice.”
- “Customer service is excellent. I have always been given good advice, when speaking to them. The product was taken out many years ago when my husband was alive. He was advised by his financial advisor to apply to Aviva for his pension. When he was due to take it, they advised us clearly on the options available – we opted to take the pension on his life and spouses life – this has been a blessing, as he died ten years ago, and I am still able to receive the pension. Whatever your circumstances they will give you good advice about your options. They have been in operation many years, so you are able to rely on them.”
Disclosure: In collaboration with Sophie Davidson.