For those fast approaching the age of retirement, money can be a concern. Knowing that your finances are arranged so that you can do more than just survive, and in fact thrive during your golden years can be a big weight off your mind. With savings accounts providing little more than a pittance of a return, many UK over 50’s are trying their hand at the stock market to help grow their nest egg.
A fit financial future
The majority of over 50’s in the UK today will have already amassed a reasonable pension pot, certainly enough to see them through later life with food on the table. But older people are also starting to realise that retirement is about more than just gardening and daytime TV. Retirees are now living longer, and enjoying better health than ever before, with many setting off to explore the world, indulging in luxury holidays or taking up new hobbies to fill up all their extra time.
With the prospect of many years of pleasure ahead of them, over 50’s realise that they need more financial vehicles behind them than just a simple pension pot. Traditionally they may have held other savings accounts, such as ISA’s, in order to bolster their basic income in retirement. But with the lowest ever rates on investments and little sign of improvement in the near future, many are starting to think outside of the box when it comes to making their money work for them.
According to research conducted by Saga, more and more mature people are turning to the stock market to grow their savings and fund their retirement. Their recent survey showed that:
- 50 per cent of the over 50’s own shares in a company, although one in six has either inherited them from a relative or been given them by an employer
- One in three of these shareholders say they are hoping to use the potential returns to boost their income and capital once they stop working
- 21 per cent say they regularly buy and sell shares to supplement their current income
- Two thirds of shareholders say that they strongly believe that they will get a better return on their investment in shares than if they put their cash into a traditional savings account
- Not all mature shareholders are in it for the money, as 7 per cent said they enjoy checking the FTSE as a hobby, and others say it keeps them mentally active
Saga estimates that there are around 11 million over 50’s in the UK right now who own shares in at least one company. There is a slight bias towards men, with 75 per cent saying they have bought shares compared to 60 per cent of women.
A good investment?
There is no doubting that, right now, investments going into savings accounts are not going to be generating much of a return. However, buying shares is not without its risk too. Many of these over 50’s are enjoying a much better return on their investment than they had hoped for, but for every success story there is also another side to the coin.
Shares are notoriously volatile, and can change value dramatically in a very short space of time. For most investors, well placed shares offer a great opportunity to grow their capital, but for the unfortunate few who don’t make the right choice, everything could be lost. If you’re thinking of making an investment on the stock market, be sure to take educated advice before making any decisions.