Essentially Wealth

• Pension boost following removal of Lifetime Allowance
• FIRE – Financial Independence, Retire Early
• Time for a midlife (financial) MOT?

Investing to achieve your long-term financial goals

After more than a decade of putting up with low returns on cash savings, the substantial increase in rates over the past two years has been welcomed by savers, but it’s important not to rely too heavily on cash savings and to carry on investing to maximise potential returns and target long-term financial goals.

Consider the wider picture
Although the availability of higher rates has provided a boost to cash savings, it’s always difficult to assess the appropriate amount to hold in rainy-day and fixed-term funds, particularly given recent cost-of-living pressures. However, history suggests that holding too much in cash can hold back your future wealth, as returns on both equities and bonds have a better long-term track record when it comes to outpacing inflation, though there is no guarantee of this in the future.

Time in the market
Long periods out of the investment market have also been shown to increase investors’ chances of
underperforming. This is because, while cash rates may look attractive, knowing when to sell and buy back into the market is extremely difficult if not impossible, particularly during times of volatility. It’s normally a good idea to stay in the market and build a portfolio capable of capitalising on any improved outlook to maximise potential long-term gains.

Don’t be fearful – let us help
Another reason why some people might shy away from investing is because they feel overawed by the whole process. Indeed, a recent survey1 found that half of the UK population admits to being intimidated by investing, with more respondents saying it would be easier to learn a new language than start investing. On a more positive note, however, other research2 recently showed growth in the uptake of regulated financial advice, with 4.4 million UK adults seeking advice in 2022, up from 3.8 million two years earlier.