Are these 3 investment myths holding you back from growing your retirement wealth?

Holding your retirement savings in cash accounts may feel like a familiar and safe option. However, inflation could erode the purchasing power of your money over time, meaning your wealth won’t stretch as far as you expect it to in the future.

In contrast, investing some of your retirement savings in the stock market could generate long-term growth and allow your money to benefit from compounding returns. In other words, your money works harder, which may help your savings outpace inflation.

As such, investing could be a powerful way to build the funds you need for retirement.

However, research by the trading platform IG reveals that 60% of UK savers avoid investing because they believe it’s ‘too risky’, while 51% are unaware that cash savings lose real value over time due to inflation.

If you’re holding back from investing because of such beliefs, it might be time to rethink your approach to retirement planning. Read on to discover the truth behind three common myths about investing.

1. Investing is only for extremely wealthy individuals

According to Money Marketing, on average, UK adults think they need around £41,300 to begin investing, while those aged 18 to 30 believe £58,000 is necessary.

Coupled with misconceptions about the level of risk involved in investing, this belief might be a significant barrier to getting started.

In fact, you could start investing with as little as £50 or less in some cases. A ‘little and often’ approach is often a manageable first step for beginners who might feel intimidated by the prospect of parting with a large lump sum. Making small, regular investments allows you to build a portfolio – and your confidence – gradually, while maintaining your other financial commitments.

The truth is, there’s no one-size-fits-all starting amount, and investing doesn’t have to be an all-or-nothing decision. The key is to decide how much you can comfortably afford to invest regularly and how these contributions support your long-term goals.

2. You need to have expert knowledge to invest

Research by Aviva shows that 33% of UK adults say the reason they don’t invest is that they don’t have enough knowledge to do so.

Unfortunately, investing involves a lot of complex financial jargon that may create the impression it’s something only ‘experts’ can or should get involved in.

In reality, successful investing is about smart, structured decisions rather than financial genius. You just need a clear plan, discipline and the right support.

Your financial planner can set you on the right path by explaining investing concepts in plain language and building a portfolio that reflects your goals, appetite for risk and time horizon.

If a lack of knowledge has held you back from investing until now, having your portfolio managed by an experienced financial professional or investment manager could provide valuable peace of mind.

3. Investing is too risky

It’s true that the value of your investments could indeed go down as well as up, and it’s important to recognise this.

However, all financial decisions involve some element of risk. As mentioned above, even saving in cash comes with the risk that inflation will reduce its value in real terms over time.

As such, the key is to understand what level of risk you’re comfortable with and manage risk in your portfolio effectively – rather than avoiding investing altogether because it feels ‘too risky’. This could mean you miss out on potentially valuable opportunities to grow your retirement fund.

Your financial planner can help you manage risk by:

• Diversifying your investments to spread risk
• Aligning the level of risk in your portfolio with your goals and time horizon
• Creating a long-term investment strategy that smooths out short-term ups and downs
• Reviewing and adjusting your investments in line with your life stage and changes in your circumstances

We can help you build a robust investment strategy that aligns with your retirement goals

The myths and misconceptions surrounding investing might make you apprehensive about getting started.

That’s where we come in.

Your financial planner will take the time to talk through your concerns and find out why you want to invest so they can create a strategy that supports your broader life goals.

We have an extensive professional network to help us provide the advice and guidance you need to feel confident investing for your retirement. This includes external investment managers who can manage your portfolio on your behalf. Our internal investment management committee continually monitors and reviews the performance of any connections we refer you to, ensuring you always receive the highest standards of service.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.