Many baby boomers are risk-averse, but could benefit from financial advice to avoid taking excessive caution, new research from Aegon suggests.
According to a survey carried out on over 2,000 UK adults, 39 per cent said they had zero risk appetite.
A greater proportion of baby boomers, 44 per cent, preferred to avoid risk at all costs, compared to millennials at 36 per cent.
However, a lack of investment knowledge and confidence was also revealed by the research, as a quarter blamed their risk aversion on concerns over making a wrong investment choice, and 20 per cent said they did not know what a good return on their investments would be in the long run.
Aegon investment director Nick Dixon says: “Our research shows that, even though baby boomers have accumulated the most wealth, they are at risk of excessive caution and exposing their hard earned money to stagnation.
“Not only will growth potential be reduced, but the impact of inflation on savings held in cash or very low risk investments means that what those savings can buy will fall over time. Those in this age bracket should consider how to make their money work harder into retirement and avoid the trap of holding excessive amounts in cash, which can create a false perception of risk control. The reality is that many baby boomers, in retirement or nearing that point, are ‘sleepwalking’ into poor financial decisions as a result of failing to seek financial advice.
“Taking measured risk is essential to generate decent investment returns. Good financial advice can build confidence and improve understanding of risk to inform investment decisions that best suit an individual’s life stage and goals.”