There’s a new scheme that has the potential to wipe out your pension pot, and that scheme is called “lifestyling”. In short, this is where retirement-eligible people have their pension provider place funds into “safer” investing waters. Unfortunately, new studies are showing that lifestyling might not be what we think it is. Instead of those new assets being safer, it’s been found that they’re actually less safe than the shares most pension holders had their money invested into in the first place.
Right now the hottest asset is bonds, which have been touted for decades as being safer than shares. Unfortunately, the trouble with bonds is that they tend to be easily manipulated by market demand. So when people begin buying bonds because they want to feel safe, the price gets incredibly high. This makes it difficult for anyone to actually profit. It’s all about artificial growth, and that’s the last thing that we really want to deal with. It’s time to make sure that you are looking at all of your options when it comes to bonds, since it’s easy to fall prey to a bubble without realizing it.
Bonds are issued as loans to companies as well as the Government itself. The low risk is appealing, but we would advise people stay out of bonds for the time being. The default rate might not be high, but the prices are going to fall eventually.
If you have your pension pot asset in bonds, you could face serious losses if the massive spending spree stops. And eventually, it will stop. There’s just no getting around that anymore. What you’re going to ultimately need to do is make sure that you’re studying exactly what you want to accomplish, and what you don’t want to accomplish. That’s the only way that you’re honestly going to get what you’re looking for, point blank.
Worried about retirement? There are alternatives than lifestyling, including just putting in more money than what you need. Sure, this might hurt in the short term, but you can skip going out to eat once or twice, can’t you? You can skip out on that one outfit that you feel you absolutely have to have right now. There are so many different ways to bring in a little more cash that you would really be fooling yourself if you didn’t pursue all of them. Now is definitely the time to look into everything properly. Don’t just take the advice of someone on the news — make sure that you have a financial adviser explain things to you in great detail. They’re required by law to give you the best possible advice and information, so hold them to that standard as much as you can!