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How inflation is affecting pension savings

How inflation is affecting pension savings

The current economic situation in the UK with rising inflation should not be too much of an issue for current retirees as they have experienced this all before, according to FTAdviser’s latest podcast guests.

Appearing on the latest edition of the FTAdviser podcast, Russell & Co's independent financial adviser Tim Morris said rising inflation may not have a massive impact on current retirees because “they have seen this environment before”.

Over the past few weeks inflation has hit a fresh 40-year high of 9.1 per cent, with no signs of slowing down.

In fact, it is expected to reach double digits soon, with the figure  predicted to hit 11 per cent this autumn.

Morris said: “People near retirement have been through this and they know how it is. They have experienced it and they'll cut their cloth accordingly.”

Barnett Waddingham's self-invested technical specialist James Jones-Tinsley was also on the podcast and agreed.

Jones-Tinsley said: “The people who are in drawdown now will have lived through times like this before and so, there's that discipline that they'll have had to apply in their working lives that they now need to apply in their retirement.”

He added: “The beauty of drawdown is that there is that complete ability to be as flexible as you need to be.”

Morris said there will always be some clients who are more concerned and need a bit more guidance and hand holding but the majority are not concerned about the impact it will have on their retirement.

He said: “The way we structured their investments is a case of you can draw money from the low risk parts of the portfolio, but also, not just that, but it's about keeping pots of cash.”

To listen to the full podcast click play on the player above. FTAdviser's podcasts are also available on Apple Podcasts, Spotify, Google Podcasts, Stitcher and Acast.

amy.austin@ft.com