Why should I invest when I retire?

If you’d like to see larger returns from your savings, it could be time to explore your investment options.


Why should I think about making investments at all?

We’d all like to live out a long and prosperous life. By investing money, you could see more of a return on your savings later on – but unless you’re willing to take a risk with your funds, it’s very unlikely that you will. Of course, investments can go down as well as up, so it’s important to work out which investment type is best for you before you begin.

How do investments differ from savings?

A lot of people put away a little money regularly into a savings pot like an ISA or high street savings account each month. That way it can build up as an 'emergency' fund for dipping into as required. But once that pot has built up and you have a bit more disposable income, you could start thinking about taking out some investments too.

Aren’t investments risky?

Well, yes, if you're comparing them to traditional savings accounts they can seem risky. But that's why they're able to generate more interest than a typical savings account. Investments can go up and down. Savings accounts won't generally go down, but they are also unlikely to generate so much income.

Is investing right for me?

It could be worth considering investing if:

  • You would like to have greater returns from the money you save each month.
  • You can afford to lock the money away for at least five years.
  • You have an alternative ‘emergency’ fund to cover any expenses for six months or so.
  • You can afford to put your money ‘at risk’ and be prepared to lose some or all of it.

If you have a period of years in which you are willing to invest and take a risk, it could prove more profitable in the future. 

How much should I invest?

The answer will depend to a large extent on how much you feel investing is right for you. If you can't afford to lose any of your savings then you probably shouldn't be investing them – on the other hand, if you have unexpectedly come into a windfall and have money to spare, investing it all might be right for you. Some investment providers have maximum and minimum amounts you can invest – as do some tax-free investments such as ISAs, so what you invest will depend on a number of factors.

How much does it cost to invest?

Again, this will depend on the amount you invest, the type of investment you make and the company you use to invest on your behalf. If you purchase any investments such as stocks or shares there will be a charge for using the stockbroking service. If you decide to purchase investments with funds, there will be up-front and annual charges by the fund manager. You may also be charged for professional financial advice if you need it.

Are there any reasons I shouldn’t invest?

There may be. Investing money probably isn't for you if you have outstanding debts like credit cards, or if you can't afford to lose any money at the moment. Also, as you reach retirement age, you probably want to take less risk with your income – just in case the investments go down and you need to access them before they have time to potentially go back up again.