Risk Profiles And Reckless Conservatism

Britons face the real risk of failing to meet their retirement savings targets, our recent survey for the Pensions Institute found.

You can read the key findings here (PDF)

A core part of the problem is that UK savers find it difficult the connect the ideas of ‘savings risk’ – failing to meet their savings goals, and ‘investment risk’ – the volatility of the investments suited to their personal attitude to risk.

The survey found that 52% of respondents would prefer to miss their savings goals entirely than take on investment risk. We refer to this reluctance to take the investment risk needed to achieve savings goals as ‘reckless conservatism.

The prudent alternative if savings goals are to be achieved on time is to reduce spending and save more but this was the preferred option of only 30% of respondents.

For reasons we’ll explain in a later post, reckless conservatism is likely to become a much bigger policy issue for the UK in the new post-RDR regime which features upfront fees and robo-advice.

Please get in touch if you’d like to know more about the results or how A2Risk could conduct research on pensions and investment for your organisation.