The Perfect Storm for Pensioners


Many retirees, and those on the cusp of retirement, should consider revising their personal financial strategy, warns the chief executive of one of the world’s largest independent financial advisory firms.

Nigel Green, founder and CEO of deVere Group, issues this warning ahead of the likely U.S. and UK interest rate rises which will create further pressures on pension funds, many of which are already nursing severe deficits. 

He comments: “There could be a perfect storm brewing for many retirees, and those nearing retirement, which could lead them to potentially becoming unstuck in their retirement planning strategies. This is because the much-anticipated U.S. and UK interest rate rises are likely to burst the bond bubble.

The growing tendency for pension fund members to opt for a ‘life styling’ investment approach, by which their exposure to bonds steadily increases the nearer they reach retirement, means many people approaching retirement are taking on more exposure to bonds than they perhaps realise.

Mr Green continues: “This threat of a bond bubble is, unfortunately, set against a backdrop of soaring company pension deficits.  The shortfalls are growing all the time and this liability gap shows no sign of diminishing – despite measures being put in place by trustees. As such, some workers approaching retirement or those already in retirement should consider revising their financial strategy in order to enable themselves to afford the retirement they desire.

“In these times of growing market volatility, I would urge individuals perhaps now more than ever to assess their current financial strategy with their financial adviser to ensure that any avoidable pitfalls can be mitigated and then consistently keep the retirement strategy under review.”