Pensioners and those nearing retirement need to rethink their investment plans and consider higher risk/higher return investments, deVere Group chief executive Nigel Green has advised.

Green commented following the incoming governor of the Bank of England Mark Craney’s evidence to the Treasury Select Committee where he said “flexible inflation targeting” was likely to be the “best” policy.

However, Green warned that ‘flexible inflation targeting’ would mean that investments made exclusively from gilts would not make a healthy return.

He said: “With the incoming governor of the Bank of England suggesting that he favours ‘flexible’ inflation targets, the case is strengthened for people nearing retirement or those currently retired to consider higher risk/higher returns investments, as an investment portfolio made up almost exclusively of gilts is increasingly unlikely to produce the yields necessary to fund a decent retirement.

“Higher inflation would be another hammer blow to the returns offered by government bonds, known as gilts, an asset class which the over-50s have, traditionally, had great exposure to as they have been perceived as a ‘safe haven’."

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