Three-quarters (76 per cent) of people over 50 believe risk appetite is an important factor when making decisions about their pension, and two out of five (41 per cent) expect to have a lower risk tolerance as they approach retirement, according to research from Standard Life.

Against a backdrop of economic uncertainty, only eight per cent of people over 50 said they expected an increase in their appetite to take on more risk with their pension savings as retirement draws near, an attitude which may potentially be driven by a wish to close a savings shortfall.

The survey echoes findings in previous research carried out by Dynamic Planner, the financial planning and advice platform.

The group’s research showed that retirement savings are particularly vulnerable to market highs and lows in what it terms the Retirement Risk Zone, within five to ten years before and after retirement.

This period carries specific tensions for savers, since some may be intending to remain invested and continue to grow their pension savings, benefiting from any increases in the markets (effectively experiencing a kind of investment ‘fear of missing out’), while simultaneously managing very real concerns about market volatility and potential short-term losses, given how close they are to retirement.

Standard Life’s managing director of individual retirement, Claire Altman said: “Attitudes towards risk will differ from person to person, but recent market volatility has clearly shown the impact this can have on an individual’s pension savings. […]

"This is especially true for those in the Retirement Risk Zone, when many may be thinking about or already withdrawing their pension savings. During this time retirement savings are more vulnerable to any major losses which could have a knock-on impact on someone’s retirement lifestyle.”

---