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Given the ongoing economic uncertainty, it's worrying news that only 36% of investors who are over 45 years old have taken steps to protect or safeguard their savings. In contrast, 77% of those aged between 18 and 34 have done so, according to research commissioned by Rathbones.
Due to a combination of rising inflation, historically low interest rates and the wider economic situation, it's likely that people's savings are feeling the pinch. That's why 17% of 18-34 year olds have diversified their portfolio, while 22% have personally reviewed their savings and investments.
Diversifying could mean putting more of your savings in fixed term bonds, or simply changing the funds that for instance your stocks & shares ISA is invested in. This sounds simple, yet only 10% of those over 45 have diversified their portfolio in the last year, while just 9% have reviewed their finances.
Now, you may be thinking that this is simply due to most over-45s having professionals in charge of their finances, whose job it is to keep an eye on the market. However, Robert Szechenyi, Investment director at Rathbones, explains: "Younger generations – particularly millennials – have grown up during times of prolonged economic uncertainty, so it's perhaps unsurprising that they are taking a hands-on approach to their finances. This strongly contrasts with that of older generations, who are by most accounts taking a much more passive approach to the current politically and economically volatile climate."
Aside from keeping a closer eye on their money, younger generations are also more likely to think about the impact of their investments. Indeed, 20% of 18-34 year olds believe social impact investing is one of the best ways to use your money for good, compared to just 8% of over-45s.
Robert concluded: "Higher inflation and the current economic uncertainty over Brexit mean that investors should be taking steps to ensure their portfolio can weather any storm as well as possible. A large part of this will be making sure that portfolios are well diversified."
Indeed, it's always a good idea to check in every once in a while, regardless of where your funds are invested – it's your money at stake, after all. So, if you've got a large amount of money at risk on the stock market, consider putting some into a fixed rate bond or ISA instead. Any type of ISA, cash or stocks & shares, may be a good idea given their tax-exempt status.
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