Money is not the units of currency that you own.
Money is purchasing power. It is the tool you use to experience the products and services you buy.
Money cannot be kept safe in a bank account or under the mattress.
Someone who tells you they had £1million 20 years ago and have confidently kept this money safe as they still have £1million has done no such thing.
The purchasing power of this money will have reduced significantly. £1million would have bought far more 20 years ago then it can today.
This is why most cash savers or conservative investors are not actually being very safe.
At an average inflation rate of 3% per year your money will have lost nearly half its value in real terms after 20 years.
What cost £1 30 years ago will now cost you nearly £2 today and remember 30 years is the average length of a two person retirement.
The only way to protect your purchasing power over time is to invest.
We invest because either we want to maintain our purchasing power for a time in the future or because we want more purchasing power in the future.
This is why you should always check your investment returns after factoring in inflation and why we build our investment portfolios with inflation as the benchmark.
If you are not sure what to do with your personal and workplace pensions at retirement then please get in touch for a free no obligation 15-minute call. We would be happy to review your position, explain where you stand and what you need to do to get the outcome you desire. We have created hundreds of happy retirements over the years. This could be you too.
Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.