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Inflation – The Asset Eroding Thorn in your Low-risk Investment Strategy

Growth is key for an inflation busting investment strategy

A portfolio that overly emphasises fixed interest securities, annuities or cash savings may struggle to keep pace with inflation and could ultimately result in you needing to make unwanted adjustments to your lifestyle or, worse, could even cause you to run out of money.

With this in mind, it is unlikely that a conservative or “low-risk” expat wealth management strategy is going to provide sufficient income as you get older.

Before August this year interest rates in the UK had remained at or below 0.5% for nearly a decade. When you consider that the inflation rate in the Euro Area averaged 1.97% from 1991 until 2018, it is easy to understand how, even with the recent interest rate rise to 0.75%, relying on UK-based savings could leave you short of enjoying the expat retirement lifestyle you have always dreamed of.

The bottom line is, that while your savings are growing at one rate, the cost of living is rising at another – and if the two don’t match, or your growth rate is lower than the inflation rate, as time goes on, your savings will buy you less and less.

There is only one answer to this and other expat wealth management retirement planning problems: plan ahead and work to diversify your assets so that you can find the balance between growth and safety that is suitable for you and your goals.

Advice from Blacktower Financial Management

At Blacktower Financial Management our experts can help you develop a confident expat wealth management and retirement plan to give you the best chance of having sufficient assets to see out your retirement and any legacy plans you might have.

We are a specialist firm, with many years of experience and our team of international financial advisers understand all the important cross-jurisdictional issues affecting expats. We can help you protect and grow your wealth and provide you with the information and support to make investing choices that are right for you.

Contact us today for more information.

Other News

Set sail with a yacht loan: All there is to know about boat finance

Yacht in DockNothing says High Net Worth Individual quite as succinctly – or indeed as spectacularly – as owning a superyacht. However, for those who are not quite yet up to owning their own version of the world-record breaking £2.8 billion History Supreme, there are plenty of more modest yet still luxurious options.

The difficulty with securing such a vessel though is that even if you have the money, finding the right way to structure both the yacht loan and the ownership arrangements can be difficult. This is made even more complex, due to cross-border wealth management concerns so often inherent in obtaining yacht financing.

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City watchdog to probe pension freedom rip-offs

The Financial Conduct Authority (FCA) has launched the investigation amid concerns that savers are in danger of being ripped off when they cash in their pensions. Insurers are to be probed by the City regulator over fears they are offering poor deals to savers who take advantage of new pension freedoms to dip into their nest eggs.

As you are probably aware from previous articles, new rules were introduced last year to allow savers to cash in their pension pots to spend as they like, rather than turning them into an annuity to pay for an income for life.  Reportedly, fears are growing that many customers are choosing the first pension their insurer offers them and risk missing out on the best deals. Findings suggest that in the final quarter of last year, 53 per cent of savers who chose to dip into their pensions stuck with the same insurer, while 57 per cent of those who signed up for an annuity didn’t move elsewhere.

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