Understanding the effects of inflation on portfolios
As you consider the benefits of managing your portfolio through our platform, it’s important to understand the risks involved, ensuring you make informed decisions.
With investing, your capital is at risk
The risk of your portfolio being eroded by inflation
Your portfolio and inflation
It’s important to recognise that the value of your portfolio could be eroded by inflation over time. While investing in a SIPP offers potential growth, however, there is no guarantee that the growth will outpace or even keep up with the rate of inflation. This could mean that the purchasing power of your portfolio may decrease, impacting your ability to meet future financial needs.
Balancing risk and reward
Every investment decision carries a balance between risk and reward. While investing offers the potential for higher returns, it also involves greater risk, including the impact of market fluctuations. We encourage you to consider your risk tolerance and investment horizon carefully.
Understand your risk level
If you’re unsure how much risk you should be taking on in your portfolio, simply try a Managed Portfolio by clicking ‘Get Started’ and taking our questionnaire. Using your responses, we’ll build you a portfolio based on your personal risk profile for optimum results.
Do portfolio’s current holdings meet their objective? Make sure you review your investment strategy
Alignment with objectives:
Are your current investments in line with your long‑term goals and risk tolerance? It’s essential to periodically assess whether or not your portfolio aligns with your objectives, such as retirement planning, wealth accumulation or income generation.
Time horizon:
Your investment time horizon is the expected amount of time before you start withdrawing from your portfolio. This timeline is crucial in shaping your investment strategy. A longer time horizon typically allows for greater exposure to higher‑risk investments like stocks, as there’s more time to recover from market downturns. Conversely, a shorter time horizon usually calls for a more conservative approach, emphasising stability and capital preservation.
Personal Circumstances:
Life events and changes in your personal circumstances can also influence your investment needs. Are there any recent developments in your life that necessitate a reevaluation of your investment approach?
Understanding the effects of inflation
Real terms value of a £10,000.00 pot over 10 years, assuming no interest earned using UK CPI figures
Graph showing the effects of inflation (using CPI figures) on a £10,000 pot over 10 years, assuming no interest earned.
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With our SIPP options, you have the opportunity to take control of your retirement savings. Make the choice that aligns with your goals and financial plans.
0.15% annual account fees, capped at £200
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Tax relief on your investments
Capital at risk
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