Equity mix remains top choice for pension investments

More than one in three people retiring within the next 10 years say they would prefer their pension to be invested partly in the stock market and the remainder in other types of investments, according to new research from Prudential.

The nationwide study shows that consumer confidence in the stock market continues despite recent market and economic upheavals.

Prudential asked 1,002 men aged 55 to 64 and women aged 50 to 59 who have a pension "If you could choose where your pension was invested, which, if any, of the following would you prefer?"

35 per cent said partly in the stock market and the remainder in other investments (40 per cent men, 29 per cent women)

29 per cent said only in cash or very low-risk investments (29 per cent men, 30 per cent women)

22 per cent said they did not know (18 per cent men, 28 per cent women)

FTSE performance since 2004
Since the FTSE 100 index of leading shares hit a five-year low of 3530 in the week of 2 March this year, it has climbed back up to 4194 (week of 6 July), 201 points below its level of 4393 five years ago in the week of 5 July 2004.

Andy Brown, Prudential's Director of Investment Funds, said: "Despite immense volatility in the stock market over the past year or so, there is still evidence of consumer confidence in equities to deliver a promising return for pension investments over the long-term.

"What is certain as well is that many people have been spooked by the recent economic maelstrom and, unsurprisingly, would prefer their pension to be in cash or lower risk investments as they near retirement.

"We've seen a marked increase in the numbers of people looking for a home for their money which they can trust, knowing that it has a solid capital base and a long-standing history which will stand it in good stead for the future.

"I think investors can feel confident in stock market opportunities if they are given a decent choice in how they access real assets such as the equity market. Investors can really capitalise on the markets if they can access funds across a number of asset classes and sectors from a range of different investment managers allowing diversification across assets and manager styles."