About savings and investment for retirement

When you retire, it’s likely your income will come from various sources. These may include your state pension, a personal pension, a company pension and income from investments.

In the years approaching retirement, you might be willing to take greater risks in the hope of building your retirement fund. But come retirement, holding onto your capital and generating a return tends to be more attractive than investing for growth. The key is finding a balance of risk and reward you’re comfortable with.

Saving for income

Savings accounts generally work in one of two ways:

• Fixed rate – interest paid at an agreed rate for a fixed term
• Variable rate – the rate moves up and down

The type of account you choose – or how you split your savings between them – will depend on your needs and preferences.

Saving for growth

Compared to equity-based investments, savings accounts are very low risk. Sharp falls in stock market values won't put a dent in your savings. If you’re close to retirement or already retired, this kind of reassurance may be a priority for you.

A good growth strategy is not to take your interest as income. Instead, you may want to leave it to accumulate, so you earn interest on your interest.

Find out about NatWest savings options

• Instant access savings accounts
• Fixed term savings accounts
• All our savings options including cash ISAs

Need more help?

If you'd like to talk to someone about your retirement plans, call us on 0800 051 1871 (Minicom 0800 404 6161) to make an appointment with one of our financial planning advisers.

Invest for the long term

Investment products work best when you invest over the longer term, usually for five years or more. This helps even out the peaks and troughs of the performance of some assets, such as equities.

Typically, returns from long term investment in equities and corporate bonds are greater than you get with cash based savings, but you can't count on this.

Investment assets

These are the main types of investment:

• Cash – this pools investors' funds and places the cash with financial institutions, such as banks
• Property – investing in a portfolio of commercial properties or shares of property development companies
• Bonds – fixed interest, fixed term loans to companies or governments
• Equities – stocks and shares: these represent part ownership of companies traded on world stock markets
• Specialist – investments such as derivatives and hedge funds

Risk

The balance of assets in your investment portfolio will depend on your attitude to risk and how long until you retire. If you’re close to retirement, you'll probably want to take a conservative approach. If not, and if you have other pension assets, you may prefer to be more adventurous.

• More on our range of investments