Balancing your goals: Why investing could be suitable for long-term goals

Reaching your long-term goals often requires careful planning and consistent action. A financial plan could help you work towards these goals and, in some cases, investing may play an important role too. 

In previous blogs, you’ve read about how you might reach short- or medium-term goals. Now, read on to discover some key considerations for long-term goals.

Assessing whether you’re on track for long-term goals can be difficult

You’re likely working towards multiple long-term goals that will take many years to reach. Among them might be creating an education fund for your children or saving enough to retire comfortably. 

Goals like these are often important for your wellbeing, and knowing you’re working towards them can be reassuring. However, it can also be challenging. 

One of the key difficulties is being unsure whether you’re on track. Imagine you have young children and you want to build a nest egg that will support them if they choose to pursue further education. You’ll need to understand what costs your child might face, what external factors could influence these costs, and the fact that you might be contributing to the fund for more than a decade. 

Regular financial reviews could help you assess your progress and highlight where adjustments might be necessary. 

In addition, long-term goals might feel overwhelming. For example, the amount you calculate you need in your pension before you can retire might seem like an impossible sum. 

A financial plan could help you understand how you might reach your target amount by accounting for contributions and potential growth over your working life. As a result, being proactive when planning for the long term may help you feel more confident about your future.

Investing provides an opportunity for your money to grow in real terms

A clear objective could give your decisions direction when you’re working towards a long-term goal, and investing could help your money grow at a faster pace. 

As investments may experience volatility, investing is not usually a strategy that’s suitable for short- or medium-term goals. But if your goal is more than five years away, it might be a suitable option.

Inflation may reduce the real value of your assets. As the value of goods and services is rising, if the value of your assets doesn’t keep pace with or exceed the rate of inflation, you can buy less with them. Over a long-term time frame, inflation can have a dramatic effect.

Imagine you had placed £10,000 in a savings account in 2000. According to the Bank of England’s inflation calculator, your money would need to have grown to £19,514 to maintain the same spending power in April 2026, due to average annual inflation of 2.58%.

If the savings account hasn’t delivered interest that matches inflation, the value of your money has fallen in real terms.

When you’re putting money aside for a long-term goal, investing might help its value to rise at a faster pace than inflation, so you’re able to reach your target sooner.

For example, according to the Guardian (31 December 2025), the FTSE 100 – an index comprising the 100 largest companies listed on the London Stock Exchange – delivered returns of 21.5% in 2025, marking its best 12-month performance since 2009.

The Office for National Statistics (21 January 2026) reported that inflation in the 12 months to December 2025 was 3.6%. As a result, if your money was invested in the FTSE 100, it could have outpaced inflation and grown in real terms.

For this reason, pensions are typically invested, and this approach could make sense for other long-term goals as well. 

However, it’s important to note that investments carry risk, and investment returns cannot be guaranteed. There is a risk that you’ll lose money when investing, and past performance is not a reliable indicator of future performance. 

A financial plan could help you identify what level of risk is appropriate for you by considering a variety of factors, from your investment time frame to your other assets. 

Contact us

If you’d like to talk about creating a financial plan that supports your long-term goals, please get in touch.

Next month, read our blog to find out how a tailored financial plan could help you balance short-, medium-, and long-term goals. 

Please note:

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.