Posted on: 27th March 2020
Since the outbreak of COVID-19, we have seen a considerable drop in the stock markets, something that will likely remain for some time. Therefore, you may be asking “How will COVID-19 affect myor investments?”
It is worth noting that if your pension is heled in a defined benefit arrangement, anyrisk is borne by the sponsoring employer. As for the state pension, this is unaffected by fluctuations due to the stock market. However, if you would like to learn more regarding defined contribution schemes, read on.
How will COVID-19 affect my pension or investments?
If you are currently paying into a workplace pension and have several years before you intend on drawing from it, you will likely be fine. In time, the markets will likely recover.
If you are edging closer to, numerous pension schemes will “lifestyle” their funds. In other words, your pension will move into predominantly less risky funds such as bonds. Your pension will not take a hit, but it will be considerably less than investing in shares. However, not all pension schemes provide this service, so be sure to check the type of funds your pension is invested in.
If your pension remains invested in mostly shares, do not panic. Over time, we tend to see the markets recover. Depending on when you aim to retire, you may have to consider taking a lower income or extending your retirement start date.
We found this tweet to perfectly explain our attitude to the markets. It was posted on Monday 9th March after the markets opened 9% down. Investing is a long term commitment as is your pension. Stay the course and we are confident the markets will recover.
If you’re investing for the next week, today is terrible news.
If you’re investing for the next year, it’s probably not much in the way of news.
If you’re investing for the next decade or more, it’s great news.
— The Motley Fool (@themotleyfool) March 9, 2020
Speak with your adviser
The most important thing is to make sure you don’t panic and make any drastic decisions. Instead, make yourself aware of the facts and seek expert advice. At, we are here to ensure all our clients receive the best advice to help their pension investments stretch further.
This blog does not constitute financial advice.can go down as well as up and you may recieve less back than you originially invested.