Retirement warning as global ‘market volatility’ could hurt ‘value of pensions’

Retirement warning as global ‘market volatility’ could hurt ‘value of pensions’

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Patrick O'Donnell

By Patrick O'Donnell

Published: 06/05/2024

- 04:00

Updated: 06/05/2024

- 22:47

Pension savings could be impacted by changes to the global economy and upcoming elections

Older Britons are being warned that recent global events could be impacting the “value of some pensions”.

Experts from PensionBee are urging pensioners to take action to make sure their retirement savings are protected.

This warning comes amid the widespread implementation of artificial intelligence technology, the wars in Ukraine and the Middle East, and upcoming elections in the US and UK.

As well as this, those approaching retirement have been saddled with rising interest rates and inflation-hiked prices.

A consequence of this has been that many older Britons are not able to save as much in pension pots as they would have hoped.

This issue looks to be compounded by the ongoing political conflicts and slow economic recovery from the pandemic.

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Pensioner worried and market drop

Pension 'values' could be impacted by changes to the market


Becky O’Connor, the director of Public Affairs at PensionBee, outlined how retirement plans are susceptible to changes in politics and world affairs.

She explained: “Most pensions are invested in the stock market and typically include some of the top-performing US companies in their main holdings.

“While these companies have been very successful in the past year, investor sentiment has shifted in recent weeks as it appears new artificial intelligence technology may not revolutionise industries as fast or efficiently as originally speculated.

“As such, the value of their share prices has gradually dropped in the past month and in turn, has impacted the value of some pensions.

Here is what retirement savers should be doing to mitigate any lose in “value” to their pension pots, according to PensionBee:

  • Remember investments go up as well as going down
  • Consider increasing your contributions
  • Consider reducing your risk
  • Don’t make hasty decisions.

According to the pension expert, retirement savings are always going to fluctuate and pot holders should be prepared for this.

On top of this, she recommends that people make greater pension contributions while markets are low.


Investor worried and US economy graph pointing down

Upcoming elections and the slow economic recovery from the pandemic could hurt retirement savings


However, the retirement expert gave specific advice to those coming closer to retirement age.

O'Connor added: “It’s impossible to completely isolate your retirement savings from the wider economy - even investing in cash means you could lose real value due to inflation - but being invested in a pension plan that’s designed for those approaching retirement could help reduce its risk of losing value.

“When markets are down, it may be tempting to withdraw your investments under the assumption your money is safer in your pocket than in stock markets.

“However, the more you withdraw, the less you’ll have invested to recover when markets rise in value.

“Withdrawing during a downturn guarantees a loss, whereas waiting for markets to bounce back allows you to regain and grow your investments again.”

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