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    Managing your pension during uncertain times

    We are all living in uncertain times and facing constant changes in relation to our finances, but it is important to not only focus on your short-term financial stability but also longer-term matters such as your pension. This may not seem like a priority when the cost of living crisis means you are focusing on the days or weeks ahead in order to get by, rather than thinking about how much money you may have when you retire. However, thinking about your pension now could have a huge impact on the quality of life you are able to lead in years to come. In fact, it’s essential to ensure that you have a reasonable quality of life during retirement.

    What is the current situation?

    Markets are currently reacting to a number of huge economic challenges which are happening all at once. These market changes in response to economic and global events are normal and it isn’t always bad news. With some investments selling for less than they’re worth, if you are regularly paying into your pension, you could effectively be getting more for your money. Pensions are always designed with the long term in mind and reacting to the short term could lead to unnecessary losses.

    Should I be worried?

    Your pension is designed to help you build up your retirement pot over a long period of time and previous history shows that over the long term (typically more than 10 years) markets have weathered numerous financial storms and risen in value.

    Obviously, it is impossible to predict the future, and nothing is guaranteed but you can look at how investment markets have typically reacted over a number of years and consider how your pension has performed in relation to this.

    What action should I take?

    Although it can be very tempting to make changes as to where your pension is invested or consider cashing in your investments, there is one key factor to think about – it is likely that you are selling after the markets have already fallen and more importantly, before they rise again! If you do this, not only are you locking in your losses but you’re also missing out on the likely eventual recovery. You should focus upon “time in the markets” rather than “timing the markets,” the latter being an impossibility.

    Further volatility is expected in the months ahead and this is normal. Regardless of where you are at in terms of when you’re likely to be accessing your pension pot, it is vital that you don’t make any rash decisions and discuss your personal circumstances in detail with your financial planner to make sure you are protecting your long-term finances.

    Get in touch

    For further information or advice, contact a member of our financial planning team today to talk through your individual situation, email or call 01254 679131.

    The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction.

    The value of investments can fall as well as rise. You may not get back what you invest.

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