The impact of a recession on your pension
By James Turner, Director at Turner Litte.
The stock market is beginning to show signs of life as measures introduced to help businesses amid the pandemic begin to take hold, but much is still uncertain. There’s no doubt that the pandemic has affected most people’s finances. From the Bank of England’s decision to reduce its rates, to the potential loss of earnings for people forced to remain at home, there is much to contend with.
“Naturally, at times of economic uncertainty such as these, people fear their retirement pots will be wiped out. For most people, their pension is one of the most valuable assets they hold,” says James Turner, Director at Company Formation Specialists, Turner Little.
So how could the continued pandemic and impending recession affect your pensions?
“If you have a defined contribution pension, your savings have probably been hit hard as a consequence, because pension schemes invest in the stock market, so big rises and falls can have an impact,” says James.
“It is important to remember that pension savings, as with any investment, is usually long-term. If you’re young, there’s still time for markets to recover before you take your pension, but if you’re close to retirement, there is the potential that your pot could have taken a bigger hit,” he adds.
Pensions are typically invested in stocks and shares, bonds, property and cash. If you’re concerned about its value, most schemes now have online platforms where you can see how your investments are performing.
“It’s important to treat your pension as an asset, and asset protection is all about planning. Effective planning ensures that no matter what happens, you will remain in control of your assets,” says James.
If you’re interested in finding our more about asset protection and would like to discuss your specific requirements, get in touch with us today. Our specialist team of experts will deal with matters pragmatically and sensitively, taking the time to meet with you and discuss your individual objectives in detail, in order to provide solutions that are uniquely tailored to your needs.
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