June market update: When you’re close to your retirement

If you’re getting close to retirement then in this video Katie Eagles from our investment team covers what’s happening in the stock markets, how this might be impacting your pension, and some of the things you might want be thinking about.

Hi, I’m Katie Eagles from the investment team at Royal London and if you’re close to retirement then I’m here to tell you a bit more about what’s happening in the stock markets, how this will be impacting your pension, and some of the things you might want to think about. 

If you’re nearing retirement, then I’m sure you’ve been keeping a close eye on what’s happening in the stock markets and it’s been really volatile over the past few months as coronavirus has gripped the globe. No doubt you’ll have seen a drop in the value of your pension, and this can be really disappointing when you’ve spent so many years saving. And being close to retirement, it could also affect the way you want to access your pension and the level of income you’re thinking of taking.

As lockdown eases across the world, global stock markets are showing signs of recovery, and you’ll see this reflected in your investments which have bounced back a little from the lows in March, but we do expect it to continue to go up and down over the short-term.

Now might be the time for you to take stock and have a think about your plans and whether or not there’s any room for flexibility. For instance, -you might consider working for longer? Or even part time?

You might also be thinking about withdrawing money from your pension. But  when markets are down it might be better to avoid doing this if you can– because you’re essentially selling your investments at a lower price, and once you have taken the money out of your pension you’ve lost the opportunity for the value to go back up when markets do recover.

And it might take some time - but stock markets do normally recover. And some of the strongest rises  tend to follow the biggest falls, so keeping your money in your can pay off in the long run. Even if you need some of your money now, you’re unlikely to need all of your pension pot as soon as you retire, so the rest could stay invested longer term.

And finally, as this uncertain situation unfolds, you can feel assured that our investment experts are continuously monitoring the markets, keeping a close eye on your pension investments and making any changes we feel necessary in response to market events.

If you’re unsure what to do with your pension investments, then I would strongly recommend speaking to a financial adviser.  We have some information on our website on finding a financial adviser, if you don’t already have one.

And in the meantime, you can use our retirement planner tool on our website or download our mobile app to keep an eye on the value of your pension.

Thanks for watching.

If you’re unsure what to do with your pension it’s worth remembering:

  • You might see the value of your pension has gone down, but don’t panic and don’t make any rash decisions.
  • Pensions are long term investments – and it’s very normal for investments to go up and down in value.
  • The company managing your pension should be very used to dealing with this type of event and they should be making decisions to help maximise your pension value in the long term.
  • If you’re thinking about switching investments, or if you’re taking money out of your pension, we strongly recommend that you seek financial advice to consider your options thoroughly before taking any action.

For more information about how stock markets may be having an impact on your retirement savings, visit our market update page.

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