June market update: When you’re making plans to retire in the future

If you’re starting to make plans for your 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 starting to make plans for your 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.  

As coronavirus has gripped the globe, we’ve seen big stock market losses and no doubt you’ll have seen the value of your pension drop. As lockdown eases across the world, global markets are showing signs of recovery, but we do expect it to continue to go up and down over the short-term. 

This volatility can be unsettling, especially if you’re trying to plan out your future. And as the uncertain situation continues then you might have to take a more flexible approach when it comes to planning. But the most important thing to remember is that a pension is a long-term investment and time is still on your side.

And it might take some time - but markets do normally recover. And some of the strongest positive returns tend to follow the biggest falls, so staying invested can pay off in the long run. It’s also helpful to remember that you’re unlikely to need all of your pension pot as soon as you retire, and the rest could stay invested longer term which means you could benefit when stock markets recover.

Having a spread of investments can help reduce the impact of market shocks on your pension. If you’re invested in a Royal London workplace pension or one of our Governed Range portfolios, then you’ll automatically benefit from being invested in a spread of different investments like company shares, government bonds and cash. This way, if one particular investment is performing poorly, you shouldn’t be as badly affected.

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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