Coronavirus and your pension: Stay calm and stay invested?

The COVID-19 pandemic that’s sweeping the globe is unsettling for us all, and the stock market has seen huge swings and heightened volatility.

Over the coming weeks and months, you’re likely to see the value of your pension investments go up and down, and understandably that could make you feel anxious and confused. We’re here to reassure you that the market declines you’re seeing are based on what’s going on in the short term- moment to moment.

Here we share some tips to try and help you feel a bit better about what’s happening with your pension investments.

1. Think long-term

The key thing to remember is that a pension investment is for the long-term. We know that the dramatic changes you’re seeing right now in your pension’s value can be very worrying, but over the long-term history has shown that eventually markets do usually recover. For instance, look at how the markets recovered after the Global Financial Crisis – over the long-term being invested in the stock market does provide the opportunity for growth.

2.  Stay calm and stay invested?

With the stock markets plummeting it’s normal to feel worried and you might feel tempted to put your money into cash instead or a lower risk investment. This could mean that you might miss out on the point when the value goes back up again. If you’re unsure what to do, then you should speak to a financial adviser.

3. Spread your investments

Most financial experts agree the best way to invest your pension is to have a spread of investment types. 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 assets from lower risk bonds to higher risk equities. This way, if one particular investment is performing poorly, you shouldn’t be as badly affected.

4. Should I keep paying into my pension?

With the uncertainty of the current situation it’s understandable to have money worries and you might even be considering reducing your pension payments. Remember, the more you pay into a pension plan, the more you should receive when you retire.

5.  Talk to an expert

If you’re really worried about your pension investments, thinking about switching investments or taking money out of your pension then we strongly recommend you speak to a financial adviser before taking any action. You can find an adviser in your area via the free handy tool, powered by Unbiased. Find a financial adviser