With recent global uncertainty causing volatility in financial markets, it is important to remain focused on your retirement plan and not become deterred. It has seemingly been one thing after another in recent months and years and it is understandable for individuals to have concerns surrounding the underlying investments in their workplace pension pots.
Over the shorter-term, performance graphs and investment figures make for grim reading. The following graph shows how the default investment funds for our most common pension providers have fared since the beginning of 2022…
The conflict between Russia and Ukraine resulted in a rocky start to the year. The immediate aftermath of this was an energy crisis, driven by the fact that the main energy giants such as Shell and BP pulled out of many Russian energy deals and looked elsewhere for an oil supply.
Taking a longer-term view, however, reaffirms the fact that investing, particularly when it comes to workplace savings, should always be considered a waiting game.
Looking at the five-year view, all sectors felt the impact of the pandemic. However, just as quickly as markets nosedived, they recovered with the same speed. The fact that these pension funds invest in a diverse number of sectors, as well as the use of ‘lifestyling’; especially helps those who are approaching retirement to take less risk (as they cannot afford to take the same amount of risk).
It is important that your scheme retirement age is accurate, as your pension de-risking will be linked to this age.