US tariffs and your pension
What’s happening and why?
Recent US trade tariff announcements have introduced market volatility as global economies evaluate their effects on various sectors. This worldwide situation means many of us are seeing impacts on our investments right now.
For most members, this won’t be their first experience of volatility
It’s natural to feel concerned when your pension pot fluctuates in value. The short-term outcomes are uncertain, but market changes are a common feature of investing. Remember how markets initially dipped during the global pandemic but eventually rebounded? Historically, markets have recovered from similar crises.
Although the future is unpredictable and past performance isn’t a guarantee of future results, ups and downs are a normal part of investing.
What should you do?
Saving for your retirement is a long-term endeavour. Focusing on short-term changes can lead to decisions that may harm your long-term financial goals. If you’ve been saving for a while, you’ve likely endured other periods of market volatility.
Remind yourself why you’re saving for the future and avoid making on-the-spot decisions. In uneasy times, you might be tempted to sell your pension investments or switch them to ‘cut your losses’. However, selling or switching investments really means offering your investments at a reduced price to someone else.
How is your pension pot invested?
With Creative Pension Trust, some members choose their own investments, but most use our default investment strategy, Cushon Core, which invests your money for you.
Cushon Core is designed with a long-term view. Younger members – heavily invested in equities and far from retirement – can afford to wait for markets to recover. For example, markets fell during the pandemic but rebounded later. Equity market declines are common, but over the long term, they have delivered strong performance.
Older members who are closer to taking their pension will find that their pension pots have fluctuated less in value; their investments are spread across a wider range of assets that have historically helped to preserve the value of pension pots rather than focusing solely on long-term growth.
What if you are planning to access your money soon?
If you were hoping to access your pot sooner rather than later, consider resources like MoneyHelper or consult a financial adviser for informed decisions.
You can access MoneyHelper, a free government service offering guidance on investments and pensions, by visiting www.moneyhelper.org.uk or calling 0800 011 3797.
If you are 50 or over, book a free, impartial Pension Wise appointment. This 45-60 minute session provides specialist pension guidance. Contact them at 0800 011 3797 or visit their website.
Alternatively, seek advice from a financial adviser, though a fee may apply. To find a local adviser, visit MoneyHelper.
