The stock market has fallen 10% in a week and chances are , so’s the value of your pension account. You probably lost considerably more than you earned and if certain “experts” are to be believed, you may be penning your employer a stiff letter demanding no more contributions be taken from your pay-packet on such a risky venture.
Of course that’s not what we’ll be doing, we may feel a little peeved that we are no closer to abolishing “boom and bust” and that we’re paying for those Big Fat Greek Weddings. But we’re not going to throw our toys out of the pram – give the pension public some credit!
I tweeted yesterday that “due to stockmarekt turmoil I’m going down the pub” which seems to have resonated juding by the number of re-tweets this silly thing got. We are phlegmatic – we keep calm and carry on - we understand the equity risk premium and we wait for markets to turn back our way. We get a little worried when we think about Japan but we still believe in cyclicality- what goes down – eventually – will go up again.
Until we get to retirement that is. In the back of our head’s is a little worry that things won’t come right in time. If you are looking to draw your pension in the next two or three years and you are invested purely in equity markets, you should be worried - and thinking hard about the timing of your retirement or the risks you are taking with your pension investments.
If you are not that close to drawing your pension then grin and bear it - keep contributing and keep your exposure to equities.
I’m going to be watching with interest for any reports from the big workplace pension suppliers - Zurich, Standard Life, Friends Life, L & G,Fidelity and the like for news of what goes on over the next few weeks. If, as I hope, there is no panic; then we will not see a spike in contribution cancellations, fund switching and call centre volumes then I hope that’s due to stoicism not complacency.
- DC Trustees still valued but they need to raise their game (via Henrytapper’s Blog) (henrytapper.com)
- Scheme Pensions aren’t the magic bullet -yet (henrytapper.com)
- The case for doing nothing (henrytapper.com)
- Workplace pensions: more bang for our buck needed (ageukblog.org.uk)
- The point of work’s to dream of doing nothing (henrytapper.com)
- Start Saving for a Pension Now (moneyexpert.com)
- Comparing Pension Products: A User Guide (moneyexpert.com)
- Accounts and accountability-who pays for NESTCorp? (henrytapper.com)
- Lessons from the storm (bbc.co.uk)
- How other countries deliver better pensions – in pictures (telegraph.co.uk)
- General Melchett’s fancy DC defaults (henrytapper.com)
- Government Increase State Pension Contribution by up to 10.9% (moneyexpert.com)
- Pension system needs urgent reform (mirror.co.uk)
- Pension fund surplus falls (lv.com)