It’s a great analogy. You may get exhausted riding to the top of a hill but you aren’t going to break anything.

People’s savings get broken (by sequential risk) on the way down from “peak savings”.

When you look at cyclists on one of the “tours” going over the top , you see both elation and fear. Elation for achieving the goal of getting to the top and fear of the decline ahead.

This is the exact fear I have today. My savings fell approximately 3% in a week- last week. On Monday the FTSE rose to a record high, it has been a long time coming. For the DC saver, success over the past quarter of a century is not just defined by what asset class you invested, but the geography

statistic of the day:

“the FTSE-100 is just 16% above its 1999 dotcom-era high, while the S&P has more than trebled in value in the same period”https://t.co/AanFJowa2H

— Jim Pickard 🐋 (@PickardJE) April 22, 2024

The disastrous fate of the Virgin Money Stakeholder Pension, brought to our attention by its IGC, was down to investing 100% in a FTSE 100 tracker. Get the investment wrong and high charges and poor engagement are second order issues.

While we may not lose too much sleep over the relative performance of our workplace pensions in the foothills of the mountain, we certainly do start worrying if we find ourselves struggling at the top. Many people have found their DC savings have been punctured by the crash in the value of bonds in 2022 and face the years ahead with trepidation. If the wheels come off on the way up, you get another bike, if they come off on the way down, you get a ride to hospital.