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YOUR PENSION AND HOW BREXIT WILL AFFECT IT

Navigating Your Pension With Brexit

It’s been almost three years since the referendum for Brexit took place in June 2016. The date was set to be earlier but now the members of the British Parliament have decided to push the date to the end of October this year. Indeed, none of us know at this point what to do with our finances since the impact Brexit will have on them may be a big one. It is quite understandable to worry about what’s next regarding our finances and especially pensions. In this article, the pension funds’ situation after the referendum will be discussed and some valuable ideas will be shared to help you steer your way through these uncertain conditions.

The GBP (Pound Sterling) has one of the highest trading volumes in the world, only behind the US Dollar, Euro, and Japanese Yen in terms of daily volume. It used to be a very stable currency but in the recent past, it has seen some major fluctuations. Although the pound has suffered in value since the referendum, the pension funds have not suffered in the same way. Statistics reveal that pension funds had a strong year in 2016 when the vote to leave the European Union (EU) was decided. It was also found that on average, the pension funds finished at 15.7% in 2016, which is the best performance since 2009. In 2017, the funds grew 10.5%, which is also not too bad considering the hit the currency took.

2018, unfortunately proved to be different year as the markets really suffered and took a tumble globally, thus ending the year in the red. This article will provide some information that you can use to navigate your pension funds in the Brexit scenario.

Read the complete article below to learn more about this!


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Is it all bad?

The UK market is horribly unloved at the moment. Stock markets hate the Brexit uncertainty, but we think it’s a bit overdone. The UK stock market has a much wider reach than it’s given credit for. The FTSE100, the index of the biggest UK companies, makes 70% of its money overseas.

This is important because when sterling falls, the value of all these international earnings become more valuable. And this currency effect helped with companies across the whole UK market paying record dividends last year – a massive £99.8bn.

A lot of pension savers, and those in retirement, turn to the bond market for income. That makes sense, bonds are generally less risky than company shares. But bond yields have been falling for a while.

So what can I do?

Invest small and often

It makes sense that the more uncertain market conditions are, the more reluctant you might be to make big investment decisions. Whether you think markets will rise or fall, you can never be completely sure of the outcome.

We’re big fans of investing smaller amounts regularly. This strategy takes out the influences of our biases, emotions and assumptions.

This is important because over the longer term, you’ll have built your portfolio through ups and downs; avoid the risk of investing everything at an unpredictable peak in the markets. 

Diversify

As well as making sure you keep committing to regular savings, you could refine this strategy by making sure your investments are well spread. The idea of diversification is that if one area performs poorly, others might rise or hold steady and help offset the losses.

The full article can be accessed via the following link:

Article by Eddie Bond

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    Paul Cook – Senior Associate

    I am an experienced financial services professional with over 18 years’ experience working for such prestigious companies in the UK as The Royal Bank of Scotland, Deutsche Bank, Morgan Stanley and Northern Trust. I am passionate about advising my clients and have been working globally since 2013.
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    I work with individuals, families and corporate organisations to help them put together a comprehensive and personalized financial plan. I specialize in providing Life Insurance, Critical Illness Cover, Whole of Life Insurance and UK Pension Transfers.
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