In this guide, we will look at how to plan for your retirement. If you have a defined contribution pension scheme – whether private or through your employer – your retirement savings have probably been hit quite hard by the COVID-19 pandemic over the past 12 months.
That’s because pension funds invest in the stock market and recent turbulence, which has caused big rises and falls, have had a significant impact on how much is in your pot.
The average pension lost around 15% when the coronavirus first hit the stock market back in March 2020, before recovering 13% of the lost ground by the end of August 2020.
Obviously, savers who are in their 30s or 40s have time on their side to potentially ride out market volatility and get their pension savings back on track.
The same can’t be said for people nearing retirement. According to a report from the People’s Pension, 74% of people either approaching retirement or aiming to retire in the near future are on course to run out of money in their early to mid-80s. In addition, only one in ten respondents are making detailed money plans for the future, suggesting that the vast majority have their heads in the sand.
Whatever stage of your life you are at, planning for your retirement has arguably never been more important than it is now after last year’s events.
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.