With the chaos surrounding Donald Trump‘s massive tariffs shake-up, you could be forgiven for worrying about what it all means for your pension. Millions of UK workers have seen the value of their retirement savings drop by thousands as stock market turmoil deepens amid the trade war.
It’s tough not to be concerned when your future financial security is on the line, particularly when money is such a key part of a comfortable retirement. We all know how important it is to have enough saved up for when you’re older – it’s not just about the basics, it’s about living your life the way you want to. But with Trump’s tariffs triggering such a mess in the markets, many pension funds are taking a hit.
Following the president’s so-called ‘Liberation Day’ last week, shares took a nosedive for a second day straight, and the FTSE 100 crashed by more than 400 points. It’s been a bit of a rollercoaster for anyone with investments tied to the stock market, and if you’re paying into a pension that includes US stocks, it might have you feeling rather uneasy about everything.
The global markets are being hit hard, with another £2.5 trillion wiped off in just one day. If you’re one of the 30 million UK workers paying into a defined contribution pension scheme, this could seriously affect your retirement savings. A lot of those pensions are invested in stocks, including those in the US, which have been taking a big hit thanks to all the uncertainty. So if you’re keeping an eye on your pension, now might be the time to start asking yourself whether it’s as secure as you thought. Are you worried about your pension after Trump’s tariffs? Take our poll below and if you can’t see it, click here
Global stock markets have shed around 10% of their value since President Trump took office in mid-February. For a UK worker with a £35,000 pension pot, that means around £3,500 knocked off the value of their retirement fund. In reality, not all their fund will be invested in stock and shares, but experts say it gives an indication of the impact. They also point out that the value of workers’ pension has time to recover, if they are some way off giving up work.
Steven Cameron, pensions director at financial giant Aegon, said: “It depends how old a person is and whether they are planning to take any money out of their pension any time soon. For the vast majority of people who won’t be touching their pension anytime soon, there will always be events which will make the underlying value of your investment go up and down. When it becomes more concerning is if you were thinking of retiring soon”.
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Independent pensions expert John Ralfe says: “The US represents something like 75% of the world’s stock markets – that is a function of the size of its economy. The default options vary from one pension provider to another but they will be disproportionately weighed towards the US. It means the US stock market is much more important to UK defined contribution pension schemes than you might think.”
Myron Jobson, senior personal finance analyst at Interactive Investor, summed it up succinctly with “it’s not a good time, unfortunately.”
Now it’s time to share what YOU think. Are you worried about your pension after Trump’s tariffs? Take our poll above and if you can’t see it, click here – then expand on your feelings in the comments.
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