Coronavirus (COVID-19) and the impact on your pension
We understand you might have questions or concerns about the Coronavirus (COVID-19) pandemic and the effect it could have on your finances; so we’ve put together some useful information and important factors you should consider to support you at this time.
Stay calm and don’t rush important financial decisions
The COVID-19 pandemic has caused some big moves in financial markets and you may have seen a significant fall in the value of your pension pot during this period of global economic uncertainty.
Whilst there may be further falls in markets, short-term unpredictability doesn’t necessarily mean a permanently smaller pension pot.
During this unprecedented time, try to keep in mind your long-term retirement goals. Making a rushed decision based on short term events and circumstances could have long term consequences on your financial wellbeing and retirement income.
There are some important factors you should consider before you make a decision on what to do with your pension pot:
- If you access your pension pot when the markets are down, you will likely suffer a loss in the value of your investments and could miss out on any increases in value in the future if markets recover.
- If you need or want to cash in your pension pot, you could lose out significantly in the longer term. So, you might want to check if it’s possible to only cash in what you need now.
- If you need money in the short to medium term and have savings that could be used instead, you might want to consider taking some money from those alternative sources, if that still leaves money in rainy day funds, rather than to realise losses in your pension pot.
- If your pension plan includes life cover, you should consider the implications of cancelling it or stopping ongoing premiums in light of the current additional health risks.
- If you make regular contributions into your pension plan, you might wish to consider continuing to make those contributions. You may be able to invest at lower prices than before the market downturn.
We recommend you get financial advice before making any decisions about what to do with your pension pot.
It is important to remember that past performance is not a reliable indicator of future results, and the value of your pension pot can go down as well as up.
Be aware of scams or fraudsters
The current situation has led to an increased risk of scams and fraud. Scams are often smart, sophisticated and hard to spot.
- Scams usually start with someone getting in touch out of the blue. Be wary of any unexpected offers of advice made over the phone, online or through social media.
- Don’t click links or open emails unless you’re confident the email is really from a sender you know or trust.
- If it sounds too good to be true, it probably is. Stay sceptical.
- Scammers often try to put pressure on you to make quick decisions. Always take your time to check things out before going ahead.
- Always check who you are dealing with before changing any arrangements – you can use the Financial Conduct Authority (FCA) Register at fca.org.uk/register or call them on 0800 111 6768 to see if who you’re dealing with is authorised.
- We’ll never ask you to move money to a ‘safe’ account, so if someone contacts you asking you to do this, it’s a scam.
- Scammers take advantage of current events to steal, so check a trusted source, like the Money Advice Service, regularly to stay a step ahead of the latest scams. Right now, look out for people and organisations you don’t know asking for contributions towards COVID-19 relief.
If you’re uncertain, we recommend you get professional financial advice or guidance
If you’re not sure about what’s best for your savings, investments and pensions, at this time in particular, it might be a good idea to consult a professional financial adviser before making any decisions. You can find one in your local area at unbiased.co.uk or by calling 0800 023 6868.
The Government has announced a range of measures to offer support to people during the COVID-19 pandemic. You may wish to investigate whether you are eligible for this support before withdrawing money from your pension. Go to gov.uk/coronavirus for more information.
The Money Advice Service provides impartial advice and guidance about all issues to do with money, for all ages. They also have a tool to help you locate free debt advice. The financial support available in the current circumstances is explained on their website or you can call them on 0800 138 7777.
For free and impartial pension guidance, it might also be helpful to contact Pension Wise or you can call them on 0800 138 3944 to book an appointment.
An update on our services
We’re following government guidance to protect our employees and customers from the spread of COVID-19.
Owing to measures that we’re taking to protect our employees and customers from the spread of COVID-19 across our business locations, we may have limited staff available to take calls relating to queries.
If you still have any questions or concerns, you can get in touch by visiting our contact us page.