How to protect your pension from coronavirus falls
PENSION savers and investors have seen the value of their pots tumble due to the coronavirus epidemic - but there are way to mitigate against future falls.
March saw the FTSE100 plunge 11 per cent - its worst day since Black Monday in 1987 as £160billion was wiped off shares.
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The market, which tracks the fortunes of the UK's 100 biggest firms, fell below 5,000 although it has since recovered to almost 6,000 at the time of writing.
But in uncertain times, how can we ensure our pensions are protected? The Sun speaks to two financial experts to find out.
If you haven't started a pension - consider doing so
Tom Selby, pension expert at investment company AJ Bell, says if you can afford to set-up a pension there's no reason not to do so now.
What funds should I invest in?
ALWAYS do your research before investing and ensure you spread your money across a range of different funds.
Tom Selby, pensions expert at investment firm AJ Bell has picked out some possible options to consider right now.
Bear in mind these are all active funds, which are likely to cost more than cheaper passive funds so do your research on the fees involved before investing. If you're unsure, get advice from an independent financial adviser. You can use to find one near you.
- Worldwide Healthcare Trust (0.9 per cent ongoing charges fee (OCF)) - This is a possible fund for adventurous investors with a long time frame to invest. It invests in pharmaceutical and biotech companies, which are in high demand at the moment due to coronavirus.
- Jupiter UK Special Situations (0.76 per cent OCF) - This fund could be an option for balanced investors with a long time frame to invest as it focuses on unloved UK firms that will hopefully increase in value - it's also particularly geared towards companies that may benefit from Brexit.
- Royal London Short Duration Global High Yield (0.58 per cent OCF) - This is a bond fund that could suit cautious investors with a long time frame as bonds are typically lower risk than equities.
- Personal Assets Trust (0.91 per cent OCF) - This is a trust that specialises on preserveing what you've invested throughout market turmoil.
- Man GLG UK Income (0.9 per cent OCF) and the City of London Investment Trust (0.39 per cent OCF) - These funds focus on paying dividends - or an income - so they could be suitable for those in retirement looking to live off any income their investments make.
Opt out of auto-enrolment and you miss out on at least a 3 per cent contribution from your employer, as well as tax relief added by the government on top.
Just be aware that once you've purchased an annuity that's that, you can't sell it.
If you’re planning to stay invested through drawdown your investment time horizon might be longer, meaning you can potentially ride out short-term fluctuations in performance.
Mr Selby adds that you might want to consider delaying retirement, if possible, until we have more certainty.
In related news, pension savers have been warned death benefits may be lost if they opt out of schemes because of coronavirus.
While hundreds of companies have stopped paying pension top-ups during the coronavirus crisis.
And some experts have warned the state pension triple lock must be axed to help pay the UK's coronavirus bill.