What does the coronavirus mean for my pension?

Richard Ross of Chadwicks on what coronavirus means for your pension. Picture: Chadwicks/Getty

Richard Ross of Chadwicks on what coronavirus means for your pension. Picture: Chadwicks/Getty


The message from wealth managers is clear: “Don’t panic.”

Richard Ross, director of wealth management company Chadwicks, said: “This period has been exceptional, but I wouldn’t be surprised if the market fell another 20% before it bottomed out. This would be in line with what we saw during the financial crisis

“But the main thing to get across to people is don’t panic, because one thing is for certain - markets will recover, although it may take some time.”

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He went on: “The problem people will have is that they will see the value of their pension go down, and will start trying to sell their stocks and shares before it goes any lower. That’s the wrong thing to do, because you’ll be selling depressed assets and they will never have the opportunity to recover.

“Most pensions are invested in a mix of shares and safer assets, like government bonds. What people will hopefully be able to do is look across their pension and release cash from these safer areas, or perhaps from money elsewhere such as cash ISAs.

“For people who do need to sell stocks and shares to release some equity, I’d be mindful of the fact that only a small loss will be crystallised. So if you had a pension pot of, say, £500,000 but you only need £2,000 to live on for a month, you’re actually only making the loss on the £2,000 and the rest will still have a chance to recover.”

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