![]() In fact, these natural drops in the market can be a good thing, offering you a chance to buy more units of your pension fund at a lower cost. If you had tried to move your money during December 2018 or June 2020, you may have missed out when the fund bounced back. Right now the UK in in a recession, causing investment markets to struggle across the board. As you can see, there are a few occasions where the value drops, before swiftly recovering. These are also the pension plans used in our Workplace pension. The chart above shows the returns of Penfold’s pension plans since we started offering them. There will always be ups and downs but over the long haul, investing has consistently delivered a net gain for savers. It’s why your return on your contributions will vary over time. Fluctuations are a normal part of investing and pensions are no different. A single month of poor performance isn’t going to be critical when you’re saving for 20, 40 or 50 years. However, by giving our savers complete visibility into their pension, chances are you’ll notice the frequent and expected ups and downs more often.Īgain, this shouldn’t be something to worry about. Generally speaking, small drops in value are nothing to worry about when you’re investing for the long term.Īt Penfold, we strive to be completely transparent with our pension performance. That way, you give your pot a chance to recover. Often, simply leaving your money and waiting is the best course of action. ![]() While your money is invested, any losses are essentially on paper - they only become 'real' when you withdraw or move your money. That's because once your savings are taken outside of your pension, any losses become realised. The worst thing you can do after a dip is attempt to access or move your money. The first step to take if you discover your pension is losing money is to not panic. Ok, it’s useful to understand the things that influence the performance of your pension, but what can you do about it? Let's take a look. Finding a balance between risk and reward is a crucial part of saving for the future. Of course, these factors can also lead to your pension pot increasing - it’s all about risk. This can come from a number of factors, such as trends in the stock market, economic downturn or new political policies. If the investments inside your pension fund drop in value, the value of your pension pot will also dip. Investing in a fund helps your savings grow, giving you a bigger pot in retirement and preventing inflation from eating into your hard-earned money. How much you (or your employer) have paid in.The value of your defined contribution pension at any time comes from two things: Of course, the size of the individual blocks will also change over time, depending on how your investments perform. The more blocks you have, the bigger your pension. These units are like a bundle of different investments, including stocks and shares, government bonds or even property. Rather than storing all your money in a savings account, everything you add to your pot is used to buy 'units' from your chosen pension fund. Why has your pension fund value dropped? As you’re probably aware, the majority of your pension is invested. Here’s what you need to know and do if your pension pot has gone down. Why do I have less money in my pot today than I did last week? Is there a chance my pension will drop until there’s nothing left? Let’s take a look at what’s really going on. You open up your Penfold app to check how your pension is coming along and… GASP! Your pot has decreased in value.
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