To wonder how long the stock market is going to be in turmoil, pension decisions

[Jud3]

So we’re in the unenviable position of being near retirement and need to make decisions.

Sorry I'm being really thick here but is this market turmoil likely to affect an NHS pension or is that not affected at all by the market because it's paid by the government. Do I need to be worried about an NHS pension that I hope to take in three years ?

I'm £50k down so far

No, NHS pensions are not affected by the stock market as they are defined benefit pensions.

Thanks so much for putting my mind at rest . Much appreciated .It's not a big pension pot but is all I have !

What about teaching pensions? The teaching pension company is impossible to contact.

I think that one is also defined benefit AFAIK.

Same here!

For those of you worried about defined contribution pension schemes what age have you given them for retirement. I ask because if you are only a few years from the age you gave them then I think they automatically move you into more safer territories (less shares, more bonds presumably).

That's my understanding anyway.

Mine all think I am retiring in two and a half years at 55 so hopefully they are already moved. However this means I probably didn't get some of the benefits of the huge increases between 2022 and now.

As it is I'm probably not going to take it for another 5 years and am living on savings mostly in fixed rate bonds. Not brillant interest rates but all above 4%.

I do still have some in variable rates and whilst I am getting nearer 5% on some of those I am watching closely to see what is best as rates may get cut soon if this continues. Certainly the 4.25% Skipton 18month bond was withdrawn recently and replaced by a 2 year 4.1% and that was before the tariff announcement last Wednesday.

So if you have not done so already you need to see what age your retirement plan has on it and decide.

If markets rebound then you might be able to buy a decent annuity. If not then drawdown is probably your best best to keep most of it invested until it rebounds. I believe quite alot of people recently have done both ie an annuity to cover basic expenses, then drawdown for luxuries. Probably only cos annuity rates were good before the Trump affect.

This won't affect those with defined benefit schemes as all the risks are borne by the employer.

Like others have said you probably have a defined benefit scheme (also known as a final salary scheme) but you would be best to check.

If it talks about final salary and no of years service then it's the a defined benefit scheme and you will be fine.

I had a defined benefit scheme with a private company which went out of business and is now sitting in the pension protection fund. I think I only get 90% of it but at least that is safe.

Obviously won't affect you in the NHS.

Definately check though because they should be able to tell you what your projected pension per year is if you have a defined benefit scheme.

Unlike us poor defined contribution people who have a pot of money and have to figure out what to do with it. It moves up and down according to the stock market and bonds and so it's more of a moving target.

if you are only a few years from the age you gave them then I think they automatically move you into more safer territories

This depends on who you are with and what you're invested in- you need to check. You also may not want to be moved too much out of equities if you are planning to draw down, so it's worth getting some advice.

It’s very difficult to know what do do though. I am already retired and have two pensions related to my employment which I’m already receiving so I think they will be unaffected - one a teachers one and a small one from my first job at a Utility company. Together with my State Pension ( smaller because as a teacher for 25 years I was contracted out) I can just about live month to month on my income but rely on investments for extras like home repairs, replacement car, holidays and large unplanned for bills)

This fund will be affected by the current uncertainty as most of it is linked to shares, albeit at a low risk ( my choice ) but still goes down with any stock market downturns. In the past I have taken the advice of my financial advisor to wait it out and eventually the markets did pick up but this time, I’m older and worried that the downturn has not yet hit rock bottom and it will be slow to regain the losses. I can access other funds in fixed rate bonds and gvt bonds for the time being but I might need to make some decisions about the bulk of my savings soon.

I have not checked how much my main funds have fallen, I’d rather not know as I feel rather powerless about improving things. I think I’ll wait for my financial advisor to make suggestions, his company are very good at keeping clients informed.

I am very worried though about my children, both live here in the UK but one works for a car manufacturer that is a huge exporter to the US and has already laid of workers in their factories and the other works for a company based in the US! Goodness knows if their jobs will be affected!

Yes you are right. People should check. All mine seemed to move me when I gave them my new planned retirement age but perhaps some don't.

It's really hard to plan though as the last few years taking an annuity was looking attractive again (I watch James Shack on You Tube) but now if interest rates fall annuities I think will become less desirable again.