Pensions - Articles - Retirees are holding their nerve despite market volatility

After almost a decade of strong gains, global stock markets have fallen in recent weeks forcing many retirees to consider where their pension pot is invested and whether or not the amount of drawdown income they are taking in retirement is sustainable.

 Despite this, research carried out by Aegon shows that overall retirees are holding their nerve when it comes to keeping pension savings invested through retirement. While 43% of retirees say they are concerned about the impact of current market conditions on their retirement income sustainability, just one in ten (11%) are reassessing their current investment strategies in order to diversify. A high proportion (67%) said that they aren’t taking any action as a result of market volatility and leaving their money where it is.

 With data from the Financial Conduct Authority showing that those taking regular sums from drawdown policies have increased their rate of withdrawal from 4.7% in 2016-17 to 5.8% in 2017-18, there are concerns that retiree’s drawdown withdrawal may not be sustainable against current market conditions. Aegon research shows that when asked whether they had decreased their rate of drawdown withdrawal as a result of global stock market volatility, over half (52%) said they hadn’t.

 Similarly, retirees whose pension pots remain invested may be tempted to move away from investment in equities following record outflows in recent months, however 58% of those surveyed said they haven’t reduced their exposure to equities in the last 12 months.

 Commenting on the research findings, Nick Dixon, Investment Director at Aegon, said: “The current downturn in markets will undoubtedly test the nerves of retired investors. Current market instability comes after over a decade of strong gains and this coupled with the introduction of pension freedoms may put some retirees at risk of running out of money in later life at a time when their pension pot is at risk of falling in value. It is positive to see that overall retirees aren’t phased by current market conditions, but this shouldn’t turn into complacency. Retired investors would be wise to reassess their pensions, with the help of a financial adviser, to consider the amount of money they are taking out of their pension pot and ensure their investments are diversified enough.”

Back to Index

Similar News to this Story

LGPS Funds a valuation anyone
Graeme Muir from Barnett Waddingham looks at the current state of LGPS Fund valuations and what to expect.
Research reveals pension tax relief timebomb set to hit
New analysis published by mutual insurer Royal London has shown, for the first time, how many of today’s workers are at risk of breaching the £1.03m l
New snapshot of what you have done with pension freedom
To mark the upcoming anniversary of pension freedoms, Canada Life has commissioned research1 looking at the behaviours of people who have flexibly acc

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS


Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.