Retirement planning: ‘What if there’s no money left…’ Woman, 50, reveals pension fears

Retirement planning: ‘What if there’s no money left…’ Woman, 50, reveals pension fears

Maxine, 50, works as a housing manager, and hopes to retire in 15 years, when she turns 65. She has three pensions – one her mum started for her years ago, a private pension, and a workplace pension.

She says of before this time: “I never went into the pension straight away on joining [a new company], I always joined later on. Because I used to just see it as another deduction out of my salary.

“But it was really around that time that I started to think, ‘Actually, if I change jobs now, I’ll make sure I start paying into the pension from day one.'”

With market volatility during the coronavirus (COVID-19) crisis, some may be concerned for their pension savings.

While Maxine hasn’t contacted her providers about it, instead deciding to “wait and see – see what happens”.

“It’s a back of the mind worry,” she says. “I don’t worry about it every day but I do think about it sometimes, I have to say. And I do think, ‘What is actually going to happen?’ Because everything’s just frozen at the moment in terms of the world.”

“I am paying attention to pension news more now because of the current situation,” she says.


“I tend to rely on what the headlines say and at the moment there’s not much good news to look at. It does make me worried – what if there’s no money left when I reach retirement?

“I’m fortunate that right now I am able to carry on working full time and I can continue paying into my pension.

“If that were to change, I’d like to hope I could continue paying into my pension, given that I’m getting closer to the age I’d like to retire, which is 65.”

Despite market volatility, Maxine isn’t too worried about how the coronavirus outbreak is currently affecting her pension savings.

“I know that pensions are for the long term so, for now, I’m going to wait and see what happens,” she says.

But, should savers be worried about market volatility? It’s something which Robert Cochran, retirement expert at Scottish Widows, has addressed.

He exclusively told “From seeing the highest daily points gain the FTSE 100 ever witnessed, to closing out the worst quarter since 1987, March 2020 was one of the most volatile months in stock market history.

“Even as countries in Asia start opening up and parts of Europe also look at easing lockdown restrictions, there’s no guarantee that we’re out of the woods yet.

“Amid the financial shockwaves caused by the coronavirus, some pension values have fallen and people are worried about what this means for their future.

“The truth is, for anyone a decade or more away from retirement, it may mean very little.

“In fact, over the long term, a downturn can provide an opportunity for savers to pick up equities at low prices and could actually boost retirement coffers.

“Of course, it is easier said than done to feel this way when media headlines talk of financial doom.

“Many people feel they need to take action to protect their future. While this can be right in some instances, there can be downsides to acting that you should be aware of first.”

Mr Cochran has highlighted some common actions which people may be currently considering with regards to their pensions, as well as flagging the potential downsides.

Change my investment plan

“You might feel switching your pension investments into lower risk funds is the sensible course of action right now,” he said.

“Before you do, it’s worth noting that these funds generally have a lower potential for growth long term.

“Moreover, selling an investment now when the markets are down could actually realise and lock in any losses.

“History tells us that staying invested provides the best opportunity for long-term outcomes.”

Stop contributing to my pension

“We understand that this is a financially difficult time for many people and you might be feeling uncertain about continuing to pay into your pension. While you can stop paying in at any time, this has consequences.

“Firstly, if you’re in a workplace pension scheme your employer pays in too. If you stop paying in, they may stop as well. Secondly, by stopping contributions now, you will miss out on buying investment units while they are, relatively, cheap.

The best course of action

“Markets go up and they go down. It can be scary, but it is entirely normal. We would urge anyone that is worried to remember that pensions are long term investments and are designed to gain from the higher performance and volatility of shares when you are a long time from retirement.

“With a long term investment that is meant to help support you when you retire, any decision you make now can have considerable impact years down the line. If you are considering making any changes to your pension, it is important to consider the implications of this carefully, bearing in mind your long term objectives. We strongly recommend you speak to a financial adviser before making changes to your investment.

“It could be that the best action, is no action – especially for younger workers.”

Published at Sun, 17 May 2020 03:01:00 +0000