The FTSE 100 fell by 138 points from the start of last week to finish. The FTSE 100, which measures the performance of the biggest companies in the UK, stood 1.4% lower (6,124 points) when markets closed last Friday (24 July) than it did the previous trading day.
The index had dropped by 138 points since the start of the week on worries of a second peak of coronavirus. Rising US cases, in particular, are weighing on global markets. The falls came despite the fact that official figures showed UK retail sales almost recovered in June from their staggering drops during lockdown. The volume of retail sales jumped 13.9% from May to June.
The current events surrounding the coronavirus pandemic has cast some worries in the financial sector, particularly for pensions, investments and savings. Here are some FAQs and tips to consider in this current economic climate:
Should I be concerned about my savings in the long term?
The short answer is no. While the coronavirus will likely continue to rattle markets, this doesn’t necessarily mean long-term investors should be overly concerned. This is because volatility in the stock markets is normal and markets often rebound quickly once immediate issues are resolved.
How is COVID-19 affecting my pension?
If you have a defined contribution pension – whether private or through work – your savings have probably also been hit quite hard as a consequence of coronavirus. This is because pension schemes invest in the stock market, too, so big rises and falls will have an impact on how much is in your pot.
Although recent research suggests that defined contribution (DC) pensions are starting to show positive signs of market recovery after dramatic falls in the number of expected retirements this year due to the ongoing coronavirus pandemic.
However, it’s worth noting that part of your pension will also be invested in ‘safer’ places such as in bonds, which are really low risk and usually offer a fixed rate of return. The older you get, the more schemes tend to choose to invest in such assets to limit risk to your pot.
If you’re concerned about the value of your pension and need some advice, contact us here.
How you can keep your investments safe
If you’re an investor, you should use the coronavirus outbreak as an excuse to review your portfolio. It’s important to manage the risks you’re exposed to, to avoid suffering losses to your capital.