The money in your pension plan is invested to help it grow over the long term
And because it’s invested, sometimes you’ll see the value of your plan go up
And other times you’ll see it go down
You could even get back less than what’s been paid in
This is because investment markets respond in different ways to world events, investor demand, politics or changes to interest rates
Think about the drops you might have noticed when the coronavirus pandemic hit
Compared to the rises you might have seen in the period afterwards
You can’t control what markets will react to
But you can control how you respond
When you see the value of your plan drop
It’s easy to panic and make a quick decision like moving your investments
But you may be switching after markets have already fallen
And importantly, before they have a chance to rise again
If that’s the case, it could mean you’re accepting your losses
And also missing out on any potential recovery
So it’s important to take a step back and think about three important things:
First, market ups and downs are normal and markets can recover over time
Second, be cautious about only thinking of the short term
Finally, remember that your pension money is invested to give it a chance to grow over the long term
So when it comes to checking your pension plan’s value
Remember to keep calm, think about whether your investments are on track to meet your long-term goals, and get advice if you need to.
