Pension savers warned pots will be ‘inevitably’ hit by Donald Trump’s war against Iran
Pension savers are being warned that “it is inevitable there will be an impact” on their pots as a result of President Donald Trump’s military action against Iran amid market volatility.
Crude oil prices collapsed by more than 10 per cent on Tuesday, representing the steepest single-day decline since 2022, as traders grew optimistic about a potential easing of tensions in the Middle East.
The dramatic fall came amid extraordinary volatility, with crude swinging within a $36 intraday range on Monday alone. Asian markets responded positively to the developments, with South Korea’s benchmark index surging six per cent.
European indices also climbed sharply, gaining as much as three per cent. Wall Street, however, bucked the global trend.
Pension savers warned ‘inevitable pots will be impacted’ by Donald Trump’s war against Iran
The S&P 500 edged down 0.2 per cent while the Dow and Nasdaq finished the session largely unchanged.
British pension savers holding defined contribution schemes are feeling the effects of the turmoil, according to retirement industry experts.
Tom Selby, director of public policy at AJ Bell, said the instability in the Middle East and its consequences for oil supplies and global confidence would inevitably affect anyone invested in global markets.
Mr Selby shared: “Given the scale of the instability we are seeing in the Middle East – and specifically the knock-on impact on oil supplies and global confidence – it is inevitable there will be a short-term impact (at the very least) on people who are invested in global markets, which includes anyone with a DC pension.
Ftse 100 plunges almost 200 points | GETTY/GOOGLE
The stock market has been volatile since Trump returned to office | Reuters“We have already seen wobbles in global stock markets as a result of the US and Israel launching attacks on Iran.”
The Ftse100 has retreated significantly in recent weeks, falling from close to the 11,000 threshold at the end of February to approximately 10,000 today.
Savers checking their pension accounts may well notice a decline in recent performance. Despite the market turbulence, Mr Selby urged pension holders to maintain perspective and resist the temptation to make hasty decisions.
The retirement expert added: “At times like this it is crucial to remain focused on your long-term goals. A short-term hit to your investment value shouldn’t be a cause for alarm.
Furthermore, the policy director warned against being “swept up in a wave of panic” during difficult market conditions, noting that similar challenging periods have occurred repeatedly over the past decade.
He wants to educate the public about it getting more and more important to start contributing to pensions earlier | GB NewsWhether the conflict involving Iran proves brief or extended remains uncertain, but Mr Selby emphasised that knee-jerk reactions to volatility rarely serve investors well.
Mr Selby advised pension holders to conduct a thorough review of their investments to ensure they remain comfortable with their current risk exposure.
Spreading investments across different sectors, geographical regions, and asset types such as bonds and gold could help cushion against market shocks, he suggested.
“History suggests that staying invested is a better course of action than trying to time when to go in and out of the market,” he said.
