So look, it's been a really tough week of pensions
this week with what's been going on in the stock
markets. And I just wanted to check in really
just to update you with where Tracy and I are
up to with our upcoming retirement and the little
thoughts and thoughts about where we are with
the stock market and how they're affecting pensions.
Now, people who tend to watch this channel are
in one of a few different positions. You're either...
building a pension and you're interested in hearing
what I'm chatting about because, you know, you'll
be in a similar position soon in terms of getting
ready to retire. You're just about to retire
or you've already retired. So that's kind of
the people who watch this channel. So we take
that one by one. If you're kind of building your
pension at the moment now, the You could say
there's a sale on at the moment, couldn't you?
You could look at it that way and say that if
you're looking to buy the main indices this week,
then they haven't been this cheap for nearly
12 months now. So that could be one way to look
at it, but that's a very glass half full way
to look at it. Another way to look at it could
be that everything you've saved, and built up
and invested over the last 12 months has had
a pretty good shakeup over the last few weeks
and the stock markets are not looking great and
you've actually lost some money. The thing with
stocks and shares though, until you convert them
stocks and shares into cash, then they are...
just bits of paper or just numbers in an app
for you. It's when you actually decide to convert
that into cash. So that takes us to the second
category of people really, which is those who
just have retired or are about to retire. Now,
if you were this week planning to go out and
buy an annuity, it's been a disaster for you
because what that means is you're converting
what you have right now in stocks and shares
into an insurance policy that's going to pay
out. If you'd have taken this out three months
ago, you could have potentially had 20 % potentially
more in that pension than you have as of this
afternoon. So that is a very difficult position
to be in if you were looking at buying an annuity.
Like many watch this channel what you've got
is a company pension Then you know, there's a
good chance that you get annual statements and
you'll be Blissfully unaware what's been going
on with your pension over the last week and if
you do log on to the Website of the pension right
about your company works with you'll probably
be in for a nasty shock today in terms of what's
happened over the last three months. If you look
at these charts here, we can see that particularly
the S &P has been an absolute disaster over the
last three months there since Trump took over
and all the shenanigans that we've been having
with the tariffs. So that has been, you know,
an absolute disaster. But markets recover, they
generally do recover. This feels slightly more
unusual than some of the other things that have
gone on in the stock markets. So, you know, for
me, it is a little bit more worrying longer term.
Now, where Tracy and I are, we're at that point
where I'm literally just on the point of retirement.
I'm fortunate in that I've got defined benefit
pensions. Now, they're unaffected by the stock
market in the short term. Now, the reason to
say that, they are affected by the stock market
because my pensions were paying out a 60th every
year. you know, 60th of my final salary. And
then the 2008 crash happened. Pension funds realized
that they couldn't afford to pay me a 60th of
the salary. So like many other pension funds,
they now from that point on then only give you
an 80th of your salary every year as a pension.
So the stock markets do impact defined benefits,
but not directly. So the way a defined benefit
works is you put money in, there's a formula.
That formula may change over the years, but it
doesn't change very often. And we're in a fortunate
position, Tracy and I, because we both worked
quite a lot in the public sector and have quite
good defined benefit pensions, which aren't going
to be disrupted. And because of that, even though
I'm retiring now, 55, I wouldn't have been looking
to withdraw from my defined contribution pots
at this point until I'm 60, really. The stock
market's got another five years to recover from
what's going on this week for us, so we're quite
fortunate there. Another thing that's definitely
worth talking about is that's if you have a company
pension, but what if you've got a self -invested
personal pension, a SIP? Well, People use SIPs
in different ways and if you open a SIP and you
put it in a default fund, that default fund will
be balanced between bonds, between stocks and
shares. The bonds haven't done quite as badly
over the last few months as the stocks and shares
have. You might also have self -invested yourself
and you've made some decisions and what many
people have decided and certainly what I did
is I put a significant proportion of my pension
investments into a money market. pretty much
goes up 5 % a year. It's unaffected by global
politics and what's going on at the moment. It
was 5 % per year. Last month, it's 5 % per year.
This month, unless inflation changes dramatically,
it'll stay at 5 % for the next 12 months. Sorry,
interest rates, not inflation. Part of my...
portfolio has been protected from this. The other
part of the portfolio, I have quite a lot in
UK shares and they have been significantly affected,
but not as much as the, if I had invested in
likes of the NASDAQ and the S &P 500, which the
American indexes, you know, anyone who's been
watching this over the last six months or so,
you know that I'm very down on the American stock
market. I just think it's the price to earning
ratio is on. on the American larger stocks are
just ridiculously high and I could never have
really committed to investing in the S &P or
the NASDAQ and I try to build my portfolio to
dodge it really as much as I can. It's hard to
dodge it when you look at world indices though
because the American stock market is so big compared
to the others that any kind of impact in America
will have a smaller impact around the world.
So, you know, my portfolios have taken a hit
for my direct contributions, but I won't be drawing
on them for five years. So personally, I'm not
too worried. It's not going to stop me from retiring,
which is the main thing. You know, I'm locked
into my retirement now. My notice has gone into
my employer and I'm just waiting to finish now.
So we've been fortunate, but you know, if you
are in a position where you've heavily invested
in the likes of the S &P and the NASDAQ, and
you do have a self -invested personal pension.
I do feel for you this week. It's been really,
really difficult, but markets go up and down.
The thing is to not panic generally, isn't it?
That's the general advice. Let's see where the
markets head within the next two, three years
because that's the timeframes we've been looking.
Someone in the comments on the last video said,
they've got self -invested personal pension and
they check it on the 31st of December every year.
Now that is brilliant. That is fantastic. I wish
I could do that because you're not riding this
rollercoaster up and down every day are you on
where the stock market's headed. It's a much
stressless way of investing for your pension.
As investment, pensions are long -term investments,
so we shouldn't be really looking at our investments
on a daily basis. We're not trading here, we're
investing. We're not buying and selling every
other day, hopefully, to try and time the market.
That's not what pension investment's all about.
It's about picking a long -term strategy and
sticking with it and having lots and lots of
years to build them funds will gradually, and
that's what we're all for. I hope you haven't
had a... too bad a week and that your retirement
plans have not been too disrupted and Tracy and
I's haven't been. So we are feeling fortunate
at the moment, but good luck everyone. And I'd
love to hear your comments in the, what you got
to say in the comments. Have a great weekend.
Cheers.