Just over two-fifths (42%) of respondents believe that their pension funds will fall in value as a result of Britain’s exit from the European Union (Brexit), currently projected for 31 October 2019, according to research by pension provider Aegon.
Aegon’s bi-annual Retirement confidence survey, which surveyed 830 respondents recruited via the organisation’s customer and consumer panels in July 2019, also found that only 4% suggested that pension savings would grow as a result of leaving the EU.
Among respondents aged between 18 and 34, the proportion that believe pension fund values will fall after Brexit rose to 46%. This is an increase of 11 percentage points since the same question was asked of this age group in 2017.
Steven Cameron, pensions director at Aegon, said: “Despite the ongoing developments, controversy and daily drama around Brexit, pension saver confidence around the impact of Brexit remains almost completely unchanged compared to two years ago. Over [four] in 10 people continue to expect it to have a negative impact on the value of their pension, while only [one] in 25 expect it to impact positively. The remainder are unsure or expect no impact.
“Defined contribution [DC] pensions invest in a range of stocks and shares, some within the UK and others from a wider geographical spread. Political and economic uncertainty, such as we’re seeing as a result of Brexit, tends to be bad news for stockmarkets. However, those invested in the FTSE 100 have actually seen strong growth, which many put down to the majority of companies in this index generating most of their earnings overseas, with the value of those to UK investors having been boosted because of a weaker sterling.
“While we have seen a fair amount of investment market volatility since the referendum, this doesn’t have any immediate effect on pension savers who are not yet taking an income. If your planned retirement is still many years away, the best course of action is generally to keep saving. If you are about to start taking an income, we recommend seeking professional advice on the best approach to investing.”