As the Brexit deadline of 31st October 2019 looms, you may be wondering how Brexit could impact your pension savings. While the final outcome is still unclear, there are some frequently asked questions that we can answer right now. Read on to find out our view on Brexit and pensions.
1. What does Brexit mean for PensionBee?
PensionBee is a UK-based company and as such we’re not directly impacted by Brexit. We do however recognise that you could see some effects on your pension balance, depending on what happens in the coming weeks.
Regardless of a ‘deal’ or ‘no deal’ scenario, it’s safe to say that we would expect to see some volatility in the markets in the short-term.
2. Will my pension balance go down?
While you might see some fluctuations in your balance in the coming weeks, this could be positive or it could be negative. It’s impossible to predict exactly how markets will react.
Our customers can take comfort in knowing that most of our plans are diversified. This means they’re usually invested in a mixture of assets such as shares, property, bonds and cash – spread across global markets, from North America to Asia. This diversification is designed to protect against the risk of any single type of asset or location.
In practice this could mean that while some assets may decrease in value in Europe, values of other assets located in Japan, Asia and North America could increase.
It’s important to also remember that pensions are a long-term investment and although it can be uncomfortable, short-term fluctuations are normal and to be expected from time to time. They are unlikely to cause any lasting damage, especially if you have no plans to retire in the next few years. As long-term savers we have to take the rough with the smooth, and be patient during the dips and periods of economic uncertainty.
3. Will my pension be managed differently after Brexit?
As your pension provider, we don’t actively manage your investments. Your pension is managed by some of the biggest money managers in the world such as BlackRock, Legal & General, State Street Global Advisors and HSBC.
Although planning for Brexit is a challenge, all large financial institutions will have been considering the potential effects of Brexit for some time. In the short-term it is unlikely your money manager will change the strategic asset allocation of your plan, and will instead approach Brexit as they would any other period of uncertainty, such as the ongoing US-China trade dispute.
4. Will Brexit affect how I access my money from 55?
Our drawdown option becomes available as soon as you reach your 55th birthday. We don’t anticipate Brexit having any impact on how you access your pension, whether you’re living here in the UK, Europe or further afield.
5. Can I switch pension plans?
It’s impossible to know which plan or type of investment may perform better following the different Brexit outcomes. If you’re concerned about the effect of Brexit on your pension, now could be a good time to review your plan choice. We have seven plans in total, with three offering defensive strategies – Preserve, 4Plus and Tailored.
Remember, it’s free to switch plans anytime and there is no limit to the number of times you can change.
If you have any questions or concerns about your pension, get in touch with the team by emailing: firstname.lastname@example.org