What happened to pensions in July 2022?

Clare Reilly

by , Chief Engagement Officer

at PensionBee

29 July 2022 /  

Man climbing a mountain against a blue sky.

This is part of our monthly pension update series. Catch up on last month’s summary here: What happened to pensions in June 2022?

Investments have tumbled in a downward trend during 2022. Stock markets are reacting to an unfolding story of three economic shocks: the war in Ukraine, the UK’s rising inflation rate, and China’s supply chain disruptions. Due to these shocks, many investments within your pension will have felt the effects of this economic pressure. However, in July we’ve seen positive movements, so are pension investments entering a recovery period?

Keep reading to find out how factors affecting market volatility are evolving.

What happened to the markets in July?

July saw marginal growth as markets appeared to stabilise after a choppy six months. Whether this will begin an economic recovery, or simply provide a brief moment of respite from this year’s volatility, remains to be seen.

In the US, the S&P 500 rose by 6.64% in July.

US Source: Google

In the UK, the FTSE 250 rose by 5.83% in July.

UK Source: Google

Have we reached the bottom yet?

This year market volatility has veered into bear market territory, where markets are in significant decline for a few months at least. As investors it’s concerning, but this period is never permanent. When the bear market reaches its lowest point, from there the only way is up towards a bull market (economic growth).

From that turning point a relief rally begins where markets gradually grow - although this can be a bumpy ride! As markets fluctuate daily with small rises and falls it can take months to retrospectively point to a date in the calendar when markets began recovering. An indicator of market recovery could be an improvement in the most volatile industries such as energy, food and manufacturing.


In the UK, we’ve seen headline inflation this year as household costs soar. The Consumer Price Index rose by 8.2% in the 12 months to June 2022. Behind the scenes we’re experiencing fuel inflation which has a knock-on effect on energy, food and other industries.

This year, the cost of crude oil (which makes diesel and petrol), has sharply increased. Following the invasion of Ukraine, world leaders reacted with bans, sanctions and plans to phase out their dependence on Russian oil and gas to constrict their economy. Consequently as available supply decreased the cost increased.

Now for the good news. In the short-term, the price of petrol has fallen from a record high of 196.96p to 188.76p per litre according to AA motoring group. This is an equivalent saving of £10 off a tank within a fortnight for consumers, as wholesale costs are declining. In the long-term, the reality of fuel poverty facing millions has reignited interest and investment in clean energy.


The United Nations reports that at least 12 million people have been displaced following Russia’s invasion of Ukraine. Without labourers to cultivate the crops, and with Russian troops preventing exports from key ports, the supply of food from Ukraine has been significantly limited. Consequently the price has been driven up by this scarcity.

Ukraine is known as ‘Europe’s breadbasket’ due to its production of sunflower products and wheat. Together, Russia and Ukraine are global suppliers of 25% of wheat, 30% of barley, and 60% of sunflower oil. Historically these products have been exported internationally, (especially across Europe) becoming staple food goods from cereal to vegetable oil.

In July, Ukraine and Russia signed a landmark deal, allowing exports from Ukraine to resume. This diplomatic move is designed to end the blockage of millions of tonnes of grain. In the short-term, food prices are expected to fall from their record high as supply improves. In the long-term, the international community is speculating the significance of this in a path to peace.


The global manufacturing industry has faced complications, from irregular trade patterns to labour market shortages, since the coronavirus pandemic began. And beyond this, the distribution of manufactured products (such as healthcare equipment) has been affected by various logistical issues: driver shortages, fuel inflation, low inventory and shipping delays.

China is known as ‘the world’s factory’ as it accounts for nearly 30% of all global manufacturing - producing everything from iPhones to Tesla cars. While other countries began returning to pre-pandemic industrial patterns this year, China didn’t. The government’s zero-COVID policy has forced China into regional lockdowns.

Currently most restrictions have been lifted and the economy is catching up on lost revenue. In the short-term, China is motivated to resume business. In the long-term, manufacturing capacity is increasing and prices may positively be affected by this.


Stock markets in the UK and US appear to be stabilising as each experienced growth in July. The energy crisis in Europe has improved, with fuel costs in the UK already going down. Diplomatic breakthroughs between Ukraine and Russia have led to an agreement on international trade allowing millions of tonnes of food to be exported. Manufacturing in China is ramping up after months of lockdowns.

In summary, some of the major factors causing the market volatility we’ve been facing this year have begun to improve, ever so slightly. Whether this is short-lived, or a green shoot of further growth, remains to be seen.

Key takeaways

You may find yourself rethinking your pension savings during the cost of living crisis, or worrying about whether you’re making the right choices during periods of market volatility. The Financial Conduct Authority (FCA) is the regulator for over 50,000 financial services firms and financial markets in the UK. In their own market volatility messaging, they outlined three important considerations for when you’re making decisions about what to do with your investments:

1. Withdrawing your money won’t recover losses

When markets are considerably down many people are tempted to withdraw from their investments under the assumption their money’s safer in their pockets than in stock markets. Or even move their pension because they believe their provider’s to blame for the losses caused by market volatility. However, withdrawing your money won’t recover losses, in fact all withdrawing does is guarantee your investment loss.

2. Money invested may see recovering markets

It’s easy to forget right now that investments go up, as well as down. So the more you withdraw, the less you’ll have invested to recover when markets eventually rise in value. Withdrawing during a downturn guarantees a loss, whereas waiting for markets to bounce back gives you an opportunity to regain and grow your investments again.

3. Access your rainy day savings before realising losses

Finally, if you’re in need of money in the short to medium-term then consider withdrawing from cash savings before accessing your investments (like pensions). Having a rainy day fund is really valuable and will enable you to spend from cash savings rather than realising losses on your investments.

This is part of our monthly pension update series. Check out the next month’s summary here: What happened to pensions in August 2022?

Have a question? Get in touch!

You can check out our Plans page to learn how your money is invested in different assets and locations. You can always send comments and questions to our team via engagement@pensionbee.com.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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