This is part of our monthly global investment market update series. Catch up on last month’s summary here: What happened to pensions in May 2025?
Conflict in the Middle East escalated in June, leaving investors cautious about the disruption to oil supply. Brent Crude (the global benchmark price for oil worldwide) jumped from around $65 in May to over $77. This eased slightly when US President Donald Trump announced a two-week hold on military escalation with Iran. While oil markets cooled briefly, the uncertainty remained. Analysts warned that if supply were cut by just one million barrels a day, oil could trade between $75–$78. If that disruption stretched to three million barrels, it could spike to $90 or even $120, according to ING.
While most investors won’t be hoarding barrels in their garages, oil prices influence something far more familiar - inflation.
Keep reading to find out what fluctuating oil prices and inflation could mean for your pension.
What happened to stock markets?
In the UK, the FTSE 250 Index rose by almost 3% in June. This brings the 2025 performance close to +5%.
Source: Google Market Data
In Europe (excluding the UK), the EuroStoxx 50 Index fell by 1% in June. This brings the 2025 performance close to +8%.
Source: Google Market Data
In North America, the S&P 500 Index rose by 5% in June. This brings the 2025 performance close to almost +6%.
Source: Google Market Data
In Japan, the Nikkei 225 Index rose by almost 7% in June. This brings the 2025 performance close to +2%.
Source: Google Market Data
In the Asia Pacific (excluding Japan), the Hang Seng Index rose by 3% in June. This brings the 2025 performance to +20%.
Source: Google Market Data
Oil, inflation and interest rates
Rising oil prices mean higher costs for businesses and households, from transport to energy bills. This pushes up inflation, and that puts pressure on central banks.
In June, the UK’s central bank - the Bank of England - held interest rates at 4.25%, despite weaker retail sales and a rise in corporate insolvencies. Many had expected a rate cut. But persistent inflation, and fears of further oil shocks, kept policymakers cautious.
What does this mean for your pension?
June was a reminder that international politics can affect your pension, even when they feel far away. So far, the tension in the Middle East hasn’t had a major impact on UK pensions, but it’s created some uncertainty.
Rising oil prices could keep inflation higher for longer and delay interest rate cuts, both of which can affect how pension funds perform. When interest rates stay high, borrowing (like mortgages) remains more expensive, but savers may benefit from better returns on cash savings. Inflation, on the other hand, can quietly eat away at what your pension savings will be able to buy in the future. That’s why it matters, even if markets themselves seem calm.
While your pension can be impacted by geopolitical events, such as the ongoing conflict in the Middle East, just remember that it’s designed to be invested for the long term. Through diversification across sectors, regions and asset types, your pension has the opportunity to continue to grow in the long-term, even in uncertain market conditions.
Have a question? Get in touch!
Do you want to know more about your pension plan with PensionBee? You can check out our Plans page to learn how your money is invested in different assets and locations, or log in to your BeeHive to see your specific plan. 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.
