Fri, 04 Apr 2025

Fri, 04 Apr 2025 Tariffs have shaken the markets - how worried should we be?

Workers are right to fear for their pensions, but the greater worry is the here and now - the economy they live in.

* The US stock market has lost around 17% of its value from its peak in February and is now down 2% from where it was this time last year.
* A decline of 20% from a peak is considered a "bear market" - a description of a market that appears to be more likely to go down than go up.
* The current situation is the biggest and quickest declines seen in world markets since Covid-19 panic in early 2020.
* Many people's exposure to stock markets comes through their pension plans, but not all contributions go into shares - much goes into safer investments like government bonds.
* Government bonds have risen in value, which can offset some or all of the fall in shares depending on how your pension savings are allocated.
* The closer to retirement you are, the higher percentage of your pension pot is likely to be invested in bonds - so the less affected you will be.
* A plummeting market is an indication that most people think companies' profits will fall due to US President Donald Trump's tariff bombshell.
* Falls like this sometimes herald an economic downturn, which is a more significant worry than the value of your pension.
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