Living on a pension during high inflation is tough. You don’t have to be Pythagoros to work out that rising costs coupled with a fixed income can lead to depleting funds. If your pension pot is drained faster than planned, it could impact the standard of your retirement.
Pension Protection in Periods of High Inflation
With careful planning, you can mitigate the impact of high inflation on your pension pot.
The longevity of your retirement income during inflation depends on a range of factors. This includes the size of your pot and what you choose to do with your retirement savings.
Rest assured, pension protection is possible. We’ll guide you through the process below.
Is your retirement plan up to scratch?
In times of economic uncertainty, it’s worth reassessing your retirement plan. Making necessary adjustments will have you better prepared to weather the storm. Planning is key when it comes to pension protection.
5 steps to reduce the impact of inflation on your retirement income
Pension protection is possible, even in the face of inflation. Here are a few strategies you can follow.
1. Retire a little later in life
Let’s face it, most of us are chomping at the bit to retire. However, delaying retirement can help you to avoid periods of high inflation – in turn protecting your pension investments from potential stock market volatility.
2. Use ISAs first
Have a cash ISA? You should consider using other savings as a backup source of income before dipping into your pension. This will allow time for stock markets to recover and your invested retirement pot to grow.
3. Take it easy with withdrawals
Reducing the amount you withdraw from your pension may seem counterintuitive during a cost of living crisis, but it can actually help your pension grow in the long run. The more you keep invested, the more potential there is for growth.
4. Stay invested and invest wisely
It’s hard to stay calm during volatile market conditions. Instead of selling your investments in a panic, consider moving them instead. Look at where your funds are invested and adjust where necessary.
5. Lean into the opportunity
Sometimes, a volatile stock market can actually present an opportunity to buy more assets at lower prices. Think about topping up your pension pot, but be aware of tax implications if you’ve already started withdrawing.
Pension protection for peace of mind in economic uncertainty
In any instance of economic uncertainty, it’s good practice to reassess your retirement plan and consider necessary adjustments. Inflation is one of the many risks we all need to consider as we prepare to hang up our hats.
The best retirement strategies will account for inflation. To be sure your plan is on track, talk to an independent financial adviser. Hopefully a straight talking one.
Let us Introduce Ourselves
To find your nearest office or get in touch with one of our specialist advisors to see how we can help your business, please go to our contact page.