Featured articles
How the stock market impacts your pension
Your pension's usually invested, either by you or your provider. That means it could be affected by stock market ups and downs. Find out how in this guide.
In most cases, your pension savings are invested. With most personal, private, and workplace schemes, your provider invests your savings on your behalf.
If you have a Self-Invested Personal Pension (SIPP) or Small Self-Administered Scheme (SSAS), you’ll invest your money yourself. Or you can work with an Independent Financial Adviser (IFA) to help you.
As a result, the stock market can impact your pension and its value. For example, if you're a PensionBee customer the balance you see in your online account (your 'BeeHive') can be influenced by markets. That’s especially when markets are volatile and moving up and down in value more.
In this guide, find out how the stock market affects your pension. That includes how your pension’s invested, why it’s affected by stock markets, and how PensionBee invests your savings.
How is your pension invested?
How your pension’s invested will vary between providers. But in most cases, your money’s invested in one of your provider’s funds or plans.
The investments (or ‘assets’) these plans hold will also vary. That might include:
- company shares;
- funds (such as exchange-traded funds, or ETFs) and trusts;
- bonds;
- property;
- commodities; and
- cash.
How much of each asset the plans hold will depend on things like their goals and risk level.
For example, a pension plan aiming for growth over a longer period might hold more company shares. That’s because they tend to offer greater growth potential than something like bonds.
A plan like that might be more suitable for those who are further away from accessing their pot.
Whereas, one designed for individuals thinking about drawing their savings in the short to medium term could be different. That might hold investments with less growth potential and more stability.
That way, those invested in it can have more of an idea of what their savings will be worth when they access them.
The fund or plan will usually hold a variety of investments. You then buy units - essentially shares - in the fund, giving you ownership of those different investments within it.
Why do stock market movements affect your pension balance?
Stock market movements can affect your pension balance if the investments your plan holds are listed on it.
That includes things like company shares and funds. It could also be property or commodities if your pension plan invests in them through investment vehicles listed on the stock market.
That might be real estate investment trusts (REITs) for property. Or, for assets like gold, it could be exchange-traded commodities (ETCs).
While usually trending upwards in the long term, stock market investments generally rise and fall in value over time. Those changes impact the value of your pension plan and its units. As a result, they can move your pension balance too.
Does a falling stock market mean my pension is losing money?
No, not necessarily. Stock markets rise and fall in value over time. So, your pension balance could dip too.
However, that isn’t ‘losing money’. You still hold the units you’ve bought in the plan, even if they’ve fallen in value.
You’d only lose money if you moved your savings to another plan or drew from your pension. In essence, you’re turning a ‘paper’ loss into a real one, because the loss doesn’t become realised until you sell units in your fund.
That can be a mistake. By changing your investments while they’re lower in value, you lose the potential for your investments to recover their value.
Historically, in the case of big market dips, that’s typically what’s happened. For example, look at the performance of the S&P 500 (an index of the 500 largest US companies) after President Trump first announced his Liberation Day tariffs in February 2025.
As you can see, investors reacted to this prospect. In the six days after the tariffs came into place on 2 April, the index fell by around 12%.
You may well have seen your pension balance dip around this time. You might’ve wanted to react too, perhaps looking into switching plans.
But that would’ve meant locking in losses that could have recovered their value, and even kept on growing in future.
That’s what happened in this case. The chart below shows the recovery from the market reaction to the tariffs, and how the market moved over the following year.
That includes an almost 10% jump on 9 April 2025, after President Trump announced pauses on the tariffs.
Not only would you have missed out on that recovery by trying to get out of US investments at this time. You might also have lost out on the market growth that followed.
Who could you be with PensionBee?
Combine your old pension pots into one new online plan. It takes just a few minutes to sign up.
Get startedHow long do stock market downturns usually last?
Stock market downturns vary in length.
As seen above, the reaction to the US tariff announcements ended very quickly. The S&P 500 fully returned to its February pre-tariff levels by late June.
The recovery from the Covid-19 pandemic took a bit longer. The S&P 500 dropped around 34% from peak to trough in March 2020. It took until August to recover that value.
Others may last years. Looking back to the 2008 financial crisis, it took more than five years for the S&P 500 to recover to pre-crash levels.
Why diversification can protect your pension from market swings
One method for protecting investments from market volatility is diversification.
This involves investing your money into different types of assets, such as shares, bonds, and cash.
It also usually means investing in different industries, as well as various countries and regions.
That way, if one market or type of asset experiences a period of volatility, those dips in value could be offset by gains elsewhere.
Diversification doesn’t stop all your investments from falling in value. But it can prevent it from affecting your entire pension balance at once.
It also potentially offers opportunity. By spreading money around, you could benefit from growth in different areas of the market.
If your provider invests your savings on your behalf, they’ll typically diversify them in the fund or plan you choose.
For SIPPs and SSASs, you’ll need to do this yourself.
How does PensionBee invest your savings?
PensionBee offers a straightforward range of pension plans, each with different investment goals and risk profiles.
Your savings are invested and managed by some of the world’s largest money managers, such as BlackRock and State Street.
The default plans are the:
- Global Leaders Plan for under 50s, aiming to grow your savings for the long term; and
- 4Plus Plan for those aged 50 and over, an actively managed plan to help manage volatility in later life.
You can also choose one of the specialist plans. That includes the:
How can you check how your pension’s invested?
With most providers, you can see how your pension’s invested by checking the plan information or factsheet. You can usually do this online.
With PensionBee, you can see this information by logging into your account (your ‘BeeHive’) on the website or app.
Go to the ‘My pension’ tab. You’ll see which plan you’re invested in at the top of the screen. Scroll down below the performance chart and select ‘View plan information’.
Here, you can see:
- your plan’s top 10 holdings;
- which sectors and industries you invest in; and
- where in the world your savings are invested.
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.
Last edited: 23-09-2026
.webp)
%201.png){kind=small}