Inflation proof (as much as you can) your pension

Journalist: Samantha Downes, Currently at the I (business editing some Sundays (freelance) and Mortgage Solutions

ended 03. June 2022

This is a feature for the I - just looking for any unusual tips or things that have been mentioned but could do with mentioning again.


2 responses from the Newspage community

Star Quote
In times like these, many people are looking for something new and innovative to invest in to give them a positive return when everything else is struggling. However, pensions are investments for the long-term and, in that case, people should remember that an equity market downturn is always temporary and that the recovery will come through at some point. Equity markets historically increase in value, and raise their dividends, at a much greater rate than inflation eats away at their purchasing power. The strongest influence on long-term, real-life investment outcomes is often not the performance of the investments themselves but the behaviour of investors. Build a portfolio with a good chunk of equities to capture the return of the markets and implement a buy-and-hold strategy to stay invested through the good times and the bad.
Check with your employer about whether they offer Salary Sacrifice when paying into a pension. This saves them Employers' National Insurance. Sometimes, your employer will pay this saving into your pension. Cash will be eroded by inflation over time so check what percentage of your pension is currently held in cash funds.