How the Ukraine war in Russia affects pensions and how to protect savings

Russia’s war in Ukraine is having far-reaching effects, as some pension funds announce they are pulling out of the country – but what does this mean for your own fund and what you need to do to reduce it? less risk?

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Pension funds are pulling out of Russia, but is it cause for concern?

Your pension may be threatened by instability and anxiety from Russia invasion of Ukraine hit the financial markets.

British companies are rushing to get rid of their Russian interests, while a number of Russian-invested institutions have been rocked by the sanctions.

In Russia, stocks have plummeted while international funds have been withdrawn, causing ripples across the financial world that is now washing up on the banks of British pension funds.

But what does this mean for you and your super, and you can do anything to limit the risk, as funds across the UK pledge to sever ties at any time. maybe with Russian investments.

How did pension funds react to the war?

Do you need to worry about how your pension could be affected by the war in Ukraine?


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The state-backed pension fund NEST has announced that it will withdraw funds from Russia. The organization’s CEO, Helen Dean, said: “In view of the situation UkraineWe will eliminate all our investment in Russian government bonds and Russian companies as soon as possible. ”

The withdrawals of up to £46 million will be remitted out of the country.

Meanwhile, the Universities Retirement Scheme, the largest private pension scheme in the UK, said it would stop buying Russian assets and was working to sell those already in place. At the time of writing, about 0.5% of the fund’s total £90bn (£450m) is invested in Russia.

“It is clear that there is a financial as well as ethical case for divesting our Russian holdings,” a spokesman said.

“In the light of these circumstances, we have introduced a ban on new long positions taken in all Russian assets.”

How could your pension be affected by the Ukraine war?

Speaking to the Mirror, pensions expert Helen Morrissey’s Hargreaves Lansdown says that despite the uncertainty, pension savers shouldn’t panic and should instead steer clear of knee-jerk reactions.

“The UK pensioners don’t have much exposure to Russia,” she commented.

While they will be invested in companies like BP and businesses affected by the crisis, in general, face-to-face contact should be limited.

“A default fund that the average person is invested in is very very very diversified, so you get diversified across different industries, different geographies and the whole reason for that is to protect people in cases like these.”

She added: “While some industries may be hit hard and go down, you will be invested in other sectors that may or may not be as affected.

“The average person in the UK would be affected by the investment strategies implemented in their pension.”

What can you do to minimize the financial risk to your pension?

Ms Morrissey said the best thing you can do if you’re worried about your pension is to talk to your provider for more information on what you’re invested in.

Regarding pension savers actively trying to protect themselves, she urged people to be patient.

“The thing to remember with pensions is that they are a long-term game, and I think when we see as much volatility in the investment market as we are seeing right now, people can feel panicky. be afraid”.

She says people may react quickly and believe they need immediate change or make limited contributions, but this should not be the cause for reactionary decisions.

“For many people over the course of their working life, they will experience many instances of investment volatility.”

She points to previous examples of volatility as proof of confidence in the market. “There was a pandemic, Brexitthere was a global financial crisis – all of this caused a lot of investment volatility.

“While you will go through times where you look at your pension fund and see it has gone down, it is very stressful. While the market goes down, the market recovers and as long as you don’t do any knee-jerk reactions you should see the value of your pension fund recover over time,” she added.

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Fry Electronics Team

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