According to American investment management firm The Vanguard Group one symptom of a Bear Market “is a price decline of 20% or more over at least a two-month period” in the market. As the FTSE 100 fell last week more than 20% from its February high – it seems we are in a Bear Market. Although the FTSE later recovered much of its value, the markets continue to torment millions of savers, borrowers or investors in this country.

Pensions

For those drawing a pension – as usual the ones with final salary schemes are best placed. Final salary schemes are about 50% invested in equities but the promise to pay members a certain level of income regardless of the markets means that it is something for employers to worry about.

For more information on pension schemes and rates which suit you, simply use our pension enquiry form to speak to an independent financial advisor.

However with a defined contribution scheme about three quarters is invested in equities and those approaching retirement will be hit hard.

For other alternatives, such as the stakeholder pension, simply use our pension calculator.

According to pensions expert Laith Khalaf who says, “Pension investors should seek to reduce risk as they approach retirement so they do not experience big swings the in value of their pension fund just as they are about to draw on it. Annuity rates had already started to slide downwards in response to falling gilt yields as investors sought safety and further falls could now ensue”.

Investments

Adrian Lowcock, senior investment adviser at Bestinvest says, “Banking crises take a long time to resolve. We can expect several years of low growth and contained inflation. Unfortunately, there’s no reliable way to predict whether markets have yet found a base but in our opinion equities are decent value”.

His advice for investors is straightforward, “Take a hard look at your asset allocation to ensure your portfolio is adequately diversified, that there are no ‘wasted’ risks and that the fund managers employed are the best of their breed. The focus should be on those areas that have proven they can weather market downturns. Ensuring you minimise losses to taxation and charges is also vital, as is the need to block out the short-term noise. Stay focused on your long-term financial objectives”.

For current annuity rates, simply look at our annuity comparison table below.

Mortgages

With interest rates at rock bottom and unlikely to be put up until next year at the earliest, fixed rate mortgages have become especially attractive, as their costs have been slashed.

Melanie Bien, of mortgage broker Private Finance says, “There is unlikely to be a recovery in the housing market anytime soon, however the problems will be exacerbated if countries such as Italy and Spain default on their loan repayments to UK banks. This would mean less money available for banks to lend here – homeowners about to re-mortgage should do so sooner rather than later to take advantage of the deals available”.

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