The spread of COVID-19 has rocked global financial markets, putting increasing pressure on individuals’ pension pots. Those with self-invested personal pensions (SIPPs) are even more exposed than those with standard pensions, as the former are responsible for deciding where to invest their savings.

GlobalData’s 2019 UK Life & Pensions Survey indicates that a staggering 30% of UK respondents with a SIPP are unaware of what investments are included within their portfolio. With financial markets tumbling globally this is worrying, as these individuals are unlikely to understand the extent to which their SIPP is exposed or has been impacted.

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Findings from GlobalData’s research also indicate that 29% of those with a SIPP are invested in shares. Clearly, these individuals will have been impacted by the recent market falls and increased volatility caused by COVID-19. And the pandemic will not just have a short-term impact on financial markets and share prices. In the longer term, the expected economic downturn will impact SIPP holders with commercial property investments. GlobalData research indicates that one in 10 SIPP holders are invested in commercial property, meaning they are exposed to the fallout an economic recession will bring.

The industry should look to help ease concerns relating to investment choices. This is particularly important given that a fifth of individuals only check their SIPP once a month, and the impact of COVID-19 on the global economy is changing rapidly. During these challenging times, SIPP providers must engage with clients about the impact COVID-19 is having on their investments and keep them up to date about the value of their SIPP.

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