Martin Lewis details how to monitor a pension investment without ‘having a heart attack'

Martin Lewis took on some challenging fan questions during his BBC podcast around pensions and retirement savings alongside his team of experts surrounding pensions and retirement savings. One desperate fan looked for guidance as he got nervous when noticing his pension investment was on a downhill trajectory.

A fan on X, formerly known as Twitter, asked the Not the Martin Lewis podcast: “My pensions tumbled in the past 2 years, when are they likely to return to their previous high and what factors impact them.”

Martin added a disclaimer before turning to his experts: “First thing to say is, nobody knows the answer to that, but what should you be looking at? One of the problems is, if you track it every day it’s going to give you a heart attack going up and down all the time. You have to look over the longer period.”

A wealth manager at Tideway, Mihir Choughule, weighed in saying that he wouldn’t waste time going into why the fan’s investments went down over the past two years, hinting at the larger economic factors like the pandemic. Instead he noted: “The key here is to make sure that you have a medium to long-term investment strategy there.”

He advised that savers simply look at whether their pension investments align with their objectives, work with their circumstances and that they are “comfortable remaining in even withstanding market volatility”. Martin added an example using a £10,000 investment that dropped to £8,000.

The MSE founder shared: “People tend to think there’s a law of return, ‘I will wait until it goes up to £10k until I’m going to deal with it’, whereas actually we should people be thinking; ‘I had £8K, what I had before is irrelevant. Is this the best place for my £8K? If not, I wait’.”

Referring back to the distressed caller, Mihir added: “I appreciate seeing red on your investment portfolio is not pleasant for anyone but if you have 5-10 years to let that money recover before you need access to it, you really shouldn’t panic and make a decision that then impacts you over that period.”

Martin agreed, urging people not to panic and move out their investments. Rather, he advised when checking your pensions people should look not just at the drop or rise but if “this is the best place for your money”.

He also jokingly revealed “some people blame me” for the UK’s poor understanding of investing but shared the main principles of investing: “It’s going to go up at times, it’s going to go down at times. The real question is, is the overall direction over a long period of time going upwards?

“If it’s dropped over the last 6 months doesn’t necessarily matter, if it’s dropped over the last 10 years that’s a problem. You just have to understand pensions are for the long term not the short term.”