What the Donald Trump win means for your pension pot

Given all the excitement this morning, your retirement funds might be the last thing on your mind, but you might want to take a moment or two to ponder your pension after all.

The fallout from Donald Trump's election win might call for some careful thinking about pension pots, industry experts have warned.

Trump's somewhat unexpected triumph is likely to rock the markets, if not now, in the foreseeable future. The market turmoil caused by Brexit had a pension slashing effect.

For example, in June, professional services firm PwC's Skyval Index, which tracks the funding level of defined benefit pensions, found that the collective deficit had bulged by nearly £50bn in the space of a month, while numbers crunched by Hymans Robertson showed that, by midday on Friday 24 June, the total pension deficit had ballooned by £80bn.

"Brexit caught markets in a brief panic followed by a very quick recovery," said Jignesh Sheth, head of investment strategy at JLT Employee Benefits. "With event risk being one of the major risks in 2016-17 for pension investments, finance directors and trustees alike should be considering what this means for their pension schemes.

"Volatility is likely to continue in the immediate short term as election rhetoric fade and clear policies are likely to emerge. Long term investors are best served managing portfolios according to evolving macroeconomic themes rather than passing short term events with sharp but short impact."

However, it might not be so bad, as Laith Khalaf, senior analyst at Hargreaves Lansdown pointed out: "The FTSE 100 was included in the early morning sell-off, but the reaction of the UK stock market was much more muted than in the immediate aftermath of the Brexit vote."

Chris Beauchamp, chief market analyst at IG, added: "Seemingly everyone predicted financial apocalypse on the back of this event, but canny investors have worked out that the sun will still come up tomorrow even after Donald’s win (although looking at the weather in London that seems hard to believe)."

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