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Should I stop contributing due to the effect of coronavirus on the markets?

Key points:

  • This article offers guidance on contributing to your pension in these challenging times
  • The article also explains how continuing to contribute could benefit you in the longer-term

Are you worried about how your pension pot has performed?

In early 2020 Coronavirus fears triggered a fall in many markets and investments around the world. You might be concerned about how this in turn affected your own pension pot.

Our main funds fell but by considerably less than the main UK and international stock markets because we’ve carefully designed our long-term strategy to help smooth out some of the sharper ups and downs in markets. Our funds since recovered and were performing in line with our expectations at the end of 2020.

Although it can be worrying to see the markets being bumpy right now, it’s best to think of your pension savings in terms of decades, rather than months or even years. Most Nest members are unlikely to experience a significant impact to their final pension pot from shorter-term market falls. If you’re young enough to ride it out, you’ll have many more years to save into your pension and benefit as the markets recover. If you’re close to retirement and saving into one of our main funds, we’ll have automatically moved your money into safer, lower risk investments to protect you from this kind of risk. 

Having said that, we know this topic is dominating the news and we want to reassure you that we’re keeping a close eye on the situation.

Please visit How will my investments with Nest be affected by coronavirus? for more information on your investments.

Should I stop my contributions to reduce any investment risks?

Our investment strategy is prepared for events like this, so your savings are in a strong position for the longer-term. Continuing to contribute means you’ll be able to take full advantage of our investment approach. 

You may also currently benefit from employer contributions and tax relief every time you pay into your pension pot. Stopping your contributions means you’ll no longer get these extra savings.

Need more help before you decide?

You might want to discuss your options with an independent financial adviser. You can also get impartial guidance from MoneyHelper (previously the Money Advice Service) by visiting their website or calling 0800 678 1648.

If you still feel that stopping your contributions is the right thing for you, then you can stop them here.

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