Financial market volatility – what does this mean for pensions?

03 October 2022

No-one could have foreseen the increase in interest rates and inflation this year, let alone over recent days, as markets react to the Chancellor’s ‘mini-budget’ on the 23rd September. You may well have seen reports in the press during these recent days regarding the negative impact that this extreme market volatility has had on many UK pension schemes.

We would therefore like to reassure our members of the Scheme’s position. We, the Trustee of the Scheme, are monitoring the evolving situation closely; with the help of our Fiduciary Manager and are able to react quickly to market movements.

Our priority is to ensure members’ pensions are protected. Principally, this means ensuring that we can pay members’ benefits as they fall due, and the investment strategy has been carefully designed with this goal in mind. We have carried out an initial review of the Scheme and can confirm the following:

  • The Scheme’s investments are targeting a low level of return – due to the Scheme being well funded – and therefore, running a low level of risk.
  • The Scheme’s investments are well “hedged”, meaning that the value of the Scheme’s assets (the money the Scheme holds) and liabilities (the value of all pension benefits) move up and down in tandem.
  • There are no material asset or investment transfers pending.
  • The Scheme doesn’t have any major short-term liquidity needs.
  • There is no material change in the employer covenant of the Scheme.

We do not intend to make any significant unplanned changes to the existing investment strategy in response to the current market conditions, remaining cognisant that the current situation continues to evolve. It is important to remember to take a long term, proportionate and well-informed view when making decisions regarding future pension provision. We would encourage all members to take appropriate financial advice before making any significant decisions. Neither the Trustee nor the Company can provide financial advice, but you can find an independent financial adviser (IFA) in your area by visiting Please be aware that an IFA may charge for any services they provide, and FDR do not cover the cost of such services.