On 28 February 2026, the US and Israel began military strikes on Iran, instigating a war in the region. You’ve likely seen news stories about how this could affect oil prices, increase inflation, and cause market volatility.
Naturally, you’ll be concerned about the investments in your pension, as well as any other shares you hold in an ISA or General Investment Account (GIA). A large market dip could significantly reduce the value of your portfolio, and you might be worried about what this means for your wider financial goals.
That’s why it’s important to stay up to date with the situation as it unfolds and be engaged with your pension.
Read on to learn more.
Markets have responded to the conflict, but the impact may be less severe than expected
The initial market response to the conflict was more muted than expected, but as the strikes continued and it became clear that this could be an extended war, stock values dipped further.
According to Fidelity, the FTSE 100 dropped by 1.6% on the tenth day after the conflict started. This left it 7.3% lower than its all-time peak on 27 February.
Asian markets fared particularly badly, with indexes falling by the following amounts on the tenth day after the outbreak of war:
- South Korea’s Kospi – 6%
- Japan’s Topix – 3.8%
- Taiwan’s Taiex – 4.4%
- Hong Kong’s Hang Seng Index – 1.9%
- Mainland China’s CSI 300 – 1%.
This might suggest that markets have crashed in response to the conflict. However, it’s important to view these movements in a wider context.
For instance, figures from Fidelity show that although the FTSE 100 fell from record highs, it was still 16% up on the year before at the time of reporting on 9 March. Although certain businesses, including travel companies, have suffered, others, like those in the defence sector, have seen growth.
Additionally, on 31 March, AJ Bell reported that the FTSE 100 opened 0.1% up, suggesting a slight recovery from the initial dip.
Meanwhile, the conflict has caused a significant increase in oil prices.
Fidelity reports that prices initially jumped from $72 to $119 a barrel. After discussions between the international community about releasing petrol reserves, the price cooled slightly to $110 shortly after.
However, as the conflict continues, oil prices have risen again. On 29 March, the Guardian reported that Brent crude oil had climbed in price by 51% since the start of the month.
Because the situation is ongoing, it is difficult to know exactly how severe the lasting economic impact will be and what effect the conflict could have on your investments.
Volatility is a common feature of markets, so it’s important to stay engaged with your pension
It’s easy to think of this conflict as an extreme situation for investors, but in reality, the war in Iran is one of a long line of geopolitical events that cause short-term market volatility.
For example, data from Schroders shows that in the past 54 years, global stock markets have experienced a fall of 10% or more in 31 of those years. Markets dipped by 20% or more in 13 out of 54 years.
As such, you could regularly face market downturns that affect the value of your pension investments. Fortunately, markets often recover eventually and continue growing, so the value of your pension could stabilise in the long term. That said, the length of time markets take to recover can vary.
It’s important to consider how these differing recovery times could affect your retirement goals. If you’re still decades from retirement, you may be able to leave your pension alone and wait for the markets to recover.
However, if you plan to retire soon, you may need to be more proactive to prevent significant losses.
Either way, it’s crucial that you’re aware of how the investments in your pension are performing so you can make informed decisions.
If you don’t closely monitor your SIPP, your savings could fall in value without you realising, potentially making it more difficult to fund your lifestyle when you retire.
Our SIPP platform gives you complete control over your investments
One of the key benefits of our SIPP platform is that you can easily review the up-to-date performance of your investments on our online platform.
This means that you can see the effects of market volatility on your pension savings in real time. It’s also simple to manage your investments on the platform, if necessary.
Having complete control over your investments in this way means you can respond to the situation as it unfolds and take steps to protect your retirement savings.
Get in touch
You can track the long-term performance of the investments in your SIPP on our easy-to-use platform. Please get in touch if you need guidance about how to do this.
You can email us at [email protected] or call 03303 202091 for more information.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
