When Your Pension Pot Goes Up and Down Like a Roller Coaster: A Simple Guide to Market Ups and Downs for UK Pre-Retirees

Paul Mitchell | Financial and Retirement Planning Coach

Find him here at: Your Smart Retirement Coach

Don’t Panic! Your Retirement Dreams Are Still Safe

If you’re between 55 and 75 and watching your pension pot bounce around like a ping-pong ball, you’re not alone. Every day, thousands of people just like you check their pension statements and feel their stomach drop when they see red numbers, or get overexcited when everything’s green.

The truth is, this roller coaster feeling is completely normal – and more importantly, it doesn’t have to derail your retirement plans. As someone who’s helped hundreds of UK pre-retirees navigate these choppy waters, I’m here to explain what’s really happening with your money and give you simple, practical ways to sleep better at night.

What Exactly Is “Market Volatility” in Plain English?

Forget the fancy financial jargon. Market volatility simply means your investments go up and down in value – sometimes by small amounts, sometimes by larger amounts. Think of it like the weather: some days are calm and sunny, others are stormy and unpredictable.

Your pension pot, ISAs, and other investments are all affected by these “weather patterns” in the financial world. When the news talks about the FTSE 100 being “up 2%” or “down 3%”, that’s volatility in action.

Why Does This Happen to YOUR Money?

Your pension and investments are probably spread across different companies through funds. When those companies do well, your pot grows. When they struggle, it shrinks. It’s that simple.

But here’s what most people don’t realise: this up-and-down movement is actually normal and expected. It’s not a sign that something’s wrong with your pension or that you’ve made bad choices. It’s just how investing works.

The Real Impact on People Like You

Let me share what I see every day in my coaching practice. Last month, I spoke with Margaret, 63, from Manchester. She’d watched her pension pot drop by £15,000 in just two weeks and was convinced her retirement was ruined. She was ready to move everything into cash.

Here’s what I told Margaret, and what I’m telling you: short-term drops don’t destroy long-term retirement plans. By the time we had our follow-up call three weeks later, her pot had recovered £12,000 of that loss. She was incredibly relieved she hadn’t made any hasty decisions.

The Three Biggest Mistakes I See UK Pre-Retirees Make

Mistake 1: Checking Your Pension Balance Every Day Would you check the value of your house every single day? Of course not! Yet people torture themselves by logging into their pension portal daily. Stop doing this to yourself.

Mistake 2: Moving Everything to Cash When Markets Drop This is like selling your house because property prices dipped temporarily. You’re locking in losses and missing out on the recovery that usually follows.

Mistake 3: Trying to Time the Market Nobody – and I mean nobody – can consistently predict when markets will go up or down. Not even the so-called experts on TV.

Why Your Brain Works Against You (And What to Do About It)

Your brain is wired to keep you safe from immediate physical danger – like running from a lion. But this same wiring makes you terrible at investing decisions.

The Fear Factor

When you see your pension pot drop by thousands of pounds, your brain screams “DANGER!” just like it would if you were facing a physical threat. This leads to panic decisions that often make things worse.

Here’s a simple technique I teach all my clients: when you feel that panic rising, stop and ask yourself, “Am I retiring tomorrow?” If the answer is no (and for most of you, it isn’t), then today’s balance doesn’t actually matter for your retirement.

The Comparison Trap

Your neighbour brags about making money on some hot stock tip. Your friend at the golf club claims they “got out just in time” before the market dropped. These conversations make you question your own strategy.

Remember: people love to boast about their wins but rarely mention their losses. For every person who claims they timed the market perfectly, there are ten others who lost money trying to do the same thing.

Simple Strategies That Actually Work for UK Retirees

Forget complex trading strategies and fancy investment techniques. Here are the straightforward approaches that work for people in your situation:

The “Set It and Forget It” Approach

This is exactly what it sounds like. You set up your pension contributions or regular investing, choose sensible funds (usually a mix of shares and bonds), and then largely ignore the day-to-day noise.

How to do it:

1. Choose a simple, diversified fund (many pension providers offer “lifestyle” or “target date” funds that do this automatically)
2. Set up regular contributions if you’re still working
3. Check your balance no more than once every three months
4. Make adjustments only when your life circumstances change significantly

The “Pound-Cost Averaging” Magic Trick

This fancy-sounding term simply means investing the same amount regularly, regardless of whether markets are up or down. When prices are low, your money buys more. When prices are high, it buys less. Over time, this evens out.

Real Example: Let’s say you invest £500 monthly into your SIPP:

• Month 1: Markets high, you buy fewer units
• Month 2: Markets drop, you buy more units for the same £500
• Month 3: Markets recover, your extra units from Month 2 are now worth more

This happens automatically if you have regular contributions set up.

The “Sleep Test” Portfolio

Here’s my favourite test for any investment strategy: if it keeps you awake at night worrying, it’s wrong for you.

A good retirement portfolio should be boring enough that you rarely think about it, but effective enough to grow your wealth over time. For most UK pre-retirees, this means:

• A mix of UK and international shares (for growth)
• Some bonds or cash (for stability)
• Regular rebalancing (once or twice a year)
• Low fees (high fees eat into your returns)

How to Actually Profit from Market Wobbles

While everyone else is panicking, there are simple ways to use market volatility to your advantage:

The Rebalancing Opportunity

Most people set a target mix for their investments – perhaps 60% shares and 40% bonds. When markets move, this balance gets out of whack.

Smart investors rebalance by selling some of what’s gone up and buying more of what’s gone down. This forces you to “buy low, sell high” without trying to time the market.

Simple Example:

• Your target: 60% shares, 40% bonds
• After market rise: 70% shares, 30% bonds
• Rebalancing action: Sell some shares, buy some bonds
• Result: You’ve taken profits from shares and bought bonds at lower prices

The Pension Contribution Boost

If you’re still working and markets have dropped, consider temporarily increasing your pension contributions. You’re essentially buying investments “on sale.”

Many people do the opposite – they reduce contributions when markets are scary. This is exactly backwards.

The Drawdown Timing Strategy

If you’re already retired and taking money from your pension, you have options during volatile periods:

• Take less during market downturns if possible
• Take more from cash or bonds, leaving shares to recover
• Use your ISA or other savings temporarily instead of your pension

Protecting Yourself: Simple Risk Management

You don’t need complex strategies to protect your retirement. These simple approaches work:

The Emergency Fund Buffer

Keep 6-12 months of expenses in easy-access cash. This means you never have to sell investments at the wrong time to pay bills.

The Phased Retirement Approach

Instead of retiring completely overnight, consider reducing your working hours gradually. This gives your pension more time to recover from any short-term volatility while reducing your income needs.

The Multiple Pot Strategy

Don’t put all your eggs in one basket:

• Workplace pension for tax relief and employer matching
• SIPP for additional tax relief and control
• ISAs for tax-free growth and flexibility
• Some cash for immediate needs

When Market Crashes Happen: Your Action Plan

Market crashes sound scary, but they’re actually fairly predictable events that happen every few years. Here’s your simple response plan:

Immediate Actions (First 24-48 Hours)

1. Don’t check your balances obsessively
2. Avoid financial news for a few days
3. Don’t make any major decisions
4. Remember: this has happened before and markets recovered

Short-term Actions (First Month)

1. Review your timeline to retirement
2. Check if you have adequate emergency funds
3. Consider if this creates any buying opportunities
4. Speak with a coach or advisor if you’re feeling overwhelmed

Long-term Actions (After 1-3 Months)

1. Review your overall strategy
2. Rebalance if needed
3. Consider lessons learned
4. Make any necessary adjustments to your plan

Technology: Your Friend or Enemy?

Modern technology can either help or hurt your investing success:

Helpful Technology

• Automatic pension contributions
• Rebalancing services
• Simple investment apps that encourage regular investing
• Portfolio tracking tools (used sparingly)

Harmful Technology

• Day-trading apps that encourage frequent trading
• Constant price alerts and notifications
• Social media investment “advice”
• Complex trading platforms that encourage overactivity

Building Your Personal Volatility Plan

Every person’s situation is different, but here’s a framework to build your own plan:

Step 1: Know Your Timeline

• When do you plan to retire?
• When will you need to start drawing from your pension?
• How long does your money need to last?

Step 2: Understand Your Comfort Level

• How much volatility can you tolerate?
• What would keep you awake at night?
• What would make you panic and make bad decisions?

Step 3: Create Your Strategy

• Choose appropriate investments for your timeline and comfort level
• Set up automatic contributions if still working
• Decide how often you’ll review your investments
• Plan what you’ll do during market downturns

Step 4: Prepare for Turbulence

• Set up adequate emergency funds
• Create a support system (coach, advisor, trusted friend)
• Plan distractions for when markets are scary
• Write down your long-term goals to reference during tough times

Real Stories from Real People

Let me share some success stories from my coaching practice:

David, 58, from Leeds: Came to me in March 2020 when COVID crashed the markets. His pension had dropped 30% and he was terrified. We worked together to create a plan, and he stopped checking his balance daily. By the time he retired in 2023, his pension was worth more than it had ever been.

Susan, 62, from Bristol: Was constantly moving her pension between different funds, trying to avoid volatility. After our sessions, she chose a simple balanced fund and committed to leaving it alone. Three years later, she’s achieved better returns with much less stress.

The couple from Cardiff: Both 67, they were taking too much from their pensions during the 2022 market downturn. We adjusted their withdrawal strategy and used their ISAs temporarily. Their pension has since recovered, and they’re back on track for a comfortable retirement.

Common Questions I Get Asked

“Should I move my pension to cash until things settle down?” Almost never. By the time you’re comfortable moving back to investments, the recovery will likely have already happened.

“My friend says I should buy gold/Bitcoin/property instead. Should I?” Beware of anyone pushing a single solution. Diversification across different types of investments is usually safer.

“How often should I check my pension balance?” No more than quarterly. Monthly at most. Daily checking causes unnecessary stress and leads to poor decisions.

“What if I need the money soon and markets are down?” This is why emergency funds and phased retirement strategies are so important. Good planning means you’re never forced to sell at the worst time.

The Power of Having a Coach in Your Corner

Here’s what I’ve learned after helping hundreds of UK pre-retirees: the biggest difference between successful and unsuccessful retirement planning isn’t intelligence or starting wealth – it’s having someone to help you stay calm and make good decisions during uncertain times.

When markets get scary, your spouse, family, and friends often share your fears. They can’t provide the objective perspective you need. A coach who’s been through multiple market cycles can help you see the bigger picture and avoid costly mistakes.

What Good Coaching Looks Like

• Someone who listens without judgment
• Clear explanations without confusing jargon
• Strategies tailored to your specific situation
• Support during stressful market periods
• Accountability to help you stick to your plan
• Regular check-ins to adjust as life changes

Your Next Steps: Don’t Go It Alone

If you’ve read this far, you clearly care about your financial future. That’s the most important step. But caring isn’t enough – you need action.

The volatility in markets isn’t going away. In fact, it’s likely to continue throughout your retirement years. The question isn’t whether you’ll face market ups and downs – it’s whether you’ll be prepared for them.

Why a 15-Minute Chat Could Change Everything

I offer a free, no-obligation 15-minute consultation via Zoom for exactly this reason. In just 15 minutes, we can:

• Assess your current situation and biggest concerns
• Identify any immediate risks or opportunities
• Discuss simple strategies that fit your circumstances
• Determine if ongoing coaching would be valuable for you
• Give you peace of mind about your retirement plans

This isn’t a sales pitch – it’s a genuine offer to help. I know how overwhelming this can all feel, especially when you’re getting closer to retirement and feel like you’re running out of time to fix any mistakes.

What Makes This Different

Unlike financial advisors who want to sell you products, or investment platforms that profit from your trading, my only goal is to help you make better decisions about your retirement. I don’t sell investments or take commissions. My success is measured by your peace of mind and financial security.

The Bottom Line: You’re Going to Be Okay

Here’s what I want you to remember: market volatility feels scary, but it’s a normal part of building wealth for retirement. The people who succeed aren’t the ones who avoid volatility – they’re the ones who learn to live with it and even use it to their advantage.

You don’t need to become an investment expert or spend hours each day managing your money. You just need a sensible plan, the discipline to stick with it, and perhaps a coach to help you stay on track.

Your retirement dreams are still achievable. The money you’ve saved is still working for you. The volatility you’re experiencing today is temporary, but the decisions you make in response to it can affect your financial security for decades.

Don’t let fear drive you to make decisions you’ll regret later. Instead, take action to get the guidance and support you need to navigate these uncertain times with confidence.

Market volatility will continue as long as markets exist. But with the right approach and support, you can turn what feels like your biggest financial threat into just another manageable part of your journey to a secure, comfortable retirement.

Ready to take control of your financial future? Book your free 15-minute consultation today and discover how to turn market volatility from your enemy into your opportunity.

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Let’s find out if you’re truly ready—and help you get there.

Disclaimer

These insights provide strategic coaching perspectives. This is NOT regulated financial advice. Individual circumstances vary, and it is crucial to consult qualified financial professionals for specific financial guidance.

Individual cases are illustrative and not predictive of future results. Actual savings and support needs will differ based on personal financial situations.

About the Author

Paul Mitchell is a dedicated Financial and Retirement Coach (Qualified To Chartered Financial Planner status) with over 35 years of experience in financial services. Through Your Smart Retirement Coach, he helps clients build confidence in their financial future and create fulfilling retirement lifestyles. As a retirement transition coach, I’m committed to empowering investors with knowledge, perspective, and strategic support.

Book a free 15-minute consultation to start your journey toward financial clarity.