Britons are being warned to expect a “reduction in retirement income by up to 20 per cent” as markets struggle to navigate the current global trade war.
President Donald Trump’s new import taxes on goods from almost every country have triggered significant economic turbulence across global markets.
The financial shockwaves have reached the UK, raising concerns among pension holders about the security of their retirement savings.
In response, The Society of Pension Professionals (SPP) has produced an informational paper to address these concerns from the British public.
Trump’s tariffs are set to slash retirement incomes by 20 per cent
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The report aims to clarify how the market volatility since early April 2025 might affect different types of pension holders in Britain.
Based on the SPP’s findings, the tariffs are concerning news for those with Defined Contribution (DC) pensions.
“Given the scale of the equity market falls since early April 2025, and the fall in government bond yields, it is possible that some DC savers may see a reduction in retirement income of up to 20 per cent,” the report states.
However, the report offers reassurance for those with Defined Benefit pensions. Millions of people in DB schemes, including Local Government Pension Schemes, are likely to be largely unaffected by the market turbulence.
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Britons are worried about their pension savings GETTY Similarly, those who rely solely on the state pension should not see significant impacts from the current financial situation.
The SPP’s Investment Committee Chair, Simon Daniel, offered clear advice for worried pension holders.
“The world is again enduring a period of financial turbulence and this has naturally created some uncertainty for UK savers and investors,” he said.
He emphasised that reactive decisions could be counterproductive.
“The overall message from this paper is that making significant, reactive changes to pensions and other savings is generally not ideal compared with keeping a cool head and planning carefully.”
Steve Dunne, PhD Researcher & Associate Tutor at The University of Warwick, previously gave a damning verdict on Trump’s handling of the economy.
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Donald Trump has made tariffs the focus of his economic a
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He explained: “Across the opening 100 days of his second term, Trump has devastated – perhaps irreparably – economic confidence in the US.
“In the short term, decreased economic trust will prolong market volatility. April 3-4 saw the largest-ever two-day loss, as US$6.6trillion (£5trillion) was erased from US stocks. Trump’s tariffs are also expected to depress growth, both at home and abroad.
“In the longer-term, diminished economic trust will continue to weaken bond markets, hampering America’s ability to service its colossal national debt.
“Perhaps most significantly, declining global trust will accelerate processes of de-dollarisation and reduce reliance on the dollar as a reserve currency. De-dollarisation would leave the US economically marginalised in a more multipolar global economy.”
