Accumulating the wealth you need to support a comfortable lifestyle in retirement could take years of work and careful planning.
Yet, the unpredictability of financial markets could disrupt even the best-laid retirement plans. Indeed, with increasing geopolitical uncertainty and costs of living continuing to climb, the first quarter of 2026 has been anything but smooth for investors.
One of the key principles of investing is that you should do so with a long-term view, as this can help you to ride out the market’s natural trend to fall and rise. History has shown that, over time, markets tend to recover, often seeing the greatest gains immediately after sharp drops.
Unfortunately, if you’re retired or approaching retirement, you may need to access your investments while markets are volatile, and this could lead you to sell at a loss.
Keep reading to discover three strategic steps you could take to safeguard your retirement savings from market volatility.
1. Diversify your investment portfolio
Diversifying your investments can help minimise the risk of volatile markets negatively affecting your portfolio – for example, you could invest across different:
- Asset classes
- Geographical locations
- Sectors and industries.
While a diversified portfolio doesn’t automatically guarantee that you’ll be protected from losses, it can help to lower your risk. For instance, if one geographical region underperforms, another could make gains that counteract this loss.
If you’re concerned about the effects of market fluctuations on your investments, please get in touch. We’ll help ensure your portfolio is diversified in line with your investment time frame, your tolerance for risk, and your financial goals.
2. Invest for income
Adding fixed-income investments, such as bonds and gilts, and dividend-paying shares to your portfolio could provide a valuable additional income stream during periods of uncertainty.
This allows you to leave your principal investments untouched, giving greater opportunity for your portfolio to continue to benefit from potential growth.
Fixed-income investments
Fixed-income investments, such as bonds and gilts, pay out regular returns as income. If you buy a bond, you’re effectively loaning money to a company or government.
The rate of interest you receive annually remains the same for the entire term of the bond, and when your investment “matures”, you’ll be repaid your original investment. So, bonds and gilts could provide a relatively “safe” way to build a steady income from your investments.
Indeed, bonds are considered to be lower risk than other types of investments, such as equities.
However, there are often strict timelines you must adhere to. If you withdraw money before the end of a fixed-term bond, you could face penalties. Also, over time, the real-term value of your bond could be eroded by inflation.
Dividend-paying shares
Dividends are the percentage of a company’s earnings that are paid to shareholders as their share of the profits.
Payments are typically made several times a year to all shareholders, and you can either take these as income or reinvest them into additional shares. The amount you’ll receive will depend on how many shares you hold.
Income you receive from dividends could be valuable in retirement, especially in volatile markets, as you can still receive dividends even if share values are moving unpredictably.
It’s important to note that shares usually represent a higher-risk investment than bonds and gilts. Plus, dividends aren’t guaranteed – some companies might pause dividend payments if they face financial difficulties.
There may also be tax implications for receiving dividends; this will depend on how much you make, your tax status, and where you live.
3. Buy an annuity
The beauty of an annuity is that it is designed to provide a guaranteed income, usually for life.
By using a lump sum from your pension savings to buy an annuity, you could reduce the risk of having to sell valuable investment assets during market downturns.
Because the income from an annuity is usually fixed, it not only provides valuable peace of mind, but you’ll also know you have a reliable income throughout your retirement, regardless of what might happen to stock markets.
With many types of annuities to choose from, we can help you choose a product that suits your specific circumstances and retirement goals.
Read more: Everything you need to know about annuities when creating a retirement income
It’s worth bearing in mind that annuities are not suitable for everyone. Once you’ve bought an annuity, you can’t change your mind. You’ll also miss out on any potential future growth your lump sum might have benefited from, had you left it in your pension.
If you’d like to explore your retirement income options or are thinking about taking out an annuity, please get in touch.
Get in touch
We can help you review and adjust your retirement savings plan regularly to ensure you stay on course to achieve your goals, even during volatile periods.
If you’d like to learn more about how we can help give you peace of mind and boost your confidence in your financial future, please email enquiries@alexanderpeter.com or call us on +44 1689 493455.
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.
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.
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