UK insurers must engage with investment clients about full impact of COVID-19

The COVID-19 pandemic has shocked financial markets around the world and survey data from GlobalData, a leading data and analytics company, reveals that personal pension holders may be unaware of the scale of the damage already caused.

GlobalData’s 2019 UK Life & Pensions Survey indicates that a staggering 30% of UK respondents with a SIPP (self-investment personal pension) do not know what investments are included within their portfolio.

Findings from GlobalData’s research also indicate that 29% of those with a SIPP are invested in shares. Clearly, these individuals will have been impacted by the recent market falls and increased volatility caused by COVID-19. Therefore, nearly a third of SIPP holders are extremely vulnerable to significant losses in recent weeks, and would surely benefit from information from insurers.

Daniel Pearce, Senior Insurance Analyst at GlobalData, comments: “The industry should look to help ease concerns relating to investment choices. This is particularly important given that a fifth of individuals only check their SIPP once a month and the impact of COVID-19 on the global economy is changing rapidly.”

In the longer term, the expected economic downturn will impact SIPP holders with commercial property investments. GlobalData research indicates that one in 10 SIPP holders are invested in commercial property, meaning they are exposed to the fallout an economic recession will bring.

Pearce concludes: “During these challenging times, SIPP providers must engage with clients about the impact COVID-19 is having on their investments and keep them up to date about the value of their SIPP.”

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