26th October 2022
Current market situation and what’s happened to your Defined Contribution (DC) pension pot
During 2022, and especially over the past few weeks, we have seen some large falls in equity and bond markets.
If you’re invested in the GSK Inflation Linked Pre-Retirement Fund and planning to retire, it’s important not to rush into decisions regarding changing your investments or withdrawing pension savings, particularly during times of market turbulence as we are currently experiencing.
If you are unsure what action (if any) to take, we recommend you take impartial financial advice.
Unusual times
Investment markets are experiencing a period of heightened uncertainty due to a number of factors including the invasion of Ukraine by Russia, rising inflation and interest rates, and more recently the UK Government’s ‘mini-Budget’ and subsequent policy announcements.
In the past, UK government bonds haven’t changed much in value over a short period. However, the unusually sharp rise in interest rates we have seen globally during 2022 so far, including in the UK, has led to an unusually sharp fall in government bond prices.
What is the GSK Inflation Linked Pre-Retirement Fund?
It’s a fund specifically designed to track the price of an inflation-linked annuity.
It’s used as both as a self-select option and within the later stages of the GSK Lifecycle Pension Option and the GSK Lifecycle (pre-2014) Option.
Why has this fund fallen in value during 2022?
The fund mostly invests in UK government and corporate bonds. The significant falls in bond prices has led to a fall in the fund performance.
Annuity prices have also fallen, so if you were invested in this fund and planning to buy an annuity, you may still be on track with your retirement plans.
What if I don’t want to buy an annuity?
If you’re invested in this fund and didn’t intend to buy an annuity, you may need to review your retirement plans.
Before making any decisions, we recommend you seek regulated financial advice. For more help on how to find a local adviser, you can visit the MoneyHelper website. You should confirm the adviser’s charges and areas of expertise before appointing them.
You can change your investments and instructions for future contributions at any time through your online account. If you are employed by GSK, you can access the Plan website via Total Reward online. If you are no longer employed by GSK, you can access the Plan website at https://epa.towerswatson.com/accounts/gsk/.
Where can I get more information?
For more information on the investment options available to you, please refer to the DC section of the Plan website.
If you have any questions or require any further information, please contact the GSK Pension Plan helpline on 01737 227563 or email at GSKpensions@willistowerswatson.com.
On behalf of the Trustee of the GSK pension plans
October 2022
Jargon buster
‘Annuity’ is an income for life, typically purchased from an insurance company.
‘Inflation-linked’ means the value of that income for life increases in line with inflation.
Important Notice
This update does not constitute investment advice. The Trustee is unable to offer advice as to whether any other funds are appropriate for you and would recommend that you seek impartial financial advice. The type of investments you may want to hold depends upon your personal circumstances. Past performance is not a guarantee of future performance and the value of investments, including funds, can go down as well as up.