How will the economy impact your pension with SNPS? How does the coronavirus pandemic influence both stock markets and your pension? We clarify the developments over the last 3 months.
Over the last 3 months of 2020, high risk investment categories such as equities achieved very high returns. November was the best month for equities in decades and December also ended with a positive result.
In December it became clear once again that investors are mainly looking to the future. With the arrival of several different vaccines and the start of the first vaccination programmes in various western countries, the future looks promising. Having said that, there are now great concerns about the British variant of the virus.
Coronavirus aid for countries in crisis is unprecedented. Due to the measures taken against the virus, many countries are 'in lockdown'. Lots of shops are closed, people can't go to work and companies are facing huge losses. In order to pull these companies through the crisis, governments all over the world have pumped billions of euros into their economies, even in the last 3 months of the year.
The European Union and the United Kingdom have finally reached an agreement on the Brexit. The leaders of the countries involved have been discussing this issue for years and they have now finally come to an agreement. All agreements are contained in a huge paper stack of more than 2,000 pages. The agreements apply from 1 January onwards and are of major importance. Thanks to these agreements, European countries can continue to cooperate well with the United Kingdom. However, trade barriers are on the increase and there are still many open ends. For example, little has been agreed on the mutual trade in services. Negotiations on this issue will take place in the coming months.
We look back on a turbulent year. A year in which the coronavirus dominated the news. The virus was responsible for the largest post-war crisis in the Netherlands. This resulted in major price movements, especially for high-risk investment categories such as shares. But ultimately, most investment categories ended the year on a positive note. Course stability and keeping an eye on the longer term paid off. It is not just the return on investments that matters for the size of your pension.
The interest rate is another important factor. Low interest rates, as we have known for years, make pensions more expensive. When interest rates are low, less pension can be purchased than with high interest rates. Interest rates were already low at the beginning of 2020, but have fallen even further during the year. That is generally an unfavourable development for pension funds. To a large extent SNPS hedges the interest rate risk both for participants who are about to retire and for pensioners. Because the interest rate risks are mostly hedged, the negative effect of the interest rate decrease in 2020 has been cushioned.
You will receive a value overview in my-Shell pension every quarter. In the value overview you can see how your pension is doing at that time. Under "How your pension capital is developing" you will find a graph that clearly shows how your pension capital is developing. This allows you to make even better choices for your risk profile.