How to protect your pension income

The last few weeks have demonstrated the downside of "pensions freedoms": the risk of your retirement capital vanishing. Merryn Somerset Webb explains how to avoid losing it all.

Let's travel back in time say, ten years. You're a pensioner. You're on your summer holidays, perhaps in a caravan park on a particularly gorgeous part of the coastline in the west of Scotland. You pick up a newspaper. You see that global stockmarkets are in total disarray. Even the FTSE 100 is down 10%. What do you do?

The answer, I suspect, is nothing much. You either have a defined-benefit pension (you are getting paid a percentage of your final salary, inflation-linked, forever), or you have handed over all your savings in return for an annuity that will pay you an income for life. You might have some bits and bobs in the market, but overall where share prices go or don't go is entirely by the bye to your enjoyment of your holiday. Which is nice.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.