Coronavirus: Canada Life Pensions and Investments Q&A


Should I be concerned about my investments?

The coronavirus pandemic is unsettling and challenging for anyone with money invested in shares or bonds, whether these are held in a pension, an investment bond, an ISA or elsewhere. Global markets have experienced significant falls in value, and this is affecting pensions and investments. Whilst this can be distressing, it is sensible to view the current circumstances, which are likely to be temporary, in a longer term context. Above all it is important not to take action or make changes to your investments unless these have been carefully considered. If you are unsure about what you should do, please speak to your financial adviser.

Why have my investments decreased in value?

With any investment, the aim is increase value, or at least preserve it. However, the value of an investment can go down. This means you may get less back from your investment than you put in. The ongoing disruption and uncertainty surrounding the coronavirus pandemic has had a significant impact on markets around the world. There have been substantial falls given the overall negative effect on the global economy. As such, the elements which make up your investment, such as stocks, property and bonds may have reduced in value. We have seen falls like this before, for example during the Global Financial Crisis.

Should I be worried about my investments in the longer term?

The impact of coronavirus seems likely to affect markets for a number of months to come and we continue to see increased market volatility (rapid rises and falls in value). While it is clearly unsettling to see investments fall, it is important to remember that historically markets have risen over the long-term, typically ten years. Therefore, time should be given to allow for recovery from short-term losses. If you are concerned you should talk to your financial adviser.

Should I stop contributions into my pensions or regular savings bonds?

Remember that an investment of any kind should be for the long-term. Historically, we have seen that markets do recover after a downturn. Over the long-term, being invested in the market, rather than for example moving into cash, provides opportunity for growth. When the market is low, asset values will be relatively cheap. Therefore, when you invest you are buying more for your money. This is likely to increase any gain in your overall portfolio when prices begin to move upwards. As a rule, the more you pay into your pensions and savings, the more you will have when you retire.

How is Canada Life positioned to weather the current economic crisis?

Canada Life UK sits within a very strong and well-diversified group of global businesses. We have a healthy capital base, robust risk frameworks and processes embedded in our business, with an investment portfolio spread across asset classes and industry sectors which allows us to navigate through this market disruption. We were established in the UK in 1903, and have worked through many global financial challenges since then.

I invest in CanLife funds - is my money invested in the right place?

Most financial experts agree that investing across a range of different asset classes is the safest way to invest over the long-term (this is called ‘diversification’). Our active investment managers are constantly monitoring their funds to ensure that underperforming stocks are avoided as much as possible and high quality assets and attractive valuations identified. With over 50 investment professionals who have an average of ten years’ time at Canada Life Investments, we have vast experience and expertise to look after your money. If you’re invested in the LF Canlife Portfolio Funds, your investments will be periodically rebalanced to suit your appetite for risk. If the current climate has prompted this to change, please talk to your financial adviser.

Insured and Non-insured funds in The Retirement Account - Are my policies protected?

Insured funds

Our insurance policies are covered by the Financial Services Compensation Scheme (FSCS) which was set up to provide protection to customers if authorised financial services firms are unable to meet claims against them. This means that 100% of the value of your insurance policy should be covered by the FSCS in the event that Canada Life UK couldn’t pay your claim. However, if any underlying fund manager was unable to meet its claims, this would not be covered by the FSCS, so the value of your insurance policy would depend on the amount we could recover from the fund manager. For more information please click here.

Non-insured funds

If a fund manager was unable to meet claims against them, The Retirement Account trustee would make a claim on your behalf and the Financial Services Compensation Scheme would cover a claim of up to £85,000 in respect of the affected fund. For more information please click here.

Canada Life International (Isle of Man)

Canada Life International (CLI) remains one of the leading international providers. Should it become insolvent policyholders of CLI policies will be protected by Isle of Man Assurance (Compensation of Policyholders) Regulations 1991. For more information please click here.

Canada Life International Assurance (Ireland)

There is no formal insurance policyholder protection compensation scheme to cover entities operating in Ireland. However, there are comprehensive regulatory measures in place to protect all policyholders of a company such as Canada Life International Assurance Ireland in the event that the company is unable to meet its financial commitments. For more information please click here.

Should I be taking action when the markets go up or down?

In times of increased market volatility you should speak to your financial adviser. It is tempting to pull your money out of investments when the markets drop. However, you would then be likely to miss out when the value goes back up again, which history has proven will happen at some point.

How can I protect myself against financial scams?

Unfortunately during this challenging and unsettling period, we have seen dishonest individuals attempt to profit from investors’ uncertainties over their money. These scams can appear legitimate and often promise to provide a superior service at a reduced price, offer ‘free’ incentives or guarantee returns. The Financial Conduct Authority (FCA), the Pensions Regulator, and the Money and Pensions Service have issued a joint statement warning people not to make rash monetary decisions as a result of the Coronavirus pandemic. To avoid being scammed people should ignore unexpected or unsolicited approaches and check firms are authorised using the FCA register.

Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.

Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised and regulated by the Financial Conduct Authority.