Find out why stock market dips can be good for your pension, and how to make the most of them to help your investment grow.
Women are famously much more reticent investors than men. According to research by Boring Money, only 26% of UK women invest, compared to 41% of all men. As a result, we have just £450 billion invested, while men have a total of £1.01 trillion.
This investment gap extends to pensions too. It’s estimated that 4.4 million UK women over the age of 50 have no private pension.
So why don’t more women invest? A UK study found that 73% assumed they needed to learn a great deal before they could begin investing, 67% thought it required a significant time commitment and 62% found the prospect of learning about investing overwhelming. In other research 35% of women said that stocks and shares are too risky.
But people who are avoiding investing or starting a pension because they are scared of risk are missing the point. Risk isn’t just part and parcel of investing; it’s what can make investing ultimately more profitable than cash savings.
In this article I’ll explain why cash savings can actually leave you poorer in the long term, and why the ups and downs of the stock market – rather than being something to fear – can potentially benefit your pension.
Why inflation matters when investing
When it comes to growing money, women tend to prefer cash savings over investments, like pensions. The problem with this is that, over the long term, stock-market based investments tend to do better than cash. They are also more likely to help you beat inflation.
So why is inflation important when you are saving or investing?
When moneyfactscompare.co.uk looked at the performance of cash ISAs in 2025, they found that, since 2010, cash ISAs returned just 1.79% interest on average each year. This meant that a balance of £100 in 2010 was then worth £130 – an increase of just £30.
However, the cost of goods and services had risen by 2.92% each year on average over the same time period. So something you would have bought for £100 in 2020 would have cost you £150 in 2025.
In real terms, this means your investment failed to keep up with inflation, so even though it had grown on paper, in reality you had ‘lost’ money.
Meanwhile, since 2010, the average stocks and shares ISA returned 6.79% per year (a whole five percentage points more than the average cash ISA). This means that your £100 invested in 2010 had grown to around £230 – £100 more than with a cash ISA. Your stocks and shares ISA beat inflation as well, so in real terms you were better off too.
Fidelity also found that at every rolling 10-year period between 1988 and 2025, “someone investing in UK stocks would have beaten inflation 95% of the time, compared with just 58% of times for someone saving in cash”.
Given that women prefer cash ISAs (we paid into 56% of them, compared to only 42% of stocks and shares ISAs) it’s us who are more likely to get poorer year-on year as a result.
Why fears of stock market dips are often unfounded
So why aren’t more women investing? Research by HSBC discovered that 19% of women are put off investing because they believe it’s too risky, and 60% believe they will lose money.
But as you can see from the numbers above, this lack of confidence is often unfounded. While no one can predict the future, or the performance of the stock markets, and there are no guarantees your money will grow, history shows us that over the long term, investing in the stock market can often be a wiser option than placing your money in cash savings accounts.
As an example, between September 2003 and July 2026, the FTSE All-World index enjoyed a compound annual growth rate of 9.64% – a far higher return than you’d have got from a cash ISA.
That’s not to say the markets enjoyed steady growth during that time; in fact, the market was subject to several significant dips. As we cover here, in the last six years alone we’ve seen at least three big worldwide crashes: 2020 (Coronavirus lockdowns), 2022 (stock market decline), and 2025 (when Trump announced tariffs).
However, after each of these dips, the market recovered. Here’s a snapshot of my own stocks and shares ISA in 2025:
You can see the dip in March/April 2025 when Trump announced tariffs. But by July the market had recovered, and by August my account was in profit, and continued to climb.
A history of the stock market crashes confirms this general pattern. One of the biggest drops was the Black Monday crash of 19 October 1987, when the Dow Jones Industrial Average plunged almost 22% in a day. However, the Dow started rebounding in November of that year, and had recouped all its losses by September 1989.
Why dips in the stock market can actually be GOOD for your pension
When you invest for the long term, dips aren’t usually worrying as you have plenty of time to wait for the market to recover. This can happen quite quickly, as my example above shows, or it can take a few years, but so far the market has always recovered eventually. It’s even reached new record highs afterwards.
In 2020, the S&P 500 (a stock market index tracking the stock performance of 500 companies listed on stock exchanges in the United States) lost almost 30% of its value in about three weeks. However, within just eight weeks it had completely recovered, and it’s gained 240% since then. That’s why, according to Yahoo!Finance you’re often best advised to hold your nerve in a stock market crash, and even to keep buying.
As an investor, dips in the market can actually create opportunity as, if you are buying at that time, you’ll get more shares for your money. Then, once the market climbs again, those shares should be worth more.
And this is where it can help your pension. Often pensions are long term investments; we don’t expect to draw down the money for years, if not decades. This allows you to ride out the ups and downs of the stock market, and take advantage of buying when prices are low.
Try not to panic about dips in the market
The only time a dip in the stock market usually matters for your investment is when you want or need to withdraw money, as you are crystallising it at a low price. But if you’re still investing into your pension, and plan to keep the money there for a few years, a dip in the market shouldn’t be too worrying.
So try not to panic if the market experiences ups and downs. In fact, as a rule, I don’t even check the performance of my pension and investments, aside from an annual review. I trust that I have chosen the right funds and platforms for me, and I just let them do what they need.
And the good news (especially for women) is this long term view can actually help. Analysis by Fidelity International found that when women do invest in stocks and shares, we do better than men: over three years Fidelity’s female investors recorded cumulative returns of 50%, compared with 47% for men. One suggested reason for this comes from Barclays data, which shows that women tend to have a more patient, longer term view, and trade less frequently than men.
So don’t be afraid of the stock market. You don’t need to be an investing expert to grow a pension. I’m not, and I have built a pension worth over £580,000 in less than eight years. You just need to find a good pension to invest in, and leave your money to grow.
Please note, this article should not be taken as financial advice. As with any investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest.
Why stock market dips can be GOOD for your pension
Why stock market dips can be GOOD for your pension
