Stock market meltdown: how to manage market turmoil

Although it might be tempting to sell your investments or cash in your pension to try to limit your losses, experts advise against making any panic decisions, as these could potentially leave you even worse off.

Free guide from Hargreaves Lansdown - Improve the way you pick shares

Free guide from Hargreaves Lansdown - Responsible investments

Lily Megson, policy director at My Pension Expert said: “With most pensions and investments tied to market performance, periods of turbulence can impact their value. But it’s important to remember that pensions are built for the long term, and short-term volatility is part of the journey. Often, the bigger risk lies not in the markets themselves, but in how we respond to them.

“Reacting in the moment, whether by switching investments or withdrawing large amounts, can lock in losses and undermine future financial security. Instead, it is important to take stock. Check that your investment strategy still supports your retirement goals, revisit your withdrawal plans, and speak to a financial adviser if you’re unsure.”

The fact that markets rose briefly on Monday afternoon amid rumours that President Trump was considering a 90-day tariff pause on all countries except China shows how quickly markets can change when the news is looking more positive.

Dan Coatsworth, investment analyst at AJ Bell said: ““These trends offer a glimmer of hope that we might be near the bottom of the sell-off, although it’s impossible to say with any certainty.

“What happens to markets next could be dictated by negotiations between the US and those on the receiving end of tariffs. The European Union looks to be going down the path of tariff talks rather than retaliating and that calmer approach might be the tonic markets need.”

If economic growth suffers due to the introduction of tariffs stifling global trade, we may see interest rates cut faster. Three rate cuts rather than two are now expected this year, which would mean the base rate could reach 3.75% by the end of 2025, resulting in lower mortgage rates for homeowners and buyers.

Sarah Coles, head of personal finance at Hargreaves Lansdown said “The money markets are expecting interest rates in the UK to fall faster than they’d previously predicted, as worries about growth eclipse inflation concerns. It means swap rates have dropped, which should feed through into lower fixed rate mortgages in the coming days. These have already edged down since the start of 2025, and are likely to continue to do so.

“The uncertainty means that if you have a remortgage looming, it’s well worth shopping around for a deal as early as possible. If rates rise between now and when you need to remortgage, you’ll have locked in a cheaper deal, and if they fall, you can track down something more competitive.”

Free guide from Hargreaves Lansdown - Improve the way you pick shares

Free guide from Hargreaves Lansdown - Responsible investments