How does it affect me if share prices fall?

Timing is more critical for those at retirement age, as this may be when a retiree uses their pension pot to buy a retirement income, or annuity. The bigger the pot, the more income they will get in retirement.

As you approach retirement age, pension pots tend to be moved to less risky investments, such as government bonds. When stock markets fall, these bonds can do better.

Anyone who has a pension pot invested and is taking an income from it will again see their investment go up and down with the stock markets.

That could mean getting less than you expected if you cash in too much after stock markets have fallen, making it important to plan how to make up any of this shortfall, experts say.