If you’ve been keeping up with the news recently, you’ll likely know that global economic growth is under increasing pressure.

In February 2025, the Bank of England halved its forecast for UK growth this year from 1.5% to just 0.75%, the BBC reports.

Meanwhile, the Guardian reveals that US Gross Domestic Product (GDP) shrank by 0.3% in the first quarter of 2025, partly due to uncertainty surrounding Donald Trump’s questionable economic policy.

GDP – which reflects a nation’s total economic output – remains a key measure of financial health. It indicates how much a country produces and whether its economy is growing or contracting.

Two consecutive quarters of negative GDP growth usually signal the start of a recession, a time when incomes tend to fall, the job market is weaker, and – crucially, if you’re planning to retire soon – potential market turbulence occurs.

Several financial organisations seem to take this risk seriously, too.

Indeed, the International Monetary Fund (IMF) recently increased the probability of a global recession from 17% to 30%, while JP Morgan has placed chances even higher at 60%.

Whether a recession actually occurs or not, this could be a sensible moment to consider how prepared you are.

If you’re approaching retirement, the next few years might seem especially uncertain, but you can take several proactive steps to recession-proof your plans. Continue reading to discover four ways of doing so.

1. Assess your current finances

Now could be the ideal time to assess your overall financial health. Even if you already have a retirement plan in place, it’s important to remember that it should evolve as your circumstances change and new challenges, such as the threat of a recession, emerge.

You could start by reviewing your monthly spending, and in doing so, you may identify non-essential costs you could cut back.

Even small reductions can add up, freeing up extra wealth to act as a helpful buffer during times of economic uncertainty.

It might also be prudent to address any outstanding unsecured debt. High-interest debt – such as that from credit cards and overdrafts – can quickly snowball and drain your financial and mental wellbeing.

Clearing these, where possible, could free up funds to act as a financial cushion during any potential global recession.

2. Review the investments in your pension

As markets tend to respond to economic uncertainty, you may find that the value of any investments held within your pension fluctuates more than usual.

While this volatility can be unsettling, it’s vital to remain calm and maintain a long-term view.

Still, it could be wise to review your pension investments now, as doing so could help you feel more confident.

One area to assess is your diversification. If your pension portfolio is spread across various asset classes, sectors, and geographical areas, it might be more likely to withstand periods of downturn in specific areas.

You essentially reduce the risk of being overexposed to any given part of the market, which is especially valuable during a recession.

It’s also worth taking a look at your current risk profile. As retirement draws closer, you may want to think about reducing your exposure to higher-risk investments. Or, you could ensure that your investments still reflect your appetite for risk and your time frame for drawing an income.

3. Maintain a financial safety net in retirement

A financial safety net in the form of an emergency fund is helpful at the best of times, and could be even more so during a recession.

Generally, it’s worth setting aside between three and six months’ worth of essential household expenses in an easy access savings account.

This could protect you from unexpected costs without having to access funds ringfenced for other purposes.

If you’re already retired, it might be prudent to save more, potentially between one and two years of expenses.

Doing so could mean that you don’t have to sell investments at a time when their value is temporarily lower due to recession.

You won’t have to deplete your savings as quick, either, and you will be less likely to be subject to “sequence risk”, when the timing of retirement withdrawals negatively affects your overall returns.

Protection might also be practical, especially critical illness cover. This form of cover pays a tax-free lump sum if you’re diagnosed with a serious condition covered by your provider.

This might allow you to fund your recovery without prematurely exhausting your retirement fund, all while offering some peace of mind at an already challenging financial time.

4. Book a meeting to review your retirement plan

It’s entirely understandable to feel anxious when the media is constantly discussing reports of economic slowdown and market uncertainty. Even the word “recession” might be enough to spark fear.

Yet, staying calm and focused on your long-term plan is essential, and this is where working with a professional can help.

A review with your financial planner could provide the ideal opportunity to step back and assess how your retirement plans hold up to various scenarios.

Your planner could walk you through some of the potential risks, and help you identify whether any adjustments are needed. This might involve rebalancing your investments, assessing your budget, or even ensuring that your financial safety net is adequate.

With a clearer picture of your finances, you could move forward with greater clarity and confidence, even if a global recession does materialise.

Please get in touch with us today if you’d like some support.

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts. 

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

Barrington Hamilton is not responsible for the accuracy of the information contained within linked sites.