The current war in Iran could impact state pensioners in the UK, experts have warned. While the heaviest burden will fall on the Middle East and wider region, savers in Britain may also be impacted by economic volatility.

After the initial strike from the US and Israel last Friday (February 27), oil and gas prices jumped due to the importance of the Strait of Hormuz. The markets remain uncertain which has led to investors moving money between assets such as bonds, commodities and currencies. This can reflect in the retirement pots of savers as the value of the money they have invested may be affected.

As reported by The I Paper, Adam Cole, retirement specialist at Quilter, said: “The conflict in Iran has added another layer of uncertainty to markets, and pensions are feeling the effects through higher volatility and a shift in expectations for interest rates and inflation.

“Markets have moved quickly to price in a riskier global backdrop, and that influences everything from gilt yields to equity valuations, which ultimately shapes pension performance.”

Financial experts advise Brits to refrain from taking any money out of their pension pot for the timebeing. Withdrawing a fixed amount at the moment will erode savings quicker.

Clare Moffat, pensions and tax expert at Royal London, explained: “If you’re getting closer to retirement and you do notice a drop in your pension fund, you might want to think about delaying taking any money out of your pension and carrying on working for a little while.

“But that might not be an option for everyone. If your plan is to take tax-free cash and then move the rest into drawdown and take monthly income from that, being careful about how much you take out in drawdown income could be a good idea too.”

Ensure our latest news headlines always appear at the top of your Google Search by making us a Preferred Source. Click here to activate or add us as Preferred Source in your Google search settings.

Meanwhile, for those already in retirement with a fund still invested, Ed Monk, Pensions and Investment Specialist at Fidelity International, recommends temporarily reducing the amount of income taken from their pension. This will lessen the effect of market activities.

He continued: “If investors can push through the short-term downturn by doing this and benefit from an eventual recovery, there is the chance to navigate uncertainty without eating into your capital.

“Withdrawing a fixed amount in this current environment will erode savings quicker if your investments are down. If you can live off the natural yield, this may be more suitable because it won’t deplete the investment itself, and when the market does turn around, the capital will still be there.”

Most importantly, experts urge savers not to make rash decisions. They say that market turbulence caused by geopolitical crises is often short-term.