How can savers and borrowers deal with market turmoil?

While individuals may worry about the impact on their personal finances during times of economic unrest, it’s important to stay calm and not make any knee-jerk reactions.

As the fallout continues after US President, Donald Trump, announced a host of tariffs on imports into the US from different countries, including the UK, there has been a lot of speculation and concern about how this will affect individuals and their personal finances.

Many will be worried about the state of their pension pots and investments amid the turbulence in the stock markets, while those planning to take out a mortgage may be more optimistic as several mortgage lenders have started to cut fixed rates due to changes in swap rates.

But, regardless of how the situation unfolds, it’s important to remember that markets can bounce back and recover from periods of turmoil.

For example, Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, reminds us that “five years ago, the COVID-19 pandemic and UK lockdown set in motion an unprecedented situation for consumers” which “caused havoc for lenders and savings providers”.

“Whether someone was buying a home or saving a pot for their future goals, the years that ensued were challenging to say the least,” she recalled.

Changes in the savings market

In the first weeks of the pandemic, the number of savings accounts (including cash ISAs) on the market dropped from 1,768 (1 March 2020) to 1,548 (1 May 2020), according to analysis by Moneyfactscompare.co.uk. The number of deals then dropped to a record low of 1,340 in April 2021.

It took more than two years for savings product choice to recover, reaching 1,816 deals in April 2023.

At the same time, savers were having to contend with low interest rates after the Bank of England cut the base rate to a record low of 0.10%, as well as high inflation in 2022 and into 2023.

“Regardless of the type of savings account consumers sought, product choice felt the shocks of the worldwide pandemic and, as time moved on to 2022, savers watched their pots lose value in real terms, as inflation soared (11.1% CPI for October 2022),” Springall commented.

The situation may have looked bleak for savers during these years, but the savings market has more than recovered with 2,191 savings accounts on the market on 1 April 2025, including a record 611 cash ISAs.

And, with many types of savings accounts and ISAs offering inflation-beating returns, there are plenty of attractive options for savers, depending on their goals and preferences.

“Savers may change their behaviours in times of turmoil, such as moving money out of an easy access account and reinvesting it into a fixed rate bond. Fixed rate bonds provide a guaranteed return, so they continue to be a haven for savers’ cash, weathering the storm of fluctuating interest rates,” Springall explained.

Mortgage volatility

The pandemic also had a major impact on the mortgage market, with the number of available deals more than halving between 1 March 2020 (5,222) and 1 May 2020 (2,566). This particularly affected borrowers with low deposits as many lenders reduced their activity in this area to try to minimise risk.

While the market gradually recovered, with product choice going back over 5,000 in November 2021 (5,156), the “mini-Budget” on 23 September 2022 dealt another unexpected blow and prompted yet more turmoil.

Once again, the number of mortgage products available plummeted, falling from 3,890 in September 2022 to 2,258 in October 2022.

But, just six months later, product choice rose back to above 5,000, showing how quickly the market can adjust and recover to different events.

Meanwhile, as of 1 April 2025, borrowers have more than 6,870 deals to choose from.

“There is an abundance of choice for mortgage borrowers, and there is a big expectation for lenders to do more to stimulate UK growth. The positive recovery in mortgage choice comes after a dramatic five years of ups and downs,” Springall commented.

With so many deals to choose from and with the current volatility in the market, if you’re planning to apply for a mortgage, it may be worth speaking to a mortgage broker to help you find the right deal for your individual situation.

Responding to turmoil

When the economy and financial markets are in turmoil, it’s important for individuals to focus on what they can control and think carefully before making any drastic changes.

For example, if you have investments in a pension or stocks and shares ISA, remember that dips aren’t unusual. Investing is designed to be a long-term strategy so, if your pot has dropped in value in recent weeks, try not to worry as your investments could recover and grow in value over the coming months and years.

“As consumers fear for their investments and pension pots over stock market turmoil, it’s important they take time to seek advice and ensure they are comfortable with their future goals so that they do not make any knee-jerk reactions they might come to regret later down the line,” Springall urged.

If you’re worried about your investments and financial situation, it’s a good idea to get professional advice before taking any form of action. An adviser will be able to discuss your individual situation, goals and requirements to help you make the right decision for you.