Millions UK pension savers could be at risk from | European Markets

Tens of millions of pension savers may risk important losses of their retirement pots after a sharp downturn within the US tech sector sparked international market instability, analysts warn.

The downturn was triggered by the emergence of a new Chinese language Synthetic Intelligence (AI) firm, which despatched tech shares plunging on Monday, raising issues about a potential knock-on impact on pensions closely tied to the sector.

Nigel Inexperienced, CEO of the financial advisory and asset management company deVere Group, warned: “The sharp declines in the S&P 500 and other tech-heavy indices present a significant challenge for UK pension funds, many of which have considerable exposure to US equities – particularly in the tech sector.”

The Chinese language firm, DeepSeek, claimed to have developed a low-cost AI model for simply $6million (£4.8million). This considerably undercuts the billions spent by opponents like OpenAI, which depend on superior Nvidia laptop chips to coach its systems.

The announcement triggered a dramatic sell-off in US tech shares, with Nvidia dropping 17% of its worth. This wiped a staggering $500billion (£473billion) from its market capitalisation, marking the biggest single-day loss in Wall Avenue historical past. Different tech giants, together with Microsoft, Alphabet, and Apple, additionally suffered sharp declines, amplifying fears of instability within the sector.

Mr Inexperienced stated: “The sector has long been a key driver of returns, with pension funds benefiting from the dominance of US giants such as Apple, Alphabet, and Microsoft.

“However, with mounting pressure from new competitors like DeepSeek and broader market uncertainty, these stocks are now facing volatility that could impact long-term pension growth.”

UK pension funds are usually diversified to minimise publicity to sector-specific dangers, which helps shield in opposition to shocks. Nonetheless, the size of the influence on tech shares raises issues.

Nvidia, the market chief in AI chip manufacturing, bore the brunt of the downturn, however the broader tech sector, together with the NASDAQ and S&P 500 indices, noticed declines of 3% and 1.5%, respectively.

Mr Inexperienced stated: “UK pension funds are deeply built-in into international markets, and a sustained sell-off in US tech may erode the worth of pension investments, probably resulting in decrease returns for thousands and thousands of savers.”

Simon Heath, associate at UK investment firm Heligan Group, stated: “Despite the recent pricing correction in US technology stocks, they continue to feel overvalued, priced off future growth rather than current cash conversion.

“Could DeepSeek’s impact on the AI sector have wider implications on technology pricing? Yes, there is likely to be further pricing correction across the wider technology sector, particularly in the US.”

Mr Heath urged pension savers to review their portfolios. He stated: “Any pension savers that are concerned around recent events in the US stock market should speak with their pension provider or IFA to understand how exposed they are to the technology sector and evaluate their risk profile to this sector given the bull market can’t last forever.”