What stock market fall could mean for prices, jobs, pensions and mortgages (2025)

As financial markets across the world continue to react to the US tariffs announcement here is what it could mean for prices, jobs savings, pensions and interest rates

The stock market has suffered major drops across the world after new tariffs were unveiled by Trump - but what does this mean for you and your money?

New increased trade tariffs were unveiled by Trump on Wednesday, April 2, affecting imports to the US and forming a major part of his government's new trade policy.

By increasing the taxes charged on goods bought from other countries, Trump hopes to encourage US consumers to buy more American-made goods, therefore increasing the overall amount of tax raised and leading to higher levels of investment in the country.

Mr Trump announced a minimum 10% tariff, affecting the UK, but up to more than 50% in other countries. Chinese imports to the US will be subject to a 54% tariff after Trump revealed a further 34% on top of an existing 20%.

Overnight on Monday the UK's FTSE 100 dropped by 5% after the markets reopened following Trump's tariffs, taking the stock market index to a one-year low as fears deepen over the global impact of Donald Trump’s tariffs.

Similar drops have been seen in other countries including Germany where the Dax index recording a drop of about 6.5%, and France’s Cac 40 went down around 5.3%. These drops are the largest and fastest declines we have seen in world markets since the panic of Covid-19 in early 2020.

But now, analysts have warned that the scale of disruption in global financial markets is one of the worst to be felt in decades.

Aaron Peake, Personal Finance Expert at CredAbility, said that people may not notice an immediate impact on their money in the short term, although they might spot their pension pot or stocks shrinking.

He said: “Most people won’t see a sudden change in their day-to-day just because the stock market has dipped. But if you’ve got a pension, stocks and shares ISA, or other investment, you might notice your pot shrinking. That can be worrying, especially if you’re close to retirement and don’t have time to ride out the ups and downs.

"There’s also a knock-on effect for people working in finance or industries that rely on investment. If businesses start to feel the pinch, they may pause hiring, scale back on bonuses, or delay pay rises.”

Here is how the fall in the stock market could impact your day-to-day finances.

Jobs

Sarah Coles, head of personal finance at financial services company Hargreaves Lansdown warned that there may be a threat to jobs in the long term due to the fall in the stock market.

She said: "There’s the threat to jobs, if businesses are concerned about their overheads and put the brakes on investment. Anyone working in the car industry will be hoping some kind of deal could be thrashed out to help protect them from the impact of punishing 25% tariffs.

"There’s clearly valuable support in the pipeline from the government, but we will need to wait to see exactly what’s on offer and the difference it can make."

Financial expert James McCaffrey from TotallyMoney said: "The shockwaves being sent through the stock market are being driven by the USA’s trade tariffs. These tariffs will make it more expensive for American companies to import goods, meaning they might buy less form UK firms, which could lead to reduced sales, lower profits and job instability.

Prices

On how the stock market plunge will impact prices, Sarah, from Hargreaves Lansdown, said: "It’s hard to know exactly what impact this will have on prices.

"We might also see companies lower global prices to compete in the US. Plus some of the goods that were destined for the US could be diverted elsewhere around the world – including the UK. If it means a glut, it could mean there are some decent bargains around for now.

"However, on the flip side, there’s also the risk that companies increase prices to pass the pain of tariffs onto their customers, and escalating tariffs could exacerbate this inflationary pressure.”

James from TotallyMoney agreed and added: “With some countries being handed higher tariffs, they might be stuck with goods which were originally destined for the US. And there's a possibility that that they could be offered to UK consumers and at a reduced price. But while this might sound great at first, it could again impact domestic industries and the people they employ.”

Savings

Sarah, from Hargreaves Lansdown, said: “Despite falling swap rates, the savings market has been holding firm, and the competitive deals have remained well above 4.5% for fixed terms and close to 5% for easy access.

"The cash ISA market was still super-competitive as we approached the end of the tax year – especially for easy access rates. However, now the deadline has passed, we can expect to see rates fall.

"It means early bird cash ISA savers should get in as soon as possible to secure the best rates, and anyone planning to fix their savings for a period need to act now, to make the most of the best deals while they’re still around."

Mortgages

Sarah, from Hargreaves Lansdown, explained: "The money markets are expecting interest rates in the UK to fall faster than they’d previously predicted, as worries about growth eclipse inflation concerns.

"It means swap rates have dropped, which should feed through into lower fixed rate mortgages in the coming days. These have already edged down since the start of 2025, and are likely to continue to do so.

Pensions

Aaron from CredAbility warned of the impacts on pensions. He said: "Even if you’re not actively investing, many UK pensions are tied to the stock market.

"If it keeps falling, pension providers might see weaker returns, which could affect the growth of your retirement savings. The key thing here is not to panic and make knee-jerk decisions like pulling out of investments too early. This could make temporary losses turn into permanent ones.

James from TotallyMoney said: “Although you might think that a turbulent stock market won't affect your finances because you don’t invest, it could have a knock-on effect on pensions, businesses, and the cost of living.

“Pensions funds invest in stocks to grow your money — but with the value of the market falling, your retirement fund could be too. This will be less of a concern for younger workers, but those who are looking to access the cash sooner might be more worried."

Interest rate

Aaron also warned of higher interest rates. He said: "If you're looking to borrow - whether that’s getting a mortgage, taking out a loan, or applying for a credit card - lenders might tighten up their checks or offer fewer deals. They could offer higher interest rates too."

And Sarah, from Hargreaves Lansdown, added: "Central banks are likely to try to keep interest rates as low as possible, in order to support growth, and the fall in rate expectations in the US has pushed down the value of the dollar against the pound, which makes the price of US imports lower."