After a year of uncertainty, with many macroeconomic and geopolitical tensions affecting the landscape, investors may well be looking toward 2026 with cautious optimism. Despite the shocks of ‘Liberation Day’ trade announcements and the resulting sell-off, markets rebounded strongly last year to reach highs amidst persistent inflation, trade trauma and an AI-fuelled rally.

In an era where headlines can move markets within minutes – what’s the lesson for investors? Staying nimble, pragmatic and avoiding knee-jerk reactions remains key. So, what’s coming for investors in the year ahead? As 2026 gets underway, some themes are taking shape.

Balancing risks and rewards

The coming year, as ever, promises a mix of challenges and opportunities. Inflation in some key advanced economies remains above target, leaving monetary policy finely balanced. Persistent inflation could weigh on consumer sectors, demanding selective positioning, lower borrowing costs could support equities and despite notions of an AI bubble, continued investment in data centres and innovation may sustain growth opportunities; time will tell. Markets may well be expecting rate cuts in 2026, but central banks may act more conservatively.

Global growth and strategic positioning

According to the International Monetary Fund’s (IMF’s) latest outlook, the global economy is projected to grow by 3.1% this year, down from 3.2% in 2025. IMF notes that while growth remains positive, it is fragile, reflecting ongoing risks from tariffs, trade tensions and geopolitical uncertainties, while other drivers including technological investment, fiscal support and favourable financial conditions are offsetting potential upsets. IMF highlights that with an uneven recovery likely, some regions and sectors may outperform, while others remain more vulnerable.

A smarter way to invest

Diversification will therefore remain a guiding principle for 2026 – balancing exposure to sectors, regions and asset classes, in line with your risk tolerance, objectives and timescale. Identifying sectors benefitting from long-term trends, mitigating risks, optimising asset allocation and adapting strategies to market dynamics – that’s on our agenda in 2026.

The value of investments can go down as well as up and you may not get back the full amount you invested.

The past is not a guide to future performance and past performance may not necessarily be repeated.

New research³ highlights a growing preference among UK workers for a gradual transition into retirement, rather than a ‘hard stop’ where work ends entirely.

Fewer than a quarter (24%) of workers expect to stop working altogether when they reach retirement age. The majority plan to either change the way they work (43%), continue in their current role (15%), or move into a new position (9%).

Finding balance – financially and personally

Gradual retirement can take many forms. Some people choose to reduce their working hours over time, while others shift into consultancy roles, mentoring or part-time work, sometimes in a new field. This approach can offer financial stability, maintain purpose and social connection, and support overall wellbeing as routines and priorities evolve.

Confidence to make the right choices

The research also highlights some challenges. Many nearing retirement are concerned that uncertainty around pension rules and tax treatment could undermine their plans. This lack of confidence can lead to rushed financial decisions, such as taking a tax-free cash lump sum or drawing income earlier than necessary, choices that could later be regretted.

Aegon’s Pensions Director, Steven Cameron, says a “significant cultural shift” in how people approach later-life work and retirement is occurring. He stresses the importance of a stable pension system that gives people the confidence to plan for the long term.

Plan, don’t rush

Today’s retirees have more flexibility than ever before, but with choice comes complexity. Taking time to plan carefully, and seeking professional guidance, can help ensure decisions align with your long-term goals and lifestyle. Whatever approach you take to retirement, we’re here to help you make confident, informed choices.

³Aegon, 2025