Pension schemes need to prepare to move swiftly in the countdown to the EU referendum, according to investment consultants LCP.

Regardless of the outcome of the vote, LCP said, schemes should be "braced for a choppy ride" in the run up to 23 June and potentially for some time afterwards.

"A clear vote to remain would likely rekindle the currently weakened UK economy in the short term," said Ian Mills, Partner at LCP.

"Sterling is likely to appreciate as investors unwind their defensive positions and international investors welcome the certainty provided by the result.

"However, a narrower victory for the Remain campaign may not provide the certainty that markets are looking for, bringing an increased risk of a further referendum later on, so dampening confidence as the debate drags on."

A Leave result would shock markets, with riskier assets hit hardest as markets digest the news, Mills went on to say.

"Sterling would likely fall further in value, credit spreads may well widen and companies that rely heavily on UK and EU revenues could suffer in equity markets, at least in the short term,""But while a fall in Sterling might sound like bad news, pension schemes with significant unhedged overseas investments could actually see their asset values increase – at least in Sterling terms."

Whatever the outcome, Mills emphasised the importance of schemes maintain a diversified investment strategy and be prepared, should risks increase or opportunities arise.

He believes a key concern for investors would be the Bank of England's response - that interest rate rises would be delayed further in the event of Brexit.

"Clearly schemes cannot second-guess the outcome, but they can ensure they remain diversified and ready to take action," he said.

First published 09.06.2016

Lindsay.sharman@wilmingtonplc.com