How-to Guides » OLD GUIDE Get ready to retire

Move your pension into low risk investments

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1. The chances are your pension has been invested in shares. This makes sense as it gives your pension savings the best prospects for growing in value over the long-term. But the stock market can be volatile, so it's important you think about moving your scheme into less risky asset as you get closer to your retirement date.

2. Think about using 'lifestyling' to protect the value of your pension fund. This is a process where your pension money is automatically moved out of shares and into lower risk investment such as fixed interest bonds and/or cash. 

Typically, 10% of your pension will be moved out of your pension and into cash/bonds every year in the final decade before you retire. This means as you reach you retirement date, none of your pension is invested in shares and all of it is held in cash/bonds. This process protect your pension fund value from a sudden stock market crash just as you're on the verge of retiring.

To find out more read How to protect your pension

3. You don't have to use lifestyling to protect the value of your pension pot. If you prefer, you can simply switch how your pension is invested yourself. You may decide you want to go for the maximum capital growth you can by leaving your pension pot in shares until you take an income from it. But bear in mind, if the stock market falls dramatically during this time, your pension fund value will suffer.