Pensions And Investments Demystified

If you have a personal or even a stakeholder pension, then you’ll need to look into the options that are available. If you don’t then you may end up missing out on some huge benefits.

Pension Providers

It’s important to know that pension providers will normally try and make your decision as simple as possible. They will usually offer you a huge range of funds and this means that you can choose from several investment strategies. If you don’t want to make the choice yourself then your pension provider will put your money in a default fund. Remember, a pension transfer is always an option. 

Defined Benefits

If you are a member of the defined benefit scheme, then you won’t be responsible at all for the decisions made. Your scheme will promise your income for you, so it is actually your employer who will take the investment decisions and the risks you need to reach the target you have set. You still may need to make some decisions though. For example, if you want to boost your savings by making more contributions then you may want to sign up with a defined scheme.

What are the Main Investment Options?

A lot of defined contribution plans will give you access to a huge range of funds and they are all designed for you to invest your money in different ways. You need to choose a fund that gives you a good amount of strategy. Of course, all of the details, such as the choice of assets will be handled by the investment experts. Investment funds are usually spread across cash, bonds and shares. You may be offered the chance to invest in specific assets or mixed assets. A lot of people invest their pension in the second fund because diversifying your investment is a very good way for you to manage your risk.  It is more than possible for you to diversify your pension yourself. You would do this by investing your money between specialised funds. This will however take a great deal of time and it will also require a lot of financial knowledge too.

Lifestyle Funds

Over the long-term, shares have performed better when compared to cash or bonds. They are much lower-risk investments. A lot of pensions will give you the chance to invest in a lifestyle fund. This will shift the balance of your investment to a less-risky investment. This will be done as you approach the age of your retirement. The shift will be taken care of by the investment experts. If you were to ever explore target date funds, then you will soon find that these work in a very similar way.


If you know that you have a very large pension pot then it is entirely possible for you to take much greater control over your pension and it also means that you can access a huge range of assets too.  You need to know that this is only for the more experienced investors who are comfortable making their own investment decisions. You can find out more about this by simply exploring the options that are available to you and also by trying to do your research as much as possible beforehand.

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