Since automatic enrolment was introduced in the 2010s, most UK workers are now saving for retirement. Millions of people who previously had no pension are now building one*. That’s great news as it means more people will be financially prepared for later life.
But here’s the important bit: while your pension is being invested automatically, it doesn’t mean it’s invested in the right way for you. Most workplace pensions are placed in a default fund, and while these funds are designed to suit the “average saver,” they don’t always align with your personal circumstances, retirement goals, or values.
Taking a little time to check your investments now can make a big difference to the size of your pension pot, and the freedom it gives you, later on.
Why it’s worth checking your pension investments
1. To grow your money more effectively
If you’re still many years away from retirement, your default fund may actually be too cautious. With time on your side, you can afford to ride out market ups and downs. By choosing higher-growth investments, such as equities, you may achieve greater returns in the long run.
2. To avoid strategies that might not work for you
Some default funds use “lifestyling.” This means your money is gradually shifted into low-risk bonds as you approach retirement, on the assumption you’ll buy an annuity. But with pension freedoms, many people now take lump sums or draw an income directly from their pot. In these cases, a lifestyling approach may not be right for you.
3. To match your values
Do you know where your pension is invested? Without checking, your savings could be supporting industries that don’t reflect your personal values. Many providers now offer ethical or sustainable funds that back companies with strong environmental, social, and governance (ESG) practices. By switching, you can make your money work in a way that feels right for you.
4. To create a strategy that’s personal
No two people have the same financial journey. Your pension should reflect:
Your attitude to risk – Are you comfortable with short-term volatility if it means higher long-term growth, or do you prefer stability?
Your retirement plans – Will you want lump sums for big family holidays or a steady income for day-to-day expenses?
Your timeline – As retirement gets closer, you may want to gradually reduce risk to protect your pot from sudden market shocks.
5. To monitor performance and fees
Default doesn’t always mean best value. By reviewing your annual statement and fund factsheets, you can check how well your pension is performing and what charges you’re paying. Sometimes small changes in fees can add up to a big difference in your retirement pot over time.
How to check your pension investments
Log in online – Most pension providers offer an app or dashboard where you can view your funds.
Review your annual statement – This shows how your fund has performed and how much you’ve saved.
Read fund factsheets – These explain each fund’s strategy, charges, and risk level.
Ask for help – If you’re unsure, your HR team or provider should be able to point you in the right direction.
Taking the next step
Pensions are one of the most powerful tools you have for building financial freedom, but only if they’re working hard for you. Spending a few minutes to check where your money is invested could mean the difference between “getting by” and truly enjoying retirement, whether that means world travel, more time with family, or simply the peace of mind that comes with security.
If you’d like some guidance, our team is here to help. You can also book a no-obligation meeting with one of our Financial Advisers to discuss your pension and create a strategy that’s tailored to you.
Because your retirement should be about living life to the fullest - not worrying about money.
References
Nest Insight, How much are UK workers really saving as a result of pensions auto enrolment?, 2024 https://www.nestinsight.org.uk/how-much-are-uk-workers-really-saving-as-a-result-of-pensions-auto-enrolment/
