Derisking a pension – options you have in the run up to retirement

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Archived article Tax, investments and pension rules can change over time so the information below may not be current. This article was correct at the time of publishing, however, it may no longer reflect our views on this topic.

We look at what options you have in the years before retirement to de-risk your pension and how to make the most of them.

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

11 July 2023

Many people’s pensions are invested using funds. This could be with a fund their pension provider has chosen or runs, or funds they’ve picked themselves.

The standard approach to retirement planning has typically been to mainly invest in funds that invest in shares while you’re young. Then as you get closer to retirement, to gradually de-risk your portfolio by choosing funds that invest in a mixture of investments including bonds, as well as cash.

The idea is to benefit from the long-term investment returns that tend to come from shares, to build up your pension. This is while also giving yourself time to hopefully ride out the ups and downs that come with investing in the stock market though of course nothing is guaranteed. Then, over time, the shift into bonds