How to choose the right investment options in retirement

MoneyPlus Features Team

Since the introduction of pension freedoms in 2015, many more people are keeping their pension savings invested in their retirement and taking money as and when they need it.

If you’re reaching retirement age and thinking of doing this, read on to find out more about choosing the right investment options for you.

Why is investment choice important?

Quite simply, the investment choices you make in retirement can make a big difference to how long your money will last – and bear in mind that generally we’re living longer these days.

So it’s a good idea to take some time to really think about your pension. How long might you need it to last you? How much risk should you take? Do you want to manage your own investments? And be aware there are different things to think about when you’re taking money out of your pension than when you’re saving into it.

Thinking about all these things at once can feel a bit overwhelming, so we’ve tried to make the decision-making process a little bit simpler for you. When it comes to choosing your investments in retirement there are two really important questions you need to ask yourself:

  1. Over what time period do you plan on taking money from your pension?
  2. How involved do you want to be in managing your investments?

Let’s look at these in a bit more detail.

1. Over what time period do you plan on taking money from your pension?

  • I plan on taking it all within the next five years

If this is the case, you might want to think about taking less risk with your investments. That’s because you won’t need them to keep growing in value over the long term.

  • I plan on taking it over more than five years

If you’re looking for your money to last over a longer period then think about taking more risk with your investments. That will give your money the chance to keep on growing in value and last as long as you need it to. Of course, you need to be comfortable taking some risk. And you need to understand that although the more risk you take the more potential there is for your money to rise in value, there’s also a greater risk of large losses if markets fall and you could even run out of money.

You can assess your attitude to risk in just a few minutes using our handy online questionnaire developed by Oxford Risk.

  • I’m not sure about keeping my pension money invested for long. I think I’d prefer an ongoing, guaranteed payment without having to worry about running out of money

If you want the assurance of a guaranteed income for life then what’s often referred to as an annuity might be for you. The amount of income you’ll get will depend on a number of factors though. So make sure you read our guide on guaranteed income for more information. It can also be a good idea to get financial advice before you commit, because once you decide to buy an annuity you can’t change your mind. And remember to shop around providers for the right deal for you.

2. How involved do you want to be in managing your investments?

  • I want to leave it to the experts

If you know how you plan to take your pension money but want to leave the day-to-day management of your investments to the experts, think about a ready-made option.

  • I want to do it myself

If you want to be in control and know how you want to invest, you can choose your own funds. If you take this approach, you should make sure you have the time to really commit. You’ll need to review how your investments are doing, research options and, if necessary, move your money around.

What next?

Whichever route you want to go down, we’ve tried to make it as easy as possible for you. We offer a range of ready-made options designed for the timeframes we talked about earlier. And if you’re a DIYer, we have all the information you need about the funds we offer online, including performance, charges and factsheets.

To find out more, take a look at our guide on choosing investment options in retirement.

If you’d like more general guidance about making the most of your pension savings in retirement, we have plenty of information and tools available online. You’ll be able to explore your options and download a free personalised retirement report to help you make an informed decision. You can also get free, impartial guidance over the phone or face-to-face with Pension Wise.

It’s important to regularly check your investments to make sure they stay on track to meet your goals. If you already have a pension with Standard Life, you can check your investments and make changes to them by registering for online servicing in three simple steps.

And if you’re already registered, why not download our app and review your investments on the go.


Remember, the value of all investments can go down as well as up, and may be worth less than you paid in.

Please note that the information given in this blog should not be regarded as financial advice.