Choosing the right investment options on the road to retirement and beyond

MoneyPlus Features Team

Where your money is invested can have a big impact on how much you’ll have in your pension in the future. We take a look at what you need to be aware of when you’re thinking of taking your pension money, and also what to think about if you decide to keep your money invested while in retirement.

Since pension rules changed in April 2015, there’s much more flexibility in how and when you can take your pension money, which is usually from age 55 but this could change in the future.

We’ve seen a shift from people taking their money as a guaranteed income for life (known as an annuity), towards keeping it invested and taking a flexible income, usually known as drawdown.

So in the lead-up to taking money from your pension, it’s important to make sure it’s invested in a way that’s aligned with your plans.

And when you’re ready, if you decide to keep your money invested, you’ll need to make choices that can help make it last as long as you need it to.

It’s never too early to start preparing for retirement

If you’re in your 40s or early 50s, you may not yet be ready to retire unless you have other income over and above your pension. But it’s a good idea to start thinking about what you plan to do with your pension money, how much you’ve got and how much you want to have when that day comes around. Then make sure it’s invested in a way that’s aligned with those plans.

Although far fewer people are choosing to set up an annuity now, your pension money may still be in investments designed for doing just that. So you may need to review where and how your money is invested.

You could be taking unnecessary risk because these investments are designed to move in line with annuity rates. If annuity rates fall significantly just before you retire, this could have an impact on the value of your pension and your retirement plans.

There are options, called lifestyle profiles, which can help make sure that your money is in the right investments for your plans, including taking a flexible income. Don’t worry though if you haven’t yet decided how you’re going to take your money. There are also lifestyle profiles designed to let you keep your options open. You can find more information about the lifestyle profiles we offer here.

Keep an eye on how your pension investments are doing and the value of your pension savings by logging in. You could also consider paying more in to your pension if you need or want to. Remember that the value of investments can go down as well as up and you could get back less than was paid in.

You’re ready to start taking your pension money

Great news – you’ve reached age 55 and you can start taking money from your pension if you wish. So now you need to choose how you want to do this.

If you decide to leave your money invested, you’ll need to think carefully about where to invest it to make sure it lasts as long as you need it to. Remember that, generally, we’re living longer these days. And there are different things to think about when you’re taking money out of your pension than when you’re saving into it.

It’s a lot to think about, so we’ve tried to make the decision-making process a bit simpler for you. When it comes to choosing your investments in retirement, there are two really important questions you need to ask yourself:

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

The Money Advice Service website has a lot of useful information on retirement options. It’s also important to shop around to find the best deal. You can find out more at or by calling 0800 138 3944. Pension Wise gives free impartial guidance over the phone or face to face if you’re age 50 or over.

If you’re still not sure what’s best for you, you should speak to a financial adviser. There’s likely to be a charge for this. If you don’t have an adviser, you can find one in your area at or visit the Standard Life website for more information about financial advice and 1825, Financial Planning from Standard Life*.

*1825 is a trading name for the Standard Life Aberdeen group’s advice business.


Please remember that the value of investments can go down as well as up and may be worth less than was paid in. Tax rules and legislation may change in the future. Personal circumstances also have an impact on tax treatment. The information here is based on our understanding in February 2020 and should not be regarded as financial advice.