Are you invested in the wrong pension fund?

Despite the shake-up of the pensions rules, the benefits of being invested in a so-called lifestyle fund are less clear, says Natalie Stanton.

The government's changes to pension rules pensions freedom, as it's been called have been in force for a while. You can now do pretty much what you want with your pension when you turn 55, with no need to buy an annuity (an income for life). That has a number of implications for retirement planning one of which is to make the fact that £100bn of pension money is still sitting in "lifestyle" funds look problematic.

Lifestyle, or target-date, funds are a popular option for workplace pensions they account for around 85% of them, estimates the Pensions Policy Institute. The idea is that they invest in riskier, high-growth assets (equities) when the investor is young, and shift towards taking less risk (bonds and cash) in the approach to retirement.

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Natalie joined MoneyWeek in March 2015. Prior to that she worked as a reporter for The Lawyer, and a researcher/writer for legal careers publication the Chambers Student Guide. 

She has an undergraduate degree in Politics with Media from the University of East Anglia, and a Master’s degree in International Conflict Studies from King’s College, London.