Can you choose where your pension is invested? Often yes, but a workplace scheme starts you in a default fund, and what else is offered depends on the scheme.

In most defined contribution pensions the money is invested rather than left in an account, and how much say you get depends on the type of pension and the scheme's own rules. This page covers the default fund and the law around it, choosing your own funds, lifestyling, ethical and Sharia options, and where a SIPP fits. It does not recommend any fund. Comparing a workplace fund with older pots is easier with someone alongside; our form on this page carries a short enquiry to an adviser holding FCA authorisation, free of charge. The value of investments can fall as well as rise, and you may get back less than was paid in.

Is your pension money invested at all?

For a defined contribution pension, usually yes. MoneyHelper's guide to pension investment options, in the copy archived on 4 December 2025, says providers often manage the money for you, using a mix of bonds, shares, commodities, property and cash to spread the risk.

Who may choose depends on the pension. The same guide says you might be able to pick your own investments with a defined contribution or personal pension, but not with a defined benefit one, where the scheme's rules set the income; final salary pensions explains how.

Because the money is invested, its value moves. The guide puts it plainly: "your investments can go up and down in value, so there’s a risk you’ll get back less than you’ve paid in".

How the default fund is invested, and the rules behind it

When you join a workplace pension and make no choice, your contributions go into the scheme's default fund. For a qualifying scheme used for automatic enrolment, the first of the descriptions of a default arrangement in regulation 3 of the charges regulations (SI 2015/879) is one "under which the contributions of one or more workers are allocated to a fund or funds where those workers have not expressed a choice as to where those contributions are allocated". The Pensions Regulator explains the reason: a scheme used for automatic enrolment cannot make joining depend on a fund choice, so it has to provide a default for everyone who makes none. Who must be enrolled is in workplace pension rules.

The trustees of a trust-based scheme with a default arrangement have further duties under the Occupational Pension Schemes (Investment) Regulations 2005. Regulation 2A requires a written statement of investment principles for the default arrangement and a review of the default strategy and its performance "at least every three years", and also "without delay after any significant change" in investment policy or in the members' profile. The default is a designed strategy, reviewed on a timetable.

Its charges are capped too, by two rules rather than one: regulation 6(2) of SI 2015/879 for trust-based schemes, applying to the value of rights in the default arrangement, and the FCA's COBS 19.6.6R for workplace personal pensions. Pension charges and fees and workplace pension charges explain what the 0.75% limit does and does not cover, and Nest's charges and Smart Pension's fees show two schemes' own figures.

As for how the money is invested, MoneyHelper says default funds are often called lifestyle or target date funds, and that a provider typically takes less risk the closer you get to retirement, because there is less time to recover losses, for instance by moving towards government bonds and cash. A default also usually assumes you will retire at your normal pension age and take everything out then; if your plan differs, such as an income through drawdown, it may fit less well (your options at retirement). The timing of the shift belongs to each provider:

  • Nest, on its fund pages as archived on 24 September 2026, says its Retirement Date Funds run in four phases and that, roughly ten years before the member's Nest retirement date, it starts moving investments out of higher risk markets, so "You’re less likely to see any big rises in value". Its Higher Risk Fund (archived 11 October 2026) offers a lifestyled option, moving the pot to a Retirement Date Fund ten years before that date, or a non-lifestyled one that stays put until the member chooses otherwise.
  • The People's Pension, on its investment options page as archived on 5 June 2026, says its three profiles start shifting savings 15 years before the member's selected retirement date, and that its self-select funds do not move automatically, so members manage them themselves.

So lifestyling belongs to a fund or profile, not to the pension as a whole: if you build your own mix, ask whether each fund has it. Lifestyling: pros and cons weighs the approach itself.

Choosing your own funds, including ethical and Sharia options

Not every scheme allows it. The Regulator's guidance says a jobholder may choose voluntarily if the scheme rules permit. Where a range exists, MoneyHelper says it often has different themes, that you can usually hold one or spread the money over several, and that the provider should list how each fund is invested, how it has performed and what it charges. Each fund you hold carries its own charge.

The themes it lists are ethical funds that avoid industries such as gambling, tobacco or mining, funds focused on a particular country, and funds that follow Islamic law. Whether your scheme offers any is a question for the scheme. Providers build the choice differently; two examples, each as that provider describes it:

  • The People's Pension (investment pages archived on 5 June and 18 June 2026) places members who make no choice in its 'balanced' investment profile. Members can pick one of two other profiles or self-select from eight funds, setting the percentage in each, except for the Shariah Fund, which takes all of a member's savings if chosen. It describes that fund as higher risk than the balanced profile, holding a smaller number of companies because of its exclusions, and says its Ethical Fund excludes fossil fuel producers and other controversial industries.
  • Nest (fund pages archived between 24 September and 9 October 2026) puts a joining member in the Nest Retirement Date Fund for the year it expects them to start withdrawing, set to their State Pension age. Members can instead choose by belief, faith or risk appetite among its Ethical, Sharia, Higher Risk and Lower Growth funds, switching through the online account. Its Ethical Fund does not put money "in companies that make weapons, test cosmetics on animals or carry out controversial mining practices"; its Sharia Fund, open to anyone, holds Sharia-compliant shares and sukuk and carries higher investment risk because it uses just two types of market. Nest's fund options has more; Aviva's pension funds shows another provider's range.

Whether a pension fits Islamic principles is its own question, answered in is a pension halal or haram, with providers in halal pensions in the UK.

If the scheme's range is not wide enough, the guide mentions a separate scheme such as a self-invested personal pension. A SIPP is its own pension with its own charges, so it sits alongside the workplace scheme and does not change it. What one can hold is in what a SIPP is; the plainer product is in personal pension plans and the differences in personal pension or SIPP. Moving an existing pot is a separate step: how to transfer a pension.

What to weigh before you change anything

These are questions to put to your scheme, not instructions:

  • Risk and growth. MoneyHelper says lower risk investments are less likely to fall but typically grow more slowly; the People's Pension says higher-risk funds are expected, not guaranteed, to grow faster and may swing sharply.
  • Past results. The same provider warns that "The past performance of investments doesn’t guarantee or act as a guide to future performance." Comparing pension fund performance goes further.
  • Cost. Ask the annual charge for each fund you would hold, as a percentage and in pounds on your own pot.
  • Time. Your age, intended retirement age and plans for the pot affect which default assumptions fit.
  • Checking back. The guide suggests reviewing a chosen fund's risk, performance and charges at least once a year, using the annual statement.

Which fund suits you turns on your age, other pensions, State Pension and tolerance of loss, which is why the scheme's documents come before any switch.

Questions people ask about pension investments

Why has my workplace pension gone down?

The funds hold investments whose prices move, so a fall is a possible outcome rather than necessarily a fault. Your annual statement shows the fund you are in and how it has performed, and the scheme can explain a particular move.

Are workplace pensions guaranteed or protected?

A defined contribution pot is not guaranteed to grow, and you may get back less than was paid in. Separately, the FSCS says it may pay compensation if a pension provider or adviser has gone out of business, and that occupational schemes may instead be protected by the Pension Protection Fund. Which applies depends on how your scheme is set up, and the scheme can say.

Should I hold bonds in my pension?

Bonds are one of the investment types MoneyHelper lists, and some funds are built around them: the People's Pension's Annuity Fund invests in UK Government and corporate bonds and is designed for people planning to buy an annuity (pension annuities). Whether bonds belong in your mix depends on your risk appetite and plans, which this page cannot judge.

Which pension fund should I choose?

There is no single answer and none is recommended here. Weigh the points above, read the fund's own documents, and consider paid investment advice if the choice feels large, as MoneyHelper suggests.

Your next step

What is open to you depends on your scheme, its fund list and your plans. Start by asking the scheme for the list and the charges. Lingering doubts about how your pots fit together can be set out on the form on this page; advisers authorised by the FCA ring you.