Most Nest members sit in a Retirement Date Fund, but Nest also lets you move to its Ethical, Sharia, Higher Risk or Lower Growth fund.
Torn between Nest's default and one of its alternatives? Sending the form on this page secures a free call-back, so an FCA-authorised adviser can weigh age, other pots and beliefs with you. The value of investments can fall as well as rise, and you may get back less than was paid in.
What does Nest invest your money in?
Yes, Nest invests your contributions. On its fund choices page Nest says: "Over 99% of our members are in one of our Nest Retirement Date Funds." The same page adds that you can choose "to invest for different beliefs, faiths or risk appetite."
When you join, you are put in the Retirement Date Fund for the year you will reach State Pension age. Nest gives an example: someone reaching it in 2055 goes into the 2055 fund. Your money is pooled with other members' and, in Nest's words, invested "in things like company shares, loans, property and more". It also names renewable energy plants and timberland. See choosing where a pension is invested for the general picture. Its investment information tool shows which companies your money is invested in.
How the Retirement Date Funds change as you get older
Nest runs each Retirement Date Fund in four phases, a method it also calls lifestyling.
- Foundation: a phase of five years in your early twenties, aiming to grow the pot steadily and avoid sharp losses.
- Growth: roughly 30 years, with more of the money in company shares and across more markets. Nest's aim in this phase is to beat the rising cost of living and "add at least an additional 3% to your savings, after all charges". That is a target, not a promise.
- Consolidation: from roughly ten years before your Nest retirement date, Nest moves money out of higher-risk markets, so sharp falls near retirement hurt less, though big rises become less likely.
- Post-retirement: if you reach your retirement date and have not taken your pot, Nest moves it automatically.
Where it moves depends on the size of the pot. Nest says: "If you have less than £10,000 in your pot, we’ll move you into the Ready to Retire Fund." A pot of more than £10,000 goes to the Nest Guided Retirement Fund instead. You can also pick that fund yourself: Nest lists it as an option for members aged between 60 and 70 with at least £10,000 invested who want to start taking money out. How those two pay out is covered in taking money out of Nest, and the date itself can be changed to match your plans.
Nest Ethical, Sharia, Higher Risk and Lower Growth funds
| Fund | Nest says it is for | Where the money goes |
|---|---|---|
| Ethical | Members with concerns about the impact organisations have on the environment and society | Only investments that pass Nest's ethical policy |
| Sharia | Members who want an approach based on Islamic law as it relates to investing | Sharia-compliant company shares and sukuk |
| Higher Risk | Members prepared to take more investment risk to try to make their pot grow more | Mainly climate-aware global equities, plus other markets |
| Lower Growth | Members who are very cautious | Mainly short-duration bonds, gilts and cash |
Ethical Fund
Nest says it will not put money into companies that make weapons or test cosmetics on animals, and it also avoids owners of oil, gas or coal reserves.
Sharia Fund
Nest says anyone can invest in it, and "you don’t have to be Muslim." Holdings are screened by Islamic scholars, and the fund avoids companies earning money from alcohol, adult entertainment or pork products. Nest adds that, unlike its other funds, it covers only two types of market, which carries higher investment risk. For the wider halal question see halal and haram pensions.
Higher Risk Fund
Choosing it means picking one of two options. Lifestyled moves your pot into a Retirement Date Fund ten years before your Nest retirement date; non-lifestyled leaves it in the Higher Risk Fund whatever your age unless you move it. Nest says this fund may be considered by someone with other safe retirement income, or a younger saver with time to ride out falls, and warns that with higher risk comes "the higher the chance you’ll end up with less than you put in".
Lower Growth Fund
The fund "aims to keep the original value of your money rather than adding to it". Over longer periods, though, the money is unlikely to grow quickly enough to beat the rising cost of living, so it may buy less in future. See also lifestyling pros and cons.
Which Nest fund has performed best?
The figures below are from Nest's fund comparison, correct as at 30 June 2026, showing each fund's average yearly return over five years.
| Nest fund | Five-year annualised total return |
|---|---|
| 2046 Retirement Date Fund (growth phase) | 7.8% |
| Ethical Fund (growth phase) | 3.7% |
| Higher Risk Fund | 9.2% |
| Lower Growth Fund | 2.9% |
| Sharia Fund | 13.7% |
The Sharia Fund's figure is the highest, and Nest says that fund carries higher investment risk. The 2046 fund stands in for Retirement Date Funds in their growth phase; one near its date, such as 2027, is invested more cautiously. Your own pot is personal to you and your circumstances, so its return can differ. Nest's own caveat: "The value of investments may go down as well as up and the return of your investment is not guaranteed." Past returns are no guide to the next five years, and comparing pension fund performance explains what to look at.
How to switch Nest funds, and what it costs
Switching is done in your online account. In a copy of Nest's help page archived on 19 January 2026, the steps are: log in and choose "Learn more about your fund" on your dashboard, then "View all of our Nest fund options", pick a fund to read about it, and select "Switch to this fund" and follow the on-screen instructions. The Lower Growth Fund page calls switching "quick, free and simple".
On cost, Nest says all its funds "have the same low charges applied", so changing fund does not change the rates. Those rates are set out in Nest pension charges, and whether the scheme suits you is a question for is Nest a good pension.
What to weigh before moving: your Nest retirement date, how soon you expect to take money, how much risk you can live with if the pot falls, and any other pensions you hold. Nest points to MoneyHelper for free guidance, and leaving Nest altogether is covered in transferring a Nest pension. To talk the Nest decision through with someone who can look at your own figures, add your number to the form here, then an FCA-authorised adviser can phone when it suits you.
Net zero, holdings and the funds near retirement
What does it mean to be in the Nest 2027 Retirement Date Fund?
It is for members Nest expects to start withdrawing in 2027, so Nest has already begun moving that money out of higher risk markets, which starts roughly ten years before the date. An untaken pot then moves to the Ready to Retire or Guided Retirement Fund, unless you set a later date.
Does Nest have a net zero commitment?
Nest says it was "one of the first pension providers to commit to net zero carbon emissions".
Where can I see what a Nest fund holds?
Nest points to its latest quarterly investment report for where each fund is invested.
Unsure whether any Nest fund suits your plans? Your details in this page's short form are enough for a free call-back, and the FCA-authorised adviser can cover your pots, age and timing.