Investing in a pension
In a defined contribution plan, such as PensionSaver, you will need to decide which funds you want to invest in.
There is risk associated with a defined contribution plan as you are using investments to build up a pension fund. Therefore, the value of your fund can go down as well as up.
It is important to keep track of the funds in which you are invested so you can switch them when necessary. It is generally felt that you should invest in lower risk funds, such as bonds, the nearer you get to your chosen retirement age.
In PensionSaver, if you feel that you don't want to make an active investment decision, you can choose the lifestyle option, where Fidelity will automatically allocate your pension account to certain funds depending on your age.
Top tips
- Even if your pension account takes a dip, company contributions and tax relief should cover any losses and your fund should still be worth more than the contributions you paid in.
- If you are unsure what type of investor you are then use Fidelity's investor profiler to help you find out.