Investment choices

You have the flexibility to invest in a way that suits you. If your circumstances change, your investments can too.

Decide what's right for you

How to choose

Everybody’s different and your circumstances may well change over time, so there are no hard and fast rules for investing into a pension.

Put simply, the more risk you take the more your pension pot may grow – or fall – in value. You should expect investments to rise in value in the long term but can also fall in value. This is why you should invest your money in a pension pot for at least ten years, so it has more chance to recover any losses.

To work out how to invest your pension, you need to consider these three points:

Your personal circumstances

How much risk you want to take

When you plan to retire and how you want to take your pension

Once you’ve considered these three key points, your money can be invested. Don’t worry, you have the flexibility to change these at any time should you wish to.

Your investment choices

When you open a Retirement Account online, we take the hassle out of choosing individual funds and have designed investment choices to suit you.

You just need to think about two things:

  • how you feel about risks associated with investing - are you a cautious, balanced or adventurous investor?
  • what you plan to do with your pension in retirement

This will allow us to place you in the lifestyle strategy that suits you.

Our lifestyle strategies are called Governed Investment Strategies and these are the only choices available when you apply for your Retirement Account online.

If you would like to look at other options for investing, you should seek independent financial advice. We can help you find an adviser if you don’t already have one. Advisers will normally charge for advice.

Your personal circumstances

To start with, try answering these questions:

  • Do you have other investments or savings to live on?
  • When do you plan to retire? If you have an existing Scottish Widows pension and are planning to take your pension or any tax-free cash in less than a year from now, call us to discuss your options. If you don’t have a pension with us, you can set up a Retirement Account online and then call us when you’re ready to take your benefits.
  • The value of your plan can go down as well as up, in line with stock market fluctuations. Are you comfortable with this? If not, should you consider other investments alongside your pension to help you achieve your goals in retirement?
  • What would happen if your pension pot dropped dramatically in value?
  • Are you comfortable with taking some risk to potentially increase growth, or would you rather minimise the risk as much as you can?

For most people it will be a bit of a balancing act. But our investment choices are designed to help you find something that is right for you.

If you don't feel comfortable making an investment choice yourself and don't have a financial adviser, you can find one here. Please be aware you will be charged for this service.

Alternatively, our team can help explain anything you may not understand, although they cannot offer financial advice.

How does a lifestyle strategy work?

A lifestyle strategy is a type of investment that automatically adjusts how your pension is invested over time, gradually moving into lower risk funds as you get closer to your selected retirement age.

Where your money is invested

Your money will be typically invested in bondsLoans made to companies which pay an agreed rate of interest until a set date. and shares (known as 'equitiesWhere the growth depends on several factors including how well those companies perform.'). These are shares within the UK, emerging markets and developed markets overseas.

Shares are considered riskier investments than bonds, so a portfolio investing in a large percentage of shares will carry more risk than one investing in a large percentage of bonds.


Chart: potential returns vs risk of value falling. The higher the potential returns, the higher the risk. Money market is the least risky, followed by gilts and bonds, then property, then shares, which have the highest risk and also the highest potential returns.

Our Pension Portfolio Funds (PPF)

These are the funds a GIS (Governed Investment Strategy) invests in. Different GIS use different proportions of these funds depending on their risk profile and how close you are to retirement.


Our Pension Portfolios (PP)

OO UK equities

OO Emerging markets equities

OO Overseas developed markets equities

OO Corporate Bonds

Source: Scottish Widows, as at 30/06/2020


How much risk do you want to take?

  How your pension pot could perform Is this for me? GIS: How your money is invested


You can expect your pension pot to have some ups and downs in value. While there’s potential for some growth, there’s also the potential for some losses. You’re cautious with your investments and don’t feel comfortable taking much risk with your money. At 15+ years from retirement - PP3
At 10 years from retirement - PP4
At 5 years from retirement - PP4


You can expect your pension pot to go up and down in value, but these may be sharper and more frequent than in the 'cautious' approach. While there is the potential for higher growth, potential losses are also slightly higher. You’re a balanced investor and feel comfortable taking some risk with your money for, potentially, more reward. At 15+ years from retirement - PP2
At 10 years from retirement - PP3
At 5 years from retirement - PP4


You can expect your pension pot to have a lot of sharp ups and downs in value. While there’s potential for high growth, there’s also the potential for significant losses. You’re an adventurous investor and feel comfortable taking high risk with your money for, potentially, high rewards. At 15+ years from retirement - PP1
At 10 years from retirement - PP2
At 5 years from retirement - PP3

Your investment near retirement

The GIS you've chosen adjust your investment depending on how you expect to take your pension when you retire.

When you’re fifteen years away from retirement, it gradually starts to move your money into lower risk investments, taking into account how you want to take your pension. Although this may lessen the potential for growth, it helps reduce the impact of potential market drops on the value of your pension as you get closer to retirement. Also, it reduces the likelihood of any sudden drops in its value. When you are five years away from retirement, we will start to move your investment into different funds depending on which option for retirement you have chosen.

Your investment in retirement

When you’re ready to take income from your plan, you’ll need to think about how best to invest your remaining pension to help achieve your retirement goals.

That’s why we we’ve created Investment Pathways for our Retirement Account to help simplify the decision.​

You’ll be able to access one of our Investment Pathways as an option. ​They are designed to help you meet your retirement income needs, based on your broad aims over the next five years in retirement.

With pension investments there are no guarantees, and there is a risk that the value of your pot could go down as well as up. Depending on how the investment fund performs, you may get back less than you paid in.

Your investment choices

Your investment choices

Get more details about how your pension is invested.

Download guide (PDF, 1.2MB) opens in a new tab

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If you’re transferring £10,000 or more and know how you want to invest your pension pot, then you’re ready. Have to hand the details of the pensions you want to transfer.


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