Should I Leave My Workplace Pension in The Default Fund?
Are you really making the most of your workplace pension?
For many us, our workplace pension is the single biggest long-term investment. Yet millions of us leave our hard-earned money sitting in the “default fund” chosen by the employer. It’s simple and easy, yes—but simple isn’t always best when it comes to your financial future.
A pension is a long term investment the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
Workplace Pensions are regulated by The Pensions Regulator.
Let’s Explain the Default Fund
A default fund is the investment option that workplace pension contributions are directed to if employees do not actively choose their own investments. This fund is typically managed by financial experts and is designed to meet the needs of a broad range of investors, taking into account different ages, backgrounds, and retirement goals.
Why Staying in the Default May Cost You
- Missed Growth Potential
Many default funds lean towards caution. This might protect against some short-term volatility, but it can mean your money doesn’t grow as much as it could over decades. - Misaligned With Your Specific Goals
Planning to retire at 55? Or happy to keep working into your 70s? Either way, the right investment mix for you could be very different from the standard default pathway. - “Set and Forget” Doesn’t Work Forever
Life changes—your pension strategy should too. If you never review your pension, you might end up with investments that no longer suit your stage of life.
What Are Your Options?
- Check Where Your Pension is Invested
Log in to your pension provider’s portal and see which fund(s) your money is in. - Understand Your Appetite to Risk
Think about how comfortable you are with ups and downs in your investments, especially given how long you have until retirement. - Regularly Review
Set a reminder to look at your pension at least once a year—or when your circumstances change (new job, house move, nearing retirement). - Get Professional Guidance
An independent Financial Adviser can help you match your pension investments with your personal goals, not just a default template.
The Bottom Line
Your workplace pension could be one of your most valuable assets. Leaving it in the default fund might feel easier today, but it could cost you in the long run. A little attention now could make a huge difference to the retirement lifestyle you want to have.
Let’s Talk
If you’d like a clear, personalised look at your pension options, we’d be happy to help. At Corcillium Wealth Management, we specialise in making pensions understandable, manageable, and truly yours.
Call us on 01483 654135 or book direct into the diary by clicking here
Corcillium Wealth Management is a trading name of 2plan wealth management Ltd which is authorised and regulated by the Financial Conduct Authority. It is entered on the FCA register (www.fca.org.uk ) under reference 461598. Registered office: 2plan wealth management Ltd, 3rd Floor, Bridgewater Place, Water Lane, Leeds, LS11 5BZ. Registered in England and Wales Number: 05998270