What investment options do I get after a pension transfer?

Whether you’re exploring transferring your pension to take advantage of better investment opportunities, reduce fees, or simply bring all your pots together in one place, you may be in good company. 

Assets in defined contribution (DC) pension schemes, where individuals build up a pot of money based on contributions and investment returns, grew by 25% in just one year, rising from £164 billion in 2023 to £205 billion in 2024, ^{Footnote [1]} with membership increasing to over 30 million people. To learn more about types of pensions, check out our article Defined benefit (DB) pensions versus defined contribution (DC) pensions.

And as the UK’s pension landscape changes, often reflecting global market shifts (like the shift from prolonged low rates to higher rates and inflation) major government reforms are also showing growing interest in pension transfers. For example, the government aims to double the number of UK pension megafunds (or schemes managing at least £25 billion) by 2030. Government policy is directing DC schemes to invest more in private market asset classes, supported by consolidation into £25 billion+ “megafunds.” By 2030, these larger funds are expected to unlock over £50 billion for UK productive assets (including infrastructure, new housing and fast‑growing businesses) while continuing to invest in traditional listed equities and bonds. ^{Footnote [2]}

After transferring your pension, you’ll typically have access to a range of investment options. These can include ready-made portfolios based on your risk appetite, such as cautious, balanced, or adventurous funds.

With a defined contribution pension, you’ll also be able to pick your own types of investments, like UK and global company shares, government and corporate bonds, property funds, or ones that focus more on the environment and social responsibility. Many pension schemes even offer something called a lifestyle strategy, which means your investments are automatically moved away from the stock market as you get closer to retirement, helping to manage risk and keep things on track.

It’s worth remembering, throughout your exploration of pension transfer options, that the value of investments can go down as well as up and is not guaranteed. You could get back less than has been paid in.

Transferring a pension isn’t just about moving money. It can be about unlocking better opportunities for your future. Some people choose to transfer their pensions to get more flexible and diverse investment options. Whether it’s the chance to invest in funds that fit your values, or simply to take more control over where your money goes, flexibility is a big draw.

Another common reason is cost. Some older pension schemes come with higher charges, so switching to a newer plan can help reduce fees and potentially boost your savings over time.

Then there’s convenience. If you’ve built up several pensions over the years, putting them into one pot can make life easier. It means fewer statements to keep track of, a clearer view of your retirement savings, and often, a more streamlined investment strategy.

Modern pension platforms also bring a fresh appeal. With user-friendly digital tools, broader fund choices, and features like automatic investment adjustments as you approach retirement, they’re designed to help you stay on top of your goals.

But before making any decisions, it's important to explore regulated financial advice, especially as transferring could mean giving up valuable benefits. A professional adviser can help you weigh up the pros and cons, understand any risks, and make sure a transfer is the right move for your personal circumstances. As financial advisers charge a fee for their service, you can also check out Money Helper for free resources and help finding a financial adviser.

Not all pensions give you the same level of control over how your money is invested. Some let you choose from a wide range of options, while others make those decisions for you.

Defined contribution pensions, like personal pensions and Self-Invested Personal Pensions (SIPPs), usually give you more choice. You can often pick from ready-made investment plans based on how much risk you’re comfortable with, or choose your own mix of investment types like company shares, bonds, and funds that are aligned with your values, including ethical funds. This freedom may also be one of the reasons some people think about moving their pension to a different provider.

Defined benefit pensions, also called final salary schemes, work differently. You don’t get to choose how the money is invested because the scheme's trustees handle that for you. Their goal is to give you a set income when you retire. If you want more control, you’d need to transfer your DB pension into a DC scheme. But this is a big decision. You’d be giving up some guarantees, so it’s important to review the financial impacts of this option. 

Transferring out of a DB pension is a complex decision that involves giving up a guaranteed income for life. This could leave you worse off in retirement, so it’s essential to get regulated financial advice before proceeding. More so, it’s a legal requirement to get FCA regulated advice if your pension value is more than £30,000.

Workplace pensions often sit somewhere in the middle. Some offer investment options, but not as many personal pensions, SIPPs or a Group Personal Pension (GPP). If you transfer your pension, the new plan you choose will decide how much investment choice you get. Some platforms offer lots of funds and tools to help you build your own plan, while others keep things simple by offering a default solution (some offer both with a range of self-select funds and a default solution). This is where your money will be managed on your behalf through the retirement journey. Thinking about how much control you want can help you choose the right option for your future.

Here are a few resources to help build your knowledge and confidence on pension transfers:

• Learn more about defined benefit (DB) pensions versus defined contribution (DC) pensions
• Find out what you need to know about defined benefit transfers 
• Pension transfers explained articles 
• See what your pension could be worth with our pension calculator 

When you move your pension into a plan that lets you choose how your money is invested, like a defined contribution pension, you’ll usually get a mix of options. Each one works a bit differently, and you can pick based on how much risk you're comfortable with and what you want your money to do over time.

For more information, check out our article on active vs passive investing: pros and cons.

Some pension plans also offer lifestyling, or auto-switching, and target-date funds. These are designed to shift away from the stock market automatically, as you get closer to retirement, to reduce the likelihood of fluctuations in your savings. And if you'd like your investments to be more aligned with your values you might want to look at funds that take sustainability or ESG (Environmental, Social, and Governance) into consideration. 

And it’s always worth remembering, as with all investments, the value can go down as well as up, and you may get back less than you put in.

If you want more control over how your pension is invested, a Self-Invested Personal Pension (SIPP) could be a good fit. SIPPs can give you access to a much wider range of investments than most standard pensions. Alongside the funds and shares, you can also invest in things like commercial property, such as office buildings or warehouses, which aren't always part of or available for every portfolio.

SIPPs also let you explore more specialist investments like exchange-traded funds (ETFs), investment trusts, and real estate investment trusts (REITs). ETFs are funds that let you invest in shares and bonds that trade on a stock exchange, such as the London Stock Exchange. They’re often used to track the performance of a market, like the FTSE 100 index, and can be a low-cost way to spread your money across lots of different companies.

REITs, on the other hand, let you invest in property (like shopping centres or apartment blocks) without having to buy the buildings yourself. They’re a way to get into property investing without the hassle of being a landlord.

Because SIPPs offer so much choice, they’re often better suited to people who are confident making their own investment decisions or who are working with a financial adviser. Some of the options available, like individual shares or commercial property, can carry more risk and may need more research before you invest. Property can also be hard or slow to sell, so you may not be able to access your money quickly.

Check out what’s a SIPP (Self-Invested Personal Pension) to learn more.

It’s important to understand what you’re getting into and remember that, as with all investments, the value can go down as well as up. You might get back less than you put in. Specialist investments may also be harder to sell quickly or may lose value more sharply, so always take time to check the risks and get advice if you’re unsure.

Every investment comes with some level of risk, but not all risks are the same. 

Shares (also called equities) can go up and down quickly. They offer the chance for higher returns, but they’re also more likely to have ups and downs. That’s why funds in the growth phase of a pension usually take on more risk. The aim is to grow your money by investing in company shares, while still keeping risk in check. Bonds, which are loans to governments or companies, tend to be steadier, but they usually grow more slowly. Cash feels safer, but it might not grow enough to keep up with rising prices and charges over time, which could reduce what you can spend in the future.

To help manage these risks, some investors and policyholders use a strategy called diversification. This means spreading your money across different types of investments. For example, someone who’s planning to retire in 15 years might choose a mix of shares for growth and bonds for stability. Another person who’s already close to retirement might prefer a more cautious approach, with more money in bonds and cash to help protect their savings. The right mix depends on your personal goals, how much risk you’re comfortable with, and how long you have until you need the money. And while those who choose their own investments with self-select funds should diversify on their own, those who have a defined contribution policy will have it done for them.

To better understand your own risk appetite, check out our risk profiler tool and answer 8 questions to help you understand your attitude to investment risk.

Many pension providers also offer tools to help you choose the right level of risk. These include risk profiling quizzes and model portfolios, ready-made investment mixes designed for different comfort levels and retirement timelines. It’s important to check in on your pension regularly to make sure it still matches your goals, especially if your circumstances change.

Remember, no investment is completely risk-free. Even cautious strategies can lose value, especially if inflation is high or markets change suddenly. That’s why it’s important to spread your investments, understand what you’re invested in, and get advice if you’re unsure.

Yes, in most cases, you can change your investments after transferring your pension. Most pension platforms are designed to give you flexibility, so you’re not stuck with your original choices. Whether you want to switch to a different fund, adjust your risk level, or explore new investment options, you can usually make changes online or through a mobile app (tips on this below).

That said, there are some situations where you might not be able to make changes. For example, if your pension is invested in a fund with a fixed term, like a guaranteed fund that locks in your money for a set number of years, you may have to wait until the term ends. Some workplace pensions may also limit your choices or how often you can switch. And if you’ve chosen a lifestyle or target date fund, the investments may change automatically over time, so you won’t need (or won’t be able) to adjust them manually. You can certainly switch out of a lifestyling option, but doing so means you’ll have to manage your investments and you might not be able to go back.

It’s also worth checking if there are any charges for switching. Some providers let you make changes as often as you like for free, while others may charge a small fee or limit how many switches you can make each year. That’s why it’s a good idea to review your pension regularly, especially if your goals or circumstances change.

It’s worth noting that making frequent changes without a clear plan can lead to poor outcomes. Some investments may take time to grow, and switching too often could mean missing out on long-term gains. Always check the terms of your pension and consider speaking to a financial adviser if you’re unsure.

Tips on using online dashboards or mobile apps to manage your pension

Managing your pension doesn’t have to be complicated. 

Keeping an eye on your pension is much easier when you use the tools your provider offers. With the MyAviva online dashboard and mobile app, for example, you can check your Aviva pension balance, see how your investments are performing, and make changes all in one place. It’s designed to be simple and secure, so you can manage your Aviva pension whenever it suits you.

You can also use MyAviva to view your transaction history, update your personal details, and track your retirement goals. The app includes helpful features like fund performance charts and risk level indicators, so you can make more informed decisions. If you’re not sure where to start, there are guides and FAQs built into the platform to help you along the way.

Checking in on your pension every few months, or when something in your life changes (like your job or income), can help you stay on track. Whether you’re adjusting your investments or just seeing how things are going, tools like MyAviva could make it easier to stay in control of your future.

You can access your pension from age 55 (going up to age 57 from 6 April 2028), which is when your pension becomes something you can start using, rather than saving into.

You’ll typically have a few main options:

1. Take a lump sum, which means withdrawing some or all of your pension as cash. You can normally take up 25% of your total pension pot tax-free. ^{Footnote [3]} Anything above that is usually taxed as income, based on your personal tax rate. For example, if you take out a large amount in one go, it could push you into a higher tax band for that year, so it may be worth planning carefully to avoid paying more tax than necessary. ^{Footnote [4]}  
   
   Let’s say you have a pension pot worth £100,000. You can usually take £25,000 tax-free. If you decide to take the remaining £75,000 all at once, that amount is added to your income for the year. If you have no other income, the first £12,570 of that £75,000 would fall under the personal allowance and be tax-free. The next portion would be taxed at 20%, and anything above £50,270 total income for the year would be taxed at 40% (based on current UK tax bands).
   
   So, taking a “large amount” means withdrawing enough in one go that it pushes you into a higher tax bracket—resulting in more tax being paid than if you were to spread withdrawals over several years.
   
   If you’re exploring how to take your defined contribution pension, check out our pension withdrawal calculator.
2. Buy an annuity, which gives you a guaranteed income for life or for a set number of years. You buy it with some or all of your pension pot. There are different types of annuities. Some pay a fixed amount, while others increase over time to help keep up with inflation. An annuity can bring you some reassurance because you know exactly how much you’ll get. But once you’ve bought one, you usually can’t change your mind or access the money again.
3. Use income drawdown, where your pension stays invested and you take money out gradually as you need it. With income drawdown, your investments don’t stop working just because you’ve retired. Your pension pot stays invested, which means it still has the chance to grow, but it can also go down in value.
   
   For example, if you take out a large amount during a market dip, your remaining pot might not recover as quickly. Some people choose to keep part of their pension in shares for growth, while moving the rest into bonds or cash for stability. This mix can help balance risk and give you more control over how and when you take your money.

As you get closer to retirement, it’s a good idea to review your investment strategy. You might want to reduce risk by moving into more stable investments, especially if you’re planning to take money out soon.

To help explore what kind of lifestyle you can have in retirement, which may better inform how you withdraw your pension funds, check out Pensions UK’s Retirement Living Standards. 

Once you start withdrawing money, it’s also important to think about how long your pension needs to last. Taking too much too soon could leave you short later on. A sustainable withdrawal plan, like taking a set percentage each year, can help your pension go further. For example, some people aim to withdraw around 4% of their pot each year, but the right amount depends on your personal situation.

Keeping your pension invested in retirement means it can still rise and fall in value. If markets drop or you withdraw too much too quickly, your pension might not last as long as you need it to. It’s important to plan carefully and consider speaking to a financial adviser before making any big decisions.

One of the biggest advantages of saving into a pension is the tax treatment while your money is invested. Any growth your investments make, whether from shares, funds, or bonds, is usually free from income tax, dividend tax, and capital gains tax while it stays inside your pension. ^{Footnote [3]} This means your pension pot can grow more efficiently over time compared to a regular savings or investment account.

When you’re deciding how to invest your pension, it’s worth thinking about how your choices could affect your future tax position. For example, leaving your money invested for longer could give it more time to grow tax-free. Choosing a mix of investments that match your goals and how long you plan to keep the money invested can help you make the most of these tax benefits. Some people also use pensions as part of a wider tax-planning strategy, especially if they’re close to the higher-rate tax band or want to pass on money to loved ones in a tax-efficient way.

It’s also important to understand the rules around pension allowances. The annual allowance is the most you can pay into your pension each year, currently up to £60,000 (across all of your pensions) for most people. If you go over this limit, you might have to pay a tax charge. 

Tax rules can change, and how they affect you depends on your personal situation. If you’re unsure, it’s a good idea to speak to a financial adviser or check the latest guidance from HMRC.