When you or your employer contributes to your pension we invest it in your selected fund(s). Depending on the fund performance your pension can go down as well as up.
Your pension is a long-term investment that is linked to the stock market (also known as equity investment) and so there will be short term fluctuations in fund value. You need to consider what you’ve earned or lost on your investment overall in relation to what you’ve paid in, rather than over a shorter period such as the last year. Over the long term, equities are expected to outperform cash investment. However past performance isn’t a guarantee of, or guide to future performance, and there is a risk that your fund could be worth less than what you’ve paid in.
You can switch to historically less volatile investment classes as you near retirement. If you’re invested in our three investment profiles (‘cautious’, ‘balanced’ or ‘adventurous’), this will happen automatically.
Before making any decisions on what you do with your funds we suggest you speak to a financial adviser (who may charge for their service). You can find one via www.unbiased.co.uk. If this isn’t suitable as advisers will probably charge for their services, there are organisations such as The Money Advice Service, The Citizens Advice Bureau and The Pensions Advisory Service who can provide free and impartial guidance.