Understanding investing

When you put money into your pension, we invest your money in a fund. A fund is a type of collective investment in which lots of people put their money, with the aim of helping their savings grow.

A fund manager decides on the objectives of the fund, and then chooses where your money goes to achieve this. This could mean investing in things like company shares, property, bonds, and cash.

To start with, the contributions that you and your employer make into your pension are paid into a fund which is chosen for you. This is called the default investment option and, unless you decide to make your own investment choices, this is where your contributions will stay.

Although a default investment option is considered a good starting point for most people, it doesn’t consider your personal circumstances. Even if you’ve already started choosing your own investments, it’s worth considering whether your pension savings are still invested in a way that is right for you.

Here are five practical things that you can do.

1. Understand how you feel about investment risk

All investment involves a degree of risk as the value of the things the fund invests in can go up and down. It’s important that you understand, and are comfortable with, the risks you're taking before making any investment choices.

Take a look at our guide to risk and reward to help you understand how you feel about risk. This will depend on your circumstances and, often, your personality. It’s not unusual for someone’s attitude to risk to change as they get older.

2. Think about how much income you’ll need in retirement

It might seem a long way off but working out how much you’ll need (or want) in retirement will be an important factor in helping you decide where you invest your money.

Our ‘Retirement Living Standards’ tool helps you understand how much you’ll need to live on in retirement.

3. Think about when you might want to access your money

This could influence the amount of risk you’re prepared to take. You might be happy to accept more risk if retirement is a long way off but if you are looking to access your money soon you might not.

4. Find out how we consider environmental, social and governance factors when we are investing your money

Visit our Environment, Social and Governance Hub.

5. Log in to our self-service portal Manage Your Account.

With Manage Your Account, you can see where your money is currently invested, view information about all the funds available to your scheme and tell us where you would like to invest your money in the future.

You can see where your money is currently invested, view information about all the funds available to your scheme and tell us where you would like to invest your money in the future.

Please note Legal & General cannot provide financial advice. If you want help to make your own investment choices, you should speak to a financial adviser. For help finding a financial adviser, visit moneyhelper.org.uk or unbiased.co.uk. Financial advisers usually charge a fee for their services, but it will be personal to you and your circumstances.