Where is your pension invested? – Many don’t know, and it could cost them

If you have a pension, you’re an investor.

Surprised?

You’re not alone – just 4 in 10 of people know that their pension in invested in the stock market*.

And that means they risk missing a golden opportunity to take control of their retirement planning, and supercharge what could be one of their most valuable assets.

When we break it down by gender, women are far less likely to know their pension is invested compared to men – just 28% versus 51%.

So why are so many of us in the dark?

This article isn’t personal advice. Investments can rise and fall in value, so you could get back less than you invest. If you’re not sure if an action is right for you, ask for financial advice.

*From a survey of 1,200 people by Opinium for HL in April 2025.

Why do most people not know their pension is invested?

A big reason is the way workplace pensions are set up.

For millions, it’s all automatic – you’re enrolled by your employer and your money is invested into a default fund, all without you having to make a single choice.

Convenient? Yes.

But it also means many people aren’t paying their pension enough attention.

Here’s the important truth, your pension has the power to work harder for you. How much you pay in, and the investment return you achieve are the two biggest influences on the size of your pot.

Combine strong investment performance with regular contributions and you could give your future self a serious leg up.

Whether your goal is to retire and travel the world, help family financially, or relocate to the coast, giving your pension a little attention now can make all the difference later.

How to get your pension working harder

Where is your pension money right now?

Start by getting a clear picture – how many pensions do you have, where are they invested, and are they working hard enough?

If you’ve had more than one job, you’ve likely got multiple pensions with different providers.

Many assume that having pensions with different providers automatically means you’re diversified – that your money is well spread.

But if each pot is parked in a provider’s default fund, there’s a good chance they might be invested in similar ways.

This means they’re likely to rise and fall in sync, reacting to market movements in a similar way – and most importantly, likely not as diversified as they could be. It pays to know where each default fund invests your money – how it’s spread across different assets, industries, and regions.

The aim of diversification is to spread your investments so that they respond differently and you always have something working in your favour.

Are you invested in pension default funds and are they right for you?

Default funds are designed to be solid, steady, and diversified, meaning your money is spread across a range of different investments, helping to cushion you from market ups and downs.

However, by nature, default funds are built to be a one-size-fits-all solution.

They have to work just as well for the 22-year-old starting their first job, as they do for a 50-year-old joining a pension scheme later in life.

These two people have very different timelines to retirement, as well as investment goals and values. The default fund is designed to be a solid hands-off option, but they aren’t tailored to you individually.

Can you choose where your pension is invested?

Most pension providers – workplace and private – offer alternatives to the default fund, giving you the choice to take more control over where your money is invested.

Generally speaking, the greater the weighting of shares in a fund, the higher the risk – but also the potential for higher returns.

With greater risk and potential, comes greater likelihood of experiencing market ups and downs. So, if you’re selecting something more adventurous, that might happen more often.

It’s important you’re comfortable with the idea that the value of your investments could fall as well as rise and you might get back less than you invest.

If retirement is decades away, your greatest advantage is time.

More time gives you the flexibility to take calculated risks, as those with a longer horizon have longer ahead of them to ride out any ups and downs.

The HL Self-Invested Personal Pension (SIPP) offers a wide range of investment options.

If you’d prefer to leave it to the experts, our Ready-Made Investments can help – you simply pick a fund that matches your goals and risk level, and our experts take care of the rest.

The HL Ready-Made Investments are run by Hargreaves Lansdown Fund Managers Ltd. Part of the Hargreaves Lansdown Group.

Bring all your pensions together

Got multiple pots? Even if you’re not paying into them anymore, you’re still paying fees. And if the performance isn’t up to scratch, you could look at other options to make your money work harder.

Combining your pensions into one pot can make life easier – one login, one statement, and one clear view of your total retirement wealth.

Keep in mind that pensions are usually moved as cash, meaning you’ll be out of the market for a brief period. However, you can set your investment instructions in advance, to make sure your money is invested as soon as the transfer completes. If you choose to transfer your investments as they are, you can’t usually change them whilst your transfer goes through.

If you’ve transferred a pension before, take a couple of minutes to check that your proceeds aren’t sitting as cash, waiting on an instruction from you, instead of growing.

Before transferring a pension check you won’t need to pay exit fees or lose valuable benefits.