Drawdown investment ideas
Important information: This isn’t personal advice. What you do with your pension is an important decision that you might not be able to change. You should check you're making the right decision for your circumstances and that you understand all your options and their risks. The government's free and impartial Pension Wise service can help you and we can offer you advice if you’d like it.
Getting your strategy right
With drawdown, you choose where and how to invest, so you’re in control of the money in your pension. Your financial goals, attitude to risk and the costs involved should all come into play when making your decisions. It’s also likely that your plans around how and when to start drawing an income will heavily influence your investment choices.
Remember your pension income in drawdown isn’t secure. Although there is the potential for gains, the value of your investments and the income they produce can rise and fall. It’s possible to get back less than you invest. You’ll need to regularly review your choices to make sure your income and investment strategy continue to meet your needs.
You can find out more about income strategies in our guide to investing in drawdown.
If you've thought about your drawdown goals, but are unsure how to achieve them, you may want to consider drawdown investment pathways. There are four pathways to choose from, and each matches a potential retirement goal with an investment option.
Investment ideas for three drawdown strategies
When looking for investment inspiration it’s important to remember your own goals, and attitude to risk. Funds are often a popular choice, as they are a collection of investments with a specific aim, chosen and run by an expert fund manager.
The individual fund ideas below have been highlighted by our team of experts as investment opportunities and aim for either long-term growth, to produce an income or to defend against market falls. But remember, past performance isn’t a guide to the future and these ideas aren’t personal advice. You should choose investments based on your own preferences, attitude to risk and research and make sure any investment is held as part of a diversified portfolio.
Take investment advice if you’re not sure. Investments rise and fall in value, so you could get back less than you invest. Please always read the key information and fund factsheet, including charges, of any investment before making any decisions.
Here are three funds which aim for growth in the long-term. As with all investments, their value can fall as well as rise so you could get back less than you originally invest. There’s no guarantee that any investment will give you the long-term growth you hope to receive.
Rathbone Global Opportunities
Invests mainly in large and medium-sized companies with the potential for growth and dominance in developed markets, such as the US, UK and Europe. The fund also has the flexibility to invest in smaller companies and emerging markets, both of which are higher risk.
View factsheet including chargesView Key Investor Information
L&G Future World ESG Tilted & Optimised Emerging Markets
Invests mainly in large and medium-sized companies from higher-risk emerging markets such as China, India and Taiwan, while being mindful of environmental, social and governance (ESG) issues. While it’s diversified across many countries and sectors, it may have more ups and downs compared to similar growth-orientated funds that invest in developed markets. The fund can also invest in higher-risk smaller companies.
View factsheet including chargesView Key Investor Information
Fidelity Special Situations
Invests in large, medium-sized and higher-risk UK smaller companies that are often unloved by other investors but have the potential to return to favour and recover and see their share price rise. The fund can use derivatives, which adds risk.
View factsheet including charges View Key Investor Information
Keeping a cash buffer
It’s important to have a cash buffer, in or outside of your pension. If the market or the income from your investments fall, you’ll have a cash source to draw an income from. This means you won’t be forced to sell when prices are low.
Holding large amounts of cash does come with its own risks though. Cash can lose value over time if inflation is above interest rates.
Why variety can help reduce risk
There’s always some risk with investing, but it’s possible to reduce the impact of the risks you face by making sure you have a good variety of investments.
Different types of investments perform well at different times, and so do different markets around the world. Holding a mixture of investments, across various markets, could help shelter you when some areas don’t perform as well as others.
Guide to investing in drawdown
This guide explains the relationship between investing and taking an income in more detail. It could help to get you thinking about your own strategy and where you might invest.
Expert support and advice
Guidance from Pension Wise
Pension Wise is a free government service for people getting ready to receive a UK defined contribution pension (this could be a personal or workplace pension).
It offers impartial guidance on pension types, how to access savings, and the tax implications of each option.
Helpdesk support
Our Bristol-based helpdesk are here for you six days a week. Our friendly and knowledgeable team are ready to answer your questions no matter how big or small.
Please contact us or schedule a callback at your convenience.
Advice on your retirement plans
Our financial advisers can help you develop a retirement income strategy, ensuring your investments align with your goals.
They'll advise you on the best time and methods for accessing your pension.