Portfolios drift over time
Rebalancing means adjusting a portfolio back towards its intended mix. If shares perform strongly, they may become a larger part of the pension than originally planned.
That drift can increase risk without you deliberately choosing more risk. A pension that started balanced may slowly become more growth-heavy if it is not reviewed.
Rebalancing can also work the other way. After market falls, it may involve adding back to assets that have fallen so the portfolio stays aligned with the plan.
It is not about predicting markets. It is about keeping the investment mix connected to your risk level, timeline and retirement goal.
When to review
- At least once a year.
- After large market movements.
- When contributions change.
- When retirement gets closer.
- When your target risk level changes.