Risk should usually change for a reason
Reducing pension risk can make sense as retirement gets closer, but it should not be automatic in every situation. The right timing depends on how and when you expect to use the money.
If you plan to access your pension soon, a large market fall could affect the amount available. Lower-risk funds may reduce that risk, although they can also reduce growth potential.
If you plan to keep money invested through retirement, you may still need some growth. Moving everything to very cautious assets too early can create inflation risk and reduce long-term income potential.
Your own comfort matters too. If market falls keep you awake or push you towards bad decisions, the investment strategy may need to be calmer.
Review points
- You are within a few years of accessing benefits.
- Your retirement income plan has become clearer.
- You have taken more risk than intended.
- A market fall would seriously damage your plans.
- Your behaviour suggests the fund is too volatile.