Pensions Guide -- Updated July 2026
Pension Lifestyling Guide 2026/27
Most workplace pensions quietly move your money out of higher-growth investments and into bonds and cash as you get closer to your selected retirement date. This guide explains how that automatic "lifestyling" process works, why the date on file with your scheme matters, and when it can work against a drawdown plan.
What Lifestyling Is
Pension lifestyling is the default investment strategy used by most workplace pensions, including the auto-enrolment default funds many employees are placed into without actively choosing an investment option. Instead of leaving your entire pot in higher-growth assets like equities throughout your working life, a lifestyle (or "target-date") fund automatically shifts a growing share of your pot into lower-risk assets such as bonds and cash as your selected retirement date approaches, aiming to protect the pot from a sudden market fall shortly before you plan to use it.
How the Switching Process Works
Rather than switching everything at once, most schemes spread the transition over a "glide path" -- typically starting 5 to 10 years before your selected retirement date and moving a set percentage from growth assets into defensive assets each year. By the final year or two before retirement, a traditional lifestyle fund may hold most of the pot in bonds and cash rather than equities, smoothing out the effect of any single bad year in the stock market right before you plan to access the money.
Why the Selected Retirement Date Matters
Lifestyling is built entirely around the retirement date your scheme has on file for you, which is often a scheme default (commonly age 65) set automatically when you were first enrolled rather than a date you actively chose. If that date no longer matches your actual plans, the consequences run both ways: retiring later than the date on file can leave your pot sitting in overly cautious assets for years longer than necessary, missing out on growth, while retiring earlier than expected can mean accessing the pot before de-risking has properly happened. Checking and updating your selected retirement date with your provider is one of the simplest, most overlooked pieces of pension housekeeping.
Drawdown vs Annuity Lifestyling
Traditional lifestyle funds were designed decades ago around the assumption that most people would buy an annuity at retirement, so they de-risk heavily into bonds and cash to protect the value used to purchase that annuity. Since pension freedoms broadened access to flexi-access drawdown, many people now stay invested well into retirement instead, which means a heavily bond-and-cash-weighted fund at age 65 can leave a drawdown investor too cautiously positioned for a pot that might need to last another 20-30 years. Many providers now offer alternative "drawdown lifestyle" or "flexible" default strategies that de-risk less aggressively and retain more growth assets, so it is worth checking which type of lifestyling, if any, your default fund uses.
Opting Out or Changing It
Lifestyling is a default, not a requirement -- most schemes let you switch into your own choice of funds or turn the automatic glide path off entirely, usually via your online pension portal or by contacting the scheme administrator. Making an active choice means taking on responsibility for reviewing and rebalancing your own asset mix as retirement approaches, so it suits people who want more control or expect to use drawdown rather than an annuity, but check gov.uk and MoneyHelper's free guidance, or speak to a regulated financial adviser, before making changes to how a pension this significant to your retirement is invested.