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What is pension lifestyling?

Find out what pension lifestyling is and how you can use it to enjoy your retirement while taking a more hands-off approach to financial management. 


  • Lifestyling is an investment strategy that reduces the risk of your pension savings as you approach retirement age.

  • The purpose of a pension lifestyle strategy is to create increased financial stability.

  • Like all investment strategies, there are advantages and disadvantages to pension lifestyling.

  • Knowing how to start pension lifestyling can set you up for a better financial future.

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What is pension lifestyling?

In the context of pension planning and retirement preparation, lifestyling is an investment strategy where your pension is automatically switched to more stable, low-risk investments as your retirement age approaches. 

Preparing for retirement can be difficult without access to the right resources and support.

We take a closer look at how pension lifestyling can help your pension, reduce the risk of financial losses, and help you create a more secure retirement plan. 

What is the purpose of lifestyling?

Pension lifestyling aims to make it easier for people approaching retirement age to optimise their pension savings and ensure a more stable financial future.

What risks could pension lifestyling help you manage?

There are several different risks that pension lifestyling can help you manage. 

Pension lifestyling:

  • Reduces the risk of short-term pension value falls.

  • Aligns your pension savings with your plans.

  • Helps protect your pension pot.

What are the advantages and disadvantages of lifestyling?

No investment strategy is 100% predictable or risk-free, and lifestyling pension strategies are no exception to the rule.

Let’s start with the advantages of getting your pension savings automatically switched:: 

  • Hands-off money management: The nature of pension lifestyling is automatic, which means your money gets moved without needing any direct input. This makes it less laborious to manage.
  • Potential for value increase: Some lifestyling options may come with value enhancement. For instance, UK government bonds (gilts) increase as the cost of pension income increases, boosting your savings.
  • Flexibility: Pension lifestyling strategies are not set in stone. You have options to adjust them if you change your mind at a later date. 

The disadvantages surrounding lifestyle pensions are also important to consider.

For instance, if you elect to withdraw your savings before your estimated retirement age, you could miss out on the benefits. 

Also, as the investments are automatic, your funds could be placed into a higher-risk account that results in financial losses before being switched to a lower-risk fund closer to your retirement. 

Because of these disadvantages, it is important for anyone considering a pension lifestyle strategy to carefully weigh up the details before making a decision.

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How to start pension lifestyling

If the prospect of pension lifestyling appeals to you, learning about how to start is crucial. 

You can follow these tips for a deeper understanding of how to start your lifestyling journey. 

  • Conduct research: The more you know about how pension lifestyling works, the more confident you can be with your decision. Developing a clear understanding of your own personal retirement and financial goals is important for making the right decision.

  • Approach your pension provider: In the UK, you can arrange pension lifestyling with most pension providers, so it’s worth talking to them about your options.

  • Talk to your employer: Some employers may offer unique benefits for retirement and pension plans. It is a good idea to find out if yours offers anything that you can factor into your decision.

  • Hire a professional financial adviser: A financial adviser can offer practical, professional guidance for different financial circumstances, including retirement and pension planning. If you’re looking for the best financial adviser for your unique situation, Unbiased can help you find the right one. 

If you discover that pension lifestyling is not for you and want to opt out at any stage, you can.

However, this will need to be done via your pension scheme, and you may want to explore if there are any penalties or additional tax liabilities beforehand. 

A financial adviser can assist and ensure that the process is carried out smoothly and with as little financial losses as possible.

Using a pensions lifestyle calculator

You can use a pensions lifestyle calculator for effective retirement planning. Financial advice can be vital in helping you plan for retirement, including legally reducing your tax bill. 

A pensions lifestyle calculator will help you identify which plan will work best for you with your current income level, planned retirement age, and financial goals. 

Want to learn more about pensions?

Planning for retirement is a crucial step, and it’s never too early to start as you can create a retirement plan and strategise on how to grow your wealth.

If you want to learn more about pensions and get expert financial advice, let Unbiased match you with a financial adviser who’ll help you create a brighter financial future.

Get pension advice
We’ll find a professional perfectly matched to your needs. Getting started is easy, fast and free.

About the author
Our team of writers, who have decades of experience writing about personal finance, including investing, retirement and pensions, are here to help you find out what you must know about life’s biggest financial decisions.