Your pension pot is usually invested in stocks and shares, along with other investments. The aim is to grow your pension pot over the years before you retire.
There’s no tax paid on the growth or income from investments in your pension pot.
You can usually choose from a range of funds to invest in. So you can choose one, or a number of funds, that best meet your needs or circumstances.
If you don’t choose when you first join the pension, your money will be invested in a fund chosen by the pension scheme. It might be referred to as a ‘default’ fund and will be designed to suit a broad range of people.
If your money is invested in a default fund, it might be put into a lifestyle fund. This is a retirement fund that works by moving your money into lower-risk investments as you approach retirement.
Be aware though that the value of investments might go up or down.