About the L&G Mastertrust > How will my pension pot be invested? > How will I be able to use my pension pot?
How will my pension pot be invested?
How your pension pot is invested and how those investments perform, can have a big impact on how much you’ll have in retirement.
How will my pension pot be invested?
How your pension pot is invested and how those investments perform, can have a big impact on how much you’ll have in retirement.
If you're still saving for your retirement, you’ll have new options for how you can invest your L&G Mastertrust pension pot, as well as a new ‘default’ investment option if you don’t make a choice.
Option 1: the L&G Lifetime Advantage Funds (the default option)
This is a ready-made investment strategy known as a type of ‘Target Date Fund’ or ‘TDF’. They're designed to do most of the work for you by automatically choosing how your money is invested as you move closer to, and then into retirement.
If you don’t make an investment choice, it’s where your pension pot will be invested.
This type of strategy is designed to aim for investment growth in the earlier years (when you’re saving for your retirement and can weather any ups and downs in the investment market) and then move your pension pot into more stable investments as you approach your Selected Retirement Date, and beyond.
You can take a look at L&G’s ‘Your guide to the Target Date Funds’ to find out more. Go to section 3 for information about the L&G Lifetime Advantage Funds.
Plus you'll find links to the fund factsheets and information about the charges for each of the Lifetime Advantage Funds in the 'Your guide to the L&G Mastertrust fund range'.
Option 2: One of the other L&G Target Date Funds
These are alternative Target Date Funds. Like with the default L&G Lifetime Advantage Funds, they’ll do most of the work for you by choosing how your money is invested.
If you’re a long way from your selected retirement date, these strategies will place more of your money into assets such as company shares. Although they are more likely to go up and down in value in the short term, this type of investment is also more likely to grow your pension pot over the longer term.
If you’re closer to retirement, they will place more of your money into assets such as bonds. Although they may not grow by as much, your pension pot is less likely to fall in value, helping you to plan for your retirement with more confidence.
You can take a look at L&G’s ‘Your guide to the Target Date Funds’ to find out more. Go to section 2 for information about the L&G Target Date Funds.
Plus you'll find links to the fund factsheets and information about the charges for each of the Target Date Funds in the 'Your guide to the L&G Mastertrust fund range'.
Option 3: Choosing from a range of Self-Select funds
This is where you get to decide how your money is invested and how much you want to invest in different types of assets.
It’s an important decision as the amount of retirement income you could receive from your pension pot would depend partly on how well your investments have performed over the years.
You can take a look at L&G’s ‘Your guide to investing’ to find out more the types of investments you can choose and how they work.
Plus you can view the full list of all the Self-Select funds that will be available in the L&G Mastertrust in ‘Your guide to the L&G Mastertrust Fund Range’.
Option 4: Choosing from a range of Self-Select Lifestyle strategies
A lifestyle is an investment strategy that automatically moves your money, over a period of time, generally into funds that reflect the way you want to use your pension pot in retirement.
The process of automatically moving your savings from one fund to another will stop once you reach your retirement date. This means that, if your plans change and you don’t take your money as planned, your pension pot may not be invested in a way that reflects your needs.
You can take a look at L&G’s ‘Your guide to investing’ to find out more the types of investments you can choose and how they work.
Plus you can view the full list of all the Self-Select Lifestyle strategies that will be available in the L&G Mastertrust in ‘Your guide to the L&G Mastertrust Fund Range’.
If you've already moved some (or all) of your pension pot into drawdown, you’ll also have new options for how you can invest your L&G Mastertrust drawdown pot, as well as a new ‘default’ investment option if you don’t make a choice.
Options 1 to 3
You’ll be able to pick from the first three options shown in the section above:
- L&G Lifetime Advantage Funds (the default option)
- L&G Target Date Funds
- Self-Select funds
If you don’t make an investment choice, your drawdown pot will be invested in the ‘Retirement’ stage of one of the L&G Lifetime Advantage Funds.
You can view the full list of all the funds that will be available in options 1 to 3 in the L&G Mastertrust in ‘Your guide to the L&G Mastertrust Fund Range’.
Please note that the Self-Select Lifestyle strategies are designed as investment strategies whilst people are building their pension pot for retirement, rather than for use in retirement.
Option 4: Choosing from four Investment Pathways
Investment Pathways have been designed to help make sure that the portion of your money that remains invested once you have moved some (or all) of your pension pot into drawdown can support your objectives for the future.
They are designed around four main ways that you might want to use your drawdown pot:
- Option 1: I have no plans to touch my money in the next five years
- Option 2: I plan to use my money to set up a guaranteed income (annuity) within the next five years
- Option 3: I plan to start taking my money as a long-term income within the next five years
- Option 4: I plan to take out all my money within the next five years
If you have more than one goal you might want to think about splitting your drawdown pot between the different options to achieve this. If you select one, or more, option L&G will invest your drawdown pot for you in a way that supports your choices.
Take a look at the ‘Your guide to the L&G Mastertrust Investment Pathways’ for more information, including the links to the factsheets for each option.
How does the default option in the L&G Mastertrust compare to the default option in the DC Section?
The DC Section's default investment option is the Lifestyle drawdown option, and the L&G Mastertrust's default option will be the L&G Lifetime Advantage Funds (LAFs).
Both default options automatically move your money into different funds over time, with the aim to move your money into less risky investments as you get closer to retirement.
That means that they both aim for more growth (or ‘reward’) in the years that you’re furthest away from retirement.
But, how each default investment option does this is different. This means that each default option:
- Invests your money into different types of funds that aim for different levels of growth in the earlier years.
- Starts to move your money into different types of investments that are designed to be less risky when you get closer to retirement (known as when you start to ‘de-risk’).
- Targets different levels of risk as you get closer to retirement.
Balancing risk and reward
When it comes to investing your money, if you want the potential for better returns, you’ll normally have to accept more risk.
Put simply, in return for the possibility that the value of your pension pot will go up by more over the long term, there will usually be a greater chance that your pension pot will go down more often over the same period. This means that, if your pension pot is invested in a higher-risk fund, you could lose a larger part – and in some cases all – of the money you have invested.
By investing in a lower-risk fund, you’re less likely to lose as much of the value of your pension pot but it’s also less likely to go up in value by as much. This is what is known as the balance between risk and reward.
Here’s how the two default options compare:
What should I think about if I’m in the DC Section's default strategy's de-risking period?
If your pension pot is currently invested in the DC Section’s default strategy (the Lifestyle drawdown option), and you’re less than ten years to retirement, then it’s worth thinking about how your investment mix will change if your pension pot is invested in the default strategy in the L&G Mastertrust (one of the L&G Lifetime Advantage Funds). And how that change will impact the level of risk that your pension pot will be exposed to.
Stocks and shares
Risk level: High
The price of stocks and shares can go down or up in value often and, sometimes, by large amounts compared to other investments.
In return, they offer the potential for growth over the long term.
Property
Risk level: High
Property prices can go down or up sharply in the short term and – in the case of a fall in price – may take a long time to recover.
In return, they offer the potential for growth over the long term.
Bonds
Risk level: Moderate to high
Although they are sensitive to changes in interest rates and inflation, bonds tend to go down or up in value less than investments in property or stocks and shares.
As a result, they are more likely to provide modest investment returns compared to investments in property or shares.
Cash
Risk level: Low
Cash is widely seen as being the least likely investment to go down or up in value.
However, although it is less likely to go up and down in value, investment returns are likely to be low.
Remember, if you don’t think that the L&G Lifetime Advantage Funds (the default strategy in the L&G Mastertrust) is right for you, you will be able to choose from a range of other investment options from 23 August 2025.
The impact of the US tariffs on my pension pot
The recent US global tariff policy has created a lot of turbulence in the markets. That’s hit share prices and other investments. As a result you might have noticed the value of your pension pot has fallen.
It’s important that you don’t panic and don't make any rushed decisions about your pension. L&G have a helpful article about looking after your pension in times of uncertainty.
Investment charges
Below you’ll find a comparison of the charges that you would pay in the default investment options for the DC Section vs the L&G Mastertrust.
You can see a full list of the investment charges that you will pay for each investment option that will be available in the L&G Mastertrust in ‘Your guide to the L&G Mastertrust Fund Range’.
Plus, if you have moved some (or all) of your DC Section pension pot into drawdown, you will find links to the factsheets and charges for the Investment Pathways options in 'Your guide to the L&G Mastertrust Investment Pathways'.
Remember, Sibelco will continue to cover the day-to-day costs for managing your pension (known as an Annual Management Charge or ‘FMC’) when your pension pot moves to the L&G Mastertrust, and you’ll continue to pay the charges for managing your investments (known as a Fund Management Charge or ‘FMC’).
The L&G Mastertrust’s approach to responsible investing
L&G invests billions of pounds of capital in projects that aim to improve society. This includes low-carbon technology, infrastructure, affordable homes, and support for small businesses.
The L&G Mastertrust Trustees consider the impact that investing in some companies could have on things that members might care about. So, they look at an organisation’s environmental credentials, how it treats its employees and how well it’s run. These environmental, social and governance factors are known collectively as ESG considerations. Find out more about the Mastertrust’s approach to responsible investing.
Are you making the most of your L&G pension account?
You can check how your pension pot is doing at any time by logging into your L&G pension account, My Account (MA).
Plus, once the move to the L&G Mastertrust takes place, you’ll continue to be able to check-in on your L&G Mastertrust pension pot using the same login details.
If you haven’t registered, it’s quick to do. Just follow these three steps:
- Visit My Account (MA).
- Complete your personal details. You’ll need your account number, which is shown on any letters you’ve been sent by L&G and on the letter that we sent to you on 23 July 2025.
- L&G will then send you an email which will contain an activation link to complete your registration.
