Should you use a target-date fund for simplicity?
A target-date fund moves gradually from equities into bonds and cash as a chosen retirement date approaches. That is genuinely useful for someone buying an annuity on that date, and it is the wrong shape for someone staying invested in drawdown for thirty years afterwards.
- What it does: shifts from equities to bonds and cash as the target date approaches.
- Where it fits: an annuity purchase or a lump sum on a known date.
- Where it does not: drawdown, where the horizon continues for decades past the date.
- The default risk: workplace schemes often lifestyle toward the scheme's retirement age, not yours.
01 What lifestyling was designed for
The glide path exists to protect the value of a pot on a specific date, because before pension freedoms almost everyone bought an annuity on that date. Removing volatility as the purchase approached made sense: the pot was about to be converted into a fixed income.
That logic is intact for anyone still doing exactly that. If you intend to annuitise at 66, moving the intended premium out of equities as 66 approaches is the same reasoning as de-risking money earmarked for a known purchase.
It stops making sense the moment the money stays invested. A retiree entering drawdown at 66 has a horizon running to 90 or beyond, and a portfolio dominated by bonds at 66 has been prepared for an event that is not happening.
Source: FCA consumer information
02 The default problem
Most workplace schemes lifestyle by default, toward the scheme's own normal retirement age rather than yours. Someone planning to retire at 60 in a scheme targeting 65 is de-risked five years too late; someone planning to work to 68 is de-risked eight years too early.
The date is usually changeable and almost nobody changes it. Checking and correcting it is a five-minute action with a decade of consequences, and it is the single most useful thing most workplace scheme members can do to their investments.
The glide path itself is also worth reading. Some end in a very conservative allocation suited to an annuity purchase; others stop at a moderate mix suited to drawdown, and the difference matters enormously.
Shows: the difference in expected growth between a de-risked allocation and a growth one across a retirement. Ignores: volatility, sequence risk, withdrawals, and the value of the protection de-risking buys.
On the defaults above, the worked example shows £1,144,018. Over 25 years the de-risked mix reaches £628,133 and the growth mix £1,144,018 — before any withdrawals, and ignoring the larger falls along the way.
Source: Workplace pensions
03 What to use instead
For someone entering drawdown, a fixed allocation reviewed periodically is usually better than a glide path, because the horizon does not end at the retirement date. The allocation should be set by horizon and guaranteed income rather than by a countdown.
The exception is the money funding the first few years, which is a known near-term expenditure and should be held accordingly. That is a bucket rather than a glide path, and it applies to a defined amount rather than to the whole pot.
Where simplicity is the objective, a single multi-asset fund at a fixed risk level does the job without the automatic de-risking. It is the same convenience without the assumption about what happens on the date.
Source: Plan your retirement income
Lifestyling was built for a world where everybody bought an annuity on their retirement date, and most people now do not. If you are entering drawdown, being three quarters in bonds at 66 has prepared you for an event that is not going to happen, and the horizon that actually matters runs to 90. Two things to do this week if you are in a workplace default: find out what retirement age the glide path is targeting, because it is probably the scheme's rather than yours, and read where the path ends up. Both take five minutes and both have a decade of consequences.
FAQ
Is lifestyling a bad thing?
Not where the date is a purchase date. De-risking toward an annuity purchase or a known lump sum is exactly right. It fits badly where the money stays invested through a drawdown lasting decades past the target date.
What date does my workplace scheme use?
Usually the scheme's own normal retirement age rather than yours, unless you have changed it. Someone retiring at 60 in a scheme targeting 65 is de-risked too late; someone working to 68 is de-risked far too early.
What should I use for drawdown?
A fixed allocation set by your horizon and your guaranteed income, reviewed periodically, with the first few years of withdrawals held separately in cash. That is a bucket rather than a glide path.
Sources
Regulator references
- FCA consumer information · Financial Conduct Authority · 2025The regulator's own consumer guidance on the products discussed here.Last verified: 2026-09-07
- Workplace pensions · GOV.UK · 2025The statutory auto-enrolment framework and who it covers.Last verified: 2026-09-07
- Plan your retirement income · GOV.UK · 2025The government's own sequence for turning pension pots into income.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.