How are investors positioning their portfolios for and within retirement?

interactive investor’s latest SIPP Index: how are investors positioning their portfolios for and within retirement?

interactive investor (ii), the UK’s leading flat-fee investment platform, has launched its latest SIPP index, looking at how pension investors have been investing their SIPPs (self-invested personal pensions) in Q4 2025 and Q1 2026 – both in accumulation and drawdown.

You can read the full report on the interactive investor website here.

The pension landscape is shifting on several fronts, with more pension savers relying on defined contribution schemes to fund retirement, the Finance Act 2026 making its way through Parliament, meaning pensions will form part of inheritance tax calculations from April next year, and pension salary sacrifice contributions above £2,000 facing national insurance from April 2029. The goalposts continue to shift.

interactive investor continues to call for greater clarity and consistency for pension savers, and its latest index shows how SIPP customers are investing throughout their working life and into retirement, even with so much uncertainty.

Key findings:

• Passive funds remain popular with ii’s SIPP investors, with allocations to exchange-traded funds (ETFs) increasing for customers in both accumulation and drawdown.
• Customers continue to favour funds, which occupied seven out of the top ten slots for regular investments during Q4 2025 and Q1 2026.
• Allocations to investment trusts slightly declined for customers in both accumulation and drawdown.
• Investment performance is down over three months, in what’s been a choppy time for markets, but ii customer performance is up significantly over the longer-term (12 and 24 months).

Digging into the latest findings and trends, Kyle Caldwell, Funds and Investment Education Expert at interactive investor, says: “At interactive investor we are agnostic in terms of how investors choose to invest, whether that be through funds, investment trusts, ETFs or for those who have more time and dedication – individual shares. However, we feel that it is vital to provide investors with the full suite of options as at certain points of the investment journey investors may prefer to dial up or dial down exposure to certain types of investments.

“For example, in the accumulation phase, particularly for those at the start of their investment journey, our data points to ETFs becoming a greater part of portfolios, almost doubling in percentage terms over the past four years (from an average holding of 9% in Q1 2022 to 17.6% in Q1 2026). When looking under the bonnet the fund type investors often turn to are global ETFs, which for a very low cost (typically below 0.2% a year) aim to replicate the return of the global stock market index. This type of ETF provides investors exposure to thousands of companies, across multiple countries and sectors. Therefore, many investors view a global ETF as a core holding in a portfolio that can be tucked away with confidence for the long term.

“However, balance is key when it comes to investing. While a global ETF is a worthy contender as a core strategy, holding other types of funds alongside it that are offering something sufficiently different can help investors to achieve greater levels of diversification. With actively managed funds, including investment trusts, it is important to look under the bonnet to ascertain how the fund manager is attempting to beat the market it is essentially competing against, and then making your own judgement call on whether the style of the fund and the composition of the portfolio has the ability to add value over the long term.

“For post-retirement portfolios, those in drawdown, our data shows that ETFs are also rising more in popularity. However, investors are casting their nets wider. Despite allocations to investment trusts declining, the closed-ended fund structure has a five-percentage point higher weighting for those in drawdown versus the accumulation phase. For me, one of the key ‘bells and whistles’ that investment trusts have in their toolkit is the ability to smooth income payments over time, due to being able to retain 15% of income generated each year in a revenue reserve. During lean periods, such reserves can be dipped into to maintain or increase dividend payouts. This is not a theoretical advantage – a large number of investment trusts utilised revenue reserves during the Covid-19 pandemic and the Global Financial Crisis, in order to keep income flowing during those dividend droughts. Due to this, 20 investment trusts have delivered at least 20 consecutive dividend increases. In addition, there are 30 investment trusts that have increased their dividends for 10 or more consecutive years, but fewer than 20 years.”

Top investment trends in accumulation and drawdown

Delving into the top investments across ii’s SIPP investors, Craig Rickman, Personal Finance Expert at interactive investor, says: “Risk appetite and asset allocation are very much personal things, and are determined by an investor’s experience, capacity to bear losses and natural inclination to stomach sharp market ups and downs. That said, as a general rule, investors in drawdown typically need to adopt more caution than those saving for retirement.

“A core reason for this is to guard against threats such as sequencing of returns and pound cost ravaging, which are most acute during the early retirement years. While there are some differences between the two, both occur when you encash shares during falling markets, depleting your savings at a faster pace if not managed correctly. Essentially, if the equity portion of your portfolio has fallen, you must draw a higher percentage of the pot to maintain the same level of income.

“This may explain, in part, why the Royal London Money Market Fund has topped the pile among drawdown investors over the latest two quarters. Cash or cash-like investments can act as a tidy and secure home to dip into during market slumps, helping to plug the income gap and crucially enabling equity withdrawals to be placed on hold until stocks recover.

“But this can’t be the only reason to illustrate the popularity of this strategy, as it also features prominently for those in the accumulation phase. Further explanations might include the facility to outpace inflation without taking on investment risk – though given the updated inflation forecasts, how long this will last is another matter – and to act as a short-term shelter against volatile stock prices, with some investors understandably spooked by the market wobbles triggered by events in the Middle East. We should note that while cash-like investments can hold an important place in any well-balanced portfolio, allocating too much over long periods can drag on investment performance, harming overall growth.

“One final trend that catches the eye for decumulation investors is that two investment trusts – Scottish Mortgage and Alliance Witan – dipped in popularity compared to the previous quarter, while three passive global strategies moved upwards. It will be interesting to see if this continues to play out over the coming months and years.”

The gender pension gap, and celebrating the success of female pension savers

Breaking down the difference in SIPP portfolios when it comes to men and women, Camilla Esmund, Senior Manager at interactive investor, says: “Escalating tensions across the Middle East, volatile oil prices, and a jittery global backdrop have cast a shadow over investment portfolios, and our SIPP customers have not been immune. It’s important not to shy away from the realities of investing; sometimes markets do take a dip, and this will impact short-term investment performance. Our SIPP Index data shows exactly why it’s important to keep a long-term mindset, even when it’s incredibly difficult to do so.

“The data over the past three months are uncomfortable numbers in isolation, but when you zoom out, as all good long-term investors should, a different and encouraging picture emerges. Over 12 months, women in accumulation under 55 returned 14.3%, and those over 55 returned 13.5%. These are impressive hard-won returns built not on quick wins, but on a disciplined and diversified approach.

“What’s particularly striking when we look under the bonnet of how ii SIPP customers are invested is the quality of construction in these portfolios. Both men and women on ii are building well-diversified SIPP portfolios, with a lot of similarities.

“Women hold slightly higher weightings in investment trusts, 12% in accumulation and 15.7% in drawdown, compared with 9.3% and 14.6% respectively for men. They also tilt slightly more towards funds. But ultimately, it’s like spot the difference.”

You can read the full report on the interactive investor website here.