Guaranteed Investment Rates

If you have an old pension plan which contains a Guaranteed Investment Rate then this section is for you.

Some pension schemes provide Guaranteed Investment Rates (GIRs) – a guarantee that your pension fund will grow by at least a specified amount each year


Typical Guaranteed Investment Rates are 3% or 4% pa and were included in the pension scheme when investment returns, interest rates and inflation were very much higher than they are today.

Guaranteed Investment Rates are more common on With Profits funds, but some other funds may also have Guaranteed Investment Rates. Such guarantees are lost if you transfer out of the scheme.

What you should check

  1. What is your attitude to risk and capacity for loss? Before switching out of a pension scheme with a Guaranteed Investment Rate if you have a low attitude to risk you should consider staying put and retaining a guaranteed rate of return on your pension fund.


  1. When are you expecting to take the benefits from your pension? Whatever your attitude to risk, if you are close to taking benefits you may not want to be subject to a volatile investment market and again would prefer to stay put.




This information does not constitute personal advice and should not be treated as a substitute for specific advice based on your circumstances.

Information given relating to tax legislation is based on my understanding of legislation and practice currently in force. Whilst I believe my interpretation of current law and practice to be correct in these areas, I cannot be responsible for the effects of any future legislation or any change in interpretation or treatment. In particular you are warned that levels of tax and tax reliefs are subject to alteration and, in any case, the value of such reliefs and benefits may depend on an individual’s circumstances.

If you are in any doubt as to whether any course of action is suitable for you, then you should discuss the matter with a suitably qualified independent financial adviser or other specialist.