Asset Allocation Calculator United Kingdom 2026-27
Building a portfolio? See how different mixes perform.
Find your ideal investment portfolio mix based on age, risk tolerance, and time horizon. See your recommended growth vs defensive split with UK ETF suggestions and a risk-return profile chart.
Based on 110-minus-age rule adjusted for risk and horizon. Not financial advice — consult a licensed adviser.
Select the question that matches where you are right now.
Your result shows a suggested split between growth assets (shares, property) and defensive assets (bonds, cash) based on your age, risk tolerance, and time horizon. This is a starting point — not a personal financial recommendation.
Shares and property have historically returned 7–10% per year over long periods but can fall 30–50% in a crash. They are appropriate when you have time to recover from downturns.
Bonds and cash reduce portfolio volatility and provide income. They typically lose less in downturns but grow less over time. Essential when you are close to needing the money.
Asset allocation depends on your full financial picture — income, debts, tax situation, and specific goals. This calculator provides a rule-of-thumb estimate. A financial adviser can create a personalised strategy.
Three inputs drive the recommended allocation — age, risk tolerance, and time horizon. Understanding how each affects the result helps you make an informed decision.
Younger investors can afford more volatility because they have decades to recover from crashes. Each decade of age shifts the allocation ~10% toward defensive assets under the classic rule.
If a 30% portfolio drop would cause you to sell in panic, your allocation is too aggressive regardless of what the formula says. Conservative investors accept lower expected returns for peace of mind.
A 60-year-old with a 30-year horizon (investing super for drawdown over decades) may hold more growth assets than the age rule suggests. A 35-year-old saving for a house deposit in 3 years should hold mostly defensive assets — the time horizon matters more than age for that specific goal.
Once you have a target allocation, you need to implement it. The three main approaches are: single diversified ETF, DIY multi-ETF portfolio, or pension fund option selection.
VDHG (90/10), VDGR (70/30), VDBA (50/50), or DHHF (100% equity) automatically maintain your allocation with no rebalancing needed. Slightly higher MER (0.19–0.27%) but zero effort.
Build your own with VAS (AU shares), VGS (intl shares), and VAF (bonds) at ~0.10% total MER. Requires annual rebalancing. On £500k, saves £850/year vs VDHG — but adds complexity.
Switch your super to the option matching your profile — High Growth, Growth, Balanced etc. Free, no CGT, automatic rebalancing. Check your fund portal and compare the allocation to this result.
Once you know your target allocation, here are the practical next steps.
Log in to your pension fund portal and your investment accounts. Many platforms (Sharesight, Stockspot) show your current allocation vs target. Knowing your actual position is step one.
Super has the best tax treatment in the United Kingdom. Switching investment options inside super is free and CGT-free. If you have significant super, align your fund option to your target allocation before adjusting outside-super investments.
Put a calendar reminder for 1 July each year to review and rebalance. Also rebalance if any asset class drifts more than 5–10% from its target. Direct new contributions to the underweight class first to minimise selling and CGT.
The rule-of-thumb formulas and how they are adjusted for risk and time horizon
The 110 minus age rule
The most common starting point for equity allocation is 110 minus your age. At 35, this gives 75% in growth assets (shares, property). At 55, it gives 55%. The logic: younger investors have longer to recover from market downturns and should take more risk to maximise long-term growth.
Risk tolerance adjustment
A more aggressive risk tolerance shifts the allocation up by 10–20%; more conservative shifts it down. Someone aged 35 who is very risk-averse might hold 55% growth assets instead of 75%; a risk-tolerant investor might hold 90%.
Time horizon matters most
A 30-year horizon allows for significant market recovery after crashes. A 5-year horizon does not. Short horizons (<10 years) warrant a meaningful defensive tilt regardless of age.
| Profile | Growth % | Defensive % | Expected return* |
|---|---|---|---|
| High Growth | 90% | 10% | ~7.5–8% per year |
| Growth | 75% | 25% | ~6.5–7% per year |
| Balanced Growth | 65% | 35% | ~6–6.5% per year |
| Balanced | 50% | 50% | ~5–5.5% per year |
| Conservative | 30% | 70% | ~3.5–4% per year |
*Historical long-run ranges. Past performance does not guarantee future returns.
UK shares, international shares, bonds, cash, and property explained
Growth assets
Growth assets are expected to deliver higher long-run returns but with more volatility. They include:
- UK shares — LSE-listed companies. Low-cost ETFs: VAS (Vanguard), A200 (BetaShares), IOZ (iShares). Historical return ~9% per year nominal over 30 years.
- International shares — Global companies. ETFs: VGS, VGAD, IVV, BGBL. Provides diversification away from UK economy (~2% of world GDP).
- Property/REITs — Listed real estate investment trusts. ETF: VAP (Vanguard). Included for income and inflation hedge.
Defensive assets
Defensive assets provide stability and income with lower expected returns:
- Bonds/fixed income — Government and corporate bonds. ETFs: VAF (Vanguard UK Fixed Interest), VIF (International). Lower return but reduces portfolio volatility significantly.
- Cash — High-interest savings accounts, term deposits. Provides liquidity and stability at cost of lower long-run return.
UK home bias
Many UK investors are overweight UK shares relative to the global market weight (~2%). The typical pension fund holds 25–35% UK shares — far above our market weight. This home bias provides dividend income (the United Kingdom has high dividend yields due to dividend tax) but concentrates risk in one economy.
Low-cost ETFs to implement your asset allocation — MER comparison
| Asset class | ETF | Provider | MER |
|---|---|---|---|
| UK shares | VAS / A200 | Vanguard / BetaShares | 0.07% / 0.04% |
| International shares | VGS / BGBL | Vanguard / BetaShares | 0.18% / 0.08% |
| Intl (hedged) | VGAD / HGBL | Vanguard / BetaShares | 0.21% / 0.12% |
| Property (REIT) | VAP | Vanguard | 0.23% |
| Aust. bonds | VAF / IAF | Vanguard / iShares | 0.20% / 0.26% |
| Global bonds | VIF / VBND | Vanguard | 0.20% |
| Diversified (80/20) | DHHF | BetaShares | 0.19% |
| Diversified (90/10) | VDHG | Vanguard | 0.27% |
| Diversified (70/30) | VDGR | Vanguard | 0.27% |
Single-fund vs DIY
A single diversified ETF like VDHG or DHHF handles allocation and rebalancing automatically at a slightly higher MER. A DIY portfolio of individual ETFs costs less (0.08–0.15% per year total) but requires manual rebalancing. On £500,000, a 0.15% MER difference saves £750/year — roughly £45,000 over 30 years at 7% growth.
How pension fund investment options map to asset allocation profiles
pension fund option names and typical allocations
Most super funds offer pre-mixed investment options with names that roughly correspond to allocation profiles:
| Option name | Typical growth % | Typical defensive % |
|---|---|---|
| High Growth / Aggressive | 85–95% | 5–15% |
| Growth | 70–85% | 15–30% |
| Balanced Growth | 60–75% | 25–40% |
| Balanced | 50–65% | 35–50% |
| Conservative Balanced | 35–50% | 50–65% |
| Conservative | 20–35% | 65–80% |
Default "MySuper" option
Many Britons are in their fund default "MySuper" option, which is typically a Balanced or Lifecycle product. Lifecycle products automatically reduce growth exposure as you age — similar to what this calculator suggests. Check what option you are actually in via your member portal.
Switching super options
Switching investment options inside super is generally free and has no capital gains tax consequences — unlike switching investments outside super. This makes it much cheaper to rebalance inside super. Compare your current allocation to this calculator output and consider whether to adjust.
Frequently asked Frequently asked questions
What asset allocation should I have in the United Kingdom?
A common starting point is 110 minus your age as your equity percentage, adjusted for risk tolerance and time horizon. At 35 with moderate risk: ~75% growth (shares and property), 25% defensive (bonds and cash). As you approach retirement, shift toward more defensive assets to protect accumulated wealth from sequence-of-returns risk.
What is the difference between growth and defensive assets?
Growth assets (shares, property, infrastructure) offer higher expected long-run returns with greater short-term volatility. Defensive assets (bonds, cash) offer more stability and income with lower returns. A balanced portfolio holds both — growth for long-term wealth building, defensive for stability and income.
Should I use VDHG or build a DIY portfolio?
VDHG (and similar diversified ETFs) is simpler — one purchase, automatic rebalancing, and suitable for most investors. A DIY portfolio (e.g. VAS + VGS + VAF) costs less in MER (0.10% vs 0.27%) but requires annual rebalancing. The difference on £200,000 is about £340/year. For most investors, the simplicity of a single fund is worth the small extra cost.
How often should I rebalance my portfolio?
Most financial planners recommend annual rebalancing, or rebalancing when an asset class drifts more than 5% from its target. The most tax-efficient method is to direct new contributions to the underweight asset class, avoiding the need to sell (and trigger CGT). Inside super, rebalancing is CGT-free.
Where these figures come from
Savings and interest figures on this page are drawn from The Bank of England (Bank Rate), HMRC (ISA and savings tax rules), the Financial Services Compensation Scheme (deposit protection), and the Financial Conduct Authority (consumer protection).
- Bank Rate (base rate) — Bank of England — The Interest Rate (Bank Rate).
- ISA annual allowance & rules — GOV.UK — Individual Savings Accounts (ISAs).
- Personal Savings Allowance — GOV.UK — Tax on savings interest.
- FSCS deposit protection (£85,000) — FSCS — Financial Services Compensation Scheme.
- Consumer money guidance — MoneyHelper — Savings.
Last checked: April 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.