Regular amounts buy different quantities
Pound-cost averaging describes investing a fixed amount at regular intervals. The FCA explains that regular purchases buy more when prices are lower and less when prices are higher. This is a description of the buying process, not a promise of a better outcome.
Keep a contribution record separate from an investment purchase record. If your statement does not show when or how contributions were invested, ask the provider rather than assuming a payroll deduction immediately bought a particular fund.
Sources: FCA: Golden rules of investing
A fictional example can still finish with a loss
Fictional arithmetic only, ignoring charges: a £20 purchase at £2 per unit buys 10 units. Another £20 purchase at £4 per unit buys 5 units. Together that is 15 units for £40, an average purchase cost of about £2.67 per unit.
If those 15 units were later valued at £2 each, they would be worth £30, below the £40 paid in. These invented prices are not market data, a fund forecast or suggested contribution amounts. The example explains quantities and cost; it does not compare strategies for your circumstances.
Sources: FCA: Golden rules of investing
Regular buying does not remove investment risk
Investments can fall as well as rise. Past performance does not predict future returns. This guide does not claim that regular investing will outperform a lump sum or guarantee recovery after a fall.
The FCA discusses affordability, risk and access before investing. This article does not assess what you can afford or suggest changing pension contributions. Use the contribution guide to prepare record questions and obtain appropriate guidance or individual advice for decisions.
- Which entries show contributions and which show purchases?
- Which dates, prices or charges are missing from the record?
- Who can explain the scheme’s process without relying on an assumed return?
Sources: FCA: Golden rules of investing
Sources & review
- FCA: Golden rules of investingChecked 2026-10-04
Next scheduled review: 2027-01-04. Provider details can change sooner. Use the official website for the current contact route.
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