When you put your money into a pension plan you may wonder what actually happens to it. In the case of a stakeholder pension you'll probably find that most of the money that you provide will be used to invest in the stock market. Traditionally, the stock market has represented a good way for investors to get a return on their investment over time. Pension companies invest in this way in the hope of increasing the value of your money, hence allowing them to cover the costs of your pension payments at a later date.

You will also find that some stakeholder pension plans will invest in something called a government bond (you may also hear that referred to as a gilt. Others may invest in a combination of gilts, shares and property. The stock market can obviously go down as well as up: it's for this reason that pension fund managers will invest the money at their disposal for the long-term, to try and overcome any temporary short-term downward trends.

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