Starting 15 years before your target retirement age – the age you’ve told us you want to retire at – we gradually switch most of your pension savings to our Retirement Countdown Fund. This fund aims to protect the value of your pension savings, reducing the risk of them falling in value when you’re due to turn them into retirement benefits.
This is an investment approach known as lifestyling. It’s designed to:
• grow your pension savings over most of your working life, then
• protect the value of those built-up pension savings as you approach your planned retirement age.
We call this switch from growth to protection investments your ‘Journey Path’ to retirement.
The advantage of the Journey Path is that it’s an automatic process designed to protect your pension savings from big gains and losses as you approach your planned retirement age. We move your savings gradually to protect against them all being moved when markets are low.
Switching investments may not be appropriate if you want to take your benefits before or after your planned retirement age. This is because we may move your pension savings to low-risk funds when you could continue to let them grow.
Alternatively, your savings could experience short-term losses in the run-up to taking your benefits, because they were left in our Diversified Growth Fund. So, it’s important that you keep us updated if your planned retirement date changes.
We explain this in more detail on pages 7-9 of our Member Booklet. You can download a copy here.
Unless you tell us otherwise, we assume your planned retirement date is your State Pension age. Please keep us updated if your plans change.