How we invest your savings

We want you to get the best possible return for your hard-earned pension savings.

Our well-researched ‘pension saving journey’, managed by professional advisers, is designed to grow your pension savings over the long term, then protect them from falls in value as you get closer to retiring.

We’re also committed to being a sustainable and responsible pension provider, investing for good.

We work hard for your money

We’ve designed our investment strategy to:

  • deliver the best financial outcomes for you
  • manage risk
  • provide good value for your savings, and
  • have a positive impact on the environment and society.

This involves:

  • lots of research
  • keeping on top of the latest thinking on responsible investment
  • using different types of investment in different areas
  • being able to change the investments quickly to get better results.

No decisions needed

We, along with our professional advisers, take responsibility for investing your pension savings. We don’t ask you to make investment decisions.

This gives you the reassurance of knowing your money is being looked after by professionals who have your best interests in mind – leaving you free to think about important questions, such as when you want to start taking your benefits and how much to pay into your pension savings.

 

Our new investment strategy

Find out more in our Member Booklet
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Targeting growth

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Reducing risk

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Responsible investing

Your pension saving journey

Your pension saving journey uses two different investment funds at the appropriate time.

During the early and middle parts of your pension saving journey, we invest your pension savings in our Diversified Growth Fund.

This fund is designed to provide stable growth for your pension savings over the long term. To achieve this it spreads money across five investment areas that tend to perform differently in different economic conditions.

This approach is known as diversification. It helps to achieve growth without too much volatility (ups and downs in value). The five areas are:

  • equities (shares)
  • interest rates
  • inflation
  • income
  • other investments.

 

More about our Diversified Growth Fund

Starting 15 years before your planned retirement age – the age you’ve told us you want to retire at – we gradually switch your pension savings to the Retirement Countdown Fund.

This fund aims to protect the value of your pension savings, reducing the risk of them falling significantly in value before you turn them into retirement benefits. To achieve this, it uses cash and other investments that behave in a similar way to cash, holding their value well in the short term. We call this switching from growth to protection investments the ‘Journey Path’.

Unless you tell us otherwise, we assume your planned retirement date is your State Pension age. Please keep us updated if your plans change.

 

More about our Retirement Countdown Fund

Responsible investing

We believe that getting positive investment outcomes, and investing for a better world, go together. We hope you welcome the thought that your pension investments can contribute to a better, more sustainable world.

For some years now we’ve been increasing our focus on responsible investing (RI). This means investing in companies that have stronger sustainability characteristics, lower carbon footprints and achieve good standards on environmental, social and governance (ESG) factors.

By the end of 2021, over half the money in our Scheme will be invested in line with ESG principles.

 

Your planned retirement age

Make sure we’ve got the right target retirement age for you. This is the age you want to retire at and we assume it’s your State Pension age if you haven’t told us anything different. Check your State Pension age now.

Why is this important? Your Journey Path to retirement is based on your planned retirement age. If you don’t retire at that age, you could miss out on some retirement income.

Retire earlier than planned retirement age Retire later than planned retirement age 
Your investments haven’t finished moving from growth to protection Your investments move to protection too early
They could fall in value before you start taking them You could miss out on investment growth
You could get less retirement income You could get less retirement income

If you stop contributing to the Scheme (usually because you leave your employer and go to work elsewhere) the charges continue to apply. It may be sensible for you to transfer your pension savings out to another pension provider so the charges don’t eat away your pension savings.

We don’t charge employees to transfer their savings out.

Man and woman in office

How we invest your contributions

We collect the contributions from you and your employer and they’re invested by our investment manager.

You can check your pension savings by looking at the fund value summary in your online member account. This shows the current value of your savings, including:

  • the total amount you and your employer have paid in, plus
  • any change in the value of your investments, less
  • any charges you’ve paid.

Your fund value is updated each week, usually every Friday or Saturday.

Investment performance

An investment’s performance is measured by the ‘return’ on the investment. This is the amount of money you make – or lose – on an investment over the time you’re invested.

Lots of things influence investment returns, including global economic and social conditions.

You may wonder why your invested contributions don’t show up in your online member account as soon as they’ve been paid.

This is because it takes time to ensure that your contributions are collected, recorded and invested correctly and safely.

Find out more

Our custodian

To protect the Scheme’s money we employ a custodian, a specialist company responsible for protecting the money in the Scheme.

Our custodian, BNY Mellon, is one of the largest and best-known in the world. They hold the Scheme funds in a ring-fenced account, separate from both NOW: Pensions and the custodian’s own funds and company accounts. This ensures your pension savings can’t be accessed or used improperly.