How we invest your savings

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

We’ve designed a well-researched ‘pension saving journey’ to give you good value and positive long-term outcomes, managed by professional advisers.

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. This leaves you free to think about other important questions such as when you want to retire and how much to pay into your pension savings.

We work hard for your money

We’ve designed our investment strategy to:

  • manage risk
  • provide good value, and
  • aim for positive long-term outcomes for you.

This involves:

  • lots of research
  • keeping on top of developments in investment markets
  • using a range of different types of investment in different areas
  • being able to change the investments quickly to get better results.

Your pension saving journey

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

Watering can

Time to grow

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 four 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 four areas are:

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

Time to protect

Starting 10 years before your target 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 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 – and keep their value well in the short term.

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

Your target 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 glidepath to retirement is based on your target retirement age. If you don’t retire at that age, you could miss out on some retirement income.

Retire earlier than target retirement age Retire later than target 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

You can change your target retirement age using your online member account.

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.

How we invest your contributions

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

The investment manager uses the contributions to make investments that are expected to provide a good return over time and also to protect you against unexpected events that affect the value of investments.

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 and timescales

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.

Investment timescales

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

There’s a process involved in recording and collecting your contributions, and keeping them safe so they can be invested. Our FAQ explains this in more detail.

To protect the Scheme’s money we employ a custodian who holds the Scheme funds in a ring-fenced account, separate from both NOW: Pensions and the custodian’s own funds and company accounts.

A custodian is a specialist adviser responsible for protecting the money in the Scheme. Our custodian, BNY Mellon, is one of the largest and best-known in the world.

How do you protect my pension savings?