How investments work
Your pension savings are invested in the financial markets. The market changes every day based on many things, including how companies are performing, world events and the economy. It’s normal for the value of your pension savings to go up and down over the short term, in line with changes in markets. A workplace pension is designed to be a long-term investment.
At now:pensions we invest your pension savings with the aim of helping them grow over the long term. We offer six investment plans and a shariah equity fund, designed to do different things. Learn more about our investment options.
How we do this
To achieve the aims of the investment plans, we invest in underlying funds with a mix of assets such as equities (shares in companies), bonds (loans to companies and or governments, with a promise of repayment plus interest at a later date), and other investments like cash and commodities (gold and industrial metals, for example). You can learn more about our funds here.
What this means
Some of the funds have a mix of investments. This is known as diversification. It’s based on the idea that different assets tend to give different results in different economic conditions. The value of different assets can go up and down depending on how their investment markets perform. But spreading the investments around can help to reduce the risk from any one type of investment performing badly.
Most of our funds use diversification to some extent, except the shariah equity fund which only invests in shariah-compliant equities.
There are never any guarantees with investment. The value of invested pension savings can go down at times, particularly in the short term, and how an asset has performed in the past doesn’t mean it will perform like that in the future. But we’ve designed our investment plans to balance growth and preparing for retirement, aiming to take advantage of how different investments tend to behave at different times.
Preparing your savings for retirement – our pension journey
We take a whole-life approach to investing your pension savings. Our investment plans, except the shariah equity fund, gradually move your money into investments designed to prepare your pension savings for retirement, including reducing investment risk.
1. Growth phase
During this phase we invest your pension savings with the aim of helping them to grow over most of your working life.
2. De-risking phase
This phase starts 10 years before your planned retirement age. We gradually move your pension savings into investments designed to prepare them for retirement, including reducing investment risk.
3. Destination phase
This is when you start to take your money out of now:pensions.
