Take the hassle of managing your investments in retirement with our Default Pension investment option.
We all know that we’re living for longer and many of us need to try to maintain some level of growth with our investments, even in retirement. At the same we know that share markets can be volatile, which can lead us to making knee-jerk decisions, potentially selling out of investment markets at the worst possible time. How do we seek to maintain growth, and at the same time reduce our exposure to the volatility of the stock market and have some measure of protection of our savings?
Our default investment option allows to you maintain the potential for growth within your Pension, yet automatically reduces your exposure to the investment markets over time.
How does this work?
Our default option is made up of two distinct investment portfolios:
- Balanced investment option – part of your pension will be invested in a mixture of investments to maintain the potential for long-term growth
- Cash option – the other part of your pension will be invested in cash to meet shorter term income needs in retirement
Reducing your exposure to growth assets over time
As you get older, the amount invested in the Balanced investment option will automatically reduce, thus reducing your exposure to market downturns. At the same time, the amount invested in cash increases. See table below.
Whilst there are no guarantees in any investment, a key benefit of the default Pension investment option is that it provides you with peace of mind in times of market volatility, as part of your Pension will always be invested in Cash.
Your pension payments
Your regular pension payments (or any partial lump sum payments or commutations) will be made from the Cash option. If there are insufficient Cash funds, then it will include funds from the Balanced option.
It is important to note that the level held in the Cash option (and in the Balanced option) will fluctuate around the above target amounts depending on market movements, commutations (withdrawals you make from your account) or having pension payments greater than the minimum.
Your investments in the two different investment options will automatically rebalance on 1 April each year. The percentage invested in the Cash and Balanced options will also automatically be rebalanced based on your age.