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Understanding the various investment choices on offer can be daunting and so we have created this simple guide as a starting point to help you decide how to invest your pension fund.
We recommend you review your investment choices regularly. This is especially important in the run up to accessing your pension savings
If you have a financial adviser, we recommend you speak to them before making a decision.
If you are a UK resident and do not already have a financial adviser, you can find details of the advisers in your area from Unbiased. Financial advisers may charges for providing financial advice.
Factors to consider when deciding where to invest
Everyone’s personal circumstances are different and your investment choices depend on many things including:
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Your attitude to risk
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Where your pension funds are currently invested
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How you plan to take your benefits
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When you plan to access your pension savings
Attitude to risk
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Cautious
Cautious investors do not like to take risks with their investments and typically invest in lower risk funds such as cash, deposit, fixed interest or bond funds which aim to deliver security rather than growth.
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In between cautious and adventurous
In between investors (sometimes known as balanced or medium risk investors) are prepared to take some degree of risk with their investments and typically invest in medium risk funds which aim to deliver long term growth by investing in a mix of UK and overseas equities bonds, property and cash.
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Adventurous
Adventurous investors are prepared to take risks with their investments and typically invest in higher risk funds that invest heavily in equities.
Where are your pension savings currently invested?
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Lower risk funds
Lower risk funds aim to provide short term security and have limited growth potential. They typically invest in cash, deposit, fixed interest or bond.
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Medium risk funds
Medium risk funds aim to grow your pension savings over the longer term. They normally provide long term growth by investing in a mix of UK and overseas shares (equities), bonds, property and cash. You could lose money if the value of your investment falls.
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Higher risk funds
Higher risk Managed funds aim to provide long term growth by investing mainly in UK and overseas equities. You could lose money and you can expect to see greater fluctuations in the value of your investments than in a low or medium risk fund. Other higher risk funds may invest in a single market, such as the Far East.
How do you plan to take your pension savings? (You can choose more than one option and mix them)
When do you think you might access your pension savings? (You can choose more than one option and mix them)
Investment choices for:
Taking pension savings all in one go
If you are intending to take all of your pension savings as a lump sum (of which, 25% is tax-free) and your chosen pension date is approaching, you may want to consider lower risk funds that invest in cash or deposits. The funds available to you will depend on the product you bought. This information can be found on our fund factsheets.
The actual funds available to you will depend on the product you bought.
| Medium risk | Managed fund |
|---|---|
| Lower risk | Cash |
Guaranteed income for life
If you are planning to exchange your pension savings for a guaranteed income for life, you may want to consider lower risk funds that don’t fluctuate as much. This becomes more important as you get closer to the date you intend to access your pension savings.
Example - moving from a medium risk to a lower risk fund
The actual funds available to you will depend on the product you bought.
| Medium risk | Managed fund |
|---|---|
| Lower risk | Cash or fixed interest |
Flexible retirement income
If you are planning to access flexible retirement income in the near future, you should consider your investment choices taking into account your personal circumstances and how long any balance of your pension savings will remain invested.
Example – investing in medium and low risk funds
The actual funds available to you will depend on the product you bought.
| Medium risk | Managed fund |
|---|---|
| Cash for lump sums or any income you plan to access soon | High and medium risk managed fund for balance of pension savings |
A number of lump sums
If you are planning to take your pension savings as a number of lump sums (of which, 25% is tax-free) you may want to consider a mixture of investments that takes into account your personal circumstances and the period of time over which you plan to take the lump sums.
Example – investing in a mixture of high, medium and low risk funds
The actual funds available to you will depend on the product you bought.
| Medium risk | Managed fund |
|---|---|
| Cash for lump sums you plan to access soon | High and medium risk managed fund for balance of pension savings |
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Investment choices
Information for unit-linked policyholders including latest fund prices and factsheets
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Retirement choices
Help with your retirement planning and understanding of your options
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Contact us
We’re here to help you