How we invest your money over time
This article explains how pension investments work, what your money is invested in, and why the way your money is invested changes over time.
We invest your money to make your pension savings work as hard as possible for you, and to grow your money over years.
All pensions work by investing your money
Over the long term, investments have proven to be effective for providing better financial returns for retirement. Cash savings can be hit by inflation, with their real-world value fading away over time if savings account interest rates don't keep up.
We choose carefully where we put your money
We look for sound investments across a range of options that have different levels of risk. this way we can seek to both protect and increase the value of your pension savings.
You can have total control over where you invest your pension money
This is called 'self-selecting.' It means choosing from our range of funds and putting your money into those you prefer. It relies on you understanding and monitoring how each of the funds are performing, and what level of risk is right for you at different stages of your life.
But most people like a little help to invest
Most people leave it to experts to make their pension investment decisions for them. In this scenario, your money is invested and looked after by independent and experienced trustees who are there to act in your best interests.
Remember - the way your money is invested changes over time
As you get closer to the time you will be taking your money, the approach to how your money is invested changes.
During the 'growth phase' of the investment strategy, your pension pot is invested in a well balanced, diverse mix of investments that are chosen to provide long-term growth potential.
The strategy then changes seven years before you reach the target age
The idea is to move your money into investments with lower risk, and provide more certainty over how much you can rely on when you need to start taking it.
(Keep in mind that your pension is invested and investments can go down as well as up. Some risk is involved, and performance in the past doesn't guarantee performance in the future.)
This is why telling us your target age is important
If we know what age you think you will be starting to take your pension, we can adjust how your money is invested at the right time.
This communication is for information purposes only and is not personal advice. The value of investments can fall as well as rise, and you may get less than the full amount you invest.
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