Choosing your investments
When choosing an investment option there are a number of things you might want to think about:
How 'hands on' you want to be
Do you want to get actively involved in selecting where you invest, or would you prefer someone else to do it for you?
- I want to be 'hands on'
The Plan's Self Select investments give you the flexibility to choose exactly where you want to invest your retirement account. With Self Select you have control over when and where to switch your investments.
- I want someone to do it for me
A LifePath option is great for members who don't want to choose where their retirement account is invested. They automatically switch where you are invested depending on how far you are from retiring.
There are three LifePath options to choose from:
LifePath Capital Fund – this is the default investment option. The strategy of this fund works on the principle that at retirement you will take the full value of your account from the Plan as one or two cash lump sums.
LifePath Flexi Fund – the strategy of this fund works on the principle that at retirement you will take the maximum tax-free cash sum (25% of the value of your account) and transfer the rest to a specialist income drawdown arrangement, out of which you will be able to draw income whenever you want.
This fund prepares your retirement account for taking your benefits this way. Please note that a drawdown facility is not available from the Scheme directly.
LifePath Retirement Fund – this fund is suitable for members who at retirement aim to buy a regular guaranteed income from an insurance company (called an annuity) in addition to any tax-free lump sum taken when they retire.
Your attitude to risk
Everyone has a different attitude to risk – some of us like to play it safe, whereas others don't mind taking some level risk.
The investment options in the Plan have differing levels of risk so you can select which option is right for you.
Your age
How long you have before you retire can affect where you choose to invest:
- I'm a long way from retirement
It's likely you have enough time to ride out any ups and downs involved linked to investment performance. Historically, investments in high risk options perform better than low risk options over the long term, even though they have more chance of dropping suddenly in value.
- I'm approaching retirement
You've probably spent time building up a good retirement account to give you an income in retirement. As you approach retirement you might want to protect the value of this account by moving it to lower risk options which have less chance of suddenly dropping in value.