Your funds

You can invest in a variety of funds through your Personal Investment Plan (PIP). Your fund options depend on whether you took your plan out with Scottish Widows or with Halifax.

things to consider before moving funds

Your PIP allows you to buy units in the fund(s) you choose, and you can currently move your money from one fund to another free of charge.

If you’re thinking about moving funds you should carefully consider the level of investment risk that’s right for you. Make sure that the Halifax, or Scottish Widows, funds you choose suit your needs by carefully considering the aims, risks and charges of the funds you’re interested in – we have some customer scenarios to help you.

Risk vs Return

Higher risk investments have the potential for more growth, over the medium to long term, but they are more likely to fluctuate in value. This means they may swing from being higher in value, to lower in value, more often. There is also a higher risk that you could lose some, or all, of what you’ve invested.

Choosing a low risk investment means that your money is less likely to fluctuate in value and you’re at a lower risk of losing some, or all, of the money you’ve invested. However you’ll also have less potential for growth, meaning that your investment could be worth less, in real terms, if inflation is higher than the return you receive.

How much risk you accept when you make an investment will depend on what you want to achieve. There’s always the risk that your money could be worth less than when it was originally invested.

Customer scenarios

To help you understand more about investing your money, we’ve prepared examples of how some customers came to a decision about their fund choice. These examples are provided to help show the relationship between risk and potential for growth and are not advice. The value of an investment isn’t guaranteed and can go down as well as up – you may get back less than you paid in.

 

Catherine’s story

Catherine has held her PIP for eight years. During this time she’s been keen to grow her capital and so has been invested in the Progressive Growth Fund, which has the potential for capital growth over the medium to long term however has a significant risk of capital loss.

She’s now planning to reduce the hours she works, with a view to retiring completely in around five years. She’d like to start taking a 5% regular withdrawal* from the plan to supplement her reduced income. Once she’s stopped working she’d like to start making larger withdrawals to pay for some home improvements and give cash gifts to her grandchildren. Catherine’s aim is to reduce the plan value to zero over the next ten years.

As Catherine is no longer investing for growth she switches all of her money into the Cautious Growth Fund. This fund has a modest risk to the capital value and a modest potential for growth over the medium term, which she feels suits the reduction in her risk appetite.

* If you’re thinking about making a withdrawal from your plan please review all of your options, and their tax implications, before making a decision.

James’ story

James has held his PIP for six years and intends to keep his plan invested for at least another five years. He has received his yearly plan statement and is interested in increasing the returns he receives. He is in the Cautious Growth Fund where his capital is at modest risk – with modest potential for growth.

James doesn’t want to greatly increase his funds’ risk profile but decides that he would like to move his money with the aim of increasing growth.

He switches 100% of his capital into the Balanced Growth Fund which has more potential for growth over the longer term, but a higher risk of fluctuating in value.

 
 

Michael’s story

Michael has held his PIP for five years. He’s in the Balanced Growth Fund which has the potential to provide modest capital growth over the medium to long term. He discusses his personal circumstances with his financial adviser and decides that he’s in a more stable financial position than he was when he opened the plan.

He has easily accessible money readily available to cover emergencies so he knows that he won’t need to withdraw money from his PIP in the short term. He’s now looking to increase the risk he’s exposed to with the aim of increasing the growth of his plan over the medium to long term.

Michael decides to keep 25% of his plan in the Balanced Growth Fund and move 75% to the Adventurous Growth Fund. The Adventurous Growth Fund carries a much higher risk of capital loss alongside a higher potential for capital growth. The fund can be subject to a considerable level of capital value fluctuation.

These customer scenarios are for illustrative purposes, there is no guarantee that the funds will perform as we describe.