Investments

Scottish Widows Master Trust
 

"As Trustees we are responsible for helping members achieve good retirement outcomes and value for money. We want members to have investment options designed to meet their goals in retirement, by providing low cost and flexible investment solutions for a variety of retirement outcomes.

Responsible investing is at the heart of the Trustees’ commitment to helping our members achieve these outcomes, and we work with Scottish Widows to ensure the schemes' investments reflect this approach. You can find out more about our Investment Aims and Objectives in our Statement of Investment Principles."

Gerald Wellesley, Trustee

 

DEFAULT INVESTMENT STRATEGIES

Scottish Widows Pension Investment Approaches (PIAs) are designed to offer a low cost, flexible option while targeting a number of retirement outcomes.

More about the default and alternative lifestyles
 

SELF-SELECT FUNDS & BESPOKE INVESTMENT SOLUTIONS

The Trustees have selected a range of robustly governed self-select funds for members. These cover the most widely used asset classes and regions on both an active and passive basis.

We also offer a choice of core funds and bespoke investment solutions that can be selected alongside a member's chosen lifestyle.

More about our funds and investment solutions
 

DRAWDOWN INVESTMENT SOLUTIONS

We offer four Investment Pathways for investment at retirement, for members who have not received financial advice.

More about our Investment Pathways
 

RESPONSIBLE INVESTMENT

Read about our Responsible Investment and Stewardship Framework, and the steps we’re taking to help tackle climate change.

More about our Responsible Investment framework

DEFAULT INVESTMENT STRATEGIES

Scottish Widows Pension Investment Approaches (PIAs) are designed to offer a low cost, flexible option while targeting a number of retirement outcomes.

The Scottish Widows Master Trust uses the Balanced PIA 'Targeting Flexible Access' as the core default investment option. The Scottish Widows Pension Investment Approaches are home to more than £40bn of assets, including £3bn invested in Environmental, Social and Governance through the BlackRock ACS Climate Transition World Equity Fund. Trustee monitoring aims to ensure that the asset allocation reflects members’ best interests. The default is available to members of any section, unless their employer has selected a different solution, subject to agreement with the Trustees.

The default investment option includes:

  • Optimal asset mix and allocation stochastically modelled by experts Moody’s
  • Inclusion of 15-year lifestyle glidepath with smooth automatic monthly switching
  • Automatic quarterly rebalancing.

In addition to the default investment option, the Trustees also aim to offer an appropriate range of alternative options for members who wish to make their own investment choices.

Alternative default investment options:

There are two alternative "default" investment options available for an employer to select if deemed more appropriate for their employees' needs. Subject to agreement with the Trustees.

  • Balanced PIA - Targeting Annuity – suited to members expecting to buy an annuity
  • Balanced PIA - Targeting Encashment – suited to members expecting to take their retirement benefits as cash.

Alternative Self-Select Lifestyles:

Members can also self-select from eleven alternative lifestyle strategies (including the two alternative default options described above), based on their attitude to risk or desired outcome at retirement. The de-risking element of most of these strategies is identical to the default investment options, with a 15-year glidepath, monthly switching and quarterly rebalancing.

SELF-SELECT FUNDS & BESPOKE INVESTMENT SOLUTIONS

The Core Funds provide members with access to a range of funds across the most widely used asset classes, allowing them to choose how to invest their pension based on their own attitude to risk, and also environmental, social or ethical views. These include:

  • A range of active and passive managed options
  • Sustainable funds in line with our commitment to responsible investment
  • Shariah option
  • Equity, bond, property, multi-asset and cash options.

Our flexible platform also allows members to simultaneously self-select from this range while leaving a portion of their funds in one or more lifestyle strategy.

For employers who would prefer a bespoke investment solution, we can help design an investment solution which meets the specific needs of the scheme and its members, subject to approval from the Trustees.

DRAWDOWN INVESTMENT SOLUTIONS

Pathway Expected member need
Leave invested Where the member has no plans to touch their money within the next five years
Buy annuity Where the member plans to use their retirement savings to set up a fixed, guaranteed income for life within the next five years
Long-term income Where the member plans to start taking their money as a long-term income within the next five years
Take money Where the member plans to take all their money out as a lump sum within the next five years

Members who don’t want to select one of the Investment Pathways can initially choose to self-select from a small range of funds from the flexible income range, invest in the Scottish Widows default drawdown investment allocation, or in some cases remain in their existing investments, where not invested in a lifestyle strategy.

RESPONSIBLE INVESTMENT

Responsible investment is at the heart of Scottish Widows Master Trust.

Responsible investment incorporates environmental, social and governance (ESG) factors in investment decisions that resonate with members’ values and beliefs, while also aiming to benefit their long-term savings.

We’ve carried out independent research to better understand our customers' views, and believe members should be able to choose where they invest their money so they can feel proud of the impact their investment is making. The Trustees work with Scottish Widows to offer members a fully governed, sustainable approach to investing, and challenge the companies we invest in to behave more sustainability and responsibly.

The Trustees have put in place an investment governance reporting framework, which includes the Trustees receiving quarterly ESG and stewardship reporting from Scottish Widows which they use to hold Scottish Widows and the underlying managers to account on these issues.

Scottish Widows have also committed to Net Zero carbon emissions across our whole book of assets by 2050, and we continually use our market presence to ensure ESG is at the forefront of all discussions with relevant stakeholders.

Read more about our strong framework, extensive research and our commitment to achieve net zero in our investments below: