Investment Choices

You can invest your pension in a way that suits you, and have the flexibility to change your mind at any time.

Decide what’s right for you

How to choose

Everybody’s different and your circumstances may well change over time, so there are no hard and fast rules for investing into a pension.

Put simply, the more risk you take the more your pension pot may grow – or fall – in value. You should expect investments to rise in value in the long term but can also fall in value. This is why you should invest your money in a pension pot for at least ten years, so it has more chance to recover any losses.


To work out how to invest your pension, you need to consider these three points:


Your personal
circumstances

When you plan to retire and how you want to take your pension

How much risk you want
to take

Once you’ve considered these three key points, your money can be invested. Don’t worry, you can change your mind about your investment choice at any time.

Your personal circumstances

To start with, try answering these questions:

  • Do you have other investments or savings to live on?
  • How long do you want to invest for?
  • Are you happy to take a long-term view and not worry about short-term dips in the value of your pension pot?
  • What would happen if your pension pot dropped dramatically in value?
  • Are you comfortable with taking some risk to potentially increase growth, or would you rather minimise the risk as much as you can?

For most people it will be a bit of a balancing act. But our investment choices are designed to help you find something that is right for you.

If you don't feel comfortable making an investment choice yourself, you can speak to us or an independent financial adviser (IFA). Bear in mind that IFAs will add their charges on top of ours.

Your investment near retirement

We’ll adjust your investment depending on how you expect to take your pension when you retire.


When you’re fifteen years away from retirement, we gradually move your money into lower risk investments, taking into account how you want to take your pension. Although this may lessen the potential for growth, it helps you to have a clearer idea of how much your pension pot will be worth when you come to retire. Also, it reduces the likelihood of any sudden drops in its value. This is known as lifestyle switching.


Choose from three retirement options

Get a guaranteed income for life

Take up to 25% of your pension pot as a tax-free cash lump sum, and use the rest to get a regular and secure taxable income for life. This type of income is known as an annuity.

Access it flexibly

Take up to 25% of your pension pot as a tax-free cash lump sum, and invest the rest in a plan from which you can take taxable withdrawals as-and-when you like. This is known as flexible access drawdown.

Take it all as cash

Take all (or part of) your pension pot as a cash lump sum, 25% of which will be tax-free and the rest taxable. This is known as full encashment.

Don’t worry, you can change the way your pension is invested at any time. It’s important to review your situation every year. When you're ready to take your pension, we can support you in choosing what’s right for you.


Bear in mind that your circumstances can change. When it comes to tax-free cash, the Government's tax rules may change too.

Your investment choices

We’ve taken the hassle out of choosing individual funds and designed our investment choices to suit you.

When you’ve chosen how you want to take your money in retirement, you should consider how you feel about investing your money. Once you've decided, we will invest your pension pot in one of our Governed Investment Strategies (GIS).

How GIS works

Put simply, each strategy is a blend of funds – known as our Pension Portfolios – that suit your attitude to risk and the length of time you will be invested. With GIS, our experts manage your pension pot and we gradually move it into lower risk investments as you get closer to retirement.

Where your money is invested

Your money will be typically invested in bonds and shares (known as 'equities'). These are shares within the UK, emerging markets and developed markets overseas.

Shares are considered riskier investments than bonds, so a portfolio investing in a large percentage of shares will carry more risk than one investing in a large percentage of bonds.

OUR PENSION PORTFOLIOS (PP)


KEY:

Source: Scottish Widows, as at 31/03/2018

How much risk do you want to take?

How your pension pot could perform Is this for me? GIS: how your money is invested

Cautious

You’re cautious with your investments and don’t feel comfortable taking much risk with your money.
You can expect your pension pot to have some ups and downs in value. While there’s potential for some growth, there’s also the potential for some losses. If your retirement age is drawing closer your focus may shift from growing your money to protecting it. A major stock market fall could have an impact on your retirement income if you do not have time to potentially recover your losses. At 15+ years from retirement - PP3
At 10 years from retirement - PP4
At 5 years from retirement - PP4

Balanced

You’re a balanced investor and feel comfortable taking some risk with your money for, potentially, more reward.
You can expect your pension pot to go up and down in value. While there’s potential for growth, there’s also the potential for losses. While you won't relish stock market falls if you’re close to retirement, by keeping your money invested, this gives you the chance to recover your losses. At 15+ years from retirement - PP2
At 10 years from retirement - PP3
At 5 years from retirement - PP4

Adventurous

You’re an adventurous investor and feel comfortable taking high risk with your money for, potentially, high rewards.
You can expect your pension pot to have a lot of sharp ups and downs in value. While there’s potential for high growth, there’s also the potential for significant losses. If you’re planning to retire in 25 years’ time, you’re investing for the long term and can withstand short-term falls in the value of your pension pot. A longer time frame gives your investment more time to recover if it falls in value. At 15+ years from retirement - PP1
At 10 years from retirement - PP2
At 5 years from retirement - PP3

With pension investments there are no guarantees, and there is a risk that the value of your pot could go down as well as up. Depending on how the fund performs, you may get back less than you paid in.

Compare our charges

They’re competitive, clear and transparent.

START YOUR APPLICATION

If you’re transferring £10,000 or more and know how to invest your pension pot, then you’re ready. Have to hand the details of the pensions you want to transfer.