How your savings are invested
When contributions are received in to the Plan on your behalf, they are invested in managed funds, which hold money from hundreds of scheme members like you. These funds, in turn, invest your money in assets such as company shares, government bonds and cash deposits.
When investing for retirement, it’s important to think about the date you select for your retirement, as it can have a significant impact on the value of your savings. This is particularly important if you are invested in the lifestyle strategy, as it is designed to reduce the risk profile of underlying investments as you get closer to your retirement age. For example, if you select a retirement date and continue to work for a few more years, your investments could potentially be growing more slowly due to taking lower risk. If you retire earlier than the date you’ve selected, your savings value might be less protected, as you may be invested in higher risk assets.
The value of investments can fall as well as rise and you may get back less than you invest.
Two ways of deciding where your money goes
If you’d rather not choose your own funds, your savings will automatically be invested in the default option for your Plan. This may be a single fund, or several funds combined as a strategy.
A default option has been selected by the Trustees of your Plan and is carefully monitored. It may also be changed if the Trustees decide that a different option would be more appropriate.
Keep in mind that default funds and strategies are designed to meet the needs of a wide range of people with different ages, backgrounds and income levels. Therefore, it is not guaranteed that your Plan’s default option will be right for your individual goals.
The default option is often known as a ‘lifestyle strategy’ or ‘working life strategy.’ This means that during the early years of your working life, your savings are invested in higher risk funds that have the potential for long-term growth.
As you get closer to your retirement age, the strategy aims to protect its value by gradually moving your savings into more cautious investments. With this type of strategy, all the changes to your investments happen automatically – you don’t need to do anything.
You can choose funds from the range available through your Plan. This is often called self-select. It allows you to tailor an investment strategy to your individual goals.
You can see which funds are available through your Plan when you login to PlanViewer. Each fund has its own factsheet. If you are unsure about whether your choice of funds are suitable for your circumstances or you need advice on any of the options available to you, we recommend that you speak to an authorised financial adviser.
Reviewing your savings
Regardless of your chosen option, it’s a good idea to check your savings regularly to ensure sure you are on track to meet your savings goals.