The low-involvement option

What is it?

Your employer, with the help of their adviser, has chosen an investment option which they believe is a good choice for most people in the company pension. Unless you decide to move your money into another investment option, this is where it will stay.

This investment option is the low-involvement option and it's designed to make saving for retirement easier.

It could be appropriate if:

  • You don’t want to select your own investment options
  • You don’t want to worry about moving your investments around as you approach retirement

How it works

Lifestyling changes your investments as you get closer to retirement

The low-involvement option is designed for the long haul and has a feature called lifestyling.

When you’re getting closer to retirement, it could be sensible to move your money into funds which are more appropriate at retirement. Lifestyling can do this for you.

In most cases, when you start your pension plan, it invests in the an investment fund, which aims to increase the value of your pension savings over time.

When you get closer to retirement your money will gradually and automatically move into lower risk funds designed to give you the flexibility to take your money the way you want when you retire.

Things to be aware of

  • You should make sure any lifestyle profile you choose matches how you plan to take your retirement income
  • As lifestyle profiles make changes to your investments based on your selected retirement date, they may only be suitable if you're planning to start taking your retirement income on this date
  • If you're in a lifestyle profile, you can’t invest in any other lifestyle profile or funds
  • Before you choose an investment option, make sure you understand its aims and risks
  • As with any investment, the value can go down as well as up, and may be worth less than was paid in

So what now?