Aegon launches new Workplace Target fund range

Fund news update

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Within five years advisers estimate only 25% of people will look to purchase an annuity at retirement*. The dramatic shift in investor behaviour means scheme default funds which target an annuity purchase will, in many cases, no longer serve ‘typical’ workplace investors.

Our new range of default fund options for workplace pension schemes – the Workplace Target range - recognises this fundamental shift. 

*YouGov adviser poll, October 2014. 

Three ways to prepare savings for retirement

All 10 Workplace Target funds use a two-stage investment strategy that’s designed to grow savings in the early years (the growth stage), then prepare savings for retirement in the final six years of saving (the retirement target stage). The range offers three retirement target approaches:

Flexible Target strategy

At the core of our new range are five flexible retirement funds. Aimed at those who want to keep their options open, these funds move assets into a cautious multi-asset mix as investors approach retirement, with currently around 25% equity (company shares), 50% fixed interest (a blend of UK corporate and UK government bonds), and 25% cash on retirement. This approach aims to offer a balance between reducing risk and continuing to grow savings as investors decide how and when they want to take their benefits.

Annuity Target strategy

These four funds are designed for schemes who believe most employees will buy an annuity on retirement. These funds move savers into 75% long gilts (UK government bonds) and 25% cash on retirement with the aim of preserving the size of annuity they can buy as they get close to retirement.

Cash Target fund

Designed for savers who plan to cash-in their savings on retirement, this fund is aimed at schemes where most members have very small pots, or are likely to use other sources to create their retirement income (for example those who also have defined benefit pension income).

Employers and advisers, can find out more about the Workplace Target funds at www.aegon.co.uk/workplace funds. You can also use our handy tool to match the funds in the range to particular schemes.