Flexible Target funds are designed for people who want flexibility about how they take their retirement income.
There are two main stages
Growth - when you are still some way from retirement
During this time, your money is invested in a range of investments to help your savings grow over the long term. You can choose a fund that matches your investment preferences and how comfortable you are with investment risk. Because there is some time until retirement, the focus is on giving your savings the best chance to grow, and that means taking on higher level of risk than later on.
Retirement target - when you are approaching retirement
As you get closer to retirement, your needs are likely to change. At this point, your investments are gradually and automatically moved into investments that are considered less risky. The aim is to help protect the shorter-term value of your savings and prepare them to provide a retirement income.
How does it work?
In the final six years before your planned retirement age, your savings are gradually adjusted to prepare for your retirement income.
Investment markets can go up and down, especially in the short term. If values fall close to retirement, it can have a bigger impact on your pension savings.
That’s why, as you approach retirement, your savings are automatically moved into less risky investments. This helps to reduce the impact of market falls, although your savings can still go down.
We also make sure your money is spread across a range of different investment types, so you’re not reliant on the success, or otherwise, of just one type.
If you choose to cash in your benefits all at once, you can normally take up to 25% of your pension pot as tax-free cash. So when you're nearly at retirement, some Flexible Target funds will move 25% into cash.
An example
Here's an example of how Flexible Target funds change in the years before you retire:
This is just an example, some of our Flexible Target funds have different starting risk levels and may move into risk reduction investments and cash at slightly different times. Some Flexible Target funds don't move into cash.
The choice is yours
Flexible Target funds are designed for workplace pension schemes. If your employer selects one as your scheme's default fund, you'll usually be invested in it automatically when you join. This means you're invested from day one.
Your employer will have selected this type of fund because they believe it’s suitable for a broad range of employees. However, it may not be the best fit for your individual needs. If you’d like more control over how your money is invested, you can choose from other funds that may be more suited to you. Please take a look at our other investment options.
If you're not sure which fund's right for you, you should speak to a financial adviser. If you don’t have a financial adviser, you can find one in your area by visiting MoneyHelper, or Origen Financial Services. Origen Financial Services Ltd is wholly owned by Aegon UK plc but operates independently.
Important information
The value of an investment can fall as well as rise and isn’t guaranteed. The final value of your pension pot when you take benefits may be less than you paid in. There's no guarantee that fund objectives will be met.
References to taxation are based on our understanding of current taxation law and practice in the UK and Ireland, which may change. Read more about tax when you take a pension. The risk levels shown here are Aegon's and shouldn't be compared to those of other providers. We review these funds regularly and may change them in the best interests of investors.