How does it work?
In the final six years before you’ve told us you want to retire, your savings are automatically prepared for when you take a retirement income.
Like the weather, markets can be unpredictable. If your fund falls when you’re near retirement this can have a big impact on your pension savings.
We gradually move you into less risky investments as retirement approaches – so you won’t need to weather the full impact if markets get stormy, but they can still fall in value.
We also make sure your fund holds a mix of different types of investment 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. You’ll then pay income tax on the remainder. So when you're nearly at retirement, the fund will move 25% into cash.
Here's an example of how the fund changes in the years before you retire: