Flexible Target funds are for those who want to keep their options open about when they retire and how they take their retirement income.

There are two main stages


Growth - when you are still some way from retirement.

In this stage, the funds invest in a mix of investments designed to grow your pension pot. You can choose the fund that best meets your savings needs and attitude to risk. The risk level is higher in the Growth stage than in the next stage -  Retirement target.



Retirement target - when you are approaching retirement

This stage happens in the final years before you've told us you want to retire. 

We recognise that your priorities are likely to change as retirement approaches, and you are automatically and progressively moved to investments that are less risky and are aimed at getting you to a target retirement income.

How does it work?

In the final six years before the date you've told us you want to retire, your savings are changed to prepare for your 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. You can read more about Tax when you get a pension at GOV.UK

An example

Here's an example of how the fund changes in the years before you retire:

Example flexible fnds chart

Please note that this is just an example, some of our lifestyle funds have different starting risk levels and may move into risk reduction investments and cash at slightly different times.

The choice is yours

Flexible Target funds are designed for use by workplace pension schemes. If your employer selects one as your scheme's default fund, you'll automatically be invested into it when you join your workplace pension scheme. This means you're invested from day one.

Your employer will have chosen it because they think it best meets the average needs of their workforce. However, it may not be the best fit for you. 

If you want more control over where your money is invested, you can select a fund that’s more tailored to your needs. If so, please take a look at our other investment options.

Your choice of investment fund can have a big effect on your pension benefits. If you're in any doubt about which fund's right for you, you should speak to a professional financial adviser. MoneyHelper gives free and impartial guidance to help make your money and pension choices clearer. If you don't have a financial adviser, you can visit moneyhelper.org.uk/choosing-a-financial-adviser to find the right one for you.

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 come to take benefits may be less than has been paid in. There's no guarantee that the fund objectives will be met.

All references to taxation are based on our understanding of current taxation law and practice in the UK and Ireland, which may change.

The risk levels shown here are Aegon's and shouldn't be compared to any other providers' risk ratings.

We review these funds regularly and may change them if we believe it’s in the best interests of investors.

Your Retirement Planner

You have lots of choice about how to access your retirement savings. We're here to help. Our website, Your Retirement Planner, has information and tools to help you understand your options when you get close to retirement.