Why is it important to know if I’m in a lifestyle fund?

Man using tablet pc

Your lifestyle fund is ‘pre-programmed’ to deliver a particular outcome (annuity, cash, stay invested) on a particular date.

You need to know because:

  • The fund may be targeting an annuity, for example, when you’d prefer to stay invested or take cash, and
  • It’s hard-wired to deliver that outcome on a fixed retirement date, which may have been chosen by your employer and it may no longer suit you.

This could mean that your pension savings are not invested in the right way to deliver the outcome you want and/or when you want it. 

For instance, if you want to retire earlier than planned, you may find you’re invested in a mix of investments that is too risky, which could mean your savings fall in value just before you retire, affecting your pension benefits. If you want to retire later, you may have the opposite problem, having moved into lower risk investments which may not provide the growth you need to sustain you in retirement, particularly if inflation is high.

It’s important to find out if you’re in a lifestyle fund and if you’re in any doubt, phone us on 0345 610 0010. We can explain your options to you but we can’t give you advice.