How do Flexible Target funds work?25 April 2018 Back to results
Flexible Target funds are for those who want to keep their options open about when they retire and how they take their retirement income.
The funds adapt as you get close to retirement, recognising that your retirement saving priorities are likely to change.
There are two main stages
Growth - When savers are still some way off from retirement.
Retirement target - When savers are approaching retirement.
In this stage these funds invest in a mix of investments designed to grow your pension.
You can choose the fund that best meets your savings needs and attitude to risk.
Retirement target stage
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 we automatically and progressively move your fund into investments that get you ready to target a retirement income.
We also know that things can change over time.
For example, only 28% of UK savers retire when they
plan to (Aegon Retirement Readiness survey, 2014).
That’s why we’ve designed these funds to give you the freedom to choose how and when you take a
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.
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.
You can cash-in up to 25% of your savings without paying tax when you retire. So, when you’re nearly at retirement, the fund will also move 25% into cash.
The choice is yours
Your employer has chosen a default fund to suit the average member of your scheme. You may feel that another fund is more appropriate but still want the comfort of having a fund that automatically prepares you for the retirement outcome you want.
If so, you may want to take a look at our other retirement target options, our Annuity Target funds, for those who plan to buy a guaranteed annuity at retirement or our Growth Tracker (Cash Target) fund aimed at those who will cash in their retirement savings.
Speak to a financial adviser to find out more.
Generally, riskier investments have better long-term growth potential, so moving into less risky investments can mean your fund misses out on some growth in the final years if the sun does shine on investment markets.
The value of investments may go down as well as up, you may get back less than you invested. 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. If you choose to remain invested in retirement, you will still be exposed to the ups and downs of the market so the value of your fund could fall. If you take an income from your retirement fund, there's a chance you could run out of money too soon.
We review our retirement target funds regularly and may change them if we believe it’s in the best interests of investors.
You have lots of choice about how you 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.