How do Flexible Target funds work?

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Flexible Target funds are a type of lifestyle fund also known as retirement target funds.

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.

Growth stage

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 

retirement income.

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.

An example

The choice is yours

Flexible Target funds are designed for use by workplace pension schemes. If an employer selects one as their scheme's default fund, members who don't make their own fund selection will be automatically invested into it when they join their workplace pension scheme. This means they'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. If you don't already have one, you can find one near you at new window)

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.