BP Investment Choices

The contributions paid into your pension plan are invested in investment funds. We offer a wide range for you to choose from, so we’re confident you’ll find one that suits your needs.

You can choose the funds you’d like your money to be invested in. You can choose to put all your pension money into one fund, or spread it between different funds.

When you join BP, you can confirm your selection, by going to My HR(Opens new window) and following the link to your benefits, your way from there. You will not need a separate username or password for this. BP will tell you when and how you can do this. Once your plan has been set up, you can change your fund selections at any time by contacting Aegon.

When you join the Defined Contribution 2010 Pension Plan, you choose where to invest your money from a range of funds. But remember, you can change your investment choice at any time in the future.

Helping you understand investments

If you’re not used to investing, don’t worry — we’re here to help you understand what it’s all about. By learning more about how investments work, you’ll feel more confident about choosing the fund(s) that’s right for you.

What's an investment fund?

An investment fund is a pool of money which is professionally managed to achieve the best possible return for investors. When money is paid in the manager uses it to buy assets. By combining your pension contributions with the contributions of other members of your pension plan, you can spread your contributions between a wider range of investments than if you were investing alone. This is called ‘diversification’ and could help to lower the risk of your investment.

Helping you make the right decision

Investing for retirement is a long-term investment and therefore something that requires a long-term view. In saving for your retirement there are a number of points you need to consider:

  • Am I saving enough?
  • Does my fund provide protection against inflation?
  • Am I comfortable with the value of my fund going up and down during my working life?

The funds you can choose from have different risk profiles, which means that they have different levels of volatility (the extent to which they go up or down) and potential return.

You choose where to invest your pension contributions when you join the Plan. You can make your investment choices by going to My HR(Opens new window) and following the link to your benefits, your way during your first enrolment period (when you’ve just joined BP).

As your circumstances change, you may want to change your fund choice (known as switching). You can change your investment fund for:

  • all or part of your existing fund value
  • future contributions, or
  • both of the above

You can do this at any time, free of charge, up to a 20 times a year.

If you want to switch funds, you can do it through our online services(Opens new window)(Opens new window)(Opens new window) or by contacting us direct using or contact information

Before you decide where to invest, you may choose to get professional financial help.


We charge for managing your plan and investments. We take these charges through deductions from your plan each month.

The Plan has a charge of £2.25 a month, which is deducted from your plan value, plus an effective annual management charge (AMC) of 0.11% of your fund value. This is made up from:

  • A gross AMC of 0.22% which is built into the unit price of each investment fund.
  • Less an active member discount of 0.11% while regular contributions are being paid into your plan. 

We add (the same amount as) this discount to your plan every month.

Even if you leave BP but continue to pay a regular contribution (of at least £20 a month) the effective AMC will remain at 0.11%. If you stop making regular contributions to your plan, you will no longer get the discount and your AMC will increase to 0.22%.

On the tenth anniversary of the Plan, the discount will become permanent even if you stop paying contributions in the future. 

Some investment funds have an additional charge. You’ll get more information on these funds in your joining pack.

We reserve the right to vary charges in the future.

The funds you can choose from are invested in three different types of investment (also known as asset classes). These are:

  • cash
  • bonds
  • shares (also known as equities)

Cash is generally considered the least volatile of the main asset classes. When we talk about ‘cash’ we mean money that’s invested in banks, building societies and other money market investments, which pays the investor regular interest.

A cash fund offers relative security as it tends not to fluctuate in value as much as other assets. But this also means that it tends to have far less potential to grow. When investing in cash, if the rate of interest earned is lower than the rate of inflation, the buying power of the money will fall.

Bonds are also known as fixed interest assets.

These are either:

  • UK gilts — loans issued by the UK government
  • corporate bonds — loans issued by companies or corporations, including financial institutions and local authorities
  • loans issued by foreign governments

In return for receiving the loan amount, the government or company will pay a rate of interest for a given period and return the loan at the end of the agreed period.

The UK government issues two types of gilts — fixed interest bonds, referred to in this booklet as UK gilts, and index-linked bonds whose interest rate and repayment amount is linked to the UK inflation rate.

Funds that invest in bonds are generally considered to have a lower risk of volatility, but this does depend on a number of factors, such as how likely it is that the issuers of the bonds (held in the fund) may fail to pay back the loan. For example, gilts (UK government bonds) have historically been less volatile than corporate bonds. And because these loans are traded on the market, the price will vary during their lifetime, so there’s some element of volatility risk, although not as much as for shares.

Shares are also known as equities or stocks. These are issued by companies and give part-ownership of the company.

The return largely depends on:

  • the financial success of the companies that issue them
  • changes in general investment conditions
  • the state of the economy

Historically, shares have provided the highest returns over the longer term when compared with other asset classes. However, equities are riskier than the other asset classes or funds (e.g. cash). The value of shares, and any dividend income from them, can fall as well as rise. You may get back less than you originally invested.

Remember you are investing in these asset classes through our funds. The fund factsheets below give details of the different asset classes that they invest in.

Each of the three main asset classes has a different level of risk. Cash is typically the safest, while shares are the riskiest.

We classify the (volatility) risk of these asset classes as follows:

  • shares - ‘above average’ risk
  • bonds (fixed interest securities) - normally ‘below average’ risk
  • cash - minimal risk (lower than below-average)

The level of volatility risk also reflects the level of potential returns expected from each of the asset types. Please note this is just a general guide. Remember that in each asset type, benefits aren’t guaranteed and the value of investments can go down as well as up. You may not get back the amount you originally invested.


When you think of the risk of volatility in the market values associated with the different investments, you should also consider the different levels of protection against price inflation (also called ‘inflation risk’) that each investment may provide for you.

Some asset classes (such as index-linked bonds) may offer protection against rises in inflation, other asset classes (such as equities) may give some level of hedging against inflation, but others (such as nominal UK gilts, corporate bonds and cash) may not provide such protection.

Your attitude to investment risk

By learning more about investments and how much risk you want to take, you’ll feel more confident about choosing the right fund(s) to suit your needs, from the range of funds available within the Defined Contribution 2010 Pension Plan.

Risk and reward

Different funds have different levels of risk associated with them. All funds carry the risk of falling in value — some more than others. Risk can be measured by the ‘volatility’ of the fund. Generally the level of risk goes hand in hand with the level of return. Please see the diagram above to see the risks associated with each asset class.

Generally speaking, the higher the ‘risk’ of a fund is, the greater the potential for long-term growth it offers — but there’s also more chance that the fund may suffer short-term ups and downs that can have a dramatic effect on returns. You might be prepared to take more risk in the hope of getting greater returns over the long term, or you might prefer to see a gradual but steady growth. Remember that the value of an investment and any income from it can fall as well as rise and isn’t guaranteed. You may get back less than you originally invested.

Risk classification of our funds

We’ve put our funds into different risk classifications so that you can choose the ones that suit your attitude towards volatility.

The categories are: 

  • Minimal risk 
  • Below-average risk 
  • Average risk 
  • Above-average risk
  • Higher risk

The risk classification is based on the fund’s volatility relative to other funds in Aegon’s full range. It’s not its risk against industry benchmarks.

Before you make an investment decision, ask yourself:

  • how long you’ll be investing for
  • how much return you hope to achieve
  • how much risk you’re prepared to take

The longer you have until you retire, the more volatility  risk you might want to take in return for a higher potential for growth. This is because your fund value will have more time to recover if the value of your investment falls during a market downturn. If your aim is to maximise the value at retirement, you won’t be able to do this without an exposure to volatility in the short term and the potential for a higher level of return over the longer term.

You may need to revise your strategy when you get closer (within around ten years) to your retirement date. At that point, you may want to think about moving all or some of your portfolio into investments that are not so prone to large swings in value.

This is because you want to avoid the situation when you’re buying a pension at the wrong point of a market cycle, when the markets have fallen in value. 

Although you might not want to take much risk with your money when investing in your pension plan, you should also note that minimal (volatility) risk funds might not give you as much potential for growth, affecting your fund value at retirement.

The range of funds available offer different levels of risk and potential reward so whatever kind of investor you are, you should find something to suit you. 

Choosing a fund

Now it’s time to choose the fund or funds you want to invest in. To confirm your choice when you first join the plan, follow the link to your benefits, your way from the My HR(Opens new window) home page. BP will tell you when and how you can do this.

Once we’ve set up your Plan, you can change your fund choices at any time by contacting us.

If you’re not sure which funds are right for you, you should get professional financial advice — you may have to pay for this. To find an independent financial adviser near you, please visit www.unbiased.co.uk(Opens new window)

If you don't make an investment choice

Unless you tell us otherwise we’ll automatically invest any contributions and payments into the DCP Lifestyle fund (in other words the fund that your employer has chosen to automatically invest your contributions). You don’t have to invest in this fund and even if you do invest in the fund at first, you’ll have the flexibility to move to a different fund in the future.