TargetPlan LifePath

The LifePath funds aim to provide you with an opportunity to grow your pension pot, whilst automatically and gradually moving your savings as you near your target year of retirement to reduce risk and to align the fund to the way you intend to draw your benefits at retirement.

At retirement you can choose how to use your pension pot – stay invested and draw an income from your investments (flexi-access income drawdown): buy an annuity (for those who want a guaranteed income); or take it as cash. The LifePath range has a fund that is appropriate for each of these choices.

The move to reduce risk and align to your retirement choice is based on your selected target  retirement date. If you change your target retirement date, let us know as it will affect when you start moving into lower risk asset mix.

You can update your target retirement age by logging in to TargetPlan(Opens new window).


There are three LifePath funds:

LifePath Flexi

For those planning to leave their pension pot invested and draw down income from it in retirement.

LifePath Retirement

For those planning to buy an annuity (guaranteed income) at their target retirement age.

LifePath Capital

For those planning to take their retirement savings as a cash lump sum at their target retirement age.

For more information on our LifePath funds, please choose from below.

The LifePath Flexi fund will glide (automatically change the asset mix) towards an asset allocation split of approximately 40% global shares (equities) and 60% fixed interest securities by your target retirement age.

When you reach your target retirement date, your pension pot will stay in the LifePath Flexi fund which will maintain the same 40/60% asset allocation mix into retirement to support income drawdown until you decide how to take your retirement income.

This option assumes you’re comfortable to stay invested in retirement and that you’re aware that this means your fund may fall in value and you may run out of money too soon.

The LifePath Retirement fund moves into a mix of bonds and other assets with the aim of ensuring that even if the value of your pension pot goes down just before you retire, the size of annuity you can buy should stay broadly the same. Though this isn’t guaranteed. 

It also assumes that you might want to take advantage of the current regulations allowing individuals to withdraw up to 25% of your TargetPlan pension pot tax free.

If, for some reason, your retirement is delayed beyond the target retirement date, your TargetPlan pension pot will continue to be invested in this way in the LifePath Retirement fund until you decide to access your savings. If you don’t buy an annuity at retirement, your pension pot stays invested, so the value may go up or down.

The LifePath Retirement fund isn’t designed for long-term investing so your savings may be eroded by inflation if you leave it too long before you take your benefits.

The LifePath Capital fund is designed to glide (automatically change the investment mix) towards cash-like investments and will invest in the our cash fund on reaching your target retirement date.

The cash fund aims to produce a return in excess of its benchmark mainly by being invested in sterling-denominated cash, deposits and money-market investments. When you reach your target retirement date your pension pot will be invested directly in the cash fund and stay there until you decide how you want to access your pension pot.

The cash fund isn’t designed for long-term investing so your savings may be eroded by inflation if you leave it too long before you cash in your pension pot.

How does LifePath work?

In the early years, your priority is likely to be to build up your pension pot as much as possible. Over the longer term, equities (company shares) have been shown to provide returns in excess of inflation and often higher than those seen for other types of investments such as government bonds or cash savings. 

When you’re more than 35 years from your target retirement age, LifePath provides such investments, but also aims to spread (or ‘diversify’) the risk. LifePath does this by investing in equities from a variety of regions and countries and by investing in other types of assets such as commercial property and commodities. However, while diversification helps control investment risk, it doesn’t remove it. In this phase, there’s a higher risk that your investments could fall in value.

During your mid-career and as your pension pot builds up, you might become more concerned about protecting your pension savings from the ups and downs of stock markets. As the years to retirement reduce, the LifePath funds gradually reduce the amount invested in these riskier assets and introduces bonds and gilts (government bonds). The introduction of bonds and gilts helps to diversify and reduce investment risk within the LifePath Fund, although the fund can still fall in value during this phase.

The LifePath Fund range lets you select a fund which automatically changes its investments on approaching your target retirement date in a way that’s more aligned to how you intend to access your retirement savings.

For example, someone looking to take their entire pensions pot as a cash lump sum may want their LifePath Fund to invest 100% in cash by the time the LifePath Fund reaches your target retirement date in order to minimise risk to the capital value - they would choose the LifePath Capital fund.

Someone looking to make regular income withdrawals (drawdown) will need their LifePath fund to be invested very differently at and into retirement - they would choose the LifePath Flexi fund.

You can change your choice of LifePath fund if your intentions for how you're going to use your retirement savings changes.

The following charts illustrate what the investment profile of each LifePath fund would be over the years towards your target retirement age.

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