Investing

The Guided approach invests your DC savings automatically in a pre-defined way in 2 phases: a Growth phase and a Synchronise phase.

• The Growth phase aims to grow your DC savings by investing in funds that typically have the potential for good growth but, because of this, are likely to go down as well as up in value. You can choose from 3 Growth phase options: Focused, Diversified and Phased.
• The Synchronise phase moves your DC savings gradually so by the time you retire, your savings are invested in a way that reflects how you intend to use them. You can generally choose from 5 Synchronise phase options*: One-off cash, Multiple cash, Flexible access, Flexible access (longer term) and Annuity. (* the Diversified option can’t be combined with the Flexible access (longer term) option.)
• The table below shows how the Growth and Synchronise options combine to create 14 Guided options. 

2

SYNCHRONISE phase

reflects how you may want to access your DC savings

One-off cash

for those who want to take their DC savings as one cash lump sum

Multiple cash

for those who want to take their DC savings as several cash lump sums

Flexible access

for those who want to start accessing their DC savings flexibly as soon as they retire

Flexible access (longer term)

for those who want to access their DC savings flexibly but not straightaway

Annuity

for those who want to use their savings to buy an annuity

1

GROWTH phase

determines how your DC savings are invested when your priority is to grow your savings

Focused

invests 100% in shares

Diversified

invests in a broad range of investments such as shares and bonds

Phased

invests in the Focused approach and then switches to the Diversified approach

One-off cash (Focused)

One-off cash (Diversified)

One-off cash (Phased)

Multiple cash (Focused)

Multiple cash (Diversified)

Multiple cash (Phased)

Flexible access (Focused)

Flexible access (Diversified)

Flexible access (Phased)

Flexible access (longer term) (Focused)

Flexible access (longer term) (Phased)

Annuity (Focused)

Annuity
(Diversified)

Annuity
(Phased)

These combine to give 14 Hands off options:

One-off cash (Focused)

One-off cash (Diversified)

One-off cash (Phased)

Multiple cash (Focused)

Multiple cash (Diversified)

Multiple cash (Phased)

Flexible access (Focused)

Flexible access (Diversified)

Flexible access (Phased)

Flexible access (longer term) (Focused)

Flexible access (longer term) (Phased)

Annuity (Focused)

Annuity (Diversified)

Annuity (Phased)

• Once you've chosen the Guided approach that's right for you, your DC savings will be invested automatically and moved gradually between different types of investments depending on how far you are from your target retirement date. This is a date you select; it can be any birthday from your 57th (or 55th until April 2028) to your 75th birthdays and is usually the date you want to start using your DC savings.
• With the Guided approach, while you should still keep your investments under review, you don't have to worry about managing them regularly or deciding when to move them to less risky funds as you approach your target retirement date; it's all done for you.
• Find out more about Guided and who this approach might suit in our investment guide.

The Customised approach lets you decide how to invest your DC savings in a range of investment funds selected by the DC Plan Trustees.

• You can decide which funds to invest in, how much to invest in each fund, and when to change your investments.
• It’s important to remember that you’re responsible for deciding if and when to change your investments, particularly as you get closer to retirement.
• You can choose from 16 funds:

• Investments aren’t like a savings account where you earn interest on your money. With investing, your DC savings purchase units in the investment funds you choose. The price of these units goes up and down depending on investment performance (which is affected by lots of things). This means the same amount of contributions will buy more units one month and less another. As the unit price changes, so does the value of your DC savings.
• For example, say the unit price of your chosen investment fund was £1. If you invest £100, you’d buy 100 units. If the unit price changed to £1.10, the value of your investment (your DC savings) would be £110. It works the other way too – if the unit price changed to 90p, the value of your DC savings would be £90.
• You should expect to see the value of your DC savings go down in some years – it’s generally a normal part of the investment cycle and nothing to worry about, particularly if you don’t need to access your DC savings for some time.

Yes, there’s a charge for investment management. These charges are built into the price of your investments and vary for each fund (including the funds that make up the Guided options) and between managers. The Trustees have negotiated competitive rates to make sure more money goes into your pocket. Find out about annual fund charges.

Choosing a Growth phase option

• Focused: may suit you if you want the potential for the highest rates of growth and are prepared for your investments to go up and down in value, sometimes quite sharply.
• Diversified: may suit you if you’re willing to accept the potential for moderate growth in return for more stable returns (that is, less risk that your DC savings will fall in value).
• Phased: this combines the Focused and Diversified options. It may suit you if you want to target the highest rates of growth initially and are prepared for your investments to go up and down in value, sometimes quite sharply when you’re a long way from retirement, but want to reduce some of this investment risk gradually as you get closer to retirement and are willing to accept potentially lower rates of growth in return.

Choosing a Synchronise phase

• One-off cash: may suit you if you want to take all your DC savings as cash in one go.
• Multiple cash: may suit you if you want to take your DC savings as a series of cash sums over a short time, say 5 years.
• Flexible access: may suit you if you want to withdraw savings throughout your retirement to suit your needs, and you plan to withdraw savings as soon as you retire.
• Flexible access (longer term): may suit you if you want to withdraw savings to suit your needs but don’t plan to withdraw savings for several years after you retire, or you plan to leave your savings to your beneficiaries when you die.
• Annuity: may suit you if you want a fixed income in retirement.