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If you would prefer a hands-off approach to investing you can choose what is known as a ‘Lifestyle’ option. This type of investment strategy is set-up to make changes automatically as you approach retirement. It follows your journey to retirement and makes investments as you progress.

As you get closer to retirement, the money in your Pension Account is gradually moved to funds which are considered to be less risky in the short term.  It is a way of protecting your Pension Account from a sudden drop in the market just before retirement. 

Your Pension Account is invested in accordance with an investment strategy which is set in advance, based on the number of years you have to go to your selected target retirement age (TRA). With this strategy your contributions are fully invested in equities which have the greatest potential for growth until you are 25 years from your TRA, with the aim of building up the value of your Account. When you are within 25 years of your TRA your investments are gradually switched to diversified growth funds. These are aimed at protecting the value of your Account by investing in a broad range of assets including Bonds and Cash. Then, as you approach retirement, up to 25% of your Account is gradually invested in cash-type investments.

It is important that you set your Target Retirement Age early on, as the ‘Lifestyle’ strategy uses this date to make the gradual movements in your investments.