Once you've identified whether you're on track to receive the income you want in retirement you might want to adjust your investment choices to suit your personal goals.
Tina manages her pension investment with the help of her financial adviser
How Tina did
The example above demonstrates the importance of regularly
reviewing your pension, with the help of a financial adviser. Everyone’s
personal circumstances are likely to be different and they will have an effect
on your attitude to risk.
This is a fictitious example to illustrate some
typical scenarios and decisions that could be made during retirement. It
doesn’t constitute advice and shouldn’t be relied on as such.
When you take out your pension you may decide that you are
prepared to accept a bit more risk for potentially higher returns on your
However, as you approach your selected retirement date you
may decide that you’re not prepared to see much fluctuation in the value of
your pension, down or up, so you may wish to switch your investments into funds
that pose lower risks to your investment. The opposite could be true if you’re
short of where you want to be at retirement, and you might be prepared to increase
the risk for potentially higher rewards.
The chance of short-term fluctuations, both up and down, in
the value of your pension savings as events in financial markets cause the
value of investments to go down as well as up.
this can happen at any time, it’s likely to be most important when you are
close to retirement (when you have less opportunity to make up any losses) or
when planning changes to your funds.
The risk that the value of an investment does not grow
quickly enough to keep up with inflation and so the buying power of your money
risk is likely to be important to you throughout the time you are invested.
pension savings could be used to provide you with an income when you choose to
take your pension benefits. The income you receive will depend on both the
value of your pension savings and the cost of turning your savings into an
income. This creates the risk that the value of your pension savings does not
move in line with the cost of providing you with an income.
Conversion risk is
likely to be important to you when you are approaching retirement.
Whether you prefer to use risk-rated, ready-made portfolios, or like to select your own funds, you can choose from a wide range of funds with different investment styles and objectives to suit your needs.
Funds typically fall in, or between the following four categories -
It's important to discuss your investment options with a financial adviser. They'll be able to confirm whether it's the right thing to do for your personal circumstances. If you don't have a financial adviser we've listed reasons why you might benefit from using one and how to find one local to you.
Find out how the risk you're prepared to take can impact on your pension income in retirement.
Switching between funds is usually free and you can call or email us with your new investment instructions.