Which statement suits you best?

We appreciate you may have seen a fall in the value of your pension savings recently and this can feel unsettling. Here are some things to consider depending on whether you’re still saving into your pension or taking money out.

 

I’m still saving into my pension

The investment options available through our pensions can be split into two main categories. First, we have our ‘easy’ and ‘default’ investment options for customers who want to let specialists manage their investments for them. Secondly, we have our DIY option for customers who want to choose and manage their own funds.

If you’ve chosen our easy investment option then your pension savings are likely to be invested in our MyFolio range. If you have a workplace pension, you may be invested in our Active Plus or Passive Plus ranges if your employer has selected one of them as your scheme’s ‘default’ investment option. All of these are managed by investment specialists and spread your money across different types of investments and countries (known as diversification).

Having a mix of investments helps to smooth returns, meaning the value should be less likely to change dramatically than if you were invested in a single type of investment or location. This approach aims to provide investment growth when markets are rising, but in situations like we’re experiencing now, where markets are falling, it can help reduce the impact of those falls.

For example, as at 1 April 2020 the FTSE® All-Share Index* had fallen by -27.9%. However, our Active Plus III Pension Fund, the main fund used in our standard default investment option for workplace pension holders, had fallen by -14.7%.

Plus, if you’re in a workplace pension, it’s likely you’re invested in what we call a lifestyle profile. This means that as you get closer to your selected retirement date, your pension savings will automatically move into investments that are normally lower risk. You may find that your pension savings have been cushioned from the extremities of the market falls as a result of them having been moved into these lower risk investments.

If you’re a DIY investor and you, or perhaps your financial adviser, have selected your funds then you, or your adviser, should be reviewing these on a regular basis as standard practice. However, to give you additional peace of mind, we apply rigorous oversight to the funds we offer through our DIY pension range, making sure the fund managers run them in line with the funds’ objectives.

You can check the current value of your pension savings and where you’re invested by logging in to our online service or downloading our app.

Past performance is not a guide to future performance.

 

I’ve started taking money from my pension savings

If you’ve already started taking money from your pension savings, you may be invested in one of our ‘ready-made’ investment options – the Short-Term Income Fund, the Annuity Targeting Fund or Standard Life Active Retirement.

These options are designed to match your plans for your pension savings. For example, if you told us you plan to take all your pension savings in the next five years, you’re likely to be invested in the Short-Term Income Fund.

We regularly monitor our ready-made investment options to make sure they’re performing as expected.

Alternatively, you may have chosen to invest in one of our risk-based investment options - the MyFolio Managed Funds. If this is the case, investment specialists are continuously monitoring these and making changes in response to what’s happening in the markets.

You can check the current value of your pension savings and where you’re invested by logging in to our online service or downloading our app.

If you’d like to find out more on how coronavirus is affecting markets and investments, read the latest market review from Aberdeen Standard Investments’ Richard Dunbar.


*FTSE International Limited (‘FTSE’) © FTSE 2020. ‘FTSE®’ is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence.


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