A pension is a long-term investment. Its value can go down as well as up and could be worth less than was paid in. Laws and tax rules may change in the future. Your own circumstances and where you live in the UK will also have an impact on tax treatment.
What is Standard Life Active Retirement?
It's a ready-made investment option for people planning to take money from their pension plan within the next five years and also planning for their money to last for more than five years. It gives you a balance of lower risk investments which aim to provide some stability for the money you want to take first and medium risk investments to give the rest of your money the chance to keep growing.
How does Standard Life Active Retirement work?
To keep things simpler for you, we make the day-to-day investment decisions:
- Investment specialists review the funds in each pot (see below) to make sure that Standard Life Active Retirement is performing in line with expectations
- You can take your money as you want, whether that’s as a regular income or lump sum withdrawals
- Your money stays invested so it has the opportunity to grow in value
- We spread the amount of risk you're taking, particularly at the start when you're invested across lower and medium risk funds
How is your money invested?
Your money is invested across three funds, which we refer to as pots. You tell us how you’d like to take your money and this determines the way it’s invested.
Here's how the pots work in more detail:
Investment specialists choose where to invest the money in each pot. They review the pots regularly to check they’re meeting their aims, and can make changes to the investments in the pots if they think it’s appropriate.
When you come to take your money, it will come from pot 1 first until it’s empty, then pot 2 and finally pot 3. This means your medium risk investments have a chance to grow while you take money from the lower risk pots.
When you first invest through Standard Life Active Retirement, your money is split across the three pots based on how you’ve told us you want to take it. It’s then up to you to regularly check how much money you have left in each pot, and split it across the three pots again if you want. You may want to think about doing this if you take a significant amount from your pension plan or if you change how much money you're taking on a regular basis.
How long your money lasts depends on how the funds you're invested in through Standard Life Active Retirement perform and how and when you take money from your plan. There are no guarantees so your money may not last as long as you want it to or it could run out altogether. It’s important that you regularly review your pension plan to make sure that you don’t run out of money too soon.
Download our guide to read more about how Standard Life Active Retirement works:
You can also see how each of the three pots have been performing by reading our latest factsheets:
Is Standard Life Active Retirement right for you?
It might be right for you if:
- you’re 55 or over (rising to 57 in 2028) and looking to take money from your pension plan flexibly
- you’re planning to take money from your pension plan within the next five years and also plan for your money to last for more than five years
- you’re comfortable leaving your pension money invested
- you’re happy to keep track of your plan and make sure it lasts as long as you need it to.
Important things to think about
- Overall, you need to be comfortable taking a medium level of investment risk and understand that, at times, your investments may go down and up significantly and you could run out of money. Because the amount you have in each pot will change, the amount of risk you’re taking will change over time
- If you’re not planning to take any money, other than your tax-free lump sum(s), in the near future, this option may not be right for you
- At the start, we’ll decide how much money goes into each pot. But then it’s up to you to regularly check this and, if you want to, ask us to split your money across the pots again
- It’s also up to you to decide what you take out and when, and to check that your money will last as long as it needs to
- If you choose Standard Life Active Retirement, you can’t invest in any other funds through your pension plan