Lifestyle profiles

Pension investment options designed to make it easy to save for your retirement

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 are lifestyle profiles?

Lifestyle profiles are investment options that are designed to make it easy for you to save for retirement. As you get closer to your retirement, they gradually and automatically move your money into carefully chosen funds designed to reflect how you plan to take your pension savings. That could be:

Keeping your money invested and taking it as and when you need it (known as a flexible income or drawdown)
Setting up a guaranteed income for life (also known as an annuity)
Taking your money as one or more cash lump sums
A combination of these options

We also have lifestyle profiles that let you keep your options open about how you take your pension savings.

Why choose a lifestyle profile?

In a nutshell, because they’re easy. Once you’re in a lifestyle profile, you don’t need to do anything. We’ll do everything for you right up until you retire, although we always recommend that you regularly review your investments to make sure they remain on track for your plans.

And if you’re in one of our lifestyle profiles - called strategic lifestyle profiles - even if you’re not retiring for 20, 30 or even 40 years, you can be confident that it will remain up to date. If there are changes in legislation, or if something happens in the markets that affects it, we’ll make changes so it continues to meet your needs.

How do lifestyle profiles work?

Here’s a quick breakdown of how your money is invested and what happens as you get closer to retirement if you’re in a lifestyle profile.

1. Growth stage – usually when you’re 10 or more years from retirement

Your money will be invested in funds that aim to grow the value of your pension savings over time.

2. Approaching retirement stage – usually when you’re less than 10 years from retirement

Your money will be gradually moved into funds that are usually lower risk, and designed to get your pension savings to where they need to be when you retire.

This all happens automatically, so you don’t need to do anything.

Here’s an example of how the funds you’ll be invested in will change as you get closer to retirement for one of our Active Money Personal Pension easy investment options – the MyFolio Managed III Universal Strategic Lifestyle Profile (399 KB).