When you have considered what level of contributions you can make to your pension it is also important to think about how these are invested.
Where you invest is dependent on factors such; as your age, your approach to risk, your financial situation and how much time you have to spend on your investment decisions. The value of your pension will go up or down depending on the investment returns and charges on the fund(s).
If you don’t make your own choice your money will be invested in the default fund. This section will provide more information on what the default fund for Baillie Gifford Group Retirement Plan is and what you should consider if you want to choose other investment funds.
Where you invest should depend on:
- Your age
- Your approach to risk
- Your financial situation
- How much time you have to spend on your investment decisions
The default fund
The default fund for the Baillie Gifford Group Retirement Plan is the Aegon BG PP Default Growth (ARC). On joining, your pension contributions will be automatically invested in the default fund.
Just because it’s the default fund, this does not mean it is the safest option or that it’s the right choice for you – you should consider if the default fund is the best way for you to invest your pension. It is designed to fulfil the broad needs of a wide range of investors not the exact needs of you as an individual.
There is a lifestyle profiling approach that is applied to the default fund. This means that funds are invested in riskier funds, with the aim of gaining a higher return, when you are a long time from retirement and then in the years as you approach retirement the funds are invested in less risky funds that are likely to offer a lower return but are likely to be less affected by investment market falls.
If you wish to move out of the default fund you can switch your investment choice at any time, with no cost or penalty. You will need to contact AEGON directly to switch your investments. If you have registered for online servicing with AEGON you can also use this to review your pension plan and switch funds.
When choosing your own funds It is important that you have the time to review them on a regular basis and are able to change them regularly. Reviewing is as important a part of managing your investments as making a choice initially. Markets, funds and your goals will change over time and it is important you review regularly to keep your choices appropriate.
Choosing my own funds
If you have registered for online servicing with AEGON you can also use this to review your pension plan and switch funds.
When choosing your own funds it's important that you have the time to review them on a regular basis and are able to change them regularly. Reviewing is as important a part of managing your investments as making a choice initially.
Markets, funds and your goals will change over time and it is important you review regularly to keep your choices appropriate.
My investment choices
When you are investing in a pension, you will need to consider your attitude to risk and the potential return or loss over the period in which you are investing. Most pension funds will have a risk that their value may be lower than the original invested value as investment can go up and down in value.
This is a decision you make based on your own personal circumstances.
There are a large number of funds to choose from, however there may also be a limit to how many funds you can choose to invest in at one time. Your provider will give each fund a risk rating and they may also review them from time to time and the risk rating may change. You will find performance details that are maintained on a regular basis on AEGON website.
Things to consider:
- There will be a maximum number of funds you can invest in at any one time
- You will be able to redirect contributions and/or switch your investment fund to an alternative any time (subject to any restrictions AEGON may impose)
- You will need to notify AEGON of all fund switches. Johnson Fleming take no responsibility for investment losses where switching is notified to us, as we are unable to process this request on your behalf
- The fund range available is constantly changing
- There are no guarantees that your pension plan will be sufficient to meet your retirement needs. You should regularly review your investment selection and potential benefits regularly to ensure it continues to meet your investment and retirement needs
- Some funds carry an additional Annual Management Charge (AMC)
- If you wish to seek professional help or guidance, you may want to see an independent financial adviser or contact Johnson Fleming.
Help me choose my own funds
Johnson Fleming in conjunction with Dean Wetton Advisory offers a Preferred Fund Listings Service which is available for your pension. This service is designed to help members who would like to take an active role in selecting their pension investment funds, but might find the full range too large to be able to analyse themselves.
The list selects a small range of funds across the major market sectors and asset classes. These are expected to be suitable as core holdings for a long term pension investor.
Although great time and care is taken to select these funds, this does not imply they will be the best performing funds available. This service is designed to help those members looking to make their own choices, but a fund being on this list is not a recommendation that you should invest in it.
When looking at your pension fund investments it’s important to understand the charges associated with them.
All pension schemes have an Annual Management Charge, this covers the providers cost of running the plan and is automatically deducted from your pension pot. For those looking at investing in funds managed by other fund managers and some funds managed by AEGON, they may be subject to an additional management charge.