How my investments work
Learn how the funds you choose can affect the way your IWDC pot grows.
When you invest the money you pay into your IWDC pot, you can:
You can find out more about Lifestyle strategies and investment funds below and on the my fund choices page. If you don't choose, you will automatically be invested in the Flexible Drawdown Lifestyle strategy.
Always remember there’s a risk that the value of investments can go down as well as up.
Before making any choices, take a look at our IWDC investment guide, which offers support on the investment options available and things to consider when choosing what's right for you.
If you don’t feel comfortable looking after your investments directly, you can opt for a more ‘hands-off’ approach and choose a ‘Lifestyle strategy’.
How a Lifestyle strategy works
Lifestyle strategies build your pension savings while you’re still working and reduce the risk of a fall in value as you near retirement. They do this by investing in a selection of underlying funds and changing your allocation to each fund as you get closer to your Target Retirement Age (TRA).
While you are still a long way from retirement, more of your money will be allocated in higher-risk funds to try to help them grow more. As you get within ten years of your TRA, your money will gradually be moved into lower-risk funds to help reduce the risk and protect the value of the pension pot you've already built up.
Visit the Target Retirement Age page for more information about your TRA, including how to check and change it.
You can set, check, and change, your TRA in your myRPS account if you've chosen to invest in a Lifestyle strategy. Go to the My Pension area of your account and select the Funds page.
Choosing a Lifestyle strategy
There are 3 Lifestyle strategies offered by the Scheme:
You can learn more about each of these on the my fund choices page. Which one(s) you choose could be based on:
The Trustee invests your IWDC pot on your behalf, based on your choices.
It’s really important that you take an active interest in your investment choices and review them regularly. You are still able to change your fund choices even if you leave the IWDC Section and no longer pay into it. No investment is 100% safe and you may want to change your choices depending on your circumstances or world events.
If you feel comfortable looking after your investments and want to be more hands-on, you can manage your investments by yourself.
Your fund choices
There are 7 funds to choose from:
You can find out about each of the investment funds, including their risk ratings, on the my fund choices page.
Alongside these 7 funds, you can also invest in any of the 3 Lifestyle strategies mentioned above.
Fund risk ratings and what they mean for you
Each fund has a different objective and risk rating, so you can choose the one that’s right for you. For example, the lowest risk rated fund is the Deposit Fund but there are medium and high-risk funds too. Please check the factsheets for your chosen fund(s) to make sure you are comfortable with the level of risk.
Higher risk funds are expected to get higher returns, but they could also drop more sharply in value. Lower-risk funds are less likely to grow much in value but are also more stable so less likely to drop in value. You might want to consider higher risk funds if you're further from retirement and are willing to take a bit more risk for potentially higher rewards.
All funds can experience rises and falls over the short to medium term. The higher the risk rating, the larger the rises and falls are likely to be.
If you choose this hands-on investment funds approach, your money will not automatically move from high to lower-risk funds as you get closer to retirement. This means it’s up to you to choose if and when that’s necessary, and to make any fund switches yourself.
You can find the risk ratings for each of the funds on the fund risk ratings page.
When choosing which investment options are right for you, ask yourself:
Watch the videos below to learn more about investment risk and the level of risk you're comfortable taking.
If you’re invested in a Lifestyle strategy, you can also check, and change, your Target Retirement Age (TRA) in your myRPS account. Any changes you do make to your TRA may affect your investments, including the allocation of your pot between investment funds and the risk profile of your investment.
Try out the Retirement Modeller to help you understand how changing your Target Retirement Age could affect your pot. The modeller is available in the 'Planning for the future' section of your myRPS account.
You may also want to speak to an Independent Financial Adviser (IFA) before making any changes. You can find more information on the guidance and advice page.