Investment choices
You can pick from three Journeys which are designed to complement the way you might take your pension pot. We have a default strategy if you don’t want to choose your own investments. Or, we offer other investment options if you want to be more “hands-on”.
Investing your pension pot for success
You can choose how you would like to invest your pension pot, or you can leave this to us.
When you first join the NCIs we will ask you how you would like to invest your contributions and when you plan to retire, your target retirement date. You can leave this up to us if you want to.
All the investment options are managed by Legal & General.
First, pick a retirement option
Before deciding where to invest, think about how you might like to take your pension pot. You can find out all about this on the My retirement page.
Once you know which of these might suit your retirement needs best, pick a way of investing to suit this.
Choose your investments
There are three different ways you can invest your pot.
Through one of our pre-built 'Journeys'
These 'target-date funds' automatically adjust how your pot is invested based on your retirement date, becoming more conservative as you approach retirement.
Not everyone is comfortable choosing how they invest so our Drawdown Journey is the default option for those who prefer to leave their investing to us.
Our FTSE4Good Lifestyle option (now closed to new investors)
This also automatically adjusts how your pot is invested based on your retirement date, but the adjustment is not as smooth as a Journey. This is ideal for those who like the idea of buying an annuity at retirement.
You can pick your own investments from our selected list
Select one or more funds that suit your risk and reward appetite.
Jump to:
Journeys
Journeys are designed to invest your pension pot in a way that suits how you might take it when you retire
Journeys are designed to invest your pension pot in a way that suits how you might take it when you retire.
The two Journeys are:
- Drawdown Journey (our default option)
- Annuity Journey
Both Journeys put your savings in a mix of assets which can help your pension pot grow. As you move through your working life your savings are automatically moved into less risky assets, so it is more stable over the longer term. When you are 10 years from your target retirement date your savings start to move into different investments, depending on which Journey you have picked.
Your investments move for you, so you don’t need to decide when to move your savings, or what to move them to.
What does it cost?
The NCIs don’t charge anything for administering your pension, but Legal & General do. This is called an annual management charge, which is 0.25% a year.
Target retirement date
Most people don’t know exactly when they will take their pension pot. Some people might take their pension pot early due to circumstances such as family or health needs, some might just want some extra cash and to keep on working.
Other people may not take their pension pot until much later in life as they’re enjoying work, or they just don’t need it yet.
Each Journey lines up your pension pot ready for you to take it around a specific time. This is your target retirement date. If you don’t tell us when you think this might be, we will pick age 65 for you.
With Journeys, as the transition from higher risk to safer funds is very smooth, if you take your pension pot a bit before or after your target retirement date, it doesn't make too much difference to your investments. So, if your plans change and you need to access your pension pot quicker than you anticipated, your investments will still be lined up and working hard for you.
Can I switch Journey?
Yes. You can switch at any time. If you are more than 10 years from your target retirement date the investments are the same for each Journey, so there is no charge to switch. If you are within 10 years of your target retirement date, there might be a small charge to switch Journey as your investments will be different.
Drawdown Journey
This Journey invests your pension pot assuming you will leave your savings invested during retirement and take an adjustable income, or cash in chunks. You decide when and how much to take out. You can take lump sums or a regular income from it as and when you need, until your money runs out or until you choose another option.
When you are 10 years from your target retirement date, this Journey starts to move your savings into a mix of return seeking and less risky assets. The aim is that most of your pension pot is secure, but it still has a chance to grow. If you don’t want to make an investment decision, we will put you in this Journey.
Annuity Journey
If you like the idea of buying a guaranteed income for life when you retire, this Journey lines your pension pot up ready to buy one.
When you are 10 years from your target retirement date this Journey starts to move your savings into much safer assets so when you reach your target retirement date your pot is lined up ready for you to buy an annuity.
Responsible investing
In both Journeys, a large portion of your money is invested in Legal & General’s Diversified Multi-Factor Equity fund and their Future World Multi-Asset fund.
These explicitly exclude companies such as those manufacturing controversial weapons, pure coal miners or companies that persistently breach the UN Global Compact with its standards on labour, anticorruption and environmental standards.
Your money is invested in companies scoring better on a range of responsible investing criteria - which include measures of as carbon reserves and emissions, biodiversity, social diversity, investor rights and many more, and less in the companies that score worse.
Both Journeys also incorporates L&G Investment Management’s Climate Impact Pledge. L&G has a published target of being Carbon Net Zero by 2050 with interim targets set to ensure progress.
FTSE4Good Lifestyle
As an alternative to the Journeys we offer FTSE4Good Lifestyle (now closed to new investors)
FTSE4Good Lifestyle works in a similar way to Journeys.
Your pension pot is invested in higher risk funds while you are some way from retirement then your savings are automatically switched into safer funds when you are 5 years from your target retirement date.
Until you are 5 years from your target retirement date your savings are invested equally between company shares overseas and in the UK. Both funds track the FTSE4Good. Once you reach the 5-year point before your target retirement date, your savings automatically switch to gilts and cash, so by the time you take your pension pot 75% is in gilts and 25% is in cash. Lifestyle works well if you would like to buy a guaranteed income for life as the blue bar - gilts, closely matches the cost of buying an annuity.
What does it cost?
The NCIs don’t charge for administering your pension pot, but Legal & General do. The Annual Management Charge for the this lifestyle option is 0.25% a year.When you are 10 years from your target retirement date this Journey starts to move your savings into much safer assets so when you reach your target retirement date your pot is lined up ready for you to buy an annuity.
What is the difference between Journeys and Lifestyle?
There are a number of key differences between Journeys and lifestyle.
Both the Journeys and lifestyle invest in companies with responsible investment considerations.They integrate responsible investing factors across all their funds. They have a strong record of attending shareholder meetings and voting against proposals contrary to their responsible investing principles.
FTSE4Good lifestyle invests half your money in overseas company shares and the other half in UK company shares. This means your money is invested in two baskets. Journeys spreads your savings more widely so if one basket does less well, you still have other baskets to protect your savings.
FTSE4Good lifestyle lines your pension up ready for you to buy a guaranteed income for life, called an annuity. If you take your pension another way, there can be better ways to invest your savings, which Journeys can help with.
Both Journeys start to move your savings into safer funds 10 years before your target retirement date. FTSE4Good lifestyle moves your savings 5 years before. This means your pension pot is in higher risk assets for longer, which could give your pension pot a chance to grow some more, but it could also go down shortly before you retire.
Unless you pick a target retirement date, lifestyle lines your pension up perfectly for the day of your 65th birthday. If you take it before or after this, it is not invested to its full potential. As the transition from higher to lower risk funds is much smoother with Journeys, you can retire in a 5-year period around your target retirement date and your pension pot should be less likely to go down value.
Pick your own investments
We have 11 investment options you can choose from. You can select one or more of these
You might want to diversify your investments to give you a good mix of assets and reduce your risk. For example, if you are closer to retirement, you might want less risk.
If you do choose your own investments, check back on how they are performing every few years to make sure they are performing as you hoped.
The high risk funds are in green. The medium risk funds are in blue. The low risk fund is in orange.
FTSE4Good UK Equities (0.2%)
Tracks the performance of the FTSE4Good UK Equity Index
FTSE4Good Developed Equities (0.3%)
Tracks the performance of the FTSE 4Good Developed Index
UK Equities (0.1%)
Tracks the performance of the FTSE All-Share Index
Overseas Equities (0.2%)
Provides a diversified exposure to a range of overseas equity markets
UK and Overseas Equities (0.19%)
Provides a diversified exposure to UK and overseas equity markets
Future World Inflation Sensitive Annuity Aware (0.15%)
Aims to improve inflation adjusted outcomes for investors likely to purchase fixed annuities
Property (0.7%)
Aims to exceed the MSCI/AREF UK Quarterly All Balanced Property Fund Index (UK PFI) over three and five year periods
Corporate Bonds (0.15%)
Tracks the performance of the Markit iBoxx £ Non-Gilts (ex BBB) Index
Fixed Interest Gilts (0.1%)
Tracks the performance of the FTSE Actuaries UK Conventional Gilts Over 15 Years Index
Index-Linked Gilts (0.1%)
Tracks the performance of the FTSE Actuaries UK Index Linked Gilts Over 5 Years Index
Cash (0.125%)
Aims to perform in line with SONIA (Sterling Overnight Index Average), without incurring excessive risk
Change my investment choice
If you would like to change your investment choice, you can do this on PensionsOnline.
Try and consider current market conditions and the economic outlook before switching. It is a common saying,m but past performance isn't an indicator of how well things will perform in the future.
The closer you are to retirement, the less risk you might want to take.
If you're ever unsure, switching can be a crucial decision so consider speaking to a financial adviser first.