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You can choose how you want to invest your savings and there is an option if you do not want to manage your own investments

RSP Lifestyle

Managing your own investments takes time and some knowledge, so we understand that it is not for everyone. If choosing your own investments takes you out of your comfort zone, you will be pleased to know that we have designed the RSP Lifestyle with you in mind.

The RSP Lifestyle aims to grow your account until you are 15 years from retirement and then gradually moves your account into investments designed to protect its value as you get closer to retirement.

If you do not want to make an investment choice, you will automatically be invested in the RSP Lifestyle – Stay Invested Pathway, with a Target Retirement Age of 65. Your Target Retirement Age affects when your account switches into lower-risk investments as you approach retirement. You can change your Target Retirement Age online by logging into ePA.

More about RSP Lifestyle

Self-Select Funds

Self-Select Funds give you the freedom to choose from a range of investment types, and when to switch between them.

If you think you would like to choose from the Self-Select Funds, you might want to read more about the different investment styles and asset classes before making your choice.

More about Self-Select Funds

Review your investments

You should keep an eye on your investments and make sure that they are still suitable for you, particularly if your retirement plans change over time.

For example, as you get nearer to retirement, you may prefer not to invest as much in higher-risk funds. Instead, you may wish to invest more in funds that protect the value of your account and are more suitable for the way that you plan to take your RSP account at your Target Retirement Age.

You can track and change your investment choices online by logging into ePA.

Log into ePA

The RSP Lifestyle

In the RSP Lifestyle, you invest in funds that aim to grow your account until you are 15 years from your Target Retirement Age (the age you want to retire). You will need to tell us your Target Retirement Age if you choose this option, and if you do not tell us, we will set your Target Retirement Age at 65.

When you reach 15 years before your Target Retirement Age, your account will gradually start to move into investments designed to protect its value but there are also three different ‘pathways’ to choose from:

These ‘pathways’ are designed to suit the different ways that you can take your account (see Retirement options to find out more). Here is how they work:

Cash Lump Sum Pathway

The Cash Lump Sum Pathway moves your account out of growth-seeking assets into a very low volatility cash fund, suitable if you intend to take your RSP pot as a lump sum payment (which can be paid in one go or over two tax years). One quarter of the lump sum would be tax free and the remainder taxed at your marginal rate in that tax year.

Annuity Pathway

The Annuity Pathway gradually moves your account to be 25% invested in cash funds and 75% invested in the IMI Retirement Fund. This is more suitable if you are thinking of taking the maximum amount of tax-free cash (25%) and the remainder as an annuity.

Stay Invested Pathway

The Stay Invested Pathway moves your account into a blended portfolio of investments, made up of global equities, the Diversified Growth Fund and the IMI Retirement Fund to continue to offer growth potential but with some protection against moves in annuity pricing. This option is suitable if you think you would like to use a drawdown arrangement to take your retirement pot over a period of time or if you want to be flexible about when you retire.

This is the default option in the RSP Lifestyle unless you select another pathway.

IMI Retirement Fund

In each of the RSP Lifestyle ‘pathways’, when you reach 15 years before your Target Retirement Age, part of your account will move into the IMI Retirement Fund. This is made up of two passive bond funds (which you can also choose from the Self-Select range of funds).

Aims

The IMI Retirement Fund aims to give you greater certainty about the amount of money you will have in your RSP account when you reach retirement. The funds it contains:

  • are less volatile than the investments in the growth phase, meaning you are less likely to see a sudden drop in value;
  • move in line with long term interest rates (which also affect the cost of annuities); and
  • keep pace with inflation, so that the value of your account will not go down in real terms.

Self-Select Funds

If you want to manage your own investments, you can choose from the following funds. Some of these are passively managed and some are actively managed – for more information, see Investment styles.

Long-term investments representing the ownership of companies via stocks and shares. The return on equities comes from growth in the value of the shares, plus any income from dividends. For overseas equities, changes in the foreign currency exchange rates could also significantly affect returns.

Capital risk rating: 6

Objective:To provide long-term capital growth in excess of UK price inflation by investing in global listed shares. The fund aims to perform in line with the benchmark as closely as possible.

Read the factsheet

Capital risk rating: 6

Objective:To provide long-term capital growth in excess of UK price inflation by investing in global listed shares. The fund aims to outperform the benchmark over the long-term.

Read the factsheet

Capital risk rating: 7

Objective:To provide long-term capital growth in excess of UK price inflation by investing in shares predominantly listed in developing countries. The fund aims to perform in line with the benchmark as closely as possible.

Read the factsheet

Capital risk rating: 5

Objective:To provide long-term capital growth in excess of UK price inflation by investing in UK listed shares. The fund aims to perform in line with the benchmark as closely as possible.

Read the factsheet

Capital risk rating: 6

Objective:To provide long-term capital growth in excess of UK price inflation by investing in global listed shares in a Shariah compliant manner. The fund aims to perform in line with the benchmark.

Read the factsheet

Capital risk rating: 6

Objective:To provide long-term capital growth in excess of UK price inflation by investing in global listed shares in companies that operate in a sustainable and responsible manner. The fund aims to perform in line with the benchmark.

Read the factsheet

Funds that invest in a mix of equities, bonds, gilts, cash and alternative investments like property or commodities. The actual weighting of these assets will depend on a number of factors, for example current economic conditions for a Diversified Growth Fund, or ethical criteria for socially responsible investments. Given the diversity of asset classes, a multi-asset fund potentially offers less volatility than a fund of pure equities but may reduce the potential for higher returns.

Capital risk rating: 5

Objective:To provide long-term capital growth in excess of UK price inflation. The fund aims to have less capital risk than an equities-based fund by investing in a broad range of asset classes including equities, bonds, and a range of alternative assets. The fund aims to perform in line with the benchmark, over the long-term.

Read the factsheet

Fixed interest securities or index-linked investments in the form of government bonds (UK Government bonds are called Gilts) or corporate bonds (those issued by companies). These investments are essentially loans, often over a set period, paying a rate of interest which is fixed or linked to inflation or an index.

The return is a combination of any interest received and any change in the bond’s value. For overseas bonds, changes in the foreign currency exchange rates could also significantly affect returns.

Capital risk rating: 4

Objective:To provide long-term capital growth in excess of UK price inflation by investing in global bonds. The fund aims to outperform the benchmark over the long-term.

Read the factsheet

Capital risk rating: 3

Objective:To provide long-term returns higher than would be available from Government-backed bonds. The fund aims to perform in line with the benchmark as closely as possible.

Read the factsheet

Capital risk rating: 2

Objective:To provide long-term returns by investing in fixed-interest bonds issued by the UK government with maturities longer than 15 years. The fund aims to perform in line with the benchmark as closely as possible.

Read the factsheet

Capital risk rating: 2

Objective:To provide long-term returns by investing in index-linked bonds issued by the UK government. The fund aims to perform in line with the benchmark as closely as possible.

Read the factsheet

Capital risk rating: 3

Objective:To provide long-term returns by investing in index-linked bonds issued by the UK government. The fund aims to perform in line with the benchmark as closely as possible.

Read the factsheet

Funds that include direct investments in land and buildings, as well as indirect investments, such as shares in property companies. Commercial property may take the form of offices, shopping centres, retail warehouse parks and industrial estates. The values of different types of property do not necessarily move in line with each other.

The return from direct investments is a combination of rental income and changes in property values. Over the long term, property's average risk and return have been higher than bonds, but lower than equities.

Capital risk rating: 3

Objective:To provide long-term capital growth in excess of UK price inflation by investing in commercial property, directly and/or indirectly via property companies listed around the world. The fund aims to outperform the benchmark over the long-term.

Read the factsheet

These may include deposits with banks and building societies, as well as governments and large corporations. They also include other investments that can have more risk and return than standard bank deposits. There are circumstances where money market instruments can fall in value.

The return comes from any interest received and any change in the value of the instrument.

Capital risk rating: 1

Objective:To protect the absolute value of the investment by investing in deposits and other short-term money market instruments. The fund aims to perform in line with the benchmark.

Read the factsheet

AMC - Annual Management Charge (the fund manager may also charge additional expenses – for example custodian, registrar and auditor costs in addition to the AMC).

Risk - The relative rate at which the price of an investment moves up and down. The score ranges from 1 (Very Low) to 7 (Very High). The higher the risk, the greater the potential for good long-term growth. The higher risk, the less stable the fund price is likely to be. The price of company shares (equities) tends to go up and down in a wider range than cash or gilts – the investment is more volatile so carries a greater risk.

Investment styles

Investment funds can be passively or actively managed. Here is the difference:

Asset classes

An ‘asset class’ is a category of assets or investments, such as equities or bonds. Normally, assets in the same class have similar characteristics, but they can have very different returns or risks. The value of the investments in all asset classes can go up as well as down. The following asset classes make up the investment options for the RSP.

The Self-Select Funds are grouped by asset class above. Click on the questions (for example "What are Bonds?") for more information.

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