Your Investments
The default fund
The current default fund for all new joiners is the Scottish Widows Balanced PIA (Targeting Flexible Access). This approach is designed specifically to provide members with growth during the majority of their working lives and then greater security as they approach retirement. To find out which fund(s) you are currently invested in, please refer to your latest annual benefit statement produced by Scottish Widows or access your Scottish Widows plan details here, as you may not be invested in the current default fund.
How does the default fund work?
The scheme default fund uses a ‘lifestyle’ mechanism that works by initially investing in the main growth fund - the Scottish Widows Pension Portfolio 2 Fund. Then fifteen years from your selected retirement age (this is set to 65 as default, but you can change this at any time) your pension pot is automatically switched into different funds designed to imitate taking income as it is needed in retirement. Lifestyling is a tried and tested investment technique that should provide most of our employees with a suitable investment platform to support their retirement income goals. However this is a flexible approach which keeps your pension pot invested for taking income as it is needed in retirement and may not be suitable for everybody, we would therefore encourage you to consider if this strategy is appropriate for you. You can find out more about the default fund, the underlying funds it invests in, as well as alternatives that might better suit your retirement planning at Scottish Widows.
Performance
Investment performance is one of the key factors in building a worthwhile retirement fund. If you log into your Scottish Widows account here you can find out the performance of the fund(s) you are invested in, the fund factsheets and a whole lot more!
ESG
Did you know that your pension scheme’s default fund has ESG (Environmental, Social & Governance) factors integrated within it? ESG is a financially-driven investment philosophy, focussed on driving returns through investment in sustainable companies. It is based on the belief that these factors are critical to a company’s future financial performance and the theory is that companies that don’t impact the environment, have a social conscience and are well-governed could out-perform other companies, although there is no certainty that this will be the case. You can find out more about Scottish Widows’ approach to responsible investing and ESG here, and how ESG considerations have been integrated into the Pension Portfolios used by the default by clicking on this link. Scottish Widows also offer a number of self-select funds available to you that focus on specific ESG or responsible investment goals such as ethical and sustainable funds. Please note that some funds may carry a higher annual management charge than the one that you currently have with the default fund. You can find out more about the alternative funds available to you at Scottish Widows. If you are considering changing your investment choice please speak to your financial adviser who will be able to recommend a suitable fund for you.