Investment risks

Whether you were automatically enrolled into the Plan, or you joined by submitting an application form, we’d encourage everyone to review their investment options regularly.

It’s your investments along with paying in the right level of contributions in the Plan that will keep your money fit and healthy for the future.

Why do I need to review my investment options?

If you were automatically enrolled, then the Lifestyle Option might not be right for you, so it’s worth looking at what other funds you can invest in.

You may not be happy with the returns you’re getting on some of your investments, or the funds’ investment objectives which might lead you to change either to a more stable option or something with more of a mix that spreads the risks.

If you made choices on your application form when you joined the fund, then they may no longer suit your personal circumstances. That’s why it’s a good idea to review the choices you’ve made and check that they’re still right for you.

You can find out more information about the individual funds in our easy to ready, fund table.

Did you know?

You can log in at any time to review and make changes to your investment options.

You can also make changes using the Your investment choices form.

What's right for you

One of the most important determining factors of what might be right for you is the level of risk associated with different funds and where you are in your life.

Investments are all about trying to make the most of your savings and balancing the risk of investments going down with the potential reward of the investments doing well. Different investment types have different levels of potential risk and reward. Usually, funds with more potential for growth carry more risk.

All investment funds carry a risk which can include:

  • Investment risk: the risk that the value of your investments will fall in value.
  • Opportunity risk: the risk that you may miss out on potential returns by investing in lower risk funds, at a time when you could consider taking a greater investment risk.
  • Inflation risk: the risk that your investments will not grow at the same pace as inflation.

 

Where you are in your life, also may change your views on risk.

Just starting out – the first 20 years of your career: If you’re early on in your career and have a long way to go before retirement, it makes sense that you might be able to take more risk with your investments. Due to the nature of investing, your money can go up or down – and with more time to go before you need it you can possibly afford to take some of the downs that might come with higher risk investments as you have time to recover any losses you might make.

Half way house – 10-15 years from retirement: If you’re around the midway through your career it can be a good idea to start mixing up your investments. This means moving away from higher-risk funds to spread the risk of any potential losses by investing in a mixture of lower and higher risk funds.  

Almost there – the final 10 years before retirement: If you’re closer to retirement, the general rule of thumb is that it’s better to take less risk with your investment options and aim for steady growth in the lead up to retirement so that you retain the value of your Account. It’s important to know how you want to take your money when you do come to retire as that also affects the choices you’ll make about your investments. There’s more about this in the Spend section of the website.

How you feel about making investment choices

To help you consider your options you could ask yourself the following questions:

  1. Do I feel uncomfortable making investment decisions?
  2. Am I happy to have investments chosen and managed for me?
  3. Do I find investments confusing and hard to understand?
  4. Am I uncomfortable managing my own investment risk? 
  5. Would I prefer someone else to take responsibility for moving my investments as I approach retirement?
  6. Do I want to keep my money invested when I retire and drawdown from my Account as I need it rather than buying a guaranteed income (annuity) when I retire?

Your answers to these questions will guide you as to whether the Lifestyle Option or choosing your own investments will suit you most. If your answers are mainly ‘Yes’ then you are likely to feel happier with the Lifestyle Option.

Remember

This is a broad guideline, and you should always take in to account your personal circumstances and attitude to risk, and seek independent financial advice if you’re unsure about anything.