DC Members
Lifestyle
With LifeStyle, your account is automatically invested for you – so you do not have to make any further investment decisions. LifeStyle is based on the general principle that your investment needs change as you approach retirement.
LifeStyle may not be right for you depending on your financial circumstances and your attitude to risk. You may therefore prefer to make your own investment choices in which case you should select FreeStyle.
When you are some years away from retirement, LifeStyle aims to increase the value of your account by investing in equities. As you approach retirement, LifeStyle gradually switches your investments into gilts to protect the purchasing power of your retirement savings. When you retire, you can take some of your account as a tax-free sum. Therefore, LifeStyle invests in a cash fund to protect part of your account from any short-term falls in value in the last few years up to retirement.
You do not have to decide when to switch your investments. This is all done for you. Your account is invested according to a set pattern based on your Target Pension Age. If you do not nominate a Target Pension Age this will be your Normal Pension Age (65). If you would like your LifeStyle option to be based on a different Target Pension Age, you should call the Helpline.
LifeStyle Investment Pattern
The switch into gilts starts 10 years before your Target Pension Age. Switching is done on a monthly basis to reduce the risk of making a substantial change in adverse market conditions. The 10 year switch pattern is shown in the graph below.
It is important to note that LifeStyle is designed to meet the needs of a ‘typical’ DC Choice member. It will not take account of all the potential options that may be available to you when you retire. For example, LifeStyle broadly assumes that you will take the maximum tax free cash available at retirement, and use the remainder of your account to buy an annuity which has inflation-linked increases. This may not fit your individual preferences.
The table below is a summary of how the switching would be implemented assuming a Target Pension Age of 65.
Age |
55 |
56 |
57 |
58 |
59 |
60 |
61 |
62 |
63 |
64 |
65 |
Equities% |
100 |
90 |
80 |
70 |
60 |
50 |
40 |
30 |
20 |
10 |
0 |
Gilts% |
0 |
10 |
20 |
30 |
40 |
50 |
60 |
70 |
75 |
75 |
75 |
Cash% |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
5 |
15 |
25 |
Total% |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
If you want to tailor your benefits to meet specific requirements, then you may prefer to use FreeStyle.
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BlackRock
If you have any questions about pensions please contact the pensions administrators:
Mitchells & Butlers Pensions,
BlackRock Pensions Administration Centre,
PO Box 704,
Peterborough,
PE1 1WL.
Telephone: 01733 353416
Email: uk.ops@blackrockpensions.co.uk
