LifePlan is aimed at anyone who wants the time and effort taken out of managing their investments. If you choose this option, as you get closer to your Target Retirement Date your money automatically switches to investments that are generally considered to be lower risk and more appropriate for your retirement.
There are three LifePlan strategies. Depending on your preferred method of drawing your funds at your Target Retirement Date, you can choose from:
This is the default option if you don't make a choice.
This strategy is aimed at members who anticipate taking full advantage of the greater flexibility in retirement benefits now available by drawing down funds as and when they need in retirement. Drawdown is not currently offered by the Scheme but once you reach your Target Retirement Date you could transfer your Member Account to a suitable arrangement outside the TSB Pension Scheme that allows you to regularly draw down lump sums (less income tax) from your investments during retirement.
This strategy has been designed based on the following principles:
- retaining growth potential in the early years (mainly through equity exposure with some diversification)
- reducing equity exposure and increasing diversification gradually from 10 years from the Target Retirement Date whilst retaining reasonable growth potential as the pension account increases in size and as retirement approaches; and
- building up a cash allocation gradually from three years from the Target Retirement Date to take account of the likelihood of members wishing to take 25% of their fund value as a tax free lump sum at retirement.
The following graph shows how your pension account will be invested up to your Target Retirement Date with the Destination Drawdown LifePlan.
This strategy is aimed at members who anticipate taking 25% of their fund value as a tax free lump sum and using the balance of their account to buy an annuity (a secure pension income from an insurance company) at retirement.
The following graph shows how your pension account will be invested up to your Target Retirement Date with the Destination Pension Annuity LifePlan.
This strategy is aimed at members who anticipate taking all their fund value as a cash lump sum at retirement. A full cash option is not currently offered by the Scheme unless your funds are worth less than Â£10,000 at that date. If they are not, once you reach your Target Retirement Date you can choose to transfer your Member Account to a suitable arrangement outside the TSB Pension Scheme that allows you to take all your fund value as cash. The strategy is designed to move from the Growth Fund and Diversified Fund to 100% cash over the last three years, so you can keep assets invested in growth seeking assets for a suitable time whilst switching into cash over the period immediately prior to retirement.
By taking your entire pension account as a lump sum there is a risk that your money will run out early in retirement and you may be taxed at a higher rate for this one off lump sum.
The following graph shows how your pension account will be invested up to your Target Retirement Date with the Destination Cash LifePlan.
Your selected Target Retirement Date
At 10 years from your Target Retirement Date, the automatic switching of your pension account will start gradually as described above.
The switching period under each of the three LifePlan strategies is fixed at 10 years but you can choose your own Target Retirement Date which determines when the investment switching period starts.
If you haven't made a choice it will be set at age 65 (the default). If you wish to choose or change your Target Retirement Date you can do this by calling Equiniti on 0345 266 9214 or email email@example.com.
For more information go to Retirement Options. If you are unsure as to what retirement age is right for you, the Scheme has a range of tools available to help you plan.Visit Retirement Options Visit Planning Tools
If you don't make any investment choices...
Your contributions will be invested in the default fund – Destination Drawdown LifePlan.
If you wish to opt-out of the default fund you must let us know your preferred options by completing an Investment options form. If you wish to opt-out of the Scheme altogether you need to complete an Opt‑Out form.
The Trustee regularly reviews the choice of funds available within the Scheme and will make any changes that are deemed appropriate. These changes can apply to the accrued value of your account and future contributions. The Trustee also has the ability to change the underlying managers, structure, operation and charges of each fund. Any changes can be made without prior notice but you will always be informed if you are affected.
The value of your account may go down as well as up. By law, employees of TSB, the Trustee and the Scheme administrator cannot give you advice on choosing your investment funds. Use of this site does not constitute advice to you. If you are unsure about any of the investment decisions that you have to make, it is strongly recommended that you contact an independent financial advisor (IFA). You can find details of an IFA in your local area by visiting www.unbiased.co.uk.