How do Flexible Target funds change as I near retirement?

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These funds are a type of Retirement Target fund. They’re designed for savers who don’t make active fund choices.


Flexible Target funds are for those who want to keep their options open about when they retire and how they take their retirement income.


The funds adapt as you get close to retirement, recognising that your retirement saving priorities are likely to change. 

Why is flexibility important?

Now, more than ever, you have lots of choice(Opens new window)(Opens new window)(Opens new window)(Opens new window) about how you harvest your retirement savings to create an income. You can stay invested, buy an annuity, or cash-in your retirement savings – the choice is yours. 

We also know that things can change over time. 

For example, only 28% of UK savers retire when they 

plan to (Aegon Retirement Readiness survey, 2014). 

That’s why we’ve designed these funds to give you the freedom to choose how and when you take a 

retirement income.

How does it work?

In the final six years before you’ve told us you want to retire, your savings are automatically prepared for when you take a retirement income.

Like the weather, markets can be unpredictable. If your fund falls when you’re near retirement this can have a big impact on your pension savings. 

We gradually move you into less risky investments as retirement approaches – so you won’t need to weather the full impact if markets get stormy.

We also make sure your fund holds a mix of different types of investment so you’re not reliant on the success, or otherwise, of just one type.

You can cash-in up to 25% of your savings without paying tax when you retire. So, when you’re nearly at retirement, the fund will also move 25% into cash.

Generally, riskier investments have better long-term growth potential, so moving into less risky investments can mean your fund misses out on some growth in the final years if the sun does shine on investment markets.


The value of investments may go down as well as up, you may get back less than you originally invested. We review our Retirement Target funds regularly and may change them if we believe it’s in the best interests of investors.

Speak to a financial adviser to find out more.

You have lots of choice about how you access your retirement savings. We’re here to help. Our website, Your Retirement Planner, has information and tools to help you understand your options when you get close to retirement.