We regularly review the funds you’re invested in to make sure they’re meeting their objectives. We’ll also make changes to them if we think it will deliver better outcomes for you.
We’ve added some investments, called private assets, into the managed funds.
Check if this affects any of your funds
In your most recent annual statement, you’ll see a list of all the funds you’re invested in. If any of them have (Managed) at the end of the fund name, they will be affected by this change.
What are private assets?
Private assets are types of investments that aren’t listed or traded on public markets. For example, they can include (but aren’t limited to), private companies or commercial property.
Private assets could grow pension investments over the long term
Private assets can offer higher, long-term growth compared to more traditional investments, like shares and bonds. However, they can take longer for us to buy or sell on your behalf.
You can transfer or switch funds at any time, but in exceptional circumstances, we may need to wait before we can transfer or switch your investments.
Having a mix of investments can help to spread risk and improve your potential for positive returns
Your fund already invests in a mix of traditional investments. We’ve added private assets to try and provide better returns for you over the long-term.
Increasing the mix of investments like this is known as diversification.
We’ll start by including about 2.5% of private assets in the managed funds. We’ll aim to gradually increase this over time, potentially rising to about 5%.
Importantly, the broad risk level of your fund won’t change because of this.
Your annual management charge won’t change but you may be charged a performance fee
The performance fee only applies to the private assets held in your fund. It’s a 20% charge on any investment growth above 5.9% (before any other charges).
How the performance fee could work
As an example, let’s assume you’ve £40,000 invested in the managed fund.
£1,000 (2.5%) of this is invested in private assets.
- The private assets grow by 10%, so are now worth £1,100.
- Since the growth was over 5.9%, the performance fee would be based on the remaining 4.1%.
- So in this simplified example the fee would be £8.20.
This is a simple example and shouldn’t be relied on for any investment decisions.
If you’ve been charged a performance fee, it’s included in the ‘Things that reduced your policy value’ table, in your annual statement. It’s also included in the ‘Investment AMC’ in the bottom right of the relevant fund fact sheet.
Read about the different types of costs and charges.
Review your funds
If you don’t want to invest in a fund that contains private assets you can switch to another investment option at any time.
Getting advice
If you’re not sure what to do, you might want to get independent professional advice. A financial adviser can make a personal recommendation based on your individual circumstances and the options available to you. If you don’t have an adviser visit Money Helper for further information. You may have to pay for any advice you receive.
Contact us
If you have any questions you need to ask about this, please use this online form at any time.
Or you can call us on 0800 073 1777, between 8.30am and 5.30pm, Monday to Friday, not including bank holidays.
