The Personal Pension plan from Aviva offers you a wide and varied choice of funds in which to invest your pension payments. You'll need to select the pension funds that match your plans for retirement and your attitude to risk and return. You also have the freedom to switch funds and start paying into new ones to suit your personal circumstances.
As well as choosing a fund or funds that invest in either a single asset or mix of assets, you can choose funds with different investment management styles. For example, you could invest part of your pension plan in funds that concentrate on companies of a specific size or economic sector. Or, you can invest in our range of socially responsible funds, which actively invest in companies providing solutions to social and environmental problems. And, of course, our fund managers aim to achieve great performance too.
Bear in mind that with any stock market investment, the value of your investment can go down as well as up and is not guaranteed and your pension fund could be worth less than has been paid in. With property-based investments, the fund value is based on a valuer's opinion rather than fact, if property sells for less than valued the fund value will be reduced. Also buying and selling property can take quite a while which may mean that there is a delay of up to six months if you want to switch your money out of a property fund, take your benefits or transfer your fund to another provider.
We recognise that things change over time, especially if you're a long way from retirement when you start your pension plan. You might want to alter the funds in which you invest if your personal circumstances or attitude to risk/return change. The Personal Pension gives you the flexibility to do this - there is no charge for switching the investment funds in which your contributions are invested, but we reserve the right to limit the number of switches you can make each year.
The fund(s) that are most suitable for you will depend on what you have planned for your retirement and your attitude to risk/return. Risk is one of the most important factors when it comes to investing your money for the future. The key is to find the right balance between the amount of risk you're willing to take and the potential return you're likely to get over your investment period. If you have a long time to go before you retire, you might be prepared to take a greater risk for the potential of a greater return, but as you get closer to retirement you'll probably want to limit the amount of risk you take even though your potential return may be less. With the help of your financial adviser, careful investment planning can help you to manage your risk/return effectively.
So what is meant by risk? All funds carry the risk that their value could drop below the value of the money originally invested. This risk can be measured by the ‘volatility' of the fund, or the amount of ‘ups and downs' in its value. Typically, the more the value of an investment fund fluctuates, the higher the potential may be for gains or losses - often referred to as its risk/return, so understanding your attitude to risk/return is important.
Aviva gives each fund a risk rating, from 1 (low) to 5 (high)
Find out more about how to apply for the Personal Pension. The first step is to talk it through with your financial adviser to make sure it's the right pension plan for you. If you don't have an adviser, you can find one in your area at unbiased.co.uk.
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