Preparing for retirement financially is a necessary step in life – it can however be one of the most challenging things we ever do. Here at Aviva, we believe that everybody deserves to access the best possible retirement and that’s why we designed My Future. This is a multi-asset default investment solution that takes members through the retirement journey, carefully managing their exposure to risk along the way.
The focus of My Future is on growing the size of members' pension savings in the earlier stages of the retirement journey, and therefore in the so-called engine of the pension, the My Future Growth Fund. For this reason, the My Future Growth Fund predominantly invests in equities - international and UK equities - to provide the potential for capital growth in member savings. The remainder of the My Future Growth Fund invests in fixed income assets, and therefore in government bonds (both UK and overseas), as well as UK corporate bonds. This is to help safeguard members' savings should equity markets fall. The focus of the My Future solution shifts to capital preservation from 15 years before retirement, when members' savings are gradually moved into the My Future Consolidation fund, which mainly invests in less risky assets and therefore fixed income.
My Future 'Universal' strategy
Together the My Future Growth Fund and the My Future Consolidation Fund make up the My Future 'Universal' strategy, which is intended for members who have not yet decided how they want to take their pension savings at retirement.
My Future also allows members to choose to prepare their savings for the purchase of an annuity, draw an income or take a cash lump sum. Please see box below.
Benefits of diversification
Diversification plays a key role across the funds in the My Future solution. This is to ensure members are exposed to the right levels of risk as they progress through their retirement journey.
Risk is managed with 15-year glidepath
The amount of risk that members’ savings are exposed to is gradually reduced as retirement gets closer. Members' savings are gradually moved into the My Future Consolidation Fund 15 years before retirement. The focus from 15 years before retirement, and so in the later stages of the retirement journey, is on preserving members' savings, while still providing the potential for some growth via a small position in equities.
Investors' capital is at risk and they may get back less than they invested.
Designed to give members choice
My Future has been designed to give members choice in terms of how they take their retirement savings. For example, they could choose to take their savings as a cash lump sum, draw an income, or prepare their savings for the purchase of an annuity. Each of these three options uses the My Future Growth Fund in the growth stage of the pension journey.
Strategic asset allocation overseen by global solutions provider BlackRock
The funds in the My Future solution (with the exception of the *My Future Annuity Fund) are overseen by BlackRock’s Client Portfolio Services team. BlackRock is a global investment manager with significant expertise in managing multi-asset solutions. BlackRock’s investment teams incorporate their knowledge of local markets and work closely together to bring together their views on markets and asset classes, which are then fed into the house asset allocation, which is used in the My Future funds. The *My Future Annuity Fund invests in the L&G Pre-Retirement Fund.
My Future does not invest in companies involved in munitions. Aviva Investors owns the voting rights to the companies held in the underlying portfolios.
For information on BlackRock please visit BlackRock.com/uk