Is Aviva's Universal Retirement Fund right for me?

A fund is a collection of investments where your money gets pooled together with other investors and is then invested in company shares or bonds depending on the type of funds. Funds can be actively managed or passive and will have an aim. This might be to generate capital growth or to provide an income, or if actively managed it will be to beat a benchmark, such as the FTSE All-Share Index. Funds are risk rated to give you an idea of how volatile they could be.

Each fund will come with its own ‘fund factsheet’ which outlines this information, along with details about where your money is invested, the asset classes it holds, and how the fund has performed over the past five years.

If you’re a beginner investor check out our article ‘Investing in funds: the basics’.

Our Universal Retirement Fund is an investment strategy built around your retirement date. It’s an actively managed fund, meaning that there is a fund manager who monitors its performance and will sell or buy investments when necessary.

The fund is built to support you all the way through your retirement journey. Early on, it focuses mostly on growth assets, like company shares to try and get your money to grow. Then, as you get closer to your retirement, the strategy shifts to investments that are generally considered lower risk, like government bonds or cash and money market options. The fund follows a set strategy that adjusts the mix of investments over time, so you don’t have to worry about making those decisions yourself.

This doesn’t guarantee that your money is safe. The value of any investments can go down as well as up, and you may get back less than you've paid in.

The Universal Retirement Fund is aimed at people who don’t want to actively manage their own pension investments and would prefer to leave those decisions to an investment professional, or those who want to keep their options open for how they wish to use their pension savings in retirement. If you want to manage your investments and tailor them to your specific wants and needs, then this might not be the fund for you. 

As we mentioned earlier, this fund follows a strategy that adjusts its mix of investments over time, depending on how far you are from retirement. If you’re earlier in your retirement journey, a larger portion will be invested in growth assets like company shares. As you then get closer to your retirement, the strategy gradually shifts towards lower-risk investments, such as government bonds and cash. But there will be a mix of low, medium and high-risk investments within this fund to help diversify the fund and manage risk. Diversification is there to try and help you ride out any rocky roads when investing. The aim is that even if one part of the fund is down, another part might be doing well and stabilise any losses. So, checking the fund factsheet will be your most up-to-date resource to seeing just what the fund is investing in. But you can expect to see asset classes like:

• Equities - Equities are company shares. They represent part-ownership in a company. Companies issue shares on stock exchanges such as the London Stock Exchange, and the shares are then bought and sold on stock markets. Their value can go up or down.
• Cash/Money market – Money market investments are also known as cash investments. They are short-term deposits of cash amounts, usually held with a financial company for less than 12 months. Please note they are not deposit accounts with banks or building societies.
• High yield bonds - These are issued by companies and governments that have a lower credit rating. When a fund invests substantially in high yield bonds, there’s a higher risk that the bond issuer might not be able to pay interest or return the capital that was invested.

Find out more about asset classes in our article.

There are several charges that apply to SIPPs, and you can find more about them on our investment charges site.

If a fund has a charge, you only pay it on the amount you’ve invested in that fund - not your whole pension. So, if your total pension is £1,000 but only £100 is in a fund with a 0.5% charge, you’ll just pay 50p.

Our Universal Retirement Fund has a charge of 0.35% ^{Footnote [1]}, which covers the day-to-day costs of running and managing the fund. This is an annual charge.

Our SIPP has a wide choice of investments, so making the right choice for you is important. Right now, we have five different ways you can invest in a SIPP:

• Universal Retirement Fund – This is our simplest option to get started.
• Ready-made funds – We’ll ask you a few questions to help you decide between five options that could match your goals.
• Experts’ shortlist – This is a shortlist of 80 funds chosen by our experts.
• Self-select – We have over 5,000 funds for you to mix and match.
• Share dealing – A different type of investing, focusing on UK shares, exchange traded funds (ETFs) and investment trusts.

Each of these options is available to anyone with a SIPP. They have their own risk levels so making sure you’re happy with where your money is invested is important.

Saving for tomorrow comes in many shapes and sizes. But the right planning can make your pensions and investments work harder towards the goals you set, whether you're just putting money aside or building carefully towards the retirement you want. Getting professional financial advice has benefits like:

• Tailored support – Each plan will be personalised to you and your goals, making sure that your portfolio meets your risk levels.
• Your choice – You can get advice for as long or as short as you need, from ongoing advice to one-off sessions. You’re able to stop and start whenever you need. 
• Expert knowledge – You’ll be speaking with an industry professional who will be there to support you with your long-term financial goals. 

An adviser will charge for their services but usually, that won’t start until you take out a product or service. Meaning you can work out whether it’s beneficial to you or not. 

Did you know we offer financial advice on pensions and defined benefit pensions? Check to see if you’re eligible and get in touch. If not have a look at MoneyHelpers articles about advice, and choosing an adviser.