Investing

The Investing plan is a way of saving for retirement. When people save, they normally need to keep in mind:

What they are aiming for

Do they just want to buy a new car next year or do they have special plans for the longer term – like meeting their financial needs in retirement?

How they feel about risk and reward

For example, some asset classes are expected – though not guaranteed – to perform better than others over longer periods, but may go up and down a lot in the short-term.

Some people are more comfortable than others with this type of risk, because:

• they believe their investments will show this better performance when measured over the whole time they are saving – meaning they will pay less money to achieve the same investment aim; and
• they understand, accept and can afford the potential consequences if this better performance does not happen.

And over time, their attitudes are likely to change, as the level of risk – and their ability to manage it – also changes.

Saving for retirement is no different. You need to decide what your aims are and balance them with the types of risk that apply to you, and that you feel comfortable taking and that you can afford.

The Investing plan arrangements are designed to try to make investing your account fairly simple. There are five funds to choose from, set up to cover a range of likely investing aims and attitudes to risk.

You can also arrange to have your account move gradually between certain funds over time. This is called 'automatic switching', and it is designed to reflect the fact that people's aims and attitude to risk generally change as they get older.

If you have read the available information and feel generally uncomfortable making decisions about investing, you should consider taking independent financial advice.

There is a 'default' option – but please bear in mind that allowing your account to go into the default arrangements is a decision in itself, and this may well not be the most suitable option for your investing aims.