If you have Additional Voluntary Contributions (AVCs) or Bonus Sacrifice savings, they will either be invested in the Scheme’s range of investment options or with another external provider. If you have AVCs or Bonus sacrifice savings with an external provider, you should receive statements of your benefits from that provider.
If you have AVCs or Bonus Sacrifice savings invested in the Scheme, we call these savings your Defined Contribution (DC) pension pot. The value of your DC pension pot will depend on many things, including how well your chosen investments perform over time, so it’s important to understand the different options available.
You can decide how to invest your DC pension pot. You can choose from the Scheme’s Targeted Investment Strategies or Freechoice range of funds. The Trustee, supported by professional investment advisers regularly reviews the options made available to you.
Your investment choice is important
It could depend on many things including; how confident you feel about making your own investment decisions, your attitude to risk, your age, your other savings and what you want to do with your DC pension pot when you retire.
The following questions will help you decide if your investment choice is right for you:
How “hands-on” do you want to be in managing your investments?
The Scheme has a number of closed investment options; Cash Lifecycle, Flexicycle and Lifecycle 2. These are not available to any member as a new investment choice. If you are currently using one of these closed investment options you can continue to invest your DC pension pot in that option. Please refer to the DC Legacy Investment Guide for more information.
Do you want your investments to be managed for you - the 'hands-off' approach
If you’re happy to decide the type of retirement income you want and don’t have the experience or time to regularly review your choice of investment funds, you may prefer a “hands-off” investment approach. The Scheme’s “hands-off” investment options are called Targeted Investment Strategies. They each follow a pre-set investment strategy designed by the Scheme’s Trustee with the help of professional investment advisers. The tailored mix of four funds used for each strategy changes automatically over time.
Watch these two short videos to find out more about the Targeted Investment Strategies work.
This video tells you the basics about how the Targeted Investment Strategies work
This video tells you about the June 2024 changes to the Targeted Investment Strategies
There are three strategies for you to choose from depending on the type of retirement income that you want to take.
This strategy is designed for members who plan to take 25% of their DC pension pot as a tax-free cash sum at their Target Retirement Age (or beyond) and the balance to provide a flexible income (e.g. income drawdown), spreading the amount and timing of withdrawals.
Members can do this by transferring their DC pension pot out of the Scheme to their choice of external provide which offers this option.
More information is available in the Scheme’s current DC Member Guide which can be found on the Member Guides tab of the Information Centre.
This strategy is designed for members who plan to use all of their DC pension pot for a cash lump sum at their Target Retirement Age.
More information is available in the Scheme’s current DC Member Guide which can be found on the Member Guides tab of the Information Centre.
The Annuity Purchase Strategy is designed for members who plan to use 25% of their DC pension pot for a tax-free cash sum and the balance to buy an annuity (a regular income for life) at their Target Retirement Age.
More information is available in the Scheme’s current DC Member Guide which can be found on the Member Guides tab of the Information Centre.
Alternatively, you can choose the “hands-on” option and create and manage your own investment strategy using the Freechoice range funds.
Members who are comfortable controlling and monitoring the investment of their DC pension pot can choose their own mix of investments from the Freechoice range.
Freechoice allows members to create an investment strategy for their DC pension pot that reflects their financial aims and personal circumstances.
Regularly check that you're in the right investment to match your future plans
To check where your DC pension pot is invested or to change your investment choice, you can log-in to My Pension using the link below. When you’re in My pension, choose the “My Pension” dropdown and then click on “Change My Investments”. You can make up to 12 changes to your DC investments per year free of charge. The value of your DC pension pot is not guaranteed and will rise and fall in line with the price of the investment funds used for your investment choice.
View and manage your investments
If you're not doing this on the HSBC network you can click here. You’ll need your username and password to log in. Don’t know yours?
Your TRA is important because changes to the investment mix used by the Targeted Investment Strategies are based on the period to your TRA. If your DC pension pot is invested in one of the three Targeted Investment Strategies, you can change your TRA on My Pension. Click the “Login to My Pension” link below. Once on the homepage, select the ‘My Investments’ tab and look for the Target Retirement Age tile on the right hand side.
You can find out more information about each funds investment objectives, benchmarks, risk ratings and how the funds are performing from the DC fund factsheets (see below).
DC Fund factsheets
The latest quarterly DC Fund factsheets and the latest monthly flash report are now available in the Information Centre.
Yes, you can change your investment selection at any time using My Pension. Once you’re logged in, you can see all your chosen investments and change your selection by choosing the My Investments dropdown. You can make up to 12 changes to your investment choices in a year without paying any administration charges. Any transaction costs will, however, be met from your DC pension pot.
Please note, if you choose to move from the Freechoice range of funds to a Targeted Investment Strategy, you will be moving from the “hands-on” investment approach to the “hands-off” approach. If you choose a Targeted Investment Strategy, it’s important to think about the type of income you will take in retirement. This is because, as you get closer to retirement, each of the Targeted Investment Strategies uses a different tailored mix of investment funds for your DC pension pot. There are three strategies for you to choose from depending on the type of retirement income that you want to take. Each strategy is designed for you to take 25% of your DC pension pot as a tax-free cash sum and to use the balance to provide either a flexible income, or an annuity, or a cash lump sum at your TRA (or beyond).
If you choose to move from a Targeted Investment Strategy to the Freechoice range of funds, you will be moving from the “hands-off” investment approach to the “hands-on” approach. This means you will need to set and maintain your own investment strategy. You can choose from a range of 18 funds available and then switch between them as your plans and financial circumstances change. You should review your fund choices and planned retirement age regularly to make sure they still meet your goals. If you have chosen the “hands-on” Freechoice option, this is especially important as you get closer to retirement. This is because your DC pension pot won’t automatically be moved into funds designed to match a particular type of retirement income.
The past performance for all the Scheme’s DC investment options is provided in the DC fund factsheets. You can find the fund factsheets by going to the “Information centre” on futurefocus. The factsheets are in the “DC Fund factsheets” tab and they are updated on a quarterly basis. You can also find how your chosen investment have performed by logging-in to My Pension and choosing the “My Investments” dropdown. This information is also shown in your annual benefit statement, which you can find on My Pension.
The Trustee regularly monitors the performance of all the Schemes investment options. If any of these options are not performing in line with the fund’s objectives and the Trustee’s expectations, the Trustee will work with its investment adviser and the fund manager to understand the reasons for any underperformance. The Trustee expects some short-term market volatility, which is a feature of all investment markets. In assessing the reasons for any underperformance, the Trustee will consider wider market conditions, economic events and global trends.
If any investment option or fund manager consistently underperforms, the Trustee may consider making changes including replacing them. Any changes to investment options are always considered over the long term and are not made in reaction to short term market movements.
If you have chosen a Targeted Investment Strategy, the changes to the investment mix that it uses are based on the time to your TRA. The same investment mix is used by each Targeted Investment Strategy until 10 years to TRA. If you change your TRA, this will change the mix of investments used for your DC pension pot if you are, or will be, less than 10 years from your TRA.
If you need some more help to decide the investment option that is right for you, it's worth thinking about getting some advice from a regulated financial adviser. Using an adviser can be expensive, so make sure you’ve read all of the information available to you first. MoneyHelper offers free support on a wide range of financial matters, online and over the phone. Go to the pensions and retirement section at MoneyHelper.org.uk. You can also use this service to find a retirement financial adviser.
