Unless you choose one of NEST’s additional funds, your pot will be invested in one of NEST’s 46 Retirement Date Funds.
NEST Retirement Date Funds aim to give you a steady return on your money and make your retirement pot grow in the long term.
They use three phases of investment based on the amount of time until your planned retirement date. Depending on your age when you join the scheme, your retirement pot may not go through all the phases of investment.
For example, if you're near retirement when you join then we’ll invest your money so you won’t take unnecessary risks with your pot. Whatever your age when you join, your money will be carefully managed at every stage of your time with NEST.
Foundation phase - The first phase is designed to get you used to the idea of saving. We'll take some risks to give your money a good chance of staying ahead of the rising cost of living and to cover the charges that are applied to the fund. At the same time, we aim to avoid doing things that would be likely to cause the value of your pot to fall a lot.
We would expect someone joining NEST aged 22 to stay in the Foundation phase for around five years.
Growth phase - The Growth phase is all about making your retirement pot grow as fast as possible. After a few years of carefully building your savings in the Foundation phase, it’s a good time to take a bit more risk while you're still a long way from taking your money out.
We'll put your money in lots of different types of investment that usually grow a lot faster than a savings account. This does mean that we'll put more of your retirement pot into the types of investment that come with more risk. But we expect these investments to grow more quickly because of these extra risks.
This phase could last more than 30 years, depending on when you plan to take your money out. This is the time when we expect to grow your pot most quickly. We aim to make it grow much faster than the cost of living. We'll also still try to reduce the chances of big falls in your pot that you could get in other investment funds that take a lot of risk.
Consolidation phase - When you’re about 10 years from your NEST retirement date we concentrate on gradually getting your retirement pot ready for you to take your money out.
In this phase we still expect your pot to grow more than the cost of living. Our main goal, however, is to reduce the possibility of your pot losing value close to your NEST retirement date.
We believe NEST Retirement Date Funds are right for most of our members. However, we also offer a range of carefully selected other funds for members who may have certain preferences about how their money is invested.
You can find out more about these funds at NEST's other funds
View our fund factsheets