This fund carries the greatest risk that members’ money won’t grow more than changes in the cost of living. This means it’s important that members who choose it aren’t concerned about their money growing significantly over time.
What the fund tries to achieve
The fund aims to preserve the value of a member’s savings while growing slightly, but with very few ups and downs.
It takes very little investment risk. This can mean a member’s retirement pot is less likely to go down in value, but it also greatly reduces the amount by which it could grow in the long term. Members need to bear in mind although the amount of money in their pot may grow, when they take it out it may be worth less. This is because it hasn’t kept up with changes to the cost of living.
What the fund invests in
NEST Lower Growth Fund invests in short-term debts from companies also known as money market investments.
How the fund tries to grow members’ money
The fund works by investing in financial products on the money markets. These offer a small return in the form of interest.
While a member’s pot will grow slowly over the years if they invest in the Lower Growth Fund, there’s a chance the cost of living will increase at a faster rate.