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Nest Retirement Date Funds

All Nest members are automatically enrolled into a Retirement Date Fund when they join.

We have designed them to be of the highest quality and to work for a broad range of people. We currently have up to 50 Nest Retirement Date Funds, so whether a member is in their twenties or their sixties, there's a fund designed for their specific needs.

Members can change their retirement year by logging into their online account.

How do they work?

Our members' money is invested in the Nest Retirement Date Fund that matches the year they expect to retire; for example, if a member is expected to retire in 2055, they will go into the Nest 2055 Retirement Date Fund. 

Nest aims to maximise members' returns by taking the right investment on their behalf at different periods, throughout their lifetime. We do this in three phases – foundation, growth and consolidation, to account for where the member may be during their savings journey. What's right for a member when they first start working and saving won't be appropriate as they get closer to retirement.

The phase each member enters depends on when they join Nest and how many years they have until their retirement. For example, members in their twenties with more than forty years until their retirement will be automatically enrolled into a Retirement Date Fund that is in its foundation phase and will experience all three investment phases. Whilst members who have less than ten years until their retirement will be automatically enrolled into a Retirement Date Fund that is in its consolidation phase. 

In each phase we spread members’ money over a broad range of global investments, such as shares, bonds, commodities and property.

Foundation phase (approx 5 years)

We aim to help younger members develop a pension saving habit by steadily building their pot and avoiding sharp falls in value by: keeping pace with the cost of living, significantly reducing the likelihood of extreme investment shocks, taking appropriate risk at appropriate times, taking account of current economic and market conditions, and targeting a long-term volatility average of 7 per cent per annum.

Growth phase (approx 30 years)

We focus on growing members’ retirement pots much more quickly by investing in diverse, growth-seeking assets, target investment returns greater than inflation plus 3 per cent and cover all scheme charges, aiming for steady growth in real terms over the life of the fund by being well-diversified and targeting a long-term volatility average of 10-12 per cent per annum.

Consolidation phase (approx 10 years)

We'll start gradually moving the pot out of higher risk assets to help protect it from the possibility of big falls in value close to retirement. But still aim to continually grow the portfolio in real terms. Although there's a chance members could miss out on big rises, they're less likely to lose the money they've built up.

Why are Retirement Date Funds beneficial?

Retirement Date Funds allow us to:

  • carefully manage money in different ways depending on the members’ age and the economic and market outlook 
  • respond quickly, adapt to changes and review our investment strategy where necessary
  • help keep down the costs of investing, which can otherwise eat away at savers’ pots

See how our Retirement Date Funds are invested.

Find out what drives our approach

Discover the principles behind what we want to achieve for members and how we achieve it.

Last updated: 08/20

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