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NEST Retirement Date Funds

Different funds for different retirement years

NEST Retirement Date Funds are the default option for savers who are automatically enrolled with NEST.

Funds to suit different workforce

When a worker enrols with NEST, their money will be invested in a NEST Retirement Date Fund based on the year they’re expected to retire. For example, if this is 2055 we’ll invest the member’s retirement pot in the NEST 2055 Retirement Fund.

NEST Retirement Date Funds are what’s known as single-year target date funds and are unique in the UK.

You can see where NEST’s funds are invested and how they are performing by reading our fund factsheets.

Investing carefully for every member

NEST aims to maximise members’ pots by taking the right investment risk on their behalf at different periods throughout their time saving.

What’s right when they first start working and saving won’t be the same as what’s appropriate as they get closer to retirement.

Members and their employers have the reassurance that NEST Retirement Date Funds invest in different ways over the three phases of saving members may go through.

We always spread the money of members invested in NEST Retirement Date Funds over a broad range of global investments. These include shares, bonds and property. Exactly where members money will be invested depends on how far members are from their retirement. This is because we’re trying to achieve different objectives in each of the three phases.

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Find out more about how the NEST Retirement Date Funds invest for members in Looking after members’ money (PDF).

NEST Starter Fund

If members join before aged 22 when they become eligible to be automatically enrolled, then they’ll be invested in the NEST Starter Fund. This is invested in similar way to funds in the foundation phase of the NEST Retirement Date Funds.

NEST Post-retirement Fund

If members don’t take their money out of NEST when we’re expecting them to, or if they join NEST after their State Pension age, unless they tell us differently we’ll make an assumption that their retirement age will be 75. We’ll put the member’s money in our Post-retirement Fund. This may not be the best place for their money if they plan to keep their money in NEST for a number of years. If they let us know when they want to take their money out, we can invest their pot in the NEST Retirement Date Fund for that year.

If a member plans to retire before or after their expected retirement year, it’s important they let us know, so we can make sure we’re investing members’ money in the right fund. Changing NEST Retirement Date Funds is free and simple to do.

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

Why we use a target date approach

NEST’s target date fund approach allows us to carefully manage money in different ways depending both on the members’ age and the economic and market outlook. Using a target date fund approach to provide our member funds also helps us keep down the costs of investing. These can eat away at savers’ pots when they save in a pension scheme.

Target date funds are also easy to communicate to members. They allow a scheme like NEST to respond quickly, adapting to changes by reviewing our investment strategy within the target date fund approach.

For example, in light of the new pension freedoms introduced in April 2015, NEST has been able to adapt the way it invests members’ money to better reflect the new regulations.

You can find out more about how the target date fund structure has helped NEST respond to the new pension freedoms by reading this article aimed at professional advisers (opens in a new window).

Find out more about the broader range of benefits target date funds offer our members in this article (opens in a new window), aimed at professional advisers.

Find out what drives our approach

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

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To access NEST’s high quality investment management, you can sign up to and start using NEST now.

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