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You have chosen to move some or all of your pension savings into drawdown, with the flexibility to make withdrawals as and when you wish.
Investment Pathways are about what you want to do with this money next and where you want to invest it.
An Investment Pathway is simply a pre-set strategy that aims for a specific outcome over the next 5 years. The one you choose should be based on how you might want to take your money over this period - and the level of investment risk you are prepared to take at this time.
The options
There are four Investment Pathway options and, like any investment option, each one has a level of investment risk attached to it. You can see how risky each option is below, on a scale of 1 – 7 (7 being the riskiest).
Risk level:
4 out of 7
Save it
This investment pathway is designed for people who have no plans to touch their money in the next five years
Risk level:
5 out of 7
Guaranteed income (annuity)
This investment pathway is designed for people who plan to use their money to set up a guaranteed income within the next five years
Risk level:
4 out of 7
Flexible income (drawdown)
This investment pathway is designed for people who plan to start taking their money as a long-term income within the next five years
Risk level:
1 out of 7
Withdraw it
This investment pathway is designed for people who plan to take out all of their money within the next five years
In short, a good Investment Pathway option is one that broadly matches your investments to your goal.
Why do you need to choose an Investment Pathway?
You don’t have to choose one. You can choose to stay invested as you are, or to make your own investment choices.
The reason the Investment Pathways have been introduced is to give people who have entered into a drawdown arrangement some help with managing their investment based on their income goals.
Remember: you can speak to a financial adviser to help make sure you get the most out of your investment strategy, and help you manage your future income
Next
If you’ve read through the information on the previous pages and you’d like to learn more about an investment pathways choice, you can do that here