Investment Pathways
What are Investment Pathways?
The Investment Pathways initiative from the Financial Conduct Authority (FCA) is designed to ensure that anyone with a Pension Drawdown Account should have access to simple, good-value investments that broadly match their retirement income goals.
The FCA have laid out four broad financial goals that you may have and we've designed four Investment Pathways which mirror them.
Investment Pathways and your drawdown account
Tom Stevenson explains how the Investment Pathways can be used within your Pension Drawdown Account and are designed around how you intend to take your retirement income.
Four retirement income goals
Depending on the plan you belong to, your Pension Drawdown Account may give you access to Fidelity’s four Investment Pathways, which are designed to mirror the five-year goals that someone in drawdown may have for retirement income.
The Fidelity Investment Pathways
Each of our Investment Pathways channels your money into an underlying Fidelity fund. These four funds are all ‘accumulation’ funds. This means that any income generated by the investments in a fund is re-invested so it contributes to the fund's growth.
| This may be for you if |
|
|---|---|
| This pathway invests in | The Fidelity Diversified Markets Fund |
| Strategy | This fund aims for long-term growth and controls risk by varying the types of investments it holds in response to market conditions. Up to half of the fund can be held in more defensive investments. |
| Things you should consider | The value of your investment can go down as well as up, so you may get back less than you invest. It is also possible that this fund may be higher risk than your current investments. |
| This may be for you if |
|
|---|---|
| This pathway invests in | The Fidelity Pre-Retirement Bond Fund |
| Strategy | This fund aims to preserve your annuity purchasing power by holding investments that are similar to those that affect annuity prices. |
| Things you should consider | If the fund does not achieve its objective, there is a risk that the annuity you eventually set up will give you a lower income than you were hoping for. |
| This may be for you if |
|
|---|---|
| This pathway invests in | The Fidelity Multi Asset Balanced Income Fund |
| Strategy | This fund aims to provide capital growth and has a long-term income target of 3-5% a year. It holds a broad range of investments. To manage risk, some of these will be relatively defensive. |
| Things you should consider | Investments with the potential to achieve long-term growth also come with the risk that they will fall in value, and there is no guarantee that the fund will meet its income target. |
| This may be for you if |
|
|---|---|
| This pathway invests in | The Fidelity Cash Fund |
| Strategy | This fund aims to preserve the value of your capital. It holds low-risk, cash-based investments, such as deposits, that may pay a low level of income. |
| Things you should consider | When interest rates are low, it is possible that charges may be more than the growth in your investment. In addition, the longer you hold your investment, the more its real value may be eroded by inflation. |
You’ll find more information about the Investment Pathways, including details of costs and charges, in the fund factsheets. You'll find these by logging in to your PlanViewer account.
Your options
You can decide how you use our Investment Pathways within your Pension Drawdown Account. This means you can spread your money over more than one Investment Pathway, move money from one Investment Pathway to another or choose an Investment Pathway for some of your money and invest the rest in your own choice of the other investments in our range.
Ready to chat?
If you’d like more information about your retirement income options, or you have decided to make a withdrawal from your pension, please call Fidelity
Investment Pathways FAQs
Yes. The Investment Pathways are designed to meet an overall plan for your retirement income, but it is possible to hold them as part of a diversified portfolio, alongside other funds available through your plan, within a Pension Drawdown Account. You cannot hold an Investment Pathway within a Pension Savings Account.
The Investment Pathway does not mature or close after the five years. If your circumstances and retirement outlook are the same, you can keep the same Investment Pathway and you don’t need to do anything. It is a good idea to review your objectives on a regular basis to check that your investments are still suitable for them. Each time you review your investments, you should ensure they match your plans for the following five years.
The lowest amount you can move into an Investment Pathway is £10.
If your circumstances or your plans have changed since you chose your Investment Pathway, you can change your investments at any time on PlanViewer. Once you’ve logged in, go to ‘Manage my plan’ at the top of the page and select ‘Change investments’. There is no charge for moving money into or out of an Investment Pathway.
No, you can switch into or out of an Investment Pathway at any time. Pathways 1 and 3 are designed with an investment timeframe of at least five year and will be subject to short term market fluctuations. In contrast, Investment pathways 2 and 4 are intended for investors who will be using some or all of their money within the next five years. It’s a good idea to review your objectives on a regular basis to check that your investments are still suitable for them. Each time you review your investments, you should ensure they match your plans for the following five years. If you’re unsure what the right approach for your pension savings might be, you should speak to an authorised financial adviser.
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