Investment Pathways
Make managing your pot easier in drawdown
Investment Pathways explained
Planning to put your SIPP into drawdown? Investment Pathways have been introduced by the Financial Conduct Authority (FCA) to make managing your pot easier. They’re designed to reduce the number of people in the UK who keep their drawdown pot in cash. Staying in cash can leave it vulnerable to inflation over the long term.
Instead, by choosing an Investment Pathway, you can invest your pot in a fund broadly designed to match your retirement plans.
Investment Pathways are completely optional. Remember that they aren’t tailored to your personal circumstances, and aren’t a substitute for financial advice. It’s also important to review your chosen Investment Pathway regularly, especially if your retirement goals change.
Important information: By providing an AJ Bell fund for your chosen Investment Pathway, we aren't giving you personal advice. Before you invest, you need to make sure that you understand all the risks and are comfortable this investment is right for you. The value could go down as well as up. Make sure you read the fund's factsheet and KIID to understand the full picture.
How do I use Investment Pathways?
We’ll offer you Investment Pathways when you access your pension and set up a drawdown pot. We’ll also offer it if you transfer a drawdown pension to us.
Whether you choose an Investment Pathway fund is up to you. You might choose to:
- Invest your whole pot in an Investment Pathway
- Choose an Investment Pathway for some of your pot and invest the rest elsewhere
- Pick your own investments
- Leave your drawdown pot invested where it is now
Keep in mind that if you choose an Investment Pathway, the investment will not happen automatically. We’ll let you know once we’ve set up your drawdown pot and remind you so you can make your investment.
If you’re picking your own investments, our time-saving investment ideas can help.
Who manages my Investment Pathway fund?
Each Investment Pathway has a corresponding AJ Bell fund that’s built and managed for you by our in-house team of specialists. You can learn more about each Investment Pathway and its fund below.
Our Investment Pathways
I have no plans to touch my money in the next 5 years
- By choosing Investment Pathway 1, you can invest your pot in an AJ Bell fund designed for people who don’t plan to touch their money in the next five years.
- Investment Pathway fund: VT AJ Bell Balanced Fund I Acc
- The value of the fund can go down as well as up and you may get back less than you originally invested.
I plan to use my money to set up a guaranteed income (annuity) within the next 5 years
- By choosing Investment Pathway 2, you can invest your pot in an AJ Bell fund designed for people who plan to use their money to set up a guaranteed income (annuity) within the next five years.
- Investment Pathway fund: VT AJ Bell Cautious Fund I Acc
- This fund isn't designed to track the price of buying an annuity. Once you buy an annuity you usually can't change your mind. The value of the fund can go down as well as up and you may get back less than you originally invested.
I plan to start taking my money as a long-term income within the next 5 years
- By choosing Investment Pathway 3, you can invest your pot in an AJ Bell fund designed for people who plan to start taking their money as a long-term income within the next five years.
- Investment Pathway fund: VT AJ Bell Moderately Cautious Fund I Inc
- The value of the fund can go down as well as up and you may get back less than you originally invested. The income produced by the fund isn't guaranteed and may fluctuate. How much income you take from your SIPP and when is up to you, but keep in mind that taking too much too soon may mean you run out of money in the future.
I plan to take out all my money within the next 5 years
- By choosing Investment Pathway 4, you can invest your pot in an AJ Bell fund designed for people who plan to take out all their money within the next five years.
- Investment Pathway fund: VT AJ Bell Cautious Fund I Acc
- The value of the fund can go down as well as up and you may get back less than you originally invested.
Remember that other providers offer Investment Pathway funds. It’s a good idea to shop around before you decide. The Money and Pension Service have a useful drawdown comparison tool which you can view on MoneyHelper.
The Financial Conduct Authority (FCA) requires providers of investment pathways for pension drawdown to set up and maintain either an Independent Governance Committee (IGC) or Governance Advisory Arrangement (GAA) to represent the interests of pathway investors.
Our most popular Investment Pathways questions
Anyone can choose an Investment Pathway fund, although they're primarily designed for customers who have set up a drawdown pot when accessing their AJ Bell SIPP. The idea is to provide a range of low-cost, simple investments designed around four broad retirement income objectives.
You can hold an Investment Pathway fund in any of our accounts - including a SIPP, Ready-made pension, Dealing account…
Read moreYou pay no dealing charge when you buy an Investment Pathway fund. Our £1.50 dealing charge only applies when you come to sell it.
Our account charge applies for holding the Investment Pathway fund in your AJ Bell account. This is based on the total market value of your fund holdings - calculated on the last working day of the month. We take it monthly from the cash in your account, usually within…
Read moreEach Investment Pathway fund is designed to be held for five years or more. However, you don't have to hold them for this long. It's important to review the investments in your SIPP regularly to make sure they still meet your retirement goals. If your plans change, you may be better off selling your Investment Pathway fund or switching to another investment.
You can sell your Investment Pathway…
Read moreYou can invest just some of the money in your drawdown pot in an Investment Pathway fund. Then, you can put the rest in your own choice of other investments.
Need more help?
Our customer support team are here to help when you need it. Here’s how to get in touch.
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