INVESTMENTS
"As Trustees we are responsible for helping all members achieve good retirement outcomes and value for money. We want members to have investment options designed to meet their goals in retirement, by providing low cost and flexible investment solutions for a variety of retirement outcomes.
Responsible investing is at the heart of the Trustees’ commitment to helping our members achieve these outcomes, and we work with Scottish Widows to ensure the schemes' investments reflect this approach. You can find out more about our Investment Aims and Objectives in our Statement of Investment Principles."
Gerald Wellesley, Trustee
DEFAULT INVESTMENT STRATEGIES
Scottish Widows Pension Investment Approaches (PIAs) are designed to offer a low cost, flexible option while targeting various retirement outcomes.
SELF-SELECT FUNDS & BESPOKE INVESTMENT SOLUTIONS
The Trustees have selected a range of robustly governed self-select funds for members. These cover the most widely used asset classes and regions on both an active and passive basis.
We also offer bespoke investment solutions for employers who prefer this.
DRAWDOWN INVESTMENT SOLUTIONS
We offer four Investment Pathways for investment at retirement, for members who have not received financial advice.
RESPONSIBLE INVESTMENT
Read about our Responsible Investment and Stewardship Policy, and the steps we’re taking to help tackle climate change.
DEFAULT INVESTMENT STRATEGIES
Scottish Widows Pension Investment Approaches (PIAs) are designed to offer a low cost, flexible option while targeting a number of retirement outcomes.
The Scottish Widows Master Trust uses the Balanced PIA 'Targeting Flexible Access' as the core default investment solution.
The default investment solution includes:
- Optimal asset mix and allocation stochastically modelled by experts Moody’s
- Inclusion of 15-year lifestyle glidepath with smooth automatic monthly switching
- Automatic quarterly rebalancing.
In addition to the default investment solution, the Trustees also offer an appropriate range of other options for members who wish to make their own investment choices.
Targeted Investment solutions:
Members can self-select from eight other lifestyle solutions, based on their attitude to risk or desired outcome at retirement. Employers can also select from these solutions to use as an alternative "default" investment option if deemed more appropriate for their employees' needs. The de-risking element of most of these strategies is identical to the default investment option, with a 15-year glidepath, monthly switching and quarterly rebalancing.
SELF-SELECT FUNDS & BESPOKE INVESTMENT SOLUTIONS
The Core Funds provide members with access to a range of funds across the most widely used asset classes. This allows them to choose how to invest their pension based on their own attitude to risk, and also environmental, social or ethical views. These include:
- A range of active and passive managed options
- Sustainable funds in line with our commitment to responsible investment
- Shariah option
- Equity, bond, property, multi-asset and cash options.
Our flexible platform allows members to simultaneously self-select from this range while leaving a portion of their funds in one or more lifestyle strategy.
For employers who would prefer a bespoke investment solution, we can help design an investment solution which meets the specific needs of the scheme and its members. This is subject to approval from the Trustees.
DRAWDOWN INVESTMENT SOLUTIONS
| Pathway | Expected member need |
|---|---|
| Leave invested | Where the member has no plans to touch their money within the next five years |
Buy annuity |
Where the member plans to use their retirement savings to set up a fixed, guaranteed income for life within the next five years |
| Long-term income | Where the member plans to start taking their money as a long-term income within the next five years |
| Take money | Where the member plans to take all their money out as a lump sum within the next five years |
Members who don't want to select one of the Investment Pathways can choose from the core fund range or the Scottish Widows default drawdown strategy.
RESPONSIBLE INVESTMENT
Responsible investment is at the heart of the Scottish Widows Master Trust.
Responsible investment incorporates environmental, social and governance (ESG) factors in investment decisions that resonate with members’ values and beliefs, while also aiming to benefit their long-term savings.
We’ve carried out independent research to understand our customers' views better. We believe members should be able to choose where they invest their money so they can feel proud of the impact their investment is making. The Trustees work with Scottish Widows to offer members a fully governed, sustainable approach to investing. They challenge the companies we invest in to behave more sustainability and responsibly.
The Trustees have put in place an investment governance reporting framework, which includes the Trustees receiving regular ESG and stewardship reporting from Scottish Widows. They use this to hold Scottish Widows and the underlying managers to account on these issues. The Trustees have also developed their own Responsible Investment & Stewardship Policy.
Working in partnership with Scottish Widows, we have set climate change targets:
- A 2030 target of halving the carbon footprint of our default investments.
- A 2050 target of net zero in our default investments.
Read more about our Policy, extensive research and our commitment to achieve net zero in our investments below:
- Read our Responsible Investment and Stewardship Policy (PDF, 198KB)
- ESG - what resonates with pension investors (PDF, 2MB)
- Scottish Widows 2022 Retirement Report (PDF, 2MB)
- Task Force on Climate-related Financial Disclosures (TCFD) - Scheme Year Ending 5th April 2023 (PDF, 6MB)