Unit-linked personal pension - Retirement - Guides - Moneyfacts

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Unit-linked personal pension

Unit-linked personal pension

Category: Retirement

Updated: 12/08/2016
First Published: 12/08/2016

Unit-linked pension contributions are used to buy units in a pooled fund (or funds).

Unit-linked pensions are invested in a variety of funds. The funds are grouped together in sectors, representing the style, area and risk level in which the relevant pension fund has chosen to invest.

As the value of the units may fall and rise during the period of investment, care is taken to 'spread' the investment in a variety of ways to obtain the best return commensurate with prudent investing.

Most companies will allow for the switching of funds at any time during the life of the investment. This becomes more relevant as retirement approaches and the riskier funds are often seen as less attractive than the more cautious funds.

Towards the end of the period the unit-linked fund is usually moved to a fixed investment where the increases are lower but guaranteed.

Investments are risk-based products. This means that the value of your initial investment and any income generated can fall as well as rise. If you are in any doubt we strongly urge you to contact an independent financial adviser to assist you before making a decision on which pension to choose.

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Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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