Understanding how your TPT pension is invested

Paying into your pension each month is a great way to boost your retirement savings. But do you know what happens to the money you pay into your pension? It’s important to know how your pension savings are invested so you can make the right choices when it comes to planning for your retirement.

Your TPT pension investments

Your TPT pension savings are invested in the stock market and, like with any defined contribution pension, the amount of income you’ll receive from your TPT savings is not guaranteed. This can sound intimidating but is very normal when it comes to pension investments. Though investing in the stock market isn’t without risk, over the long term these investments generally grow faster than inflation. As pensions are long term investments, this means that while they will likely go up and down in the short term, this is all in aid of giving your investments the best opportunities to grow in the years ahead.

The value of your pension pot, and therefore the income it can provide you with in retirement, is based on a number of factors.

Some of the most important being the contributions you and your employer make, charges, and the investment returns achieved by the funds your pension savings are invested in.

As well as making sure you are saving enough, it’s important to consider where your pension savings are invested. If you don’t feel confident making your own investment decisions, you can leave this to TPT to manage for you – something many of our members do.

When you’re first enrolled with TPT, your pension pot will be automatically invested in one of our ‘default investment options’. This could be in one of our target date funds (‘TDFs’ for short) or our Ethical Target Date Fund.

You can choose to remain in the default investment option. Or, if you want to be more actively involved with how your pension savings are invested, you can instead make your own fund choices from our self-select range.

TPT's default target date funds

The target date fund you’ll be automatically invested in is determined by the age that you plan to retire – your ‘target retirement age’. When you’re first enrolled with TPT, your target retirement age is automatically set at age 65 but you can change this at any time in your online account.

Each target date fund then invests in a range of assets – or holdings - that the fund managers believe will provide good returns, such as company shares, bonds and property. The investments held by our funds must also meet our responsible investment criteria and align with our climate action plan and decarbonisation targets.

In the earlier stages of your pension savings journey, your money is invested in higher risk assets, to give it the potential to grow. As you get nearer to your target retirement age, your money is moved into more cautious assets that are less likely to fluctuate.  These changes are made in order to protect the value of your pension pot from any sudden falls in the stock market in the run up to your retirement.

The aim of our target date funds is to provide a long-term return that outperforms inflation, so that your pension savings grow in real terms, while avoiding high levels of risk as you approach retirement. 

Because of how target date funds work, it’s important to keep your target retirement age up to date. If you are planning to retire earlier or later than age 65, please let us know. You can easily check and update your target retirement age in your online account.

Choosing your own investment funds

If you’re interested in investments, or have particular religious or ethical beliefs that need to be considered, you can instead choose from our range of self-select funds.

If you do decide to choose your own investment funds, it’s important to highlight that you’re then responsible for making any fund changes in the future and making sure your selected funds have an appropriate level of risk for your needs. You will also need to monitor how the funds perform and ensure they remain aligned with your overall retirement plans. With our self-select range, unlike with the default target date funds, there is no automatic switching into lower-risk investments as you approach your target retirement age. This means you would need to actively update your fund choices to switch your money into lower-risk options, which can all be done through your online account.

Trust us to help save for the future

Careful consideration goes into choosing the funds for TPT members to invest in and we regularly review the selection available. We have an experienced inhouse investment team and work with specialist investment management companies to provide our members with high-quality, well-managed investment options. We also have a comprehensive responsible investment framework and climate change policy that our investments must adhere to.

If you’d like to review your investments or make changes to the funds your TPT pension savings are invested in, you can do this through your online retirement savings account.