Investing your pension savings

As you probably know, the money you save into your pension is invested to help it grow over the years.

Some people like to choose their own funds, but others prefer to leave it to the experts – and we have something for both.


Don’t want to choose your own funds?

Then Mercer Smartpaths are for you. Often called lifestyle investments, these do the heavy lifting for you.

They aim to grow your pension pot until you’re 8 years from retirement, and then gradually move into investments designed to protect its value.

If you don’t want to choose your investments, you’ll be invested into one of these, with a target retirement age of 65.

Your target retirement age matters because it affects when you switch into lower-risk investments. If you’d like to change it, just log into Optimize. 

There are three Mercer Smartpaths:

  • SW Mercer Target Annuity Retirement
  • SW Mercer Target Cash Retirement
  • SW Mercer Target Drawdown Retirement

You can find more detail on the Mercer Smartpaths in Mercer's investment guide.


Want the freedom to choose your own?

Then you can pick from our core range of funds. With these, it’s up to you to choose which to invest in and when to switch.

You can find a full list of the funds to choose from in Mercer's investment guide.

Mercer's investment guide

If you’re doing it this way, it’s important that you keep a close eye on your choices over the years.

For example, as you get closer to retirement, you might prefer not to invest as much in higher-risk funds and look towards protecting the value of your account. 

You can track and change your investment choices online by logging into Optimize.

Those who want the freedom to choose might want to learn more about risk and investment styles and asset classes before you make your decisions.


How much risk do you want to take?

You also need to decide how comfortable you are with risk.

All investments come with some level of risk – but generally speaking, the higher the risk, the higher the potential rewards.

The opposite is true, too – investments with a lower risk of losing your money generally offer less potential for a higher return. 

There’s no right or wrong answer – it’s up to you what you feel happy with, and this might change over time, too.


Investment funds can be passively or actively managed

  • Passive funds aim to track a particular stock market index, with the fund’s allocation to individual stocks the same as their weighting in the index.


  • Active fund managers make investment decisions to try to beat the particular stock market index. Because of the higher level of research and transactions involved, these funds tend to have higher charges than passive funds.


Asset classes

An ‘asset class’ is a category of assets or investments, like equities or bonds.

Normally, assets in the same class have similar characteristics, but they can have very different returns or risks. The value of the investments in all asset classes can go up as well as down.