Investment Pathways

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.

What are Investment Pathways?

Planning to put your SIPP into drawdown? Investment Pathways have been introduced by the Financial Conduct Authority (FCA) to make managing your pot easier.

The idea is to reduce the number of people in the UK who keep their drawdown pot in cash. This could leave it vulnerable to inflation over the long term. By choosing an Investment Pathway, you can invest your pot in a fund that’s been designed to broadly 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.

Learn more about Drawdown

How do I use Investment Pathways?

We’ll offer you Investment Pathways when you access your pension and set up a drawdown pot or transfer a drawdown pension to us.

Whether you choose an Investment Pathway fund is up to you. If you prefer, you can pick your own investments, or simply leave your drawdown pot invested where it is now. Similarly, you could choose an Investment Pathway for some of your pot, then invest the rest elsewhere. 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, built and managed for you by our in-house team of specialists. You can learn more about each Investment Pathway and its fund below.

The four Investment Pathways

  • Investment Pathway option 1 – 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 Acc IP1
    • What do I need to consider? The value of the fund can go down as well as up and you may get back less than you originally invested.
  • Investment Pathway option 2 – 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 Acc IP2
    • What do I need to consider? 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.
  • Investment Pathway option 3 – 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 Income fund Inc IP3
    • What do I need to consider? The fund aims to deliver an annual income of 4%, although this yield 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.
  • Investment Pathway option 4 – 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 Acc IP4
    • What do I need to consider? 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, and it’s a good idea to shop around before you continue. Money and Pension Service have a useful drawdown comparator which you can view at maps.org.uk.

The Financial Conduct Authority (FCA) requires providers of investment pathways for pensions drawdown to set up and maintain either an Independent Governance Committee (IGC) or Governance Advisory Arrangement (GAA) to represent the interests of pathway investors.

Investment Pathway FAQs

How much will I pay in charges for an Investment Pathway fund?

What if my retirement goals change and my Investment Pathway fund is no longer right for me?

Do I have to hold my Investment Pathway fund for five years?

How do I invest in an Investment Pathway fund?

More FAQs