How Lifetime Advantage Funds work
When you invest into one of the Lifetime Advantage Funds, how your money is invested depends on how long you have until your target retirement age. For example, you might be building your pension, approaching retirement, or starting to take your savings.
Accumulation stage: Building your pension before retirement
During this stage, your money is typically invested in asset classes that aim to deliver higher returns over the long term – such as equity (shares in companies).
When you are within ten years before your retirement age, your money is still invested for growth, but with a consideration of reducing risk. This means shifting more into lower-risk assets such as bonds (loans to companies or governments) and less into equities, which typically carry relatively higher risk.
Decumulation stage: Taking your retirement savings
When you start withdrawing money from your pension pot to enjoy retirement, its size will gradually reduce. The remaining balance stays invested, but withdrawals often outpace growth, so your pot may shrink over time.
A simplified graph to show asset allocation shift is available in our Guide to Target Date Funds.
The below graph shows more in detail of the types of investments (known as asset classes) the funds may hold and how their proportions can change over time. It does not reflect the actual value or performance of your investments. Select different stages to see how the plan works.
For illustrative purposes only. Source: L&G, as at June 2025.
Asset classes explained
Equity is shares in companies. They may be listed on stock exchanges in different regions and from different industries or sectors.
They are loans to governments.
Investments not bought or sold on a stock market. These may typically include infrastructure (such as roads and bridges), scientific research projects, renewable energy, property and more.
Developed small cap (or capitalisation, meaning the market value of a company) companies are a type of equity investment. Specifically, this includes companies whose total market value is considered small, about £100 million to £2 billion.
Includes high yield bonds, which are loans to companies that can pay higher interest rates to compensate lower credit ratings; and emerging market debt, which is loans to governments or companies in developing countries.
Investments like property, private equity (company shares) and infrastructure that can be bought or sold on a stock market.
Loans to large companies that tend to be stable, which is reflected in their credit rating.
Money held in bank accounts or lent for a short time to governments or companies.