Investment Changes

Overview

When you pay into the Tesco Retirement Savings Plan, Tesco pays in too. The money is then invested, to help it grow over the long term, in things like companies, government bonds and property, throughout different parts of the world. Our top priority is to help your money grow as much as possible while keeping it safe, to provide you with an income after you stop working.

With the support of experts, Tesco and the Plan Trustees regularly review these investments and how they perform, to make sure that they continue to be suitable for our members’ needs.

As part of our latest review, we’re making changes to some of our funds so that we can continue to help your retirement savings grow as much as possible, while keeping them safe.

These changes will also help us to keep on track with our commitment to aim for the Plan's investments to be ‘net-zero’ by no later than 2050.

We believe the changes we’re making offer very good value for money and, although your total annual charges are set to go up slightly (see below for more details), we’ve been able to use our scale to keep overall costs low for our members.

If you’re happy with these changes, you don’t have to do anything.

If not, you can change where your savings are invested (at any time) in Manage Your Account (MYA).

See 'What do I need to do now?' for more information. 

What are the changes?

The majority of the changes will apply to a small number of the investments that we use in our automatic investment option, but we’re also making changes to some of our self-select funds (the investments that you can choose for yourself). 

The changes will take place gradually, from November 2023 until around June 2025. They could apply to the savings that you currently have, as well to any savings you build up in the future. For information about all our funds, take a look at the Fund Factsheets in our document library. These Fund Factsheets will be updated as and when the changes come into effect.

1. Changes to our automatic investment option

Our automatic investment option is where most members have their savings invested. We’re making changes to some of the funds within this option.

Changes to the Tesco Corporate Bond Fund and the Tesco Equity Fund

Between November 2023 and January 2024, we’ll be introducing currency hedging to these two funds. Currency hedging is a strategy that’s used to prevent changes to exchange rates from affecting the value of investments. This should create more stability and help to avoid any sudden large changes to the value of your investments when there are exchange rate movements in the market.

Changes to the Tesco Diversified Fund

We’re also adding a new fund to the Tesco Diversified Fund. This will take place gradually, starting from the second half of 2024. We expect it to take 12-18 months for this change to be completed.

The new fund is made up of companies, properties, forestry, and investments in infrastructure, and will focus on investments with clear responsible investment targets, as we expect these types of investment to provide better returns, and to help us on our path towards net-zero. The new fund aims to be net-zero by 2040 by, for example, investing in sustainable forestry in Scotland.

How will these changes affect my total annual charges?

Depending on how far you are from your target retirement age, you could see your total annual charges go up by a maximum of 0.02%, from 0.28% to 0.30%, starting from November 2023 at the earliest. This means that, for every £1,000 of savings you have, your total annual charges will go up by no more than 20 pence a year.

Members who are less than five years from their target retirement age should see their total annual charges go up by a smaller amount, but still by no more than 0.02%.

2. Changes to our self-select funds

The self-select funds listed below will also be updated, to reflect the changes we’re making to the underlying funds used within the automatic investment option.

The total annual charges for these funds will also be going up gradually, from November 2023 at the earliest, as shown in the table below.

Transaction Costs

Please note that, when changing investments, there are one-off costs that come with selling investments and buying new ones, known as transaction costs. These are not charges, but additional costs that are automatically taken from the value of investments whenever they are changed. The level of these costs depends on the transactions being made, but they are usually very small and we’ll continue to keep them as low as possible for you.  

Global events and your money

Some financial markets and investments have been impacted by current high inflation, rising interest rates and the cost of living crisis, and this may have some effect on people’s retirement savings over the short-to-medium term.

We’ve been monitoring this situation closely and have carefully considered the timing of these investment changes. We believe that making these changes is still the right thing to do, to help your money grow over the long term and keep it safe, so we plan to go ahead from November 2023.

What do I need to do now?

You don’t need to do anything if you’re happy with these changes, but if you want to change where your savings are invested (at any time), you can do this in Manage Your Account (MYA), which you can access here without having to enter any login details, or go to legalandgeneral.com/manageyouraccount.

Please note that transaction costs (see above) apply whenever you change where your savings are invested.

If you need further help, please visit the guidance or financial advice page. 

If you have any questions about these changes, please call our helpline on 0345 070 0090, or email us at tescoretirementsavingsplan@landg.com

The future

We’ll continue to review the Plan’s investments to make sure they remain appropriate and low-cost, to provide good value for our members.

The Plan website will be kept up-to-date with the latest information on investments and charges. Details of any future changes to investments or charges will also be made available through the website.

Our approach is always focused on helping your savings grow as much as possible while keeping them safe. We believe this is best achieved through investing responsibly, which also helps the planet. We’ll continue to work as closely as possible with the companies we invest in to help us reach our goals, including being net-zero by no later than 2050.

We’ll also continue to use our scale to engage with and encourage companies, some of which may need time to make improvements.

Don’t forget, you can see which companies your retirement savings are invested in, and give your views on issues that come up at those companies, through Tumelo.

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Remember, the value of investments can go down as well as up. This is normal and we expect your investments to grow over the long term. Investment growth is not guaranteed.

Nothing in this communication should be taken as financial advice. Neither Tesco nor the Plan’s Governance Committee can provide advice on the investments offered in the Plan.

If you’d like advice on your investment options, please speak to a financial adviser.

This communication is about the Tesco Retirement Savings Plan and does not affect the Tesco PLC Pension Scheme.