Until the end of January 2005, the Lifestyle strategy switched your investment units from equities into bonds and cash over a 5 year period. Switching aims to reduce the effect of equity market volatility on your investment in the years just before retirement.
Based on their latest research, our advisers recommended that we extend the switching period to 8 years. So, on 1 February 2005, we adopted 8 year switching for all new Lifestyle investors.
Switching over 8 years instead of 5 reduces your exposure to any volatility in equity returns because your money is invested in equities for a shorter period. So you should see a more stable investment return in the 8 years before retirement but may not benefit as much from an up-swing in equity markets as you would if switching over a shorter period.
