Interactive Investor

Quick guides

Target date funds explained

What are target date funds?

Also known as retirement date funds, target date funds provide an ‘autopilot’ approach to investing for goals with specific target dates. As your withdrawal date gets closer such funds take less risk. As a result, your investments are automatically rebalanced and reallocated along the way, which saves you from doing it.

Why invest in target date funds?

  • Invest on ‘autopilot’ for goals with specific withdrawal dates.
  • Reduce risk through diversification.
  • Lower the cost of building a diverse portfolio

Flexible investing

Different goals, such as retirement or children’s university fees, have different timescales, so it makes sense to choose an appropriate fund for each goal. It is also easy to switch funds if the date of a goal changes. Similar to any other fund, you can top up or sell at any time.

Investment pathways 

From 1 February 2021, hundreds of thousands of people turning 55 this year and entering the 'drawdown’ phase of their pension saving will be met with four new investment options for their pension pot. For more information and to find out our four low-cost investment options visit our investment pathways page.

These articles are provided for information purposes only. The content is not intended to be a personal recommendation. The value of your investments, and the income derived from them, may go down as well as up. If in doubt, please seek advice from a qualified investment adviser.