LV= Smoothed Pension

Investing in the LV= Smoothed Pension

All you need to know

Overview

The LV= Smoothed Pension offers a range of multi-asset funds that are available through our Self-Invested Personal Pension (LV= SIPP)

Each fund is designed to grow your money while providing you with a smoother investor experience, so you can spend less time worrying about your investments.

Our Smoothed Pension supports investors of different ages, whether you're saving for your retirement, or accessing your pension to draw income.
It can act as the only investment within the LV= SIPP or as a low-volatility option alongside other investments.
Our investments come with 100% protection from the Financial Services Compensation Scheme (FSCS) should we ever get into financial trouble and couldn’t honour our commitments.

Please remember:
This is a stock market related investment which can rise and fall in value. This means you’re not certain to make a profit and you could get back less than you paid in.

Smoothing

How does smoothing work?

Our simple smoothing process averages daily fund prices over the past 26 weeks. This process is designed to prevent you from feeling an immediate impact of sudden market shocks.

The LV= Smoothed Pension uses a smoothing process designed to help level out the peaks and troughs of the stock market.

When you invest in our smoothed funds, you'll begin to experience the benefits of smoothing from day two of your investment. Then, our smoothing process builds up to a 26-week average by cumulatively averaging the daily fund prices (underlying prices) over the time you've been invested.

Once you've invested for longer than 26 weeks (roughly 6 months), your fund value will be a rolling average of the last 26 weeks of underlying prices.

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Explaining our smoothing mechanism

View video transcript

Are you looking for an investment option that aims to grow your fund while providing a calmer experience?

Our Smoothed Managed Funds have a built-in mechanism designed to provide you with a calmer investment journey by averaging out the traditional peaks and troughs of stock market investing.

We call this smoothing.

Here’s how it works.

On day one, your money is invested into your chosen fund(s) at the underlying daily fund price.

On day two the underlying daily fund prices for day one and day two are added together and divided by two.

On day three the underlying daily fund prices for all three days are added together and divided by three, and so on.

This process continues for 26 weeks - approximately six months.

After this, your investment value becomes a rolling average of the underlying daily fund prices over the previous six months.

This means if markets are growing, you will see smoothed fund prices increasing at a slower rate than the prices of unsmoothed funds.

But, if markets are falling or fluctuating, you won’t see the same sudden drops or changes to your smoothed fund value as you would in an unsmoothed fund.

Our robust smoothing mechanism has allowed our members to experience calmer investment journeys since it was first launched and it has remained stable throughout difficult market conditions, including the 2008 financial crisis and the 2020 COVID-19 pandemic.

You may find this valuable if you’re nearing retirement, you’re already taking a retirement income, or simply want to reduce the impact of stock market volatility on your investments.

As a mutual we’re here for our members, and our smoothed funds are designed to reduce the stress that can come with investing while supporting you to reach your financial goals.

Please remember our smoothed funds are a stock market related investment and while we aim to grow your investment, you could get back less than you paid in.

Speak to your financial adviser to discuss how LV’s Smoothed Managed Funds could be right for you.

Although it’s unlikely, we may need to suspend the smoothing mechanism at some points, to protect our members and our business. We might need to do this if the underlying daily fund price becomes less than 80% of the smoothed price, or in other exceptional circumstances.

If we did have to do this, the smoothed fund(s) you’re invested in would be valued using the underlying daily fund price or, if needed, on a daily gradual averaged price until smoothing is reintroduced.

Features

As part of our Smoothed Managed Fund range, the LV= Smoothed Pension lets you...

Choose from a range of fund options.
Benefit from our smoothing process.
Buy an optional 10-year guarantee.
Make a lump sum investment.
Make regular and ad-hoc withdrawals.
Easily transfer your existing pension savings and access valuation information online.
The funds are 'with-profit', which means you'll get the benefit of the growth in the funds, as well as any additional with-profits member bonuses.

Choose from a range of fund options

Tailor your investments with a choice of fund options:

Smoothed Managed Extra Cautious
Smoothed Managed Cautious
Smoothed Managed Balanced
Smoothed Managed Growth
Smoothed Managed Growth Plus

Benefit from our unique smoothing process

Smoothing aims to reduce the impact of short-term stock market changes. It builds up to a 26-week average of previous fund prices – you’ll experience the benefits of this from day two of your investment.

Once you’ve invested for longer than 26 weeks, your fund value will be a rolling average of the previous 26 weeks’ underlying prices.

Buy an optional 10-year guarantee

An optional guarantee is available for a 10-year term on our Smoothed Managed Cautious Fund investments.

This guarantees your investment's value on the 10th anniversary, will be at least the value at the guarantee start date, less any withdrawals and ongoing or ad-hoc adviser charges.

Make a lump sum investment

Invest lump sums from £5,000 to £1,000,000. Each new lump sum is invested into a new, separate policy.

Important Information

Investing money can be rewarding, but it comes with some risks. Here’s what you need to know:

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It’s a stock market-related investment, available to UK residents up to and including the age of 89 at outset (note that maximum age at entry to our SIPP is 85 years attained).
Your investment could go down as well as up, so you could get back less than you paid in.
Our smoothing process won't prevent your investment from dropping in value.
Smoothing can be suspended at our discretion if either the underlying price is 80% or less of the averaged price, or in exceptional conditions.

There are costs involved in setting up and looking after your LV= Smoothed Pension, you can read more about the charges here.
If you withdraw more money than your LV= Smoothed Pension has grown by, the value will be less than you’ve put in.
If you invest in the Smoothed Managed Cautious Fund and select the optional 10-year guarantee, please be aware of the associated terms and charges.
There’s no minimum or fixed term. But this is a medium to long-term investment of at least five years – preferably 10 years or more.

Documents

Important documents, specifically created for you

We've produced some helpful documents to give you even more information about the LV= Smoothed Pension.

Next Steps

Getting the most from your money

To help you get the most from your money, you can speak to a financial adviser. If you don’t have a financial adviser you can find one near to you on unbiased.co.uk, or you can have a chat with one of our investment advice specialists.

Please note that the information given on these pages should not be seen as advice to take out this product.