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The Investment Builder is turning four years old

Read about why we’re celebrating the fourth birthday of the Investment Builder, despite the challenging conditions

It’s been a challenging year across the globe

While the safety and wellbeing of loved ones has been the top priority for most people, looking after our members’ interests has been at the top of our agenda.

That’s why now, despite the challenging conditions, we’re celebrating the fourth birthday of the Investment Builder.

We launched the Investment Builder, the defined contribution part of USS, in October 2016. Four years on, we look at how it’s performed, and what changes we’ve been making to help you plan, save and prepare for your retirement.

Do I have an Investment Builder pot?

If you earn above the salary threshold, have transferred funds from another scheme in to USS since October 2016 (including switching any Money Purchase AVCs from Prudential), and/or make additional contributions, you’ll have an Investment Builder pot.

How the Investment Builder has performed

Despite a challenging year in 2020, we’ve seen strong performance to 30 September 2020.

The Do It For Me investment options have delivered strong positive absolute returns and relative performance when compared to the benchmarks.

The Let Me Do It investment options also performed strongly with 9 out of 10 of the funds matching or outperforming their benchmarks, and we have taken steps to address the challenge faced by the USS UK Equity Fund.

The USS Growth Fund is the largest fund in the Investment Builder, with assets of £590m as at 30 September 2020. In the past four years, it returned an average growth rate of 6.6% a year. By way of comparison, inflation in the UK (as measured by UK CPI) has had an average growth rate of 1.9% a year over the same period.

During the same period, the USS Cautious Growth Fund returned an average growth rate of 5.1% a year, providing returns while also limiting risk to members’ savings as they approach Target Retirement Age.

The USS Ethical Growth Fund and USS Ethical Cautious Growth Fund also showed strong returns during that same period, with average growth rates of 11.5% and 7.3% a year respectively.

You can find more detail on the performance of these and the other funds you can choose from in the Fund Factsheets, available in My USS.

Developing our investments for members

We continually look to deliver value to our members and develop our approach to investments. That’s why in February 2020, we expanded the Investment Builder to include Private Market assets. This exciting development means the Investment Builder puts members’ savings into investments that aim to provide more stable long-term returns. Diversifying the funds also aims to reduce risk. And as we can manage this in-house, there are no additional costs to members or employers.

We’ll continue to review and develop the Investment Builder, to ensure it meets the needs of our members, as they save and prepare for their retirement.

How we’ve grown

The Investment Builder now has almost 90,000 members, and it holds over £1.2bn in assets (as at 30 September 2020), making it one of the fastest growing defined contribution arrangements in the UK.

In May 2019, we became the first hybrid pension scheme to achieve Master Trust authorisation from The Pensions Regulator, which means we are meeting the high standards expected of us, whilst managing and protecting members’ benefits.

What the Investment Builder offers you

You can choose how you build and manage your savings. And you get the flexibility to use your pot in a number of different ways. You don’t even need to wait until you retire – you can use your pot from age 55*.

*This will rise to age 57 in 2028, as the government plans to increase the minimum pension age.

Not part of the Investment Builder and want to find out more?

For the latest information on the USS funds please review the Fund Factsheets in My USS.

Past performance is not necessarily a guide to future performance. The value of investments may go down as well as up and the return on your investments is not guaranteed.

Published: 10 November 2020