Here’s what we think of PensionBee – an online platform that helps customers take control of their retirement by combining their existing pension pots into one new plan.
Launched in 2016, PensionBee is on a mission to transform the pensions industry by helping people take control of their retirement savings.
With a ‘job for life’ now mostly a thing of the past, many people end up with various pots of pensions that become increasingly difficult to keep track of as the years go by. PensionBee will help you locate all of your old pensions and combine them into one brand new, easy-to-manage plan.
You can choose from PensionBee’s range of pension plans – including a planet-friendly Fossil Fuel Free option – or, if you’re not sure which one to go with, you’ll be placed in its Tailored Plan. This automatically adjusts its mix of investments to maximise growth while you’re younger and reduce risk while you’re older. Bear in mind that PensionBee does not offer financial advice, so can’t recommend a specific plan to you.
Once your pension has been set up, it will be managed by one of PensionBee’s partners including BlackRock, HSBC, Legal & General and State Street Global Advisors.
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PensionBee was born from a desire to make pensions simple and accessible to everyone, so user-friendliness is its key selling point.
Once you’ve registered by providing some basic personal details, the first step is to work out where all your existing pension savings are. If you can’t find them or don’t have the time, tell PensionBee the names of your past and current employers and your personal ‘beekeeper’ will track them down for you.
If there is an exit fee of more than £10, your beekeeper will let you know so you can decide whether to still go ahead. Also, if your old pension has guarantees – such as guaranteed annuity rates or a final salary promise – you will be sent the relevant paperwork to consider before you transfer.
On average, it takes about 12 weeks to transfer all your old pensions over. From your online ‘beehive,’ you can see your current pot balance, your projected retirement income, and set up regular or one-off contributions.
Sustainable investing option
PensionBee offers a Fossil Fuel Free Plan. Created and managed by Legal & General, it is one of the UK’s first mainstream private pension plans to completely exclude companies with proven or probable reserves in oil, gas or coal. It also excludes tobacco companies, manufacturers of controversial weapons, nuclear weapons and persistent violators of the UN Global Compact.
Alongside this, it invests more of your money in companies that are aligned with the Paris Agreement on climate change. The annual fee is 0.75 per cent.
PensionBee also offers a Shariah Plan, which contains only shariah-compliant investments – these are socially responsible investments that follow the principles of Islamic religion.
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Unique selling points
- Fossil Fuel Free Plan. PensionBee’s Fossil Fuel Free Plan completely excludes the fossil fuel and tobacco sectors while only investing your money in companies aligned with the Paris Agreement’s climate goals.
- Simplicity. You won’t have to deal with confusing jargon or complicated processes.
- Accessible to everyone. Even if you don’t have any previous workplace pensions or are self-employed, you can use PensionBee to open a new one.
The plus points
- No minimum. There is no minimum contribution so you can pay in as often or as little as you want.
- Automatic tax relief. PensionBee will automatically claim your 25 per cent tax top up from HMRC and add it to your balance (so long as you’re eligible).
- Easy withdrawals. From age 55 (57 from 2028), you can take your pension out online through the PensionBee drawdown. Or, if you’d rather receive a regular income throughout your retirement, you can buy a pension annuity through PensionBee’s partner Legal & General.
- One annual fee. PensionBee charges one simple annual fee from 0.50 to 0.95 per cent, depending on which plan you choose (see below). They’ll ask your permission if there are ‘exit fees’ of more than £10 to move your money from an old provider.
- Personal beekeeper. You’ll be assigned a ‘beekeeper’ who can track down your old pensions, help answer any questions you have, and update your details when necessary.
- Diversified investments. PensionBee offers diversified plans, meaning that they invest across different countries and asset types (such as stocks and bonds) to keep risk down.
- No exit penalties. You are free to move your pension at any time without charge. There is also a 30-day cancellation policy.
- No financial advice. PensionBee can’t offer financial advice so won’t be able to recommend a plan to you.
- Simplicity can mean less choice. PensionBee is all about keeping things simple, so it’s not for anyone wanting to self-select and manage the funds within their pension plan.
Cost of use
Joining PensionBee is free and there is no charge for consolidating your pensions. Once your new plan is in place, you’ll pay an annual fee of between 0.5 and 0.95 per cent of your total pension depending on the plan you choose. This includes underlying fees paid to the managers who invest your money.
Fees are halved for any amount above £100,000 to reward saving. So for example, the Tracker Plan costs 0.50 per cent up to £100,000 and 0.25 per cent for any portion of your pension over that amount.
How does this cost compare with competitors?
Government-backed pension scheme Nest comes with two fees; a 0.3 per cent annual management charge, and 1.8 per cent charge on each contribution. This means that for every £50 you contribute, £49.10 is paid into your pension. This charge is in place to pay back the government loan used to set up Nest. There are no charges for transferring pots into Nest.
Aviva charges an annual management fee of 0.35 per cent for its ethical self-select pension, dropping to 0.25 per cent on pots over £200,000.
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