Here’s what we think of The Sustainable Pension Company – a sustainable pensions provider for people who want to align their retirement savings with their values without compromising on returns.
The Sustainable Pension Company (TSPC) was inspired by the Make My Money Matter campaign – led by Love Actually director Richard Curtis – which calls on individuals, employers and government to make sure pensions put people and planet on a par with profit.
TSPC was launched earlier this year by sister company Aspirations Financial Planning with the aim of helping clients to invest their retirement savings into sustainable funds that are in line with their values.
It offers five ready-made portfolios, according to the level of risk an individual feels comfortable taking over the long term, which all have a targeted weighting towards “positive impact” investments. Each portfolio contains 10-15 global funds that are actively managed by experienced fund managers such as M&G, Liontrust, Hermes and Wellington.
TSPC aims to make greening your pension as simple and streamlined as possible. First you will have a free phone consultation with a Financial Planner, which should take about 20-30 minutes. They will help you work out where your existing pension/s are, how they’ve performed so far and what your objectives are.
You will be asked to complete a risk assessment questionnaire, which will help TSPC to identify the most appropriate sustainable portfolio for you. After this you’ll need to complete some letters of authority to allow TSPC to move your old pensions.
At this stage, TSPC will assess whether or not you should consider transferring your pensions. This isn’t a given as they could have benefits that you won’t want to lose. Once you have agreed to go ahead, TSPC will do all the hard work for you and transfer your existing pensions over to your new plan.
You will then be given log in details for your personal online portal where you can track the performance and balance of your pension at any time.
To take out a pension with TSPC you must have total pension funds of at least £25,000 and be at least five years away from your chosen retirement age. You must also be a UK resident for tax purposes.
Sustainable investing option
All of TSPC’s funds are weighted towards positive impact funds. The higher the risk level of your chosen portfolio, the higher the percentage of positive impact investments it will contain. All TSPC funds invest in a broad range of companies which meet specific ESG (environmental, social and governance) standards. They focus on areas such as tackling climate change, decarbonisation, supporting companies to transition to sustainability and driving positive change through lobbying and stewardship.
TSPC does not currently have factsheets containing the top holdings of its portfolios available on its website, but these will be sent to you if you ask. As an example, the top holdings of the ‘balanced’ portfolio (this means its level of risk is medium) include the Wellington Global Impact Bond, Regnan Global Equity Impact Solutions and M&G Positive Impact.
TSPC focuses on ready-made portfolios to make investing your pension sustainably as easy as possible. Its sister company Aspirations is able to offer advice on any wider areas of financial planning to include the TSPC portfolios.
Unique selling points
- Phone-based service. While many pension providers are moving more towards a wholly online or app-based service, TSPC offers a more personal phone service from the start. This means you can talk through which portfolio (within their offering) suits your individual circumstances best before you commit, and make sure your chosen level of risk is appropriate for you.
- Set up for sustainability. TSPC was launched specifically to offer sustainable pensions. While other providers may have this as an additional offering, it is TSPC’s sole focus.
The plus points
- Competitive rates. Fees compare favourably to other sustainable pension providers (see below)
- Diversified investments. TSPC offers diversified portfolios, meaning that they invest across different countries and asset types (such as stocks and bonds) to keep risk down. They aim to invest for positive impact without compromising on returns.
- No exit penalties. You are free to move your pension at any time without charge.
- No detailed info about funds on website. If you want more information on the funds held in your chosen portfolio, you will need to ask for it as this isn’t currently available on the website.
- Not available for new pensions. TSPC is only for people transferring a minimum of £25,000 from other pension providers. Once it is more established, the aim is to also offer new accounts.
- Lack of meaningful track record. TSPC is very new so doesn’t have a track record on the performance of its portfolios. However, the funds held in its portfolios do, and are actively managed by experienced fund managers.
Cost of use
TSPC charges an initial fee of one per cent (with a minimum of £500 and capped at £5,000) of your pension balance and an ongoing financial planning fee of 0.4 per cent. There is also a fund management fee of one per cent per year, and a platform fee of between o.1 and 0.3 per cent per year.
This means the total annual fee for a pension with TSPC is between 1.5 and 1.7 per cent. Fees are paid directly from your pension fund.
How does this cost compare with competitors?
PensionBee charges 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.
Nest (National Employment Savings Trust) has a 0.3 per cent annual management charge as well as a 1.8 per cent charge on each contribution.
Similar ethical pensions worth considering are:
This article is in partnership with The Sustainable Pension Company