Launched in the UK in 2014, PensionBee has a bold promise for UK residents: simplify and streamline pensions. Worker pensions are essential for retirement, yet the current system has some problems, which we will discuss throughout this review. So far, PensionBee has amassed over 500,000 users and continues to sign people up every day. Is this platform one that you should use as well? Find out in our comprehensive PensionBee review.
PensionBee Review: What Problem Is This Platform Solving?
Worker pensions are a fundamental component of retirement. Many workers in the UK have them, but the problem is that they are tied to employers most of the time. That was ok when people started working at 20 and worked with the same company for 30 years – they would have a pension with that company and retire comfortably.
Times have changed, though. Now, it’s not uncommon for workers to bounce between jobs. People might stay at one position for a few years and then go to another, repeating this process for 30-40 years. They’ll leave behind them a string of pensions in different places.
Unfortunately, these multiple pensions present two problems for retirement:
- People forget about them! Tracking down all your old pensions – especially if they’re smaller ones – is a considerable pain come retirement. Plus, it’s easy to forget that you even have them, translating into lost income.
- If you have 5-10 companies on your resume by the end of your career, you may have 5-10 pensions. Invariably, you won’t have all your focus on each of these, so some will probably languish, perhaps in high-fee funds that wind up eating into your retirement!
PensionBee aims to solve this problem by helping customers trace their old pensions and consolidate them into one easy-to-use and manage pension through their innovative app. It is possible to trace pensions, but you still need to know what you want to do with them, even if you trace them. PensionBee not only traces them but also provides a consolidated pension for all your funds!
On paper, PensionBee provides an invaluable service to UK workers!
Sign up and when you transfer one pension or more, you’ll get £50 added to your new pension. (£40 referral reward and £10 tax top up.)
What Funds Does PensionBee Offer?
As is evident from this PensionBee review already, this platform makes it easy to consolidate your pensions. For prospective users, the question is: what funds does PensionBee offer?
There are seven funds that you can invest your money in with PensionBee:
- Tracker – invests your money in global shares, bonds, and cash. This option is a “generic” one that tries to follow the broader markets.
- Tailored – with this plan, your investments change as your age progresses. The idea behind this plan is that, as you age, your investment choices should become more conservative to protect capital.
- Fossil Fuel Free – for those more eco-conscious, this plan avoids investments in the fossil fuel and tobacco sectors and targets companies aligned with the Paris Agreement goals.
- 4Plus – this plan aims to achieve long-term growth of 4% above the cash rate through active management.
- Shariah – this fund picks companies approved by an independent Shariah committee.
- Preserve – the idea behind this fund is to make short-term investments into stable companies. As the name implies, the goal of this fund is to reduce risk and preserve capital.
- Pre-Annuity – lastly, this fund puts your money in bonds to provide you with returns that are roughly equal to purchasing an annuity. If you want to eventually buy an annuity with your funds, this might be the most suitable investment!
Ultimately, PensionBee offers quite a few different choices. You can pick plans that range from pretty aggressive to quite conservative. The inclusion of the Shariah and Fossil Fuel Free plans shows how much thought the owners of PensionBee have put into creating a genuinely inclusive platform!
Fees and Other Caveats
Some financial companies offer services that wind up having egregious fees. Fortunately, with PensionBee, this is not the case.
Management fees range from 0.5% for Tracker and Preserve to 0.95% for 4Plus and Shariah. The three other plans sit at about 0.7%. While these aren’t the least expensive fees in the business, overall, they are pretty competitive. Additionally, for any amount you have saved over £100,000, PensionBee halves the management fees.
As a quick example, let’s say you have £200,000 saved in Tracker. The first £100,000 would be subject to the 0.5% fee. That would be £500 per year. However, the £100,000 extra balance would only be subject to 0.25% for an additional £250. Therefore, the overall cost would be £750, or 0.375%.
Given that these are typically retirement funds (and often consolidated from multiple pensions), many people won’t be paying the total management fee, and the halved rates are particularly competitive in the marketplace!
There are no fees for transferring your pensions to PensionBee. Whether you have one or fifty pensions, PensionBee will consolidate them! The only possible way you may lose money in the transfer process is not through PensionBee at all – instead, your old provider may charge an exit fee. However, if this fee exceeds £10, PensionBee will notify you before completing the transaction.
Fascinatingly, there are also no fees to transfer out of PensionBee. In theory, you could use their service to consolidate everything and then transfer it all out – for free – to another provider the next day if you tried it and decided you didn’t like their platform.
All in all, it’s an incredibly cost-efficient way to save money for your retirement. Unlike SIPPs and other pension advisers, you pay an annual management fee with PensionBee. That helps keep your cash in your hands, not your advisers!
PensionBee Review: The App and the Process
Much of the allure of PensionBee is its simplicity. It’s a low-cost way to consolidate your pensions. This platform’s intuitive app and process are part of what makes it so easy.
Once you start the app, you can tell that it has been well-designed. You merely need to register, provide some information about yourself, the fund you want, and your previous pensions, and, once the money starts coming into your account, you can begin tracking it with the app.
The app itself is available for both iOS and Android devices. It features an incredibly minimalist design that is about as clean an aesthetic as we’ve seen on any financial app.
And it’s not just the app that is a pleasant experience either – the customer support options are fantastic. They make it easy to get whatever information you may need, from the status of your pension transfers to what the situation is with a contribution or withdrawal. Their customer support team is fast, friendly, and ready to help!
With a beautiful app, simple process, and minimal fees, it’s clear from this PensionBee review that this platform is the one to use for consolidating your pensions!
Three Additional Pros and One Drawback
There are some other, less-obvious benefits to PensionBee that we haven’t mentioned so far.
First, you can open a brand-new pension if you are self-employed. You’ll get a 25% tax bonus from the government when you pay your contributions. Please note that this is not unique to PensionBee. This perk exists for any self-employed pension in the UK.
Second, there’s a quick tool in the app where you can check to see if you are on track for retirement. And, if you are in a position to start making withdrawals, you can see what you’ll receive, what taxes you’ll pay, and what’s remaining. The app makes it easy to stay on top of your pension balances!
Finally, PensionBee does not manage the funds themselves. Instead, the seven funds you can invest in are products from big-name companies like HSBC and BlackRock. That means your money is secure. Your funds also have protection under the FSCS, so you’d get 100% of your money back if anything were to go wrong.
While PensionBee has a lot of pros, one flaw for those with a “do-it-yourself” mindset is that you have no investment decisions that you can make. You pick one of the plans, and that’s it. If you want to pick shares or funds yourself for your pension, PensionBee is not for you. Conversely, if you want something simple that can run on autopilot, PensionBee is perfect.
PensionBee Review: An Incredible Platform that Solves a Very Real Problem
PensionBee aims to solve an elementary but genuine problem for UK employees: having multiple small pensions from previous employers. And the company, solution, and app solve this problem nearly flawlessly. From registration to pension management, the brains behind this platform have created a world-class solution that almost every UK worker should consider. They even have the ability for self-employed people to join the party and get started with PensionBee (which, if they become employees in the future, they can always get those pensions back into PensionBee later).
The only real drawback is that you only have access to seven funds. They’re seven well-managed, relatively inexpensive funds, but if you want more hands-on control over your retirement money, PensionBee won’t give that to you.
However, if you want an easy, quick way to consolidate your pensions and ensure your retirement is in tip-top shape – as you can tell from this PensionBee review, this platform is unequivocally the way to go!