PensionsReviews

PensionBee Review (Best UK-Based Pension Manager?)

What Is PensionBee?

PensionBee is a UK-based company focused on making it easier to save for your pension. The app allows you to consolidate any old work pensions into a single pension fund that you can manage from one tidy looking platform.

PensionBee launched in 2014, founded by CEO Romi Savova and CTO Jonathan Lister-Parsons. Savova and Lister-Parsons were inspired to create the service after experiencing difficulties managing their pensions on traditional platforms. They claim that they have taken the entire pension process, which can normally take weeks or months to set up, and compressed it so you can set up an account in just 5 minutes.

Since launching, PensionBee has become popular with Brits as an easy way to save for and manage pensions. It includes money managers from some of the world’s largest financial institutions, including HSBC, Legal & General, State Street Global Advisors, and BlackRock. The company’s tagline reads “Honesty, Innovation, Quality, Simplicity, Love.”

Should You Get PensionBee? Is It Right for You?

PensionBee offers a simplified approach to saving that is best suited if you are focused on building your pension. PensionBee could be right if you are:

  • Trying to consolidate older work-sponsored pensions
  • You want to focus on building portfolio wealth
  • You don’t want to deal with the hassle of an actively managed pension
  • You want a selection of pre-built pension plans to choose from

How Does PensionBee Work?

Typically, people in the UK only encounter pensions in the context of work-sponsored pension plans (though SIPPs are becoming much more popular with younger crowds). As people change jobs over the years, the result is that they end up having a bunch of cash wrapped up in previous employer-sponsored pension schemes.

A lot of people just forget about these pots and let them languish in poorly managed accounts. Even worse, it can be a massive hassle to track down lost pension funds and figure out what to do with them.

That’s where PensionBee comes in. PensionBee has been praised due to its simplified approach to consolidating and saving for pensions. They let you collect all of those loose pensions funds floating around and consolidate them into a single competitively priced pension plan.  

All you need to provide is some basic information about your old pensions, and the platform will then transfer them over to one of your plans. Their plans are looked after by some of the world’s largest money managers (State Street Global Advisors, HSBC, BlackRock and Legal & General).

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PensionBee has several different pension funds, including Tracker, Match, Tailored, and Future World, among others. Each fund has slightly different assets and a slightly different focus, though managers make sure that funds are properly diversified. Some plans, such as the BlackRock funds, have access to alternative assets including property and commodities.

Let’s look at some numbers to see the asset allocations of different plans. We will compare the Tracker and Match plans, which are the two most popular kinds of PensionBee plans.

  • UK Equities:
    • Tracker: 39.4%
    • Match: 13.25%
  • European Equities
    • Tracker: 13.30
    • Match: 13.25%
  • North American Equities:
    • Tracker: 13.32%
    • Match: 18.19%
  • Asian Equities (ex. Japan)
    • Tracker: 6.63%
    • Match: 4.91%
  • Japan
    • Tracker: 6.64%
    • Match: 4.91%
  • UK Bonds:
    • Tracker: 6.08%
    • Match: 4.76%

And so on.

As you can see, the Tracker plan focuses a plurality of assets in domestic equities, while the Tracker fund is more evenly spread across global equities and bonds.

Notably, the Tracker plan does not allocate any funds to global bonds, while the Match plan does not allocate any assets to UK Gilts or Index-linked gifts.

Other plans might have different asset allocations. For example, the Future World plan focuses its effort entirely on investing in equities, while excluding low-risk assets such as bonds, cash, and gifts. This portfolio is geared towards those who want to maximize their investment returns while also focusing on environmentally responsible investing with companies that have low carbon-emissions and green tech.

The Tailoring plan is probably the most flexible and is set up to decrease risky investments as you age. This plan will automatically re-allocate asset risk ratios as you get closer to the designated retirement age.

The bottom line is that PensionBee offers a ton of great options for different kinds of investors. The best part is that they take care of the boring slog of tracking down your old pension funds and depositing them into your account. Once you identify your pension plan and give the required information, you don’t have to do a thing.

Once your pension is set up, you can manage everything from the mobile app. The app has a clean interface. From the app, you can view your current pension status and make ad hoc investments.

Is PensionBee Legit?

The big question: Is PensionBee safe? Is the company legit?

The answer: Yes, PensionBee is a legitimate organization and your money is 100% secure with them. PensionBee has been independently verified by the UK’s Cyber Essentials Scheme and they use the most up-to-date bank-level security protocols to encrypt your information. PensionBee takes great pains to verify personal information to prevent fraud and unauthorized account access.

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No security system is 100% secure though. That’s why PensionBee has up to 100% FSCS protection. That means if something goes wrong, 100% of your investments will be insured. Keep in mind that this provision does not include losses incurred due to poorly performing investments.

As mentioned above, their team of money managers include some of the most reputable names in the industry. Funds are not actively managed, but the algorithms used are top-of-the-line and include the latest in economic models.

Given that PensionBee is still fairly new, there is not enough historical data to make a solid estimate of the average portfolio performance. The company has some fact sheets which say that their average 1-year performance on the Tracker fund is 9.33% and 22.11% 3-year performance.

Given that the 1-year and 3-year average benchmarks for passively managed funds are 10.45% and 24.73%, PensionBee’s returns are slightly lower than average. However, their plans usually manage to outperform actively managed funds with a similar portfolio structure.

What Fees & Charges Does PensionBee Have?

Like most money management services, the majority of PensionBee’s revenue is generated from account fees and management fees. PensionBee charges a 0.50%-0.95% annual account fee, depending on the plan. For instance, the Tracker plan has a 0.50% annual fee and the Tailored plan has a 0.70% annual fee. They will halve this fee for accounts with more than £100,000. These are pretty decent rates compared to a lot of other pension management services.

Other than that though, PensionBee does not have any fees. They are not an advisory service, so they do not charge for financial advising, and there are no hidden fees or upsells. They do not charge to consolidate your old pension plans and there is no charge for withdrawals and deposits.

There is one exception to the above rule about withdrawal fees. If you withdraw all of your funds within 12 months, they will charge a £480 fee. Technically, they do charge transaction fees (all investment transactions have a fee, regardless of the organization), but those are incorporated into the value of your pension so you don’t have to actively deal with them.

What Else Does PensionBee Do?

This is one area where PensionBee falls short. They are excellent with managing pensions, but they don’t really do anything else. They are not an advisory company, so they do not offer financial advice, and then can’t help you with salary transfers. So if you are looking for a financial advisor, you will have to look elsewhere.

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What Are People Saying About PensionBee?

PensionBee has been very well received in its 6 years of existence. Consumers praise the simple approach to pension saving and for taking the hassle out of lost pension funds. The focus on consolidating pensions takes the stress out of saving and all funds are passively managed so you don’t have to worry about your money being irresponsibly invested.

Don’t take it from us though: PensionBee has some great word-of-mouth on the web. We checked out PensionBee’s Trustpilot page and they have an extremely high 4.6/5 average rating from almost 2,000 customer reviews. Most reviews praise the simple process and claim that everything worked smoothly.

What Are the Benefits of PensionBee?

  • Fast and easy pension consolidation
  • Low fees
  • Extremely low-hassle investing
  • Minimal fees
  • Excellent customer service and high customer ratings
  • Clear pricing structure
  • Decent investment performance

What Are the Drawbacks of PensionBee?

  • No advisory services
  • No real investment decisions; plans are more-or-less pre-built
  • Regular withdrawals can rack up lots of fees in certain circumstances

Our Verdict

PensionBee has some fantastic strengths and relatively few weaknesses. The simplified pension scheme is a god-send for tracking down missing pension funds and they have a decent selection of pre-built plans with good diversification and performance track records. The one drawback is that they don’t offer advisory services. To be fair, they are not an advisory company, so it’s not a huge flaw. Otherwise, PensionBee can be a smart new method of consolidating and saving for retirement.

Tom
About author

Fully qualified CISI Investment adviser for 5 year. Managed UK private client portfolios.
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