Consolidating your pension pots into a single retirement pot can give you more control over how your investments are invested. PensionBee is one of the few companies that offers this vital service. In this PensionBee review, we will look at the main features of PensionBee, the cost, and various pros and cons.
Should I Combine My Pensions?
It’s not uncommon for people to have multiple pensions. There could be several different reasons for this: you could have started working from an early age, you may have changed employment several times throughout your career, or several employers might have offered you a pension as a reward for your employment. Whatever the reason for your multiple pensions, it’s important to ensure that this money is invested safely and is being used as efficiently as possible.
Note: The government won’t allow you to move a pension with guaranteed benefits over £30,000. If your pension meets this criteria, you will need to get financial advice before consolidating it.
Easier To Keep Track
Pensions can be difficult to keep track of if you have several small individual pots. It’s easy to get confused over which pension fund is from which time in your life, their different investment plans, and their different fees. All of which play a massive part in the success of your pension pot over the years.
Pensions are important to your future, but tracking them can be time-consuming and stressful. Consolidating your pensions into one pot can save you time, and money!
Consolidating your pensions can even make it easier for family members to access your pension benefits in the event of your death.
Pay Less in Fees
When you have multiple pension pots, it can be difficult to track how much you are paying in fees each month. If you are paying multiple companies to manage your pensions, you are likely paying a lot more in fees than necessary.
If your pension pots are smaller, fees can quickly eat into any returns the investments might be experiencing. A friend of mine recently went to check a pension pot she had from an old employer, and it was actually losing value! The fees were eating away at the money both earned, and money she had put in while at that employer.
The easiest way to save on fees is to consolidate your pensions into one pot, so instead of paying multiple fees, you just pay the one. Ultimately saving your money, and giving your pension the best chance to grow before retirement.
Make Ethical Choices
Do you know what your pension fund is being invested in? If you don’t know, how can you be sure that your money is working for you in a way which aligns with your personal beliefs and aims?
Your annual pension statement should tell you where the fund is invested. Most workplace pension providers have ethical investment funds available to their clients. However, you are unlikely to be allocated this fund unless you specifically request it.
If you use your money to reward companies with good environmental, social, and governance standards, you could improve society. That’s because it encourages companies to consider the environmental and social impact of their business practices.
Additionally, sustainable funds did well when the market fell sharply at the beginning of the coronavirus crisis. Since they are exposed to fewer sectors that were badly affected by the sudden shock, they may retain their resilience in years to come.
Pension investing tends to be for the long term, so responsible investing can help assure that your portfolio’s value does not fall too much if there are future adverse events during its lifetime.
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How To Find Old Pensions
There are an estimated 1.6 million unclaimed pension pots in the UK. According to a recent study by The Association of British Insurers (ABI), only 1 in 25 people remember to tell their pension provider when they move house. So it’s not surprising that, over the years, people lose track of their old pensions.
As you accumulate more pension plans, losing one becomes more likely. If you think you might have a pension with a previous employer and have lost track of it, contact your previous employer. If you no longer have any contact details for them, the Government’s free pension tracing service may be able to help you find them.
Your chance of finding a lost pension is usually higher if you provide as much information as possible, so make sure you include your full name (and any previous names), your date of birth, and your recent addresses.
That said, this will not tell you how much your old pension is currently worth, how it is performing, or what pension options you have at 55 (rising to 57 from 2028), so be sure to contact your pension provider as well.
PensionBee Review:
Founded in 2014 after the founder, Romi attempts to move her old workplace pension and found the whole process troublesome. PensionBee offers a simple solution to a complex financial problem.
They consolidate all your old pensions into one place. Reducing the potential for charges and simplifies drawdown later on in life.
PensionBee’s pension finder tool helps you bring all your pots together into one, easy-to-manage pension pot. Not only can you manage your pension from the easy-to-use PensionBee website, but you can also use the Pension Bee App! They also have a nifty Pension Bee Calculator to see if you’re on track with your pension savings.
PensionBee Plans
PensionBee offers nine pension funds to its customers:
Tailored Plan
This is the most popular fund as it changes up the investment strategy as you age to create more risk during your younger years and automatically moves to a more low-risk strategy once you start approaching retirement.
>> CLICK HERE TO JOIN PENSIONBEE TODAY AND GET £50 ADDED TO YOUR PENSION! <<
Tracker Plan
The Tracker plan invests your money in the world markets and is considered the ‘fix it and forget it’ pension. The mix includes 80% equities, 15% fixed income, and 5% cash. However, this plan’s risk profile is on the higher end (5 on a scale of 7), but it is PensionBee’s lowest-cost plan.
4Plus
The 4Plus plan simply aims to grow your pension pot by 4% per year.
Future World
Future World is an environmental portfolio that chooses investments in companies with low-carbon emissions and opportunities in green tech. The portfolio is heavily weighted in equities, and 49% of it is invested in the North American markets.
This plan is the highest risk of the funds on offer, at a 9 out of 10. It is also among the more expensive plans, but this is common among green or ethical funds.
Shariah
The plan will only invest your money in Shariah-compliant companies approved by an independent Shariah committee. The investment is 100% equity-based. It is expensive, but it’s actively managed and hard to find something equivalent in the UK market.
Preserve
Preserve is a portfolio for the risk-averse. It invests in creditworthy companies, but it only uses a short-term scheme. This plan is very low risk but also generates very low returns.
Match
Match is a portfolio that mimics the pension industry in general. PensionBee describes Match as an automated way of following the ‘smart money’.
Fossil Free
The Fossil Fuel Free plan excludes producers of fossil fuels, tobacco companies, manufacturers of controversial weapons, and those who violate the UN Global Compact. If you are looking for a high-risk investment with a potentially high reward, then this is the fund for you.
Pre-Annuity
This plan provides returns comparable to the cost of buying an annuity and the fund invests in low-risk Bonds.
PensionBee Fees & Charges
You might be wondering whether PensionBee costs anything…
When you’re saving for retirement, be sure to check all the fees on your investments. High charges can start to erode your pension fund sooner than you expected. PensionBee aims to give users a simple and low-cost way to deal with their pensions.
The main cost you want to keep an eye on in a pension product is the annual management fee. The annual management costs range between 0.50% and 0.95% and the costs depend on the type of plan you choose. The full annual management fee applies to the first £100,000 only. If you save over £100,000, you’ll only be charged half of the fee on the portion of your savings over £100,000.
The fee is automatically deducted daily, so you don’t have to go through a massive hit in your account at the end of the financial year. It is gradual, which is one reason why new savers may find it reassuring.
PensionBee won’t charge you to transfer, combine, contribute to, or withdraw funds.
But, of course, there may be exceptions to this rule. If you move your pension to PensionBee and then withdraw your entire pension within 12 months, you’ll pay £480 in exit costs. Encouraging you to draw down over time rather than grabbing all your money and running.
Transaction costs are also unavoidable, and they’re the same no matter where you put your pension.
On PensionBee, you can easily see how projected charges will impact your pension pot by using their handy visual.
>> CLICK HERE TO JOIN PENSIONBEE TODAY AND GET £50 ADDED TO YOUR PENSION! <<
Can PensionBee Be Trusted?
How safe is PensionBee? Well, when you invest in the markets, there is always a risk that your money will be affected by the ups and downs of the market. However, PensionBee is a safe pension provider and has authorisation from the Financial Conduct Authority to provide pension services in the UK.
PensionBee Alternatives
Finding a pension provider that works for you is important, as it can have a direct impact on your retirement savings. In a global marketplace, there are many providers to choose from — some of which may offer better retirement plans and benefits than others.
If you’ve had a look through this PensionBee Review and decided it might not be for you, or that you want to explore some other options, why not take a look at some of the companies below.
Nutmeg
Penfold
Hargreaves Lansdown
AJ Bell You Invest
Scottish Widows
Wealthify
… and more, just google ‘where to combine my pension’ to see all the options.
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