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PensionBee Review

as of 27/08/2020 at 10:32 am

Holly's View

This is a simple to use, modern pension which feels different from the start. Onboarding is relatively quick and easy and there is a strong sense of the ‘personal’, with ‘BeeKeepers’ allocated as client service managers to help customers throughout the transfer process. Language is kept simple throughout, charges can be illustrated as £s or %s – and the proposition feels much more customer-focussed than traditional incumbents.

Our Rating

How our ratings work

We score each provider on about 20 different criteria including cost, service, website, functionality, customer feedback and our experience of the service. All overseen by our PhD gonk!

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Recommended For

Beginner Investor

Confident Investor

In a nutshell

Brings pensions together

Nice digital service

Limited investment

Visit PensionBee

You Say

Your overall rating

How Your Ratings Work

Don’t want to take our word for it? We ask existing customers and investors to rate their experience with the company – based on value for money, overall service and the website. We need at least 20 customer reviews before we add anyone to our Best Buys list.

Based on 61 reviews

Your Reviews

View all reviews

What to Expect

  1. Best Buy 2020
  2. Ease of use
  3. Mobile and apps
  4. Behind the scenes

Best Buy Pension
Very strong customer ratings and decent on costs.

Best Buy for Beginner Investors
Strong customer rankings and decent charges for ‘ready-made’ options.

Best Buy for Sustainable Investors
They have a clear option for a ‘Future World’ plan which is clearly presented to customers – this Legal & General-managed account focusses on a move to a lower carbon economy.

This is a nice digital service which works simply and well online, with a decent app too. Pricing information is easy to find and the language is clear and easy enough to follow. And there are useful short videos to help navigate your way around. 
 
Service is relatively good with live chat availability and an attentive customer service team. 

The site is clear and easy to use. Navigation is intuitive and the information does not overload. The app is much improved, enabling customers to sign up, add money and trade, which is much more functional than its previous state – essentially a basic reporting tool.

There are three main investment options for customers. This is not for investment enthusiasts but for those after a simple life. What is unusual in this service is the simplicity which flows through everything. Some will find this delightful. Others will find it lacking. 

Investment Choice

Products

Pension

Investments available

Funds from other groups

Ethical investments

Investment help

Robo advice / ready-made portfolios

The 'Geeky' Details

Provider details

Once PensionBee has aggregated all your pensions into one single pot (or 'hive'?) then your money will be invested in one of their 7 plan options. These are all funds managed by global giants State Street, BlackRock, and Legal & General.  
 
The State Street option is a low-cost tracker fund which invests into major global markets. The BlackRock 'tailored' option is what's known as a target date fund - the idea being that the closer you get to retirement, the more they dial down the riskier assets such as shares, to avoid any sharp falls just before you might want to cash your investments in. And the L&G option is a climate-conscious plan which invests in nearly 2,000 shares from around the world, picking those with low carbon impact and also excluding controversial weapons.  
 
Costs range from 0.5% a year to 0.95% a year depending on the investment pick you make. 

Important Facts & Figures

Provider Size:

Small start-up but has some big friends under the bonnet
Minimum amounts:
£0 minimum investment

Your Questions

"Hi, I'm trying to choose an 80/20 low cost tracker fund to transfer my pension to, as I'm currently paying 1% fees to my provider which I want to save on. Does the performance of different tracker funds vary a lot (e.g. between PensionBee, Nutmeg, AJ Bell) and how do I compare their track records? Many thanks, Vivienne"

Vivienne, London

22/07/2020

Read our reply

Your question

Hi, I'm trying to choose an 80/20 low cost tracker fund to transfer my pension to, as I'm currently paying 1% fees to my provider which I want to save on. Does the performance of different tracker funds vary a lot (e.g. between PensionBee, Nutmeg, AJ Bell) and how do I compare their track records? Many thanks, Vivienne

Vivienne, London

22/07/2020

Holly Mackay says

Hi Vivienne,

 

Thanks for your question. The short answer to your first question about PensionBee, Nutmeg, & AJ Bell Youinvest - is yes, the performance between the various investment solutions you name does vary quite a lot.

In theory the very definition of a tracker fund is that it mirrors an index. So for retail investors, anything tracking the FTSE 100 for example will basically return you the same. That's the theory.

In reality, the sorts of options you mention will typically offer about five choices, which will differ in volatility and the percentage of shares in the portfolios. However, one provider's most volatile portfolio might have 95% of shares in it for example, while another provider's might have 80%. So it can be very difficult to compare like with like.

The other thing is that even if you compare two investment portfolios which both have 80% in shares, the underlying geographies will probably be different. We've seen examples over the last few years where groups have taken very different positions on US equities and have consequently had very different results.

These sorts of ready made investment options are relatively new in the market and very few have meaningful track records yet. A track record of less than a year is monkey and a dart board kind of stuff. I think you really need to see a track record of five years to evidence skill over luck, and none of these guys really have these long track records.

So, the long answer is that it is very hard to make a decision about these providers on an informed and reliable performance basis.

I would use our Compare pages to help you identify two or three you like the look of, and then visit their sites to see what the precise make up of their 80/20 portfolios is - and go from there.

Additionally, this article which was run in June's Telegraph may be helpful to you.

 

Good luck and I'm sorry I don't have a more concrete answer!

Holly

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

"Hello there, I’m 41 years old and have recently become a full time freelancer. I want to continue to pay into a pension and am looking at signing up to PensionBee. I’ve got about five different pension pots floating around, which I know either I or they can track down. My main concern is this - I’m always being told that my Civil Service pension is a great thing to have (I was a teacher for a year and then had a different Civil Service pension for about two years) and so will I lose out by transferring it to a new place? By the way, I am loving Boring Money! I’m really keen to start taking control of my finances and it’s proving so helpful... not making me feel like a clown for not understanding all the financial faffery! Thanks!"

Hannah, Herefordshire

08/07/2019

Read our reply

Your question

Hello there, I’m 41 years old and have recently become a full time freelancer. I want to continue to pay into a pension and am looking at signing up to PensionBee. I’ve got about five different pension pots floating around, which I know either I or they can track down. My main concern is this - I’m always being told that my Civil Service pension is a great thing to have (I was a teacher for a year and then had a different Civil Service pension for about two years) and so will I lose out by transferring it to a new place? By the way, I am loving Boring Money! I’m really keen to start taking control of my finances and it’s proving so helpful... not making me feel like a clown for not understanding all the financial faffery! Thanks!

Hannah, Herefordshire

08/07/2019

Helena Wardle says

Hi Hannah,

Great question and I am happy to give you some guidance and help, but without knowing more about you it’s difficult to personalise this.

Safe and secure

Your Civil Service pension is a ‘promised income’ at retirement, based on your salary and years of service with the employer, instead of being a pot with a fund value - unless you transfer it.

These types of pensions are seen as safe, secure pensions without any risk. To buy the same benefits elsewhere in retirement will almost always require a bigger pot than what the transfer value will offer you when you transfer.

So in answer to your question, you are likely to lose out on what is considered valuable benefits if you transferred.

However...

In some instances it can make sense for some people to transfer these types of pensions. If you are only doing this to consolidate your pensions, I would not normally consider this as a good reason to transfer a secure pension, particularly when you are not close to retirement age.

The civil service statement will normally quote you an annual income that you have built up by the time you leave, and this will usually go up by inflation between now and when you retire.

You can’t access the pension before retirement, so is it worth thinking about whether you need to make any decisions on this pension now?

I hope this helps,

Helena

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

"I am a beginner investor and would like to invest in a "socially responsible" Stocks & Shares ISA. I have looked into the Nutmeg and Wealthify funds, having found out about them through the Money Saving Expert website. Is there information about any other such providers on your website? And do you have any advice about how to compare the "socially responsible" criteria on the different funds?"

Joy, Glamorgan

16/04/2019

Read our reply

Your question

I am a beginner investor and would like to invest in a "socially responsible" Stocks & Shares ISA. I have looked into the Nutmeg and Wealthify funds, having found out about them through the Money Saving Expert website. Is there information about any other such providers on your website? And do you have any advice about how to compare the "socially responsible" criteria on the different funds?

Joy, Glamorgan

16/04/2019

Phoebe Smith says

Hi Joy,

Great to hear that you're eager start investing, and are particularly interested in ethical/socially responsible investing. 

This is an area of the investment world that has been seeing a lot of interest recently. More platforms are introducing ethical ESG (Environmental, Social and Governance) options for their customers to choose from.

 

Why invest ethically?

There are many naysayers who dislike ethical investing because they feel that, while being a nice tree-hugging hippy thing to do, your investment returns will be poorer for it. However with the UN’s Intergovernmental Panel on Climate Change warning in October 2018, that we only have 12 years to bring global warming under control and avoid a 'climate catastrophe' - the support for ethical is growing. 

As is the performance of the ethical options which already exist. If we look at three different funds ranging from ethical to not-so-ethical, we can see that ethical performance has been on the up ever since 2014. (For more detail - take a look at our full article).

  • FTSE4Good Global - which only includes socially responsible businesses
  • FTSE All Share - which tracks the entire investment market: good, bad and ugly
  • The Vice Fund - which invests in tobacco, gambling, booze and weapons

While the Vice Fund doubled investors’ money in its first five years (2002–2007), by the start of 2019 the FTSE4Good was the leading fund of these three. It even beat the benchmark set by the all-encompassing FTSE All Share.

This just goes to show the naysayers, that you don’t have to sacrifice returns anymore to invest in the future of the planet. But then again, nothing with the stock market is ever certain.

 

More info on ethical investing

As we are pretty interested in ethical investing here at Boring Money (having written a report all about it in 2018), our Best Buys page and a few of our articles might be helpful to you. Why not take a look at:

Our Best Buys page - use our 'ethical investments' filter to whittle down the list providers to just those who market their own ethical options. As of April 2019, the only providers on our Best Buys page who offer ethical options are: Vanguard, Nutmeg, Wealthify, PensionBee, Barclays Smart Investor, Wealthsimple, and Moola.

Of these ethical options, we review all seven as suitable for beginner investors. However you can filter them again, using other filters such as: 'Low cost for small portfolios (<50k)' and 'Start with £100 or less', to find the best providers for you to explore further.

 

How to compare 'socially responsible' criteria

There is a lot of confusion about what counts as 'socially responsible', ‘ethical’ or 'ESG'. Some of this is due to the fact that one person’s ethics are not always in line with another’s.

  • Negative screening - Most investors think of ethical investing as just blacklisting certain types of companies or industries from their portfolio - according to our research, consumers most want to avoid: arms, tobacco, gambling and pornography.
  • Impact investing – where money is actively funnelled towards certain projects to support positive change – is less recognised, but once offered to people it is more popular than blacklisting. Our survey respondents named healthcare, green energy and sustainable agriculture as the areas they most wanted to see their money put to positive use.

Unfortunately, because of the relative youth of ethical investing, and all the confusion over how to define 'ethical' options, there is currently no easy way to compare the ethical options out there. Beyond reading up on them and doing your homework, there's no quick way to see at a glance how one ethical investing option differs from another. You just need to comb through the details yourself, and see how these ethical options measure up to your ideas of what 'ethical investing' means.

This being said, Morningstar are working toward creating a tool which could be really helpful for investors who'd like to do this. And we are hoping to have the functionality to help readers compare ethical investing products in the future. Unfortunately though, these projects are still in development.

Meanwhile, some investment platforms such as Fidelity, do offer investors helpful info to help them find out more about the ethical funds on their platform.

Take a look at the bottom of this page, to see the top 10 most bought and sold ESG funds on the Fidelity website in February 2019: www.fidelity.co.uk/funds/esg-investing

 

Hope this helps!

Phoebe

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

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