PensionBee: Pricey but makes setting up a pension easy as can bee

If you’ve been putting off sorting out your pension because of the time and effort you’re anticipating, then this might well be the solution you’ve been looking for. Within a few short minutes you can tick ‘set up a pension’ off your to-do list.

However, for not much more effort, you historically could have achieved better returns elsewhere and your pension pot would now be bigger. At Moneybox, for example, you’d have achieved 133% average returns over the past 5 years vs PensionBee’s 54%. Replicated over 10 or 20 years, that could mean the difference between the retirement of your dreams and… well, a retirement that isn’t the one you’re dreaming of.

PensionBee’s big selling point really is that it provides everything in one place, giving you control over your retirement pot at the click of a button. It is, therefore, a good option for those who might not otherwise get a pension sorted – younger savers, busy self-employed people, and those who have bits of paperwork relating to old workplace pensions stuffed in a drawer somewhere and little idea of what they’ve saved overall, or where it’s invested. (No judgment here; I also have the drawer.)

However, be aware, in simplifying the process, PensionBee takes away the responsibility for picking which individual funds and stocks you want to invest in. Great if you don’t want that responsibility; not so great if you like to have control over how your savings are invested. If you want to make those kinds of decisions yourself, you’re better off with a A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundSelf-Invested Personal Pension (SIPP). For our picks of the best SIPPs, head over to this page.

Personal pension

PensionBee is a personal pension – not to be confused with a A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundSIPP. Personal pensions are best suited to people who prefer a hands-off approach to pension saving, whereas SIPPs are better suited to those who like to choose their own investment assets (picking individual stocks, for example).

After signing up, you’ll be given a choice of eight different plans. There is just one risk level within each plan. This is pretty much the only big decision you’ll need to make with a PensionBee pension and, as you have no choice but to pick a fund (it’s all that’s offered) it’s well worth spending some time thinking about which is the most appropriate plan for your:

• risk profile
• retirement goals
• Timeline (your intended retirement date)

The other factor you may wish to consider in choosing your pension fund is its historical performance. While past performance is not a guarantee of future returns, it can provide some valuable information on how funds are managed. We’ve done our own analysis here.

These are the eight funds PensionBee offers:

Tailored (default plan)

Managed by BlackRock. The Tailored Plan is PensionBee’s default option. It is a target date fund that invests your money differently as you go through life. Suitable for savers who don’t want to make regular investment decisions and would rather leave it to the professionals.

Tracker

Managed by State Street Global Advisors. This medium-risk plan will invest your money into a mix of assets, including equities and bonds. Suitable for anyone who wants a cost-effective ‘set and forget’ investment.

Fossil Fuel Free

Managed by Legal & General. This higher-risk plan will invest the majority of your money into equities. Crucially, it will exclude the fossil fuel and tobacco sectors while only investing your money in companies aligned with the Paris Agreement goals. Suitable for: anyone who values environmental responsibility.

4Plus

Invests your money in a range of assets that are adjusted on a weekly basis, depending on market conditions, by experts at State Street Global Advisors. This is a medium-risk plan. Suitable for anyone who is considering accessing their pension in the near to medium term and wishes for their returns to be actively managed by experts in the meantime.

Impact

Managed by BlackRock. Actively invests only in companies addressing the world’s great social and environmental needs whilst saving for your retirement. A higher-risk plan investing the majority of your money in equities.

Shariah

Managed by HSBC Global Asset Management and State Street Global Advisors. This higher-risk plan invests your money only into Shariah-compliant companies.

Preserve

Managed by State Street Global Advisors. A low-risk plan that invests more of your funds into assets which typically experience smaller fluctuations in their value, such as bonds. Suitable for anyone wanting a lower-risk plan with more modest returns.

Pre-annuity

Managed by State Street Global Advisors. A higher-risk plan. Invests your money in bonds to provide you with returns that broadly correspond to the cost of purchasing an annuity.

You’ll notice that some of the world’s biggest money managers look after PensionBee customers’ investments – a comfort if you are worried about trusting your life savings to a less well-established brand than the likes of Vanguard and Fidelity.

And another positive – switching between plans is simple and can be done at any time, so you’re not stuck with the fund you chose on day one if you change your mind or strategy. One click in the portal and it’s done.

Important: With investments, your capital is at risk. Pensions can go down in value as well as up, so you could get back less than you invest.

Pension tracking and consolidation

PensionBee offers a pension consolidation service, locating and transferring all your existing pensions held with other providers. This is especially useful if you’ve changed jobs and have multiple workplace pensions. It isn’t something many other providers offer any more. Quite often you’ll find yourself redirected to the government’s free pension tracing service so if you’re looking for someone to do the job for you – for free – PensionBee could be the answer as long as you have at least the pension provider’s name

Tip: If you don’t know which providers your pensions are with, or what pensions you have, use the UK government’s free pension tracing service. It’s designed to find lost pensions.

It’s extremely simple to apply for a transfer. I applied to transfer in a small pension pot from a job I was only in for a short time, and which had been languishing in an account I’d not looked at for years. The application process took just 5 minutes and, although PensionBee can trace pensions without your policy number, I did have that information, which meant it was likely to be found more quickly. PensionBee does state that the more information you have the better. I was asked for the provider’s name and policy number (optional). I was also given the opportunity to say if my name or address had changed since opening the pension.

PensionBee is one of the few companies to provide absolute transparency on their average transfer times (10 days) and this is an extremely impressive average – far quicker than competitors. My transfer took longer, although this was not caused by PensionBee, but by a complication that my previous provider required copious amounts of paperwork from me to get around.

There are no fees for using this tracking and consolidation service and – one additional thing I really liked – I was able to check in on progress thanks to a nice ‘transfer status’ graphic in my portal.

Life insurance

PensionBee started offering Life Insurance in May 2023. Through a partnership with tech-driven life protection specialist, LifeSearch, PensionBee customers can now purchase fully digital mortgage and family life insurance, in addition to critical illness cover. It’s accessible via a simple compare, apply and buy online process, and LifeSearch provides expert advisers who are available if you want to talk through your needs or gain some guidance.

As PensionBee invests on behalf of customers via pooled funds, savers using the Tracker, Fossil Fuel Free, 4Plus, Preserve, Shariah, Pre-Annuity and Impact Plans are not entitled to any voting rights.

Investors in the Tailored plan have the opportunity to use ‘Voting Choice’ which is a global BlackRock initiative to allow clients to exercise proxy voting.

Mobile platform

The PensionBee app is second to none. You can manage and track your pension, check how much you have saved and monitor the progress of your transfers all from your device. It’s a well-designed platform that is laser-focused on usability and simplicity. I can’t fault it.

The app is available on iOS and Android. On the Google Play store, it scores a comforting 4.5/5.

Web platform

Unlike some other neo-investment apps (I’m thinking of Dodl and Penfold), you’re also given the chance to access your account via the web as a PensionBee customer.
The PensionBee web platform is also easy to navigate with a beautifully clean and simple-to-use interface. You’d be hard-pressed to find a platform that is optimised for such a good user experience.

By logging in to your account, you can see the status of any pending transfers, and monitor the live balance of your pension with just one click. It’s just as easy to see how your pension fund is performing under the ‘Analytics’ tab.

Tip: You should think of your pension as a long-term investment. As such, you can reasonably expect to see its value go up and down over time, in line with broader market movements.

If you see the value of your pension falling, don’t panic or make rash decisions. PensionBee doesn’t offer personal financial advice so if you find yourself unsure about what to do, seek advice from a qualified financial adviser or financial planner.

Personal pension

PensionBee charges an annual fee as a percentage of your total pension pot value, which is automatically deducted from your pension pot. The fee varies according to how much you have in your pension pot:

For pensions under £100,000 you’ll pay one annual fee of 0.50 – 0.95%, depending on which plan you choose:

When your pot size is larger than £100,000 the portion of your savings over this amount are halved.

For example, on a pot of £150,000, your fees would be:

Fees on a £1m pension pot would be:

There are two things I like about PensionBee’s fees. Firstly, they are all-in. So you don’t have fund fees on top as you do with many other providers (they’re to be expected with SIPPs). And secondly, the fees are low.

A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundSIPPs are generally cheaper than personal pensions because they are more of a DIY option. Vanguard’s ultra-low priced SIPP starts from just 0.15% per annum with fund charges of 0.06% to 0.78%, for example. But, for a personal pension, where you are essentially handing over all the responsibility for investment choices to a panel of experts instead, PensionBee is well-priced.

Withdrawal fees

There are no fees for transferring in or out of your PensionBee account, and no exit fees for closing your account.

Drawing down

Drawing down your pension is completely free with PensionBee once you reach pensionable age – that’s 55 at present but rises to 57 on 6 April 2028. But if you decide to withdraw 100% of your balance within 12 months of having a live balance, or the balance of your account is less than £150, you will find yourself having to pay a £150 withdrawal fee.

Remember: Once you turn 55, you’ll be able to withdraw up to 25% of your pension tax-free from your personal or workplace pensions. But for withdrawals made on the remaining 75% of your pensions, you’ll be charged at your normal income tax rate.

Deposit fees

It’s free to make contributions into your PensionBee pension.

Minimum deposit

There are no minimum contribution amounts. You can save any amount into your pension, as often as you like.

Interest paid on cash

You won’t receive interest on any cash held in your PensionBee accounts at any time, including before it’s been invested so make sure it’s invested and working hard to earn you a return.

Please note: all published fees are correct at time of publishing. However, we suggest checking Penfold’s website for the most up-to-date figures.

PensionBee is designed to make saving for retirement simple. It’s not set up for those who want to choose individual assets within their portfolio and, as such, there’s not much need to provide advanced research tools for PensionBee customers.

In my view, PensionBee gets the balance about right – providing clear, detailed information on the differences between its five funds and the various risk levels without drowning users in data. For those who want a bit more depth of information, PensionBee provides links to the BlackRock and HSBC websites where users can get extensive data on the make-up of funds in which each plan invests, and the funds’ historical performance.

When selecting a provider for your investments, it is very important to first ensure they meet certain minimum safety standards. We judge PensionBee to meet the threshold for a ‘safe’ provider because:

• PensionBee is regulated and authorised by the UK Financial Conduct Authority (FCA)
• PensionBee is listed on the London Stock Exchange (PBEE:LSE)
• The holdings in the PensionBee Personal Pension are structured as long-term insurance contracts, which means that if something happens to the money managers of your pension assets, and the Financial Services Compensation Scheme (FSCS) accepts the claim, they would cover the pension at 100% with no upper cap. Because PensionBee has arranged for the contracts with the money managers, it will pursue the compensation on your behalf.

Account safety

All PensionBee customers are required to enable 2-factor authentication (2FA) on their account to protect against the risk of account takeover.

Remember that all investing involves risk. The value of your investment can go up as well as down, and you could get back less than you put in.

PensionBee is a one-stop-shop for pension info. If this is your first pension, or your first experience of setting up a pension for yourself (rather than a workplace pension), PensionBee’s articles, videos and podcast will get you up to speed on what you need to know, including:

• Pension basics
• Pension types
• Finding and transferring pensions
• Pension contributions
• Pension withdrawal
• Pension rules
• Retirement planning
• Socially responsible investing
• Pensions for the self-employed
• Protection for your family

There are regular posts to help you stay on top of the personal finance news that might affect you, and insights to help you understand how certain changes could affect you, all delivered in PensionBee’s trademark clear and helpful way.

Customer service at PensionBee is excellent. You can contact their UK-based agents via:

• Live chat
• Email: contact@pensionbee.com
• Telephone: 020 3457 8444

When you’ve signed up to PensionBee, you’ll be designated a “BeeKeeper” – a customer relationship agent – who can help answer your queries about your PensionBee pension, transferring other pensions across and how to use the platform. I have to say, every experience I’ve had with PensionBee has been smooth and got me the information I wanted.

PensionBee has an “Excellent” score on Trustpilot – 4.6 at the time of writing – based on almost over 10k reviews. That’s higher than most of PensionBee’s competitors.

Reviews are overwhelmingly positive about the PensionBee pension transfer process, and customers’ relationships with “BeeKeepers” who are described as very helpful and knowledgeable.

Financial advice

PensionBee does not provide financial advice so cannot give you any personal guidance on your savings or investments. They can help explain the various pension options available, however. If you need more help deciding which option is right for your particular goals and set of circumstances, then you should always seek expert pension advice from a qualified financial advisor / financial planner.

Account opening

Account opening is as hassle-free as it’s possible to get. The fully digital process can be done online or through the app and you’ll just need your National Insurance number and pension policy numbers for previous pensions (if you have them) if you want to transfer them in. PensionBee will still help you track down lost pensions without policy numbers but it could mean the process takes longer.

Alternatively, if you don’t have any pensions to transfer, you can opt to make a one-off contribution or regular deposits, to start building up your retirement fund. PensionBee allows you to choose how much you’d like to contribute, how often and by what means (bank transfer or Direct Debit). They’ll also automatically claim your 25% tax top-up from HMRC and add it to your balance if you’re eligible for tax relief. If you’re the director of a limited company, you can make employer contributions into your pension, as well as personal contributions via your BeeHive.

Closing your account

There’s no exit fee for leaving PensionBee. PensionBee also has a 30 day cancellation policy, which means they’ll return your pension to your old provider free of charge if you cancel your PensionBee plan within 30 days of opening it.

Withdrawing funds

It generally takes around 10 working days after requesting withdrawal of funds for you to receive your money.

Transferring accounts

This is one of PensionBee’s strongest selling points – how easy it is to track down and consolidate old pensions in your new PensionBee account. It typically takes around 10 days to complete a transfer but could be longer if your current provider has an outdated paper transfer process. But you’ll be allocated a personal guide – a ‘BeeKeeper’ – who provides regular updates as your switch progresses.

If you want to transfer out of your PensionBee pension, PensionBee aims to complete these requests within 14 days if the new provider is regulated within the FCA. PensionBee actually averages 10 days to transfer out, which is the gold standard among pension firms, and is testament to their commitment to doing things right.

Remember: If you have a Defined Benefit pension worth over £30k, you are required, by law, to seek regulated independent financial advice and must confirm you have received this before PensionBee (or any other provider) can proceed with your transfer.

Have a question about PensionBee that we haven’t covered? Ask it here and we will get back to you as soon as possible!