With ethical investing gaining traction globally, more Muslims are looking for Shariah-compliant options to grow their wealth without compromising their faith. According to a 2021 study by the Office for National Statistics (ONS), one-third of Muslim employees didn’t have a workplace pension. 78% said concerns around investments being Shariah-compliant were a major factor. This signals a clear need for more awareness around halal pension options. One solution is Shariah-compliant investment options.

PensionBee not only offers a Shariah-compliant pension option but also aims to bridge the knowledge gap by producing more educational content around halal investing. So what are Shariah-compliant pensions and how can Muslims invest in one to help them secure their financial future?

What is a Shariah-compliant pension?

For Muslims, a Shariah-compliant pension is a way to plan and save for a happy retirement while adhering to Islamic values.

These are pensions that invest according to Shariah principles, which means that the investments in the fund don’t generate income from impermissible sources such as:

• alcohol;
• tobacco; or
• weapons.

Investment funds that are Shariah-compliant are essential for Muslims. However, they can be a responsible investment choice for anyone. A common misconception is that they don’t perform as well as non-Shariah compliant pension funds. This is because they exclude certain industries. In reality, there’s considerable merit to well-managed Shariah-compliant investment funds.

Comparing Shariah investments to non-Shariah investments isn’t very helpful. This is because the purpose of Shariah investments isn’t to outperform the benchmark. It’s to open investment markets and other important tools like pensions to the Muslim community. Which otherwise would be hugely underserved financially.

Ethical vs. Shariah-compliant investments - are they the same?

The aim of both ethical and Shariah-compliant investments is to align financial decisions with personal values. However, they differ in their approaches. Ethical investing generally avoids industries that harm society or the environment. For example, tobacco or fossil fuels. And instead, focuses on sustainability and social responsibility. It’s flexible and varies based on individual beliefs.

Shariah-compliant investing is rooted in Islamic law and prohibits:

• interest;
• gambling; and
• investing in haram industries like alcohol or conventional banking.

While both emphasise responsible investing, Shariah-compliant investments follow stricter, faith-based rules. Whereas ethical investing can be seen as more subjective.

PensionBee’s Shariah Plan

PensionBee’s Shariah Plan invests exclusively in Shariah-compliant companies and is suitable for anyone looking to invest responsibly or according to their faith.

The plan is composed entirely of equities and invests in the HSBC Islamic Global Equity Index Fund, managed by HSBC Global Asset Management and State Street Global Advisors (SSGA). While it’s standard practice for investors to be offered a range of portfolios that offer differing proportions of equities and bonds according to their risk profile, bonds aren’t compliant with Shariah investing. This means as a Muslim, our pension portfolios would ideally be 100% invested in equities.

You can find further information in the HSBC Islamic Global Equity Index Fund Fact Sheet.

How the plan ensures halal compliance

The HSBC Islamic Global Equity Index Fund tracks the Dow Jones Islamic Market Titans 100 Index. This is an index of the 100 largest global stocks that comply with Islamic investment guidelines.

The fund invests largely in equities in the technology and healthcare sectors with around 75% of the holdings based in the USA.

To maintain Shariah compliance, all investments in the fund are approved by an independent Shariah committee. The process involved is transparent, ensuring that those invested in the fund can be confident that their fund aligns with Islamic principles.

Regular reviews of the fund and ongoing compliance, including purification of non-compliant revenue, are an integral part of the process of maintaining Shariah compliance.
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Fees and benefits of the Shariah Plan

The Shariah Plan is suitable for Muslims seeking a halal investment option and those looking to consolidate or start their first pension. The plan is also suitable for self-employed individuals seeking a Shariah-compliant pension. By signing up to a PensionBee Shariah Plan, you’ll benefit from:

• One simple fee - you’ll pay a 0.95% annual management fee. This is halved on amounts over £100k.
• No minimum contributions - you can start investing without having significant capital.
• Easy consolidation - you can manage all your pensions in one place by combining your old pensions into one plan.
• Personalised support - a dedicated UK-based account manager (a “BeeKeeper”) to help manage pension and transfers.
• User-friendly platform - a website and app to monitor your pension performance, discover educational content and contribute or withdraw from your pension.

Learn more about Shariah Investing

Understanding Shariah compliance can feel overwhelming for those new to halal investing. Fortunately, there are several excellent resources to help you on your journey. Here are a few we recommend:

• Islamic Finance Guru - a personal finance platform for Muslims in the UK.
• UKIFC - a specialist advisory and developmental body. Their focus is promoting and enhancing the global Islamic and ethical finance industry.
• Riba Free Foundation - a non-for-profit organisation developing financial literacy training.
• The Pension Confident Podcast - learn more about Shariah investing in episode six. Host Philippa Lamb talks to Co-Founder of Islamic Finance Guru; Ibrahim Khan and PensionBee’s VP Product; Martin Parzonka. You can listen to the episode, read the transcript or watch the best bits over on YouTube.

Is the Shariah Plan right for you?

With no minimum pension contributions and the ability to combine other pension pots in one place, PensionBee makes it easy to manage your pension, whether online or in their app.

Having a pension is an important part of securing your financial future and as a Muslim, investing in line with Shariah principles is key. PensionBee’s Shariah plan offers a balanced, accessible way to do both.

Want to find out more about PensionBee’s Shariah Plan? Head to the plans page.

Muhammad is the Founder and Content Creator behind Muslim Investing - a platform dedicated to helping Muslims learn more about Islamic finance and halal investing. He aims to create awareness around the misconceptions of finance in Islam and help Muslims grow their wealth in the process.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. Past performance does not guarantee future results. This information should not be regarded as financial advice.

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It’s been over 18 months since the UK was plunged into a cost of living crisis. Since then, that term’s become part of our everyday vocabulary and is something many of us continue to worry about. Despite inflation falling to 8.7% in May 2023, many are still experiencing the impact of the high cost of living and the fall in real income. With so many of us struggling with energy and grocery bills, it can be difficult to think about stashing money away for retirement. According to a report from the Financial Services Compensation Scheme (FSCS) from March 2023, 85% of people were increasingly worried about their future and the impact of the cost of living crisis.

The impact of the cost of living crisis on pensions

So what’s the real impact of the cost of living crisis on pension saving? According to the FSCS, 23% of those with a pension have either decreased their contributions or stopped them altogether. While this could provide temporary relief and enable you to cover a rise in bills or build a more accessible emergency savings fund, there’s no getting away from the fact that it’ll significantly impact your retirement fund and the compound returns on your pension. If you’re worried about how far your savings will go in retirement due to the steep rate of inflation right now, our inflation calculator could help you visualise how your pension could be impacted.
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The FSCS also found that 28% of people have consolidated different pension pots into one since the cost of living crisis, while 13% say they’ve changed their pension provider, which suggests consumers are also proactively trying to protect their pension savings where they can.

Under-35s are significantly more likely to be relying on their savings as a result of the cost of living crisis. And whilst for those under 35, retirement can seem a way off, there are huge benefits to starting early when it comes to saving for your future and so eating into the money that you could be putting into your pension savings now, might set you back later down the line.

For those approaching retirement, the report found 29% of respondents aged 55 and over have moved money out of their pensions to cover day-to-day costs. While in some circumstances this might be the only option, there are some things you can do to protect your future savings.

Four ways you can protect your pension during the cost of living crisis

Founder of Money to the Masses; Damien Fahy says: “Whatever you’re putting away, whether it’s into a pension or other savings, you can dial down and dial back up, like a dimmer switch. You can turn it down when you need to, but then turn it back up at a later point. If you turn it off, it becomes much more difficult to turn it back on.”

1. If you’re tempted to stop contributing to your personal or private pension for now, consider reducing the percentage you’re contributing rather than stopping altogether. Even if retirement seems a long way off, the small amounts that you pay in each month will go a long way in the long term, thanks to compound interest and investment growth. So if you can, continue your contributions even if they’re small amounts. If you’d like to see the impact of stopping or dialling back your pension contributions, why not use our pension calculator?
2. When it comes to workplace pensions, it’s worth noting that if you do reduce your contributions, or indeed opt out altogether, your employer contribution, and tax relief, is likely to also be impacted. If you do need to opt out of your workplace scheme, make sure you check the policy thoroughly as by opting out, you may also lose valuable benefits paid in case of illness or death.

Consumer Editor at The Financial Times; Claer Barrett says: “With workplace pensions, say you put in 5% of your salary, it seems like a wrench at the time but your employer might match it by contributing another 10%.”

3. It’s vital that you check what you’re entitled to in terms of Universal Credit. There’s a massive £19 billion unclaimed every year in the UK. It might be that you’re entitled to additional support for energy bills or housing costs, and you mightn’t need to impact your savings and pension contributions.
4. If you aren’t sure what you have in terms of pension savings, now’s a good time to think back to previous jobs where you may have had a workplace pension and start tracking them down. If you’re under 55, you won’t be able to take the money out, but you could reduce any fees you’re paying on several different pots by consolidating them into one.

If you feel as though you need some guidance, there are a number of organisations that you can turn to for support when it comes to financial struggles such as Citizens Advice, StepChange and MoneyHelper. If you feel as though you need specific financial advice, and are able to pay for it, make sure that it’s regulated - you can check this on the Financial Conduct Authority’s free register of authorised individuals, firms and bodies. The Money Advice Service has a similar directory for those seeking independent pensions advice and, if you’re over 50, you’re eligible for a free appointment with a government service called Pension Wise, which can give individual and specific guidance about accessing your pension pots.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. Anything discussed on the podcast should not be regarded as financial advice.

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This article was last updated on 21/02/2025

Did you know you could increase the amount of the State Pension you receive by making extra National Insurance (NI) contributions? When the ‘new’ State Pension was introduced in 2016, the government announced that you could plug gaps all the way back to 2006. The deadline has been extended three times since the announcement, and you now have until 5 April 2025 to top up.

How does this top up work and would it help you?

The current full State Pension is £221.20 a week (2024/25) and to receive the full amount, you’ll need 35 qualifying years of NI contributions. However, if you’ve taken time out of the workplace, for example to raise a family or care for older relatives, you might have gaps in your NI contribution history. If you have missing contributions from 2006-2016 you can plug the gaps by making extra NI payments.

Bear in mind that if you’re over the age of 73, you’ll be receiving or eligible for the ‘old’ State Pension so you won’t need to top up.

How much does it cost?

Making up for one year of missed NI contributions will cost you up to £907.40 (2024/25), which will add about £302.64 per year (£5.82 per week) to your pre-tax State Pension. There might be occasions where you don’t need to pay the full amount. For example, if you only have two months of missing contributions, you’ll only pay £151.20 (2024/25) to make up the full year.

However, the rate you pay depends on which year you’re topping up:

If you don’t top up your State Pension you’ll get an amount proportionate to the number of years you have full NI contributions for. For example, if you have 30 years of NI contributions, then you’d get an amount worth 86% of the full State Pension. This works out at £190.23 per week (2024/25).

How do I top-up my National Insurance?

You can top up your NI in two ways via the gov.uk website:

• making voluntary Class 2 National Insurance contributions; or
• making voluntary Class 3 National Insurance contributions.

It’s worth noting that you can’t pay to increase your State Pension beyond the maximum of £221.20 per week (2024/25).

Do I need to top up my State Pension?

Find out if you have any NI contribution gaps by checking your National Insurance record on the DWP website. Even if you have missing years, you may still qualify for a full State Pension. You can check this by using the government’s State Pension forecast calculator.

When not to top up your State Pension

Certain benefits automatically come with NI credits, so you may find that there are no gaps in your NI contribution record, even though you weren’t working. If you were in receipt of these benefits you may not need to top up your State Pension. Examples include:

• if you were on Child Benefit;
• if you were a grandparent looking after children;
• if you were on maternity, paternity or adoption pay;
• if you were on statutory sick pay; or
• if you were unemployed and actively looking for work.

If you were ‘contracted out’ of the Additional State Pension, before the changes came into effect in 2016, then you’ll need to check whether topping up can help. You can find out more information on the gov.uk website.

Samantha Downes is a financial journalist and has written for most national newspapers and women’s magazines. She is also the author of two finance guides and has set up the Substack PumpkinPensions to help guide people looking to save more towards their future.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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For all the benefits that come with being self-employed, managing your finances can be challenging. Having an irregular working schedule can mean a less predictable irregular income. This in turn can make saving for the future trickier.

But challenges are there to be overcome, and there’s no reason why you can’t build yourself a great financial nest egg as a self-employed worker. Here are some steps to take to ensure you’re saving for your future, even if you have an unpredictable income.

1. Create an adaptable savings plan

The first step to saving on a fluctuating income is understanding your cash flow. If you’ve been self-employed for a while, analyse your income over previous years to see your peaks and troughs. Which months do you tend to bring in more money than usual, and which months are a bit slower?

As well as income, you need to work out your baseline expenses like rent or mortgage payments, utilities and food. These are the things that you absolutely have to pay each month, no matter what your income’s like.

Once you have these numbers, you can get an idea of how much spare cash is potentially available to save each month. Put this into a savings account, making sure to put more in during your peak months, to cover the slower times.
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2. Focus on flexible pensions

A pension is one of the most tax-efficient ways to save for retirement. While pensions may have traditionally been seen to benefit PAYE (pay as you earn) employees because of Auto-Enrolment, there are flexible options which suit self-employed workers too.

For example, PensionBee’s self-employed pension allows you to contribute flexibly and make adjustments based on your income levels. This means during high-earning months, you can contribute more. While during leaner times you can reduce or even pause them - all without any penalties.

Use the cashflow you put together earlier to get an idea of how much you can contribute. Rather than a specific cash amount, it could be a percentage of your income each month - which can be adjusted up or down based on your earnings. This way, your contributions are always in line with your earnings, and it also protects your pension pot from the impact of inflation.

It’s important to think about adding to your pot when you receive any windfalls or lucrative contracts. Of course, you need to make sure your main expenses and any debts are covered first. But if you’re lucky enough to have a chunk of excess cash in a particular month, a one-time pension top up is ideal. Your future self will thank you.

3. Combine new tech with old-fashioned research

Being self-employed means you’ll already have lots of admin on your plate, so when it comes to the process of saving money, you’ll want to minimise this. At the same time, you’ll want to maximise the returns of your savings given the sometimes unpredictable nature of your earnings.

A good option is to combine the power of tech with the occasional bit of manual research. There are a number of mobile apps that can link with your bank and ‘sweep’ money aside into a virtual savings account each month. Some can also work out when your income is higher and automatically put more aside.

You should always check whether the app provider is authorised before giving it access to your accounts. You can do so on the Financial Conduct Authority’s (FCA) Register or the Open Banking register.

While the apps are good, many don’t offer the interest rates you’d get with traditional savings accounts or ISAs. That’s why it’s worth shopping around every few months for accounts with the best rates. Some even pay interest on a daily or monthly basis, so you can see your money working harder for you.

4. Create a separate emergency fund

We’ve mostly been speaking about saving money for the future, but it’s worth touching on emergency funds as well. This is a financial buffer that protects you should the unexpected occur. Examples could include health issues, urgent house or car repairs, or a sudden loss of contracts. Most people need one, but if you’re self-employed, it’s a must-have. Having this financial safety net means you won’t have to dip into your regular savings or take on any expensive debt when unforeseen costs come up.

Ideally, you’d want three-to-six months of essential expenses saved up. Keep this separate from your regular spending account, and maybe even from the long-term savings we mentioned earlier. This is because some savings accounts penalise you for withdrawing money, and ideally this emergency fund needs to be easy to access.

Saving with an unpredictable income might sound like a tough task, but it’s definitely manageable. There are lots of great tools out there now that can help you - from flexible pensions to automated savings apps and a whole lot more. By combining these with discipline and adaptability on your part, you can save towards a comfortable retirement.

Nilesh Pandey is a Freelance Writer who’s been trusted by businesses and entrepreneurs across the globe. Over the last decade, he’s worked with companies in industries such as tech, private equity and pharmaceuticals, while seeing his words appear in national newspapers and international speeches. Nilesh is also a regular Writer for Your Business magazine.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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This article was last updated on 01/10/2024

Saving for retirement is a long-term goal, so plenty can happen during your lifetime that might cause you to fall behind on your pension savings.

If you find yourself with a pension shortfall - when the amount you’re currently saving isn’t enough to reach your retirement goal - you’ll want to get back on track as soon as possible.

Do you have a pension income shortfall?

First, you’ll want to check if you’re on track to reach your retirement goal. The easiest way to do this is to use our pension calculator.

You’ll need to provide:

• retirement income goal;
• current age;
• expected retirement age;
• current pension pot value; and
• current level of contributions.

If the projected income figure is less than your goal, then you’ve got a pension income shortfall.

How much do you need to save to catch up?

If you’ve used our pension calculator, learning how much you need to increase your contributions to meet your retirement income goal is simple.

Simply adjust the ‘personal monthly contribution’ slider until the projected figure meets your goal figure.

Here are some possible scenarios.

‍The above scenarios assume a retirement age of 65 and an employer contribution of £150 per month. We haven’t included additional state pension income.

Bear in mind that you’re likely to earn a higher salary as you get older, so you should be able to increase your contributions over time. Your employer should also be able to pay in more as your salary increases.

Options to boost pension savings

If you need to make up for a shortfall, there are plenty of ways to go about it.

Join a workplace pension

It’s now a legal requirement for employers in the UK to offer a workplace pension to their employees. New employees should be auto-enrolled into this scheme, but it’s possible for the employee to opt out of it. You can’t join your company pension until you’re 22 and earn at least £10,000 per year. If you’re 21 or under and earn £6,240 or more in a tax year (2024/25), you have the right to opt into your workplace pension scheme. If you choose to opt in, you’ll be entitled to the minimum level of employer contributions. If you earn less than £6,240 you can still ask your employer to give you access to a pension to save into. They have to do this, they just don’t have to make any employer contributions

If you’re working but haven’t joined your employer’s workplace pension scheme, doing so will help you get back on track. Not only will you receive tax relief on contributions from the government, but your employer will also contribute at least 3% of your qualifying earnings.

If you’re working but haven’t joined your employer’s workplace pension scheme, doing so will help you get back on track. Not only will you receive tax relief on contributions from the government, but your employer will also contribute at least 3% of your salary.

Start a personal pension

If you’re self-employed or unable to join a workplace pension for another reason, you can always start your own self employed pension.

You can choose between a defined contribution pension or a Self Invested Personal Pension (SIPP). Even though you won’t receive employer contributions (unless you own a Limited business), you’ll still receive tax relief from the government.

If you’re unsure which is right for you, you might want to speak with a financial adviser first.

Combine your old pensions into one

If you’ve changed employers, you’ll likely have multiple pension pots dotted around the place. It’s easy to lose track of these pensions or forget about them altogether. For example, you might move home and forget to tell your pension provider. This isn’t uncommon. It’s estimated more than 4.8 million pension pots are missing in the UK with this figure expected to grow by 130% by 2050.

Keeping track of multiple pensions can be time consuming, if you even know where to look. And given that different providers charge a different range of fees, you might find yourself paying more than you need.

Combining your pensions into one easy-to-manage plan that has a single fee structure could save you money in the short-term, as well as reducing the amount of ‘fee erosion’ over the long term.

Before moving your old pensions, check if there are any exit fees or other penalties that could make it worth keeping them where they are.
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Delay retirement

The longer you pay into your pension, the more chance it has to grow. And thanks to the miracle of compounding returns, the amount that it grows increases over time.

So delaying retirement by even a couple of years can significantly increase your retirement income. Here’s an example.

Let’s take a 55-year old with a pension pot of £150,000, and see how their retirement age could affect their income.

And this assumes they never pay into their pension again after the age of 55, which is unlikely.

Delaying retirement can have lots of benefits. For more, read 6 reasons why you should delay taking your pension.

Plan for a more modest retirement

Increasing pension contributions isn’t always possible, and it can become costly if you leave it until later in life (as we’ve seen). Depending on your retirement goal, you might find that you can actually live off less without seeing much impact on your standard of living.

A recent Which? survey suggested that couples enjoying a moderate retirement living standard spend £43,100 a year. That’s £21,550 each. So, depending on how much you planned on saving for each year of your retirement you may decide you don’t need to increase your contributions as much as you thought or at all.

However, if you can increase your contributions - even just a little - you might find it worth doing. Because no one knows what the future brings, and saving more now could pay off just when you need it.

Consider other ways of earning retirement income

While it’s sensible to have a good pension in place, you don’t necessarily have to rely on it exclusively to earn your retirement income.

Other ways of earning income in retirement include:

• Cashing out of other investments
• Selling collectable items
• Renting out property
• Downsizing your home
• Selling a second home
• Releasing equity in your home (comes with risks)
• Taking on part-time work

Planning ahead for retirement

Retirement is one of those things that seem a long way away until you get there, by which time your options to address any shortfalls will be limited.

If you do find yourself with a gap in your pension savings, don’t worry. The above tips should help you get back on track, even if you need to adjust your retirement expectations a little.

When it comes to pensions, the best time to act is when you’re young. The next best time is today.

Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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Love is one of our five PensionBee values, driving everything we do from the way we communicate to the way we design our product. As we’re on a mission to make as many people as possible pension confident so that everyone can enjoy a happy retirement. We’ve long been dedicated to celebrating the diversity of our customers and showcasing the different experiences within our community.

After reading a report from Anything But Grey about the marketing industry’s age-related blind spot, I wanted to ensure we continue representing a core demographic of our customer base, the over 50s, in our next marketing campaign. To date, we’ve featured customers in their 50s enjoying a campervan as well as walking along the beach, and this time set out to showcase customers at home enjoying their everyday lives. It was important to us that we were visualising and reflecting back what people belonging to that age group actually look like and not just a stereotype.

In January, we sent a call out in our newsletter looking for enthusiastic customers to be a part of our marketing campaigns. We were inundated with responses and a team of us spent time speaking to customers and getting to know their stories. We selected six people to join our existing bank of testimonials, which seeks to amplify our customers’ voices in the media and share their experiences of the pensions industry. Of our new additions, half are over 50. Whilst this shouldn’t be a surprising statistic given the industry we’re in, we’re really proud to be representing this age group across our website, digital assets and offline in an authentic way.

Moira, Fiesal and Ed, who are all over 50, are three of our 240k Invested Customers. This genuine representation helps add authenticity and honesty to our marketing. They were used in the campaign alongside Suzette, Alex, Kezia and Jackson, her French Bulldog! We wanted to showcase how our customers are both preparing for and enjoying retirement.

We’re committed to highlighting the real people that are combining, contributing and withdrawing from their pensions with PensionBee. Take a look at our website and digital ads to see them there.

We’d love to hear from you! If you’re interested in sharing your PensionBee experience with the press or appearing in future campaigns send an email to press@pensionbee.com.

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At PensionBee we’re strong believers in fair fees and transparency. That’s why we release our Robin Hood Index every year, and continue to press the industry for change. Where others charge you hidden costs we’ll only charge you one annual fee, so you’re always clear on what you’re paying and what this means for your pension.

As we’ve grown, we’ve seen savers’ pots grow significantly, and we want these customers to feel comfortable that we’re the right place for their pension. We think you should be rewarded for saving - not hit with a higher fee - so we’re changing our fee structure to offer an affordable pension for all. Here’s how it works.

The more you save, the less you pay

For pensions under £100,000 you’ll continue to pay 0.5% - 0.95%. However, once your pension grows larger than £100,000, we’ll halve the fee on the portion of your savings over this amount.

We’re introducing this new structure to give the most diligent savers a fairer fee, and to put more money in the pocket of customers nearing drawdown. We’re committed to giving you a good retirement and our fees are essential to that, as well as our dedication to transparency. Head over to our fees page to see exactly how the new fee structure could impact on what you pay.

Tell us what else you’d like to see

Like all of our product updates, this new fee structure was driven by your feedback so keep on telling us what else would improve your pension. We’ve just launched a new direct debit feature to make contributing easier, and we’re planning on starting work on our app early next year. We’re serious about making pensions simple, so don’t be shy - leave your feedback in the comments section!

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You’d think that working more and earning more means you’re always better off. But this isn’t always true, especially for parents. One threat for parents is crossing the £100,000 income boundary and losing your entitlement to 30 hours of free childcare.

The good news? Pensions contributions can be a clever way to sidestep it.

Why is the £100,000 ‘childcare cliff’ so dangerous?

Working parents in England and Wales are now able to claim 30 hours of free childcare per week - up to 1,140 hours a year. This is for children aged nine months to four years and must be claimed during term time. With average nursery fees often topping £8 an hour, it can represent a saving of several thousand pounds a year.

So far so good. But here’s the sting - if either parent’s adjusted net income creeps over £100,000, the free childcare hours vanish. Even if you’re just £1 over the line.

That’s no small loss. Imagine expecting a £6,000 saving on childcare and suddenly discovering it’s gone, all because of a bonus or extra income you didn’t factor in.

And working out your adjusted net income isn’t always straightforward. It includes:

• your salary;
• any dividends;
• interest;
• bonuses; and
• rental income.

So even a modest bonus or small amount of additional income could tip you over.

Once you pass £100,000, you also start to lose your Personal Allowance. For every £2 you go over, you lose £1 of allowance. That’s why the effective tax rate in that band can creep up towards 60% when you factor in lost allowance, Income Tax and National Insurance (NI).

For some, earning more can actually leave you worse off.

How can pension contributions help?

This is where pensions come in. Pension contributions lower your adjusted net income. This means you can use them to bring yourself back under the £100,000 threshold and hold onto your free childcare hours.

Here’s a simple example. Imagine your adjusted net income will be £100,600 this year. If you make a pension contribution of £700 (or use salary sacrifice), your adjusted net income falls to £99,900. You keep the 30 hours of free childcare and boost your pension savings at the same time. It’s not a loophole or a trick - it’s simply how the system is designed.
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What do I need to be aware of?

Before you start adding extra money into your pension, there are some important points to keep in mind.

• Only certain contributions count - payments that qualify for tax relief or go through salary sacrifice reduce your adjusted net income, not deposits into a regular savings account.
• Know your limits - pension contributions are capped by the annual allowancewhich is £60,000 per year for most people (2025/26). If you’re an additional rate taxpayer earning over £260,000 per year, your annual allowance may taper down.
• Get your estimates right - you need to include all income sources and deductions when you calculate adjusted net income. Miss something - like a dividend, bonus or rental income - and you could be caught out.
• Remember pensions are long term - money you contribute to a pension is generally locked away until retirement age which for most modern workplace or personal pensions is 55 (rising to 57 from 2028). Whereas the UK State Pension age is currently 66 (rising to 67 from 2028). So don’t treat your pension contributions as easily accessible savings.
• Check with your employer - some employers limit how often you can change contribution levels, which matters if your income includes irregular bonuses. If you’re a PensionBee customer, you can make completely flexible contributions.
• Think about the whole household - the £100,000 income threshold applies per parent. But once one person crosses it, the whole family loses the entitlement.
• Watch the timing - you have to reconfirm eligibility for the free childcare hours every three months. If your income changes mid-term, this could impact your entitlement.

What can I do now to protect my free childcare hours?

If you’re concerned that your income could be going to hit the £100,000 threshold, here’s what you can do to make sure you’re protected.

• Model your adjusted net income as accurately as possible - add together all of your income streams including your salary, dividends, interest, rent and bonuses, and subtract expected deductions, including pension and gift aid.
• Aim for a safety margin - don’t target exactly £100,000. Leave wiggle room for forecast errors, fluctuations or surprise income.
• Talk to your employer - ask whether pension contributions via salary sacrifice are offered. This could make things simpler as your employer will take the money straight from your pay before you even see it.
• Adjust early in the tax year - if you know bonuses or extra income may come, make changes to your adjusted net income as early as possible.
• Monitor quarterly childcare re-declarations - when you confirm eligibility every three months, update your forecasts.
• Get specialist help if needed - if you have multiple income sources or complicated investments, a qualified Independent Financial Adviser (IFA) or tax specialist can help.

Crossing the £100,000 income line can cost families far more than they realise. The right pension contributions can help you avoid that trap, protecting your entitlement to childcare support and your long-term retirement savings.

It’s worth carefully considering how you can use your pension to make sure you don’t end up worse off just by earning a little more.

Jo Middleton is a Lifestyle and Personal Finance Writer who strongly believes that everyone should be empowered to not just understand their bigger financial picture, but thrive as part of it. She’s written for The Guardian, The Times, iNews, Online Mortgage Advisor, Boring Money and many more. Jo splits her own spare cash between savings, investments, pets and trips to the seaside.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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March 2020 was a daunting time for everyone, including at PensionBee. Lockdown number one was in full effect, working from home was a new experience for many of us, and no one knew when we were going to see our loved ones next.

Adjusting to working from home

When the initial whispers of a lockdown were happening, we began quickly looking at a company-wide work from home arrangement. One of the key challenges we faced was to make sure we could continue to take care of our customers’ pensions while keeping their information secure. And we needed to continue to do our jobs at the level that our customers have come to expect.

Working from home isn’t a new concept at PensionBee. Many of us have been working from home infrequently for many years. But we’d never had our whole team work from home, and no one had done it for such a long period of time.

Working from home isn’t a new concept at PensionBee

It was challenging at first. In the office, it’s so easy to share information and ideas, help each other with specific challenges, or just relax over a coffee break together. Collaborating over Highfive, our video conferencing software, wasn’t new but it took some getting used to as our only option.

Our technical team pulled out all the stops when it came to making life easier for everyone. Within a day or two, the whole team was up and running from their dining tables, home offices and - in a few cases - their coffee tables. We were able to stay in touch with our customers without missing a beat, reassuring everyone involved that this storm will pass, and that we’d be there to look after their pensions so they could focus on what’s important – their health and wellbeing.

Staying safe and reassuring customers

We maintained a ‘business as usual‘ approach while making sure that everyone was safe and adhering to the lockdown rules. We created a Critical Task Unit (CTU), allowing a few select members of the team to remain safely socially distanced while working in the office to process the post and paperwork we often receive from providers. Fortunately, we were able to contact dozens of providers that normally have a paper-based pension transfer system, and convince them to process hundreds of transfers paper-free. This helped cut down on the amount of unnecessary paper used, along with the number of people needed in the office to get through it all.

The rest of our BeeKeepers and Nectar Collectors adapted to working from home well. They made full use of virtual meetings, using secure networks to take care of customers’ accounts, and answering customer emails, calls, and live chats without missing a beat.

From day one, they were managing to answer over 90% of customer calls and were available on email and live chat

We had a huge influx of customer communication at first. Understandably, many customers were concerned about the volatility of the stock markets and how their pensions might be affected. The BeeKeepers took working from home in their stride. From day one, they were managing to answer over 90% of customer calls and were available on email and live chat for any customers that just needed some reassurance that their future retirement was being carefully managed.

Looking to the future

By the time the pandemic started to settle down, the whole PensionBee team had adapted well to our new way of working. Some people have chosen to work from home permanently, moving closer to their families or accelerating planned moves out of the capital. Despite the challenges we faced, PensionBee hit several significant milestones, including reaching £2 billion of AUA in July of this year and listing on the High Growth Segment of the Main Market of the London Stock Exchange back in April. We were even able to celebrate this huge achievement remotely with each other over video calls (thanks to bottles of bubbly we received in the post!).

We’re a family at PensionBee. And after the year that everyone’s had, not seeing your family for a long time has been tough - especially when you’re so used to seeing them every day. We’ve done our utmost to keep the hive buzzing over the last 18 months, and we’ll continue to look after our customer’s pensions, and each other, as the last of the lockdown restrictions lifts and we can finally get back to a bit of normality.

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Adapting and innovating are essential for any company to remain competitive. A business’s digital transformation strategy is a key part of enabling it to be nimble in responding to changes in its industry and building compelling products and services.

Open source software (OSS) now lies at the heart of many companies’ technology infrastructure. Its transition to a pervasive foundation for software development over the last 30 years has been remarkable. The time has long passed when only proprietary software solutions would factor into a business’ thinking about what software should comprise their tech stack. A report by Red Hat, a provider of OSS to large companies, surveying over 1,000 businesses across the world, revealed that 95% of companies agree that OSS is important to their infrastructure.

Business leaders are showing confidence that utilising OSS in their business operations isn’t just a viable option but in fact, the preferred way to drive their business forward, with the same report finding that open source will make up more of the software solutions these businesses use in two years’ time than proprietary software.

As OSS becomes increasingly critical to the operations of businesses of all sizes we take a look at a few of the essential ways it can enable and drive forward digital transformation.

Speed of innovation

OSS enables businesses to innovate quickly by giving them a starting point for their software solutions that they can build on. This could be particularly beneficial to start-ups and small businesses who could start with community-developed OSS to see whether a solution is right for them without the long-time lock-ins and potentially prohibitive costs often seen with proprietary solutions.

Businesses can also develop prototypes more rapidly, as OSS often provides generic solutions that a team can easily customise for their needs. With access to the source code, businesses are able to build, test and modify different versions of a software product, to understand whether one provides the benefits and efficiencies they’re looking for and more swiftly iterate a new version if it doesn’t.

Greater control

An inherent property of OSS is that it can be freely modified. Businesses, therefore, can have more precise control over the features and capabilities of their end product. As a business’s needs change they’re free to develop a solution that best serves their end goal rather than relying on proprietary vendors to develop features they’re looking for (if they ever will) first. This puts the power and timing to deploy features and fixes further into the hands of businesses.

Additionally, a business may find an open source solution which provides 80% of the capabilities they require meaning they simply need to modify the remaining 20% to suit their particular needs. In this way, businesses will find that many open source solutions have already done much of the heavy lifting in terms of development and helpfully provide a suitable foundation to build on top of.

Agility

Deploying OSS enables businesses to be flexible and react more quickly to changes within their industry. Its customisability enables unique solutions to be developed that could give businesses a competitive edge in the marketplace and allow them to more easily modify the software infrastructure that supports their business model and processes.

Further, businesses don’t need to make long-term commitments to proprietary solutions and can therefore change up their approach and pivot towards new priorities with greater ease when implementing new or adapting existing digital technologies.

Security

The security and stability of a piece of software is, of course, a paramount concern when designing a digital transformation strategy. As OSS is publicly accessible, it’s open to anyone to view the source code, increasing the chances of identifying security and reliability issues and consequently, the speed with which fixes can be deployed. This can help to better ensure the integrity and security of the software solutions that are powering a business’ transformation.

Community development and engagement

The open source community is hugely engaged with the projects it develops. Its community’s a big driver of the tremendous value OSS provides and one which champions transparency and collaboration. Businesses can draw on not only the expertise offered by their own employees, but the expertise of the large open source community. Some businesses make a point of “giving back” to the communities that build the software they use, either by making code contributions or helping with writing documentation, answering questions or related activities.

Can open source alone bring successful digital transformation?

Whilst open source’s already driving the digital transformation goals of businesses effectively, simply making the choice to use OSS alone may not allow businesses to immediately reap the potential benefits it can bring. Red Hat advocates for what it calls an open transformation approach. They suggest that, in addition to open technologies, open processes and open culture are key to ensuring successful digital transformation. Open processes concern identifying and removing barriers and developing better ways of working within the business and an open culture seeks to ensure teams effectively communicate and work together as they navigate changing circumstances.

As development in each of these areas progresses together, they can maximise the impact that implementing new or adapted technologies can have on business goals.

Open source - a digital driver for progress and success

The choice to use open source-based solutions in digital transformation strategies is becoming ever more attractive to businesses. The adoption of open source continues to be a strongly positive one. Business leaders are indicating that the decision to deploy open source as part of their infrastructure isn’t just one of the cost savings but rather because they see that it offers legitimate advantages over proprietary solutions and can enable a faster time to market for products and services.

Open source can allow businesses to scale up, adapt to changing market needs and create innovative, unique solutions, without having to sacrifice the high levels of security and stability necessary to underpin digital operations.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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For women in the UK, financial independence can be vital, sometimes lifesaving. And the best way to ensure it is by pushing for progressive government policy. Women’s financial independence seems mainly defined as having enough money to make your own decisions and meet various spending or savings goals. Just ‘financial independence’ by contrast, is often defined as having enough passive income to not work.

Why the difference? Potentially a bit of sexism (although passive income’s a big no-no on the equality front), but mainly because of the barriers many women face to accessing finance that gives them that independence of choice to live their lives comfortably, fairly and with dignity.

Debt burdens, childcare costs and access to domestic abuse support funding are just some areas in which social and governmental reform will have the effect of creating more financial independence for women, who bear the biggest burden of all three.

Debt

The Women’s Budget Group says: “These households, who already face economic hardship, may need to borrow for necessities (e.g. food, shelter) and yet are often also forced to pay the most in interest rates. By contrast, households on higher and more stable incomes can often borrow more cheaply to fund consumption (e.g. holidays or luxury items) and asset accumulation”

Being debt-free or having manageable debt payments is largely thought to be a key indicator of financial independence. We’re often told debt’s a personal problem and the result of poor budgeting or money management. In fact, it’s a structural issue that has greater impacts on lower-income households, the majority of which are female.

Charities such as StepChange has successfully campaigned for more debt relief provisions from the UK government. In November 2022 the government introduced a breathing space scheme, called the Debt Respite Scheme, which means creditors are obliged to freeze interest and charges, along with pausing debt collection activity, when people tell them they’re struggling with debt problems.

Find out more about StepChange campaigns and how to get involved.

Childcare

More tireless campaigning can be seen from Pregnant Then Screwed, which was one group responsible for the somewhat-welcomed announcement in the UK’s latest Spring Budget that from September 2025, working parents of children under the age of five will be entitled to 30 hours of free childcare per week.

“We are elated to hear that the childcare sector will now receive a significant investment”, Joeli Brearley, Founder and CEO of Pregnant Then Screwed said. “However, we’re concerned that the money pledged isn’t enough to reduce costs for parents sustainably.”

The average cost of sending a child under the age of two to nursery is £138.70 a week part-time (25 hours) and £269.86 a week full-time (50 hours) in the UK, meaning many women don’t feel they have an independent choice to make when it comes to leaving the workforce to raise children.

Find out more about Pregnant Then Screwed campaigns and how to get involved.

Leaving the workforce is a major contributor to the gender pay gap, which remains largely unchanged year-on-year in the UK. Women already account for 69% of low earners, so additional pay disparity’s not helpful in securing financial independence.

Domestic abuse

Financial constraints are a major reason why women across the income spectrum can find it extremely difficult to leave an abusive relationship and to stay out. Many domestic abuse situations will involve an element of financial control, be that racking up debt in her name, restricting access to bank accounts and withholding money in a variety of ways.

Having a solely owned, easily accessible ‘f*** off fund’ – a pot of money that may help you to leave an abusive relationship, or an unsuitable job or tenancy – can therefore provide essential, sometimes lifesaving, assistance.

Cuts to refuge funding amounted to £7 billion from 2010 to 2018, and more recent grants haven’t been enough to meet the rising cost of living. With services forced to turn women away, that ‘fund’ potentially needs to be the biggest it’s ever needed to be.

Women’s Aid has run an SOS (Save our Services) campaign since 2014 to secure funding for refuges. Find out more and how to get involved.

It may also be important to keep other pots of money separate from partners. There are no additional benefits to combining your finances in the UK - you can still apply for a joint mortgage or other joint loans, and if you choose to marry or get a civil partnership your tax and pension entitlements aren’t dependent on joint finances. But there are potential drawbacks in addition to financial abuse, such as combined credit scores and taking on debt.

However, combining finances, or depending financially on a partner, can also be an important decision, for example, in order to support a creative endeavour or spend more time with children or communities.

All women deserve to make choices unburdened by the financial constraints of debt, abuse and gendered costs, and it’s important this basic level of independence is facilitated in our society. After that, the importance of your financial independence is really up to you.

This blog was inspired by an article from Rebalancing Act, a weekly newsletter answering women’s questions on money, finance and economics.

Natasha Turner is one half of the weekly women’s finance, economics and money newsletter, Rebalancing Act, and Global Editor of sustainable finance publication ESG Clarity. She’s also currently writing a book on whether finance can ever be truly feminist.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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Furlough has been a lifeline for many businesses and employees, but its had a less generous impact on pensions. As furlough begins to end, find out how the the government-backed scheme affected workplace pensions.

When is the furlough scheme ending?

The furlough scheme will end on the 30th September 2021.

Introduced in March 2020 by the Chancellor, Rishi Sunak, the ‘Coronavirus Job Retention Scheme‘ - or furlough scheme - was intended as a short-term measure to reduce mass redundancies and unemployment.

Yet the scheme has evolved and been extended several times. Initially the government paid 80% of wages (up to £2,500) but from 1st July 2021 this was amended to 70% of wages (up to £2,187.50) with 10% topped up by employers to match the previous 80% payment.

The Self-Employment Income Support Scheme

Instead of the ‘Coronavirus Job Retention Scheme’ for contracted employees, there’s the ‘Self-Employment Income Support Scheme‘ for self-employed people. Similar to the furlough scheme, the Government has extended this - from four to five lump sum grants.

Face a reduction of more than 30% profits and you can claim up to 80% of 3 months’ average profits - with a maximum payout of £7,500. Face a reduction of less than 30% profits and you can claim up to 30% of 3 months’ average profits - with a maximum payout of £2,850.

Covering May 2021 to September 2021, the fifth and final grant is a taxable single installment.

What should I look out for?

As furlough ends, it’s a good time to take a step back and look over your finances. Most people will have noticed a change in their money - up or down - during the 18 month furlough period. Find out how this affected your pension too.

How has the furlough scheme affected my finances?

Income through furlough functions in much the same way as your usual income: you’ll pay your National Insurance contributions, pay off your student debt, and pay into your workplace pension.

The big difference is this is 20% less than you would’ve been paying.

With reduced commuting costs and leisure expenses, some might see they have more spare money since furlough was introduced. Others will find the 80% furlough payment hit their finances harder, so rebuilding savings and security may be a priority.

How has the furlough scheme affected employees?

Around 40% of furloughed employees didn’t get a top up from their employer, meaning that many low-paid workers would be below the minimum wage for their contracted hours. This has a knock-on effect on their finances: with a decrease in savings and an increase in debt.

It’s not all bad news. Unemployment rates are reducing and the reopening of sectors will reintroduce the 100% wages workers were earning before the pandemic.

The goal for all furloughed employees should be getting back in the black and building towards a diverse safety net of financial assets: such as property, pension and savings.

How has the furlough scheme affected self-employed people?

Self-employed people aren’t entitled to employment benefits - such as sick leave. During a health pandemic this had drawbacks.

Another problem is pensions. Self-employed people aren’t required to pay in and around 84% aren’t contributing to a pension besides the State Pension.

Some self-employed people have experienced a significant increase in work. But for those missing out on pay, and pension contributions, their personal finances might be less positive. Ensuring you’re enrolled in a self employed pension is a good first step.
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What is the long-term impact on my pension?

The extent to which you’re pension has been impacted by furlough depends on two factors:

• Did your employer pay you the 80% furlough pay, without any top up?

Example: if you and your employer were paying in £100 a month into your workplace pension, then under the 80% furlough rate you’d only be paying in £80. Over the 18 month furlough period that would equal a loss of £360 to your retirement savings.

• Did you opt out of your pension, or not contribute to a self-employed pension?

Example: if you and your employer were paying in £100 a month into your workplace pension before furlough, but during furlough you opted out of all contributions, over the 18 month furlough period that would equal a loss of £1,800 to your retirement savings.

Keep up with personal pension contributions

Any loss to your pension savings can be countered with regular or one off contributions, putting you back on course for your retirement goals.

Example: if you’re a basic rate taxpayer and set up a monthly contribution of £12 into your personal pension, you’ll receive £4 in tax relief giving you a £16 a month contribution increase. Over 24 months you’ll have made £360 in contributions, including tax relief.

If you’re looking to manage your money for retirement, consider combining your old pensions into one easy-to-manage online plan with PensionBee - a leading online pension provider.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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A new colleague recently asked me how we prioritise work at PensionBee and how she could get her new ideas introduced into our product.

Like a lot of things in Product Development, and indeed work in general, prioritisation can be an art as well as a science. We need to ensure we deliver value to our customers, and whilst there are many great ideas we’d like to execute on, we need to ensure there’s a foundation of logic built into what will make the biggest difference to the greatest amount of people, given we’re juggling scarce resources, such as people, time and budget.

Goal setting (OKRs) method

The Objectives and Key Results (OKRs) framework was created by Andy Grove at Intel in the 1980s, which was then picked up by John Doerr in the 1990s and early 2000s who took the concept to Google and helped it become the company that it is today. This framework has effectively become the ‘gold standard’ of goal setting and prioritisation in the ‘tech world’.

It enables the business to set an objective, with clear measurable results, and for teams within the business to ideate and execute on solutions that can achieve those targets.

We use the OKR framework at PensionBee, and as I write this, we’ve recently run a strategy session with our Growth team to reaffirm their current objective and ideate on some ways that can get them to achieve it. Check out some of what the Growth team will be focusing on this year in this blog on what Open Banking means for our customers.

So OKRs are a bit of the ‘science’ of prioritisation, but what about the ‘art’? Well, here are some methods that we (and no doubt many others) use to some degree.

The ‘start up’ method

There’s a feature list a mile long of things that we know we need to do, a natural symptom of being a young company with a backlog of obvious stuff that doesn’t yet exist. A good example of this is customers being able to withdraw from their pension via our mobile app. We’re a pension provider, we allow customers to drawdown from their pension from within the website, but what about our customers who have signed up from the Apple and Google app stores that don’t even know we have a web product? We need to definitely deliver that feature, to allow all of our customers the same experience and functionalities.

The ‘we’re a fintech’ method

As a pension provider, we need to encourage positive savings behaviour. Making it possible for customers to add additional money to their pension is paramount to this aim. However, as a pension provider in the fintech space, we need to make it possible to do this, in a way that is both better and easier than our legacy peers. Partnering with technology companies like our partnership with Plaid, an ‘Open Banking’ supplier enables us to hit this goal.

The ‘regulatory’ method

Sometimes the regulators in our industry, such as the FCA, will implement initiatives that aim to enhance customer outcomes...

One of these initiatives, Investment Pathways, was put in place to provide customers entering drawdown with additional guidance so that they could consider if their chosen investment plan was suitable for them when they were considering their retirement goals.

Of course, anytime there are these industry mandated initiatives, they will shoot straight to the top of the priority stack of what we will build.

The ‘subject matter expert’ method

At PensionBee, we’re fortunate to have some of the smartest people in their respective fields working with us. These subject matter experts will apply their knowledge and industry experience to propose initiatives that will get PensionBee to hit its business goals. The sponsorship of the Brentford Bees football club, was great for brand awareness and timed to perfection, happening just before Brentford were promoted to the English Premier League.

The ‘idea backlog’ method

This one is a bit of cheeky inclusion in the ‘art’ of prioritisation. The Backlog really should be prioritised based on quantifiable data points, and very much aligns to the OKR framework. It’s still an art to make sure it works though!

In the last six months, PensionBee adopted the Agile discipline of Scrum with an aim to get better specifications, collaboration and faster cycle times in place.

The adoption of this method has been a real success, but not without its sticking points. Trying to really define teams and responsibilities has become crucial to ensuring everyone has focus in their work. For a long time there has been semi clear dividing lines, but with a lot of grey.

Specifically, our Growth delivery team, which is tasked with product features to grow PensionBee’s core AUA and customer number metrics, faced a real tension between product development vs. marketing requests (like brand, content and SEO). How do you compare things like having an Open Banking enabled contribution journey, vs. new landing pages for specific plan campaigns?

The Product Manager for the Growth team, Ari, who previously sat in our Acquisition team, and knows the inner workings and goals of both, created a process guide for how ‘Marketing’ requests can come into the Growth team’s backlog for triage against everything else. That list of items is on a weekly basis curated with Ari and the Business Owners of Team Growth, our CMO, Jasper and VP of Marketing, Neill.

So there you have it - there isn’t one size fits all when it comes to deciding what to deliver on, but all of these methods together form the special ingredients that work towards us building a great pension product and service, so that everyone can look forward to a happy retirement.

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Maintaining data integrity’s essential for all organisations and poor data integrity can have many negative consequences. Businesses may be less competitive, experience reputational damage or fail to meet regulatory standards, and many organisations may find it more difficult to make evidenced-based decisions among numerous other implications. At worst, poor data management can even lead to serious consequences for some organisations like misidentifying patients and issuing incorrect treatments.

For those, like PensionBee, who operate within the pensions industry, failure to maintain data integrity could impact numerous areas of service. The Pensions Regulator (TPR), which regulates the UK’s workplace pension schemes, emphasises that without accurate record-keeping there could be a variety of consequences ranging from a pension scheme failing to meet its legal requirements to harming their ability to check employers are paying the correct contributions to their employees. In 2019, TPR found that hundreds of pension schemes had failed to review their data within a three-year period, let alone perform an annual review as per their expectation. Among other issues, this may mean workplace pension savers may not receive the pensions they’re entitled to.

With the potential cost of poor data integrity so high, it’s important that organisations are able to maintain a set of data they can readily rely upon. To this end creating a ‘golden record’ of data is sought after for its ability to not only help organisations meet compliance rules but also create more efficient processes and unlock new opportunities. A golden record of data refers to a consolidated data set which is considered to be the single source of truth for all the data a business holds about a customer, employee or product.

Building a golden record involves collating data stored across potentially numerous systems, such as customer relationship management (CRM) and enterprise resource planning (ERP) databases, and harmonising them into a single data set. The idea is that the golden record data can be safely assumed to be correct and the most reliable data available.

No matter whether an organisation functions as part of a government, within a healthcare or education setting, or as a non-profit or commercial organisation, a golden record of data can positively impact how efficiently it runs day-to-day and create new opportunities.

Why create a golden record for data?

It’s easy to imagine that as the amount of data stored across multiple systems increases so too does the probability of errors and mismatches among those data records. This makes it difficult and time-consuming for a business to use such data as it becomes difficult to identify and decide which are the correct details for an entity such as a customer or product.

Without a golden record, data are often duplicated and sometimes incomplete across databases. Anyone who’s ever searched through databases of records has probably come across these issues; for instance, encountering several versions of someone’s name, where one may be misspelt, or finding multiple email addresses recorded for the same individual.

Take, as another example, the name of a business customer. This may be recorded in an invoicing system as Arkwright Enterprises, whilst being also recorded in an ERP system as A. Enterprises. Or perhaps the postal address entered by a customer when registering on an e-commerce site may include a line not recorded in the CRM database. If all of these systems were to be merged into one master data set without cleaning the data beforehand, each of these records would be included as a separate entry along with any errors in the data itself.

The benefits of creating a golden record

A golden record of data can open up many benefits, of which some of the most significant are listed below.

Compliance and regulation

It’s much easier to fulfil compliance-related requests such as a Subject Access Request (SAR). SARs were created as part of the General Data Protection Regulation (GDPR) and Data Protection Act (DPA) legislation, introduced in 2018, enabling consumers to request the data a business holds about them and details of how it’s being used. Should a business receive one of these requests it’ll find itself in a much better position to provide all the data necessary as well as information on where and how it’s stored.

Business decision-making

More incisive decision-making is enabled by greater insights into a data set. For example, a business may notice certain trends in consumer behaviour which may help them develop a new product or marketing strategy.

Enhanced marketing activity

Marketers are provided with a more holistic and meaningful picture of their customers. This could give them the ability to create more highly targeted campaigns, and ads which are better personalised to customers or open up opportunities to cross-sell other items.

Operational costs and complexity

A golden record of data can provide several benefits to the way a company operates. Operational costs such as data storage are reduced when there are fewer data entries which need to be maintained.

Data can be more quickly and easily searched and analysed because it’s immediately available in the highest quality possible and because there’s only one central record to look at instead of searching multiple systems.

As the fields in the master data set are linked to the corresponding ones in a data source such as a CRM system, when those fields in the original data source are updated so too is the master record, thereby helping to ensure your master data set always has the most recent data.

The challenges of creating a golden record of data

The benefits of a golden record can transform how successful an organisation can be yet reaping the benefits depends upon having a well-thought-out and implemented plan for creating a golden record of their data. Compiling a record of data, free from inaccuracies and duplication, isn’t necessarily a quick or straightforward process and often requires several carefully applied steps to get to that point.

Identifying and standardising data

Prior to being merged into a golden record, all the sources of data need to be identified. This can be more complex in some organisations which may have a large and growing number of systems, each recording data separately.

The fields within the data source should be reviewed to ensure they’re as complete and accurate as possible. For example, there may be a value for an item in a data source which has been entered into the wrong field, such as a customer’s full name being entered entirely in the first name field and not split across both first and last name fields. The fields in the data source should also follow the formatting requirements of the golden record. For instance, the format for a date field in a data source should match that used by the golden record.

Matching and merging data

Next, matches in the data need to be identified to remove any duplicates. In a customer database, for instance, there could be numerous customers with similar names. Are these the same individual? If so, are the variations in the name simply misspellings? Or was an error made in editing the wrong entry at some point meaning the different data entries are mixed up with each other?

Where any duplicated data has been identified, a decision has to be made as to which field, from which data source, should supersede all others and become the authoritative version of that item of data which can be merged into the golden record. Going back to our earlier example, when deciding between two names recorded separately, should a business go with A. Enterprises from data source one or Arkwright Enterprises from data source two? In this case, a business may choose to use the data from data source two as this source is generally more reliable in recording business names. A scheme which records employer contribution data, such as contribution amounts, date of payments and recipient data, in multiple places, will need to decide and resolve which are the most accurate instances of the data if inconsistencies are found.

However, there could well be more complex scenarios, particularly where it’s not clear that the data from multiple sources are referencing the same entity. In circumstances like this, a manual review may be needed to decide which version of a record should be chosen for merging. Whilst manual reviews may slow down the process of creating a golden record they may be the only way to judge which data source to use and the short-term trade-off in time should reap benefits over the long term.

Unlocking the power of the golden record

Having a golden record of data holds tremendous value for organisations across industries, from meeting compliance obligations at a minimum to helping to propel commercial business ambitions, yet the advantages it offers may be limited without a rigorous process for creating one in the first place. There should be well-designed data source selection and cleansing criteria, including manual data cleansing where it’s needed, as well as a process for how future updates to a golden record are made. Establishing a method which includes controlling and approving future changes will help protect its integrity and produce the kind of quality data that can help make transformative business decisions.

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We’re always looking for ways to help our customers manage their pensions more easily. Recently, we launched Regular withdrawals, a new way for those over 55 to more conveniently withdraw from their pensions online or through the PensionBee app. Currently, this feature is only available to a select number of customers, but if you’re over 55 and would like to start using our newest method, let us know by emailing feedback@pensionbee.com and we’ll be happy to make it available to you. However, we’re looking forward to opening the feature up to all customers eligible to withdraw from their pensions soon.

How does a Regular withdrawal work?

Our new feature enables you to take a regular income from your PensionBee pension by setting up automatic monthly payments directly to your bank account. It saves going through a manual process every time you want to draw down from your pension. Simply, choose how much you’d like to take from your pension and select a payment date from the available options. Your money should then arrive in your bank account on your chosen date each month. A weekend or bank holiday may impact the processing time of your payment. So, the date your payment arrives in your bank account could vary slightly from your chosen date in these instances.

We know that many customers will appreciate the ‘set and forget’ approach of a Regular withdrawal, however, there’s also a lump sum withdrawal option so you can always take money from your pension as and when you need.

How to set up a Regular withdrawal

Start by logging into your PensionBee account through the PensionBee app or online.

When using the PensionBee app:

Tap the ‘Funds’ tab and select ‘Withdraw money from your pension’ then select ‘Set up Regular withdrawals’.

When logging in online:

Click the ‘Withdrawals’ tab and select ‘Regular withdrawals’.

Then follow the below steps:

1. Read the information about how the withdrawal process works and confirm you understand before proceeding.
2. We’ll ask you some important questions to ensure you understand whether withdrawing from your pension is the right decision for you. These include:
   • getting free impartial guidance about what to do with your pension savings, including the options available to you; and
   • confirming you understand the implications of your financial decisions.
3. Select the bank account you’d like your withdrawal sent to or add a new account. (If you add a new bank account or if this is your first time making a withdrawal we’ll need to verify the details provided. Once completed, you’ll be able to come back to finish setting up.)
4. Choose how much you want to withdraw and your preferred payment date from the options.
5. Review the details of your withdrawal request before confirming you want to proceed.

It’s worth noting that you can’t use both of our withdrawal methods at the same time. If you already have an active lump sum withdrawal you’ll need to wait for it to clear before setting up a Regular withdrawal but we’ll let you know if you do have one pending. Similarly, if you want to take out a lump sum you’ll need to cancel a Regular withdrawal first.

If you’d like to change your withdrawal amount or date, simply cancel an existing Regular withdrawal and set up a new one.

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Take control of your retirement

Our company mission is to make pensions simple so that everyone can look forward to a happy retirement. For many customers, receiving regular automatic payments from their pension will mean one less thing to think about. It provides greater flexibility over how you’d like to take your pension and could help you manage your finances in retirement more effectively.

Let us know what you think

We hope you’ll find our new feature easy to use but we’re keen to learn about any ways you think we could improve it, or any other features you use to enhance your PensionBee experience. You can let us know what you think by emailing feedback@pensionbee.com.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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The gender investing gap includes the difference between the number of females and males who engage in investing activity. Historically, women haven’t invested at the same rate as men. This is for a mix of reasons such as lower risk tolerance, lack of confidence or education. Often, women prioritise supporting families and saving for the future.

The tide on the gender investing gap’s slowly turning. With it, comes the opportunity to speed up impact investing. In 2022, BNY Mellon calculated that if women invested at the same rate as men, there would be an extra $3.22 trillion of global assets under management available to invest. Women display preferences for sustainability considerations when investing. A 2020 survey found that only 19% of women said they would invest in a company that wasn’t considered socially responsible. This is compared to 51% of men. So, what could this mean for allocating money to funds and businesses addressing the world’s great social and environmental problems?

Closing the gender investing gap will have a positive impact for economic growth and female entrepreneurship. Below we explore the gap through a climate and social impact lens. We take a look at the positive effect that would take place when women are empowered and given the right tools to invest at the same rate as men.

The gender investing gap

How has the gender investing gap evolved over the last few decades? A study by the University of California-Berkley found that in the 1990s men traded 45% more than women. A FinanceBuzz survey revealed that 60% of men check their investment portfolios once a week. By comparison, only 41% of women do.

These patterns have shifted since the outbreak of COVID-19. Women faced more job losses due to caregiving responsibilities and loss of income. This has rolled back some of the economic gains made by women in recent decades. The pandemic also prompted more open conversations about investing amongst women. These focused on how they could protect and increase their family finances during uncertain times.

The female investing mindset’s likened to women’s approach to business practices which have been found to value honesty and transparency. This combined with a long-term outlook, has the potential to contribute to a new era of impact investing that looks beyond financial returns.

How closing the gap will drive impact investing

At an overarching level, impact can be positive or negative, intended or unintended, and direct or indirect. Impact investing as a strategy aims to address social and environmental problems, alongside financial gains. Examples range from renewable energy projects to microfinance initiatives, regenerative agriculture programmes, affordable housing and the supply of healthcare and education, to name but a few.

Investments falling under the ‘sustainable’ umbrella continue to grow. At the beginning of 2020, the value of sustainable investment in major financial markets globally stood at $35.3 trillion.

This is only set to rise under the influence of policies that have set out a pathway to decarbonise the global economy. This is alongside the appetite of investors who recognise the transitional, legal and reputational costs of business as usual. So, how will the closing of the gender investing gap contribute to this?

Women outperform men and have a longer-term mindset

Evidence from many studies suggests that when it comes to investing, women tend to outperform men. Warwick Business School found that women outperformed men by an average of 1.8% over a three-year period. With a higher rate of return, think about how that money could be allocated to impactful causes. In the same study, it was found that women only traded their investments nine times a year, versus men at 13 times a year.

Data from RBC Wealth Management notes that women are less likely to prematurely sell assets during periods of major market volatility. They’re also around 25% less likely to withdraw their investments than men. Similarly, N26, a group of European investors, found that only 23% of women prioritise short-term wealth gains compared to 43% of men who have long-term wealth as their investment priority. Such a position could be beneficial from a climate standpoint, as even if profits for a business they’re invested in decline, female investors are unlikely to sell. Instead women might instead focus on a company’s climate and social agenda.

Legacy’s another important piece of the puzzle. Female investors have been found to focus on future generations. They have a desire to pass down wealth to their children for safety and confidence. This ties into the principles of sustainable development, i.e. meeting the needs of the present without compromising the ability of future generations to meet their own needs - as set out in 1987 by the United Nations Brundtland Commission.

Female investors display an affinity for sustainability

By unlocking the opportunities for more women to invest, we could witness a rise in impact investing. This is driven by higher interest and preferences by women for sustainability. In 2017, Morgan Stanley asked investors how interested they were in sustainable investing or other investment funds that pursue positive social and environmental impacts, without impacting potential financial returns. 84% of women said they were interested versus 62% of men.

More recently, a 2022 sustainable investing report by Boring Money, which interviewed over 4,500 UK citizens and 1,500 retail fund investors, found that seven in 10 women agreed that they could achieve better returns with sustainable funds, compared to six out of 10 men. The results also revealed that 48% of women chose climate change as an area to focus on, compared to 42% of men.

Whilst not the same as sustainable investing, the female affinity to ESG as a framework for risk assessments shows that closing the gender gap in investing could lead to wider adoption of processes for investment screening that incorporate more than financial performance.

From their ‘Women and investing: reimagining wealth advice‘, UBS found that 71% of women were making investing decisions with sustainability considerations in mind, compared to 58% of men. That, combined with women investing at the same rate as men, could mean there is over $1.87 trillion flowing into more responsible investing. This would be enough to fund regeneration and decarbonisation initiatives aplenty, not to mention projects dedicated to eradicating poverty and gender inequalities.

Unlocking the impact of female entrepreneurship

Empowering female investing can have a positive ripple effect on female entrepreneurship and with that, the opportunity to support enterprises and funds focused on socio-economic equality and supporting women.

Vice Presidents of The European Central Bank (ECB) have called for an increase in the number of female fund managers and decision-makers in venture capital funds to positively impact women and the sustainability agenda. As it stands, only 5% of managing partners in EU venture capital funds are women which could, in part, explain why women-led businesses continue to report struggles on gaining investment from VCs.

A European Parliamentary report entitled ‘Closing the gender investment gap for a more resilient, innovative, inclusive and balanced economy’ has weighed in on the contribution female investors can provide to female entrepreneurship. It states, ‘We know that 30% of entrepreneurs are women, but they receive 2% of the financing available and with the pandemic, this figure has even dropped to 1%.’ The paper highlights that the rise in female investing to fund entrepreneurship can make climate action more impactful through solution-based businesses focused on innovation and equality.

Creating a conversation that’s representative and inclusive of all genders, ages, races and backgrounds can help ensure that female investing with an impact focus includes voices in South America, Central America, Africa and Asia and furthers the climate agenda. By empowering female investors, we can help protect those who are most vulnerable to climate change, especially women and girls.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Amy Nguyen is a Strategist, Researcher and Writer focusing on corporate sustainability, global value chains, finance and fashion. Amy is the Founder of Sustainable & Social, a platform dedicated to deconstructing complex climate issues for a millennial audience.

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Hi, I’m Nancy Kilpatrick from Legal and General, and I’m writing to you today to give you an update about the Future World Plan, which you’re invested in.

How did the plan perform compared to the market, over the last three months? Did we have a good quarter or a bad quarter?

The Future World Plan returned c. 7% over the three months to the end of September, broadly in line with global stock markets. Given the range of news we hear day in, day out, this can almost certainly be classified as a good quarter for savers in the plan.

Stock markets continued their recovery from their low point in March during the third quarter of 2020, although September saw markets give back some of these gains on concerns that a second wave of COVID-19 cases was acting as a headwind to the global economic recovery. Encouraging updates on COVID-19 vaccine candidates and supportive comments from central banks over future monetary policy had boosted stock markets during July and August.

Most of the world’s markets made gains early in the third quarter, before some uncertainty emerged in September. We saw US stocks continuing to lead the recovery, recording a new all-time high in August, led by technology stocks in companies such as Alphabet, which owns Google, and Apple. September however, brought the return of volatility amid the on-going impasse in Congress over the contents of a new fiscal stimulus package. The US presidential election, of course, was another major source of uncertainty in the region.

The UK was a notable exception in that it posted a disappointing quarter, losing ground as new localised lockdown restrictions raised concerns over the economic outlook, while there were fears that the government would fail to agree a trade deal with the EU before the end of the Brexit transition period in December. Dividend cuts across a broad range of sectors also highlighted the impact of the pandemic as companies opted to preserve cash.

What can savers expect for the next quarter?

While there is no doubt that the discovery and availability of a viable vaccine will be the primary driver of market returns (as the recent short-term boost following the announcement from Pfizer demonstrates); looking through this, there are other factors that concern us with the outlook for global stock markets.

At time of writing, the US election has brought about the (highly expected although subject to final/re-count) change in President from Trump to Biden, which brings a level of uncertainty in itself, moreover concerns over potential disjoint of a Republican senate and Democratic President add to worries of a difficult environment for future policy, particularly around taxation of large tech companies and international trade.

In Europe, the threat of deflation, meaning the decline in prices for goods and services, which was already prominent before the pandemic, continues to raise concerns. While this can be the cause of negative market movements, the potential for more central bank intervention to boost markets in reaction to this conversely, would have an opposing positive effect on short-term returns. In the UK of course, we have Brexit and the hard exit which were central to our fears before the pandemic took over.

While it is clear that there are many issues to be worried about on the horizon from a political and longer-term economic perspective, so long as central banks continue to be able to ‘do whatever it takes’ to prop up economic activity by way of fiscal stimulus, investment markets will continue to react to these shorter-term boosts in a positive way. In this world of uncertainty, what we can be certain of is a boost, once a vaccine becomes readily available for COVID-19.

How has Legal & General driven positive social change in the past quarter?

The third quarter brought an exciting announcement, which all of us at Legal & General are incredibly proud of. You may be aware that we are firm believers in diversity, crucially, that diversity of thought is not only good for business but key to effective management. As a founding member of the 30% Club we were proud that Legal & General were the first investment manager to put our vote to this topic; voting against any FTSE100 company with all male boards in 2015. Through the years, we continue to extend these expectations on a global level, with most recent attention on US and Japanese companies.

This quarter we have formalised our (and no doubt many others’) long held view that diversity is not just about gender. Ethnic diversity is key to ensuring that company boards are truly reflective of both company client bases and the world around us. We are delighted to announce that from next year, Legal & General will be voting against any FTSE 100 company with all white boards, another milestone that we are immensely proud to be leading with. Our hope is always the ‘domino’ effect; to truly effect change we need to come together as an industry to send consistent messages to companies. The more asset owners use their votes in this respect, the more pressure there will be for companies to implement change. We hope others will join us on this path, such that in time, board diversity becomes industry norm rather than an exception.

Views expressed are of Legal & General Investment Management Limited as at 12 November 2020. Forward-looking statements are, by their nature, subject to significant risks and uncertainties and are based on internal forecasts and assumptions and should not be relied upon. There is no guarantee that any forecasts made will come to pass. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be solely relied on in making an investment or other decision.

Your updated fact sheet will soon be available to download in the BeeHive. If you’d like to ask a question in the next update or share your thoughts, you can get in touch with PensionBee via email or Twitter.

As with all investments, past performance is not indicative of future performance and you may get back less than you start with.

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Hi, I’m Nancy Kilpatrick from Legal and General, and I’m writing to you today to give you an update about the Future World Plan, which you’re invested in.

How did the plan perform compared to the market, over the last three months? Did we have a good quarter or a bad quarter?

The Future World Plan had a good quarter to end June 2020; returning 17.5% as global stock markets rebounded strongly during the second quarter, recovering much of the losses incurred during the opening quarter of 2020. Stimulus measures announced by central banks around the world, including several interventions by the US Federal Reserve to calm unsteady markets, lifted stocks in April. Subsequently, rising hopes for a rapid recovery in global economic growth helped to maintain the momentum behind equity markets as the quarter progressed, with lockdown measures being lifted and major economies reopening.

Year-to-date (to 17 July) global stock markets have more than recovered; returning 3.5% in sterling terms. US shares led the charge with the region recording its best performance since the final quarter of 1998. The market has been led higher largely by the major technology stocks which dominate both US and global markets. With the US making up around half of the country exposure within the fund, and technology 15% with the likes of Microsoft, Amazon and Apple amongst the top 10 holdings, this has been beneficial for plan returns. Other regions present a mixed picture, with Europe overall just managing to eek out a positive return this year, emerging markets struggling and, most notably the UK, still down around 15% this year. Given the industrial and consumer services (retail and restaurants) weightings in the UK market as a whole, our home region has struggled.

What can savers expect for the next quarter?

While it is pleasing to see such a recovery in markets we warn that these are still very early days. The outlook, not just for financial markets, but for all of our daily lives; is still very much driven by how the virus plays out. Recent signs of a second wave led to uncertainty around the severity of those. For financial markets particularly, the resulting impact to companies and the economy through the halt in activity brought about by lockdown measures are most likely to impact returns in stock markets. Indeed, at the time of writing we see increased cases in the US ‘sunbelt’ states leading to tightening lockdown measures. With vaccines generally unlikely to become widely available until next year, this reminds us that it is a case of too early to tell and makes us question how exuberant the stock markets can really be in these highly uncertain times.

How has Legal & General driven positive social change in the past quarter?

While we tend to believe that engagement via talks with company management taking place behind the scenes can often be most effective, there are occasions when we feel that it is necessary to address certain causes for concern publically.

Most recently we spoke out against the actions of the world’s largest mining company, Rio Tinto, following the destruction of a 46,000-year-old Aboriginal heritage site as part of a mine expansion. We were disappointed in this incident and concerned with the implications for the ongoing relationship with local communities.

While the issue of land rights and (social) licence to operate is a complex one, which has important ramifications for the mining industry, we have made it clear to not only the Chair, but to the sector and to regulators that we expect the company to demonstrate accountability in this case, and institute changes to prevent such incidents from happening again. While we watch for future developments closely, we continue to work with others to send a clear message – that business cannot be at the expense of community relations.

Views expressed are of Legal & General Investment Management Limited as at 28 July 2020. Forward-looking statements are, by their nature, subject to significant risks and uncertainties and are based on internal forecasts and assumptions and should not be relied upon. There is no guarantee that any forecasts made will come to pass. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be solely relied on in making an investment or other decision.

Your updated fact sheet will soon be available to download in the BeeHive. If you’d like to ask a question in the next update or share your thoughts, you can get in touch with PensionBee via email or Twitter.

As with all investments, past performance is not indicative of future performance and you may get back less than you start with.

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Hi, I’m Nancy Kilpatrick from Legal and General, and I’m writing to you today to give you an update about the Future World Plan, which you’re invested in.

How did the plan perform compared to the market, over the last three months? Did we have a good quarter or a bad quarter?

The fund performed in line with global stock markets over the quarter, returning -17.9%. This compares with the UK stock market return of -23.8%, showing some element of benefit from being invested in all regions rather than solely the UK, the latter of which saw a more major impact. That said, it has been an unprecedented time for all of us, both on a personal level, in the way that we all lead our everyday lives, and also markedly for our investments as the impact of the COVID-19 pandemic plays out across economies and every investment market. For almost everyone with investments therefore, this has absolutely not been a good quarter.

As soon as there were signs of global contagion and most notably outside China and surrounding Asia; fears led to unprecedented selling of assets – almost every asset class with the exception of (some) government bonds and cash fell in value over the quarter. At times we even saw pressure on low-risk government bonds as investors looked to raise and stockpile money from anything that they could sell, and at levels not seen since the 2008 financial crisis.

What has however, also been unprecedented has been the response by central banks and governments to help prop up markets and to attempt to limit the longer-term impacts of this pandemic. Interest rate cuts, more stimulus has, at the time of writing led to a record ‘rebound’ last week, particularly as the US government announced more measures, extending the already significant action it has taken in an attempt to stabilise global markets. Year to date (14th April), the US stock market is down only 12% with the lows this year so far showing a return down over 30%.

While action across the pond might feel irrelevant at these times, what the US does is particularly important to your investments as the region makes up around 60% of the global stock market and most significantly, the plan in which you are invested. The relative resilience of the US market can mainly be attributed to its exposure to technology companies, which as you would imagine have been the least worst performers at these times when working from home has significantly increased. The other side to this is the UK market (c. 6% of the fund), which tends to have more of an exposure to oil, gas and mining companies which will fare worse when activity drops due to lockdown scenarios.

That said, it is still very early days and wholly likely that we might still see more negative moves from here – equally, should ‘normality’ resume, and a vaccine be found and efficiently distributed, we could very well see a relatively quick rebound in stock markets from current levels (which remember are largely driven by sentiment). More on that in the next section with what investors might expect going forward…

What can savers expect for the next quarter?

We will, as you would expect, spend a lot of time thinking about what could happen from here. It is deeply concerning that markets are not looking to fundamental data but are very much now reacting to how the virus plays out. This makes it almost impossible to predict what is to happen however, we do have three scenarios that we consider at this time to try to understand how our investors will be impacted.

The first being the big initial shock that we have seen, followed by a ‘rapid’ rebound. This would be a situation where there are a few weeks of lockdown, then a gradual lifting of restrictions. This is our most positive case and we warn that there will still be quite an impact on unemployment and a significant impact on global GDP growth; around -3%, similar to what we saw in 2008. The rebound in economic growth (which lag markets by at least six months) should then follow in 2021.

The second scenario involves the potential of a second wave of infections and then a longer period of lockdown. Here we see this initial shock, a lockdown for months rather than weeks, with the most harmful impact being a second wave of infections. This level of shutdown and additional impact of a second wave, could then lead to some bankruptcies and have a larger effect on economic growth (some -5% to -10% of global GDP).

The third, the worst case and least likely in our view, is something akin to the Great Depression mark 2. In that scenario life as we knew it does not return to normal; the virus lingers and a new lockdown of sorts remains for the longer-term in that people are wary of being physically close to other members of the general public. This leads to travel, leisure and entertainment industries (in addition to commercial property, transport and energy) not recovering. This could mean significant company bankruptcies across industries leading to more than 20% decline in global GDP.

When it comes to official estimates; The UK’s Office for Budget Responsibility has published a virus scenario – based on three months of full lockdown with a further three months of partial lockdown, they see the economy (not stock markets) shrinking 35% in Q2 2020 and unemployment spiking at 10% before a sharp recovery. Separately, the IMF produced a report called The Great Lockdown which forecasts a 3% contraction of world GDP in 2020 as a whole.

As we have said, these are unprecedented times and the outlook is very difficult to predict. What we have seen however, is a pulling together of communities, governments and policymakers to support both businesses and every economy. So far this has shown positive signs and so long as the spread of the virus can be controlled, we see the first two scenarios as the most likely, with a shorter-term hit to growth, but an eventual recovery. What supports our relative optimism at this time are (albeit very early) signs that the rate of infection in Europe is slowing (with Spain and Germany now relaxing some lockdown measures), daily deaths are declining, and we have had news that China has approved human trials for three potential vaccines.

Whilst there is no doubt that these are difficult times, if we all continue to pull together, maintain faith, and continue to support the companies that we are invested in, we will get through this and will recover. How long it will take is the biggest question mark.

How has Legal & General driven positive social change in the past quarter?

From Q1 2020 we will be voting against all companies where the CEO also serves as board chair (excluding Japan, due to unique features of this particular market). We have advocated a separation of these roles for many years because having a distinct CEO and board chair provides a balance of authority and responsibility that we believe is in both the company’s and investors’ best long-term interests. Board independence is equally important to ensure robust oversight over company strategy and executives’ decisions – CEOs should not be able to ‘mark their own homework’.

Last year, we supported 51 shareholder resolutions in the US asking for a split of functions of board chair and CEO, and voted against 40 directors proposing to combine roles of board chair and CEO without the prior approval of their shareholder.

On a company specific level we are pleased that, following active engagement with DTE Energy over a three-year period, and providing clear guidance of our intentions of voting policy from this quarter; we have seen the company separate CEO and board chair roles in advance of our vote being cast.

Views expressed are of Legal & General Investment Management Limited as at 15 April 2020. Forward-looking statements are, by their nature, subject to significant risks and uncertainties and are based on internal forecasts and assumptions and should not be relied upon. There is no guarantee that any forecasts made will come to pass. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be solely relied on in making an investment or other decision.

Your updated fact sheet will soon be available to download in the BeeHive. If you’d like to ask a question in the next update or share your thoughts, you can get in touch with PensionBee via email or Twitter.

As with all investments, past performance is not indicative of future performance and you may get back less than you start with.

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5 ways pensions should change to fit the modern world

Most parts of our lives have been revolutionised by technology and customer-first approaches, but sometimes it feels like the pensions industry has some catching up to do. Here are five features we think future-fit pensions should have.

Usable online account

Many providers offer online pension dashboards, but does anybody actually use them? Onerous log-in processes, poor design and limited online functionality add up to a pension portal that’s yet another never-clicked-on bookmark (if it makes it to bookmark status at all…)

Wouldn’t it be nice to have a pension portal that’s beautifully designed and easy to use? It would display your current pot size and your projected retirement income, and let you make payments or set up regular contributions with a few clicks. After all, it does make sense to check your retirement savings from time-to-time, so that you can see if you’re on track, and make adjustments if you need to. With PensionBee you can manage your pension in an online account to do just that, and use our app to access your real time pension balance.

Manage your pension with ease. Get started.

A pension in one place

If you’ve had several different jobs (and people now have an average of 11 during their careers) then you probably have several different pension pots, which makes it pretty tricky to keep track of your retirement savings. The pension system harks back to an earlier time when most people had a ‘job for life’.

In the modern world, perhaps it would help if our pension stayed with us when we moved from one employer to another?

‘Pot follows member’ was one of the proposals of former Pensions Minister Steve Webb, but it was shelved by the government last year. Current Pensions Minister Baroness Altmann has suggested that the idea will be picked up again at some point, but it’s likely to be a while before your pension will automatically follow you from job to job.

In the meantime, don’t leave your pensions lurking in dormant pots while the providers siphon off fees. It’s estimated there could be £750bn of dormant pensions by 2050.

PensionBee can locate and transfer old pensions and put them in a single, easy-to-use plan.

Less paperwork and small print

Surely we don’t still need to receive huge wads of paper through the post? Pension providers have a habit of sending hefty paperwork that’s full of small print and jargon, which means many pension holders struggle to fully understand their pension situation. We think the pensions of the future have concise, easy-to-read documents that make the important information (fees, for example) clear up front, and that don’t try to baffle customers with jargon. It saves trees, too.

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Low cost

So as we’ve said, we think your pension should be easily accessible online and that you shouldn’t have to wade through stacks of paperwork to find the details. And in turn, these steps should help to drive increased consumer choice and force the market to be more transparent: high-tech pensions should be low-cost pensions.

Currently, many people aren’t aware of the amount of cash that their providers are taking from their pension pots in the form of fees, as many of the old-school pension providers bury various charges in reams of paperwork. These fees can have a big impact on the size of your pot: if you’re paying an annual fee of 2%, your pension pot could be reduced by 36% when you retire, for example.*

Giving you control

Your pension is your money for retirement, and you should feel like you’re in control of it. You should be able to get the information you need about your pension, move your money to another provider if you choose, and shop around for the best annuity when you reach retirement age. Unfortunately, many people aren’t currently in that situation. Pension providers often make it difficult to get information and they charge steep exit fees if you try to move your money. Many people are also led to believe that they have to buy their annuity (their retirement income) from their pension provider, when in fact everyone has an ‘open market option’, which gives you the right to shop around for a good rate.

* Standard assumptions apply. This calculation is based on a pension pot of £20,000, and is an illustration of how much the fees may reduce your pension pot by when you reach retirement age.

As always with investments, your capital is at risk.

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