Whether you’re lounging by the pool somewhere hot or chilling at the bottom of your garden, nothing’s more relaxing than settling down with a good book. But rather than escaping to your favourite fictional world this summer, why not opt for something a little more practical?

If you’ve been longing to get a better grip on your finances and want to understand how to best manage your money now and in the future, there’s a wide selection of personal finance books with your name on. Here are eight of the best to add to your summer reading list.

1. The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich

Since the The 4-Hour Workweek was first published in 2007, it’s consistently topped best-seller lists and is showing no signs of abating. It seems we can’t get enough of Timothy Ferris’ sage advice on how to restructure our lives so they’re not all about work. If you’ve got dreams of working less and living more, The 4-Hour Workweek will tell you everything you need to know from how to outsource your least favourite tasks with virtual assistants, to taking mini-retirements throughout your career.

2. Worth It: Your Life, Your Money, Your Terms

In Worth It, author Amanda Steinberg explores the savings gap between men and women and shares the essential financial information women need to take financial control of their lives. It details some of the author’s own experiences alongside tips for evaluating your financial priorities and creating financial stability.

3. Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence

Examining how our relationships with money encompass more than just our earnings, spending habits and savings, authors Vicki Robin and Joe Dominguez explore how living frugally can make us happier. First published in 1992 and re-written for the 21st century, Your Money or Your Life is full of real-life examples of how you can follow their nine tips to change the way you perceive and interact with money so it more closely mirrors your values and aspirations.

4. Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

It’s not hard to see why Rich Dad Poor Dad has been a bestseller for two decades. It documents co-author Robert Kiyosaki’s experiences growing up with two dads (his real father and the rich father of his best friend), and their attitudes towards money. Rich Dad Poor Dad advocates the importance of financial education and independence and offers tips on how you can make your money work harder, whether that’s by investing, buying property or running your own business.

5. The 100-Year Life: Living and Working in an Age of Longevity

In The 100-Year Life authors Lynda Gratton and Andrew Scott use psychology and economics to examine rising life expectancies and the death of the final-salary pension, and the impact these will have on modern generations if they don’t restructure their lives differently. If the idea of working until pension age fills you with dread, this is the the book to help you figure out how to maximise your pension savings and turn the way you think about your career and retirement on its head.

6. The Richest Man In Babylon

If you’re not ready to let fiction go completely this summer, The Richest Man In Babylon, is a series of stories about financial successes and failures dating back to ancient Babylon. Author George Clason will teach to teach you everything you need to know about caution, financial planning, saving, and making money.

7. You Are a Badass at Making Money: Master the Mindset of Wealth

Based on Jen Sincero’s personal experience from living in a garage to becoming a No. 1 New York Times bestselling author, You Are a Badass at Making Money is a candid and funny book that’ll help you identify where you’re going wrong with your money management. It’ll teach you how to shift your mindset and provide practical tips on how you can unlock your earning potential.

8. Principles: Life and Work

Principles is written by one of the world’s most successful investors and entrepreneurs, “the Steve Jobs of investing” Ray Dalio. In it he shares the tips he’s amassed during his 40-year career, building one of the largest hedge funds in history. While this book won’t teach you to become a savings champion overnight, you’ll learn a range of skills that can be applied to all areas of life, from tackling challenges and making decisions to motivating others.

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When the time comes to finally draw your pension it’s important to put some strategies in place to ensure you don’t outlive your savings. Get it wrong and you could be forced to return to work or drastically decrease your outgoings, but get it right and you could live a comfortable retirement for decades.

Calculating your retirement income

Before you can choose a spending strategy for retirement you’ll need to work out the total value of your pension and how much this could generate in retirement income. Think about how much each of your pensions is worth: if you haven’t already consolidated your old workplace pensions into one, you might have a few dotted around from previous employments.

Use the pension tracing service to find out the contact details of your pension(s) https://t.co/OKkCLY3Ioy #PAD2016 pic.twitter.com/vN4s8r6kmT
_{— DWP (@DWP)}

These should be fairly straightforward to locate, however if you need some assistance the government’s Pension Tracing Service is a great place to start. When you’re calculating your total savings, don’t forget to include money you’ve got saved in ISAs and other assets.

Planning for the best case scenario

As well as digging into your pension statements to see how much you’ve got saved, you’ll also have to consider how long your money will need to last. At the moment the State Pension age is 66, but it’s slowly increasing. By 2028 you’ll need to 67 you can claim the State Pension.

It’s possible to withdraw a workplace or private pension around a decade earlier from the age of 55, although this is going up too and is expected to increase to 57 by 2028. In the not too distant future it looks likely that both State and personal pension ages will be based on average life expectancies.

Retirement age must move as life expectancy grows, says WEF https://t.co/CUCrSeb42q #retirement
_{— Pension Geeks (@PensionGeeks)}

Last year analysis by the ONS showed that the average 65-year-old claiming their State Pension would live for around 22.8 more years, giving them an average life expectancy of about 87 years. So that’s around 23 years of retirement after the State Pension kicks in and possibly 33 years of retirement if you access your personal pension at 55. Needless to say this is a long time to be relying on your retirement fund to see you through, especially if you haven’t saved very much or intend to live a lavish lifestyle.

People retiring in 2018 have the highest income expectations in a decade https://t.co/rwVm9gjMWD #retirement
_{— Pension Geeks (@PensionGeeks)}

If you plan for the best-case scenario it’s less likely you’ll be caught short and experience a retirement shortfall. That means dividing your retirement income by anywhere between 23 and 33 years, or more, depending on when you’d like to retire. Our online pension calculator can help you do the maths and will give you a breakdown of how much you’ll be able to take from your pension each year. If the amount is too low and not realistically enough to live on, you’ll need to think of other ways to supplement your income, or increase the amount you save in the run up to retirement.

4 strategies for maintaining your retirement fund

When it comes to choosing the best way to withdraw your pension and ensure it lasts, there are a few pension options and strategies you can employ.

1. Drawing a fixed retirement income

There are two ways of drawing a fixed income from your pension. An annuity is a financial product you can buy upon retirement and that works similarly to an insurance contract. You sell your pension for an agreed rate, and then receive a set income for a fixed term. This can be several years in duration, or for the rest of your life.

An annuity is a good way of guaranteeing an income and also takes the hassle of managing your retirement income out of your hands. It also provides greater security than the main alternative as you’ll know up front how much you’re going to receive and will be able to plan and budget accordingly. We offer retirees the option of purchasing an annuity through our annuity partner, Legal & General.

If you’d like to receive a fixed retirement income but would like to explore an option that’s less permanent than an annuity (which cannot be undone), self-managing your withdrawals is an option, using drawdown. If you opt for this strategy you’ll have to be strict and ensure you don’t go over the limits you set for yourself. If you struggle, you may want to consider purchasing an annuity in future.

2. Generating a variable retirement income

Drawdown is a flexible retirement product that lets you access your retirement savings when you need them. Not only does flexi-access drawdown put you in control of how much you withdraw and when, it also provides an opportunity for your pension to continue growing.

With drawdown your pension remains invested so the amount of retirement income you have has the potential to increase over time, however there’s a risk that it could also decrease depending on how your investments perform. One of the main advantages of drawdown is that you can change your mind and do something else with your pension, such as buying an annuity, at any time.

3. Avoiding excess tax charges

Effectively managing tax is one of the most important strategies you can employ to ensure your pension lasts well into retirement. If you withdraw too much retirement income in one tax year, the rate of income tax you pay will be higher, leaving you with less money.

When you first access your private pension you can opt to withdraw 25% as a tax-free lump sum with no questions asked. From there you’ll be charged income tax on every future withdrawal you make. If your pension is your only income, you can withdraw up to £11,850 tax-free in 2018/19, as everyone receives this personal tax-free allowance.

It’s important to be mindful of the income tax brackets, and time your withdrawals so that you don’t take so much that you fall into a higher tax bracket than you planned. In 2018/19 the tax brackets are 20% for total withdrawals between £11,851 and £46,350, 40% for total withdrawals between £46,351 and £150,000, and 45% for anything over £150,000.

4. Delaying taking an income

One of the best ways to ensure your pension lasts you well into retirement is to put off spending it until you absolutely have to. This spending strategy won’t suit everyone, but if you have the means to live in the early part of your retirement without drawing your pension it’s a good idea to delay accessing your savings for as long as possible.

Where a private pension is concerned your savings will have longer to grow if you leave them alone. If you keep working and paying into your pension you’ll continue benefiting from tax relief and employer contributions also, provided you still meet the criteria for Auto-Enrolment.

Call to raise retirement age to at least 70 https://t.co/oWuHSKZRbM #retirement
_{— Pension Geeks (@PensionGeeks)}

For the State Pension, the amount you’ll receive, when you finally start drawing it, will be based on your National Insurance record and how many years of qualifying contributions you have. Depending on your circumstances, you could receive more State Pension the longer you keep paying in and may also receive more if you simply defer taking it.

It’s never too early to start thinking about which spending strategy to implement in retirement and, the sooner you consider your options, the more prepared you’ll be.

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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There’s no doubt that podcasts are having a moment. At its Apple Worldwide Developers Conference earlier this year, the tech giant confirmed there are over 550,000 options available in its iTunes Store, with the number of episodes running into the tens of millions.

It’s not hard to understand why podcasts are so popular. They’re a great way to indulge your hobbies, learn new things on the go, escape from reality and put your multi-tasking skills to the test. Whether you’re looking for content that’s funny, entertaining, informative or motivational, podcasts can cover everything from sport and the arts to current affairs and finance.

With hundreds, if not thousands, of personal finance podcasts at your fingertips we’ve rounded up nine of our favourites that you should be listening to right now.

1.Money To The Masses

Hosted by qualified money expert and financial planning champion, Damien Fahy, Money to the Masses is designed to put you in control of your finances. With topics ranging from how to make money, spend it and save into property and pensions, you’ll find almost 200 episodes to enjoy.

2. The Financial Wellbeing Podcast

Co-hosts actor and writer David Lloyd and financial planner Chris Budd, regularly talk about the link between happiness and money, offering tips and advice to help you achieve financial peace of mind. In the 40-episode back catalogue of The Financial Wellbeing Podcast you’ll learn everything from the principles of behavioural finance and defined benefit pensions to debt management and theories of happiness.

3. Meaningful Money

Meaningful Money has one goal, to help you make sense of money. Hosted by financial planner and wealth management MD Pete Matthew, Meaningful Money is full of simple tips and tricks to help you in your financial planning. From personal finance and insurance to pensions and investing, you’ll find almost 300 episodes of actionable advice.

4. Fintech Insider

Brought to you by the brains behind financial consultancy 11:FS, Fintech Insider is dedicated to all things fintech, banking and financial services. With three new episodes created every week you can expect everything from the latest news to insightful interviews with the thought leaders and innovators of tomorrow from hosts David M. Brear, Jason Bates, Chris Skinner and Simon Taylor.

5. Money Box, BBC Radio 4

Every Saturday financial journalist Paul Lewis rounds-up the week’s personal finance news on BBC Radio 4’s Money Box podcast, with a live midweek call-in show where experts answer listeners’ questions. Expect to hear discussions on the personal finance basics such as banking, benefits, property and pensions, plus more varied topics from AI to zero-hour contracts.

6. Cash Chats with Andy Webb

Hosted by award-winning personal finance expert and self-confessed “money-saving geek” Andy Webb, Cash Chats is designed to help you with your finances. Each week Andy chats to a money blogger, writer or finance expert to cover a range of topics from fast fashion and holiday budgeting to everyday banking and investments.

7. This is Money Podcast

Brought to you by the Financial Website of the Year, This is Money, the eponymous podcast tells you everything you need to know about money each week and what it can mean for your finances. With topics ranging from buying a home to the NHS, this current affairs podcast highlights the latest news from the financial markets to Whitehall.

8. Informed Choice Radio

New on the podcast today, Martin is joined by @UNIQfw to discuss her new book, Boomers: Redefining Retirement https://t.co/RTJbbtXgCU pic.twitter.com/vm55YQFdmW
_{— Informed Choice (@InformedChoice)}

Informed Choice Radio is a bi-weekly personal finance podcast geared towards helping you achieve your financial goals. Financial planner, MD and host Martin Bamford mixes expert interviews with practical tips to get to the heart of the latest personal finance, investing and business news.

9. Boring Money

While there might not be any new episodes on the horizon, the Boring Money back catalogue is a treasure trove of free financial advice. Named after Holly Mackay’s website, which aims to help people without PhDs in Finance make smart decisions about money, the Boring Money podcast is especially good for anyone who thinks investments are boring.

Catch our VP Marketing, Jasper Martens, on one of the episodes discussing whether financial advice should be the norm when people begin taking control of their pension pots.

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I have two roles at PensionBee, that of Head of Brand and Communications and that of Diversity Champion. Never have my roles overlapped more than in the past week. By now the name of George Floyd, a man who was murdered at the hands of the Minneapolis Police Department on 25 May, is ingrained in everyone’s consciousness. Like most, I was profoundly sad when I heard the news, unable to reconcile yet another senseless loss of a black life caused by systemic racism.

My heart has been heavy and the feeling that enough is enough has been palpable and harder than ever to suppress. Thankfully I’m not alone, and it feels as though the world is finally waking up to the fact that things cannot continue as they are and change is desperately needed for the good of humanity. What I’ve learned in the past few days, and wanted to share here, is that it’s not enough to grieve privately or demand change in our personal lives, we must use our voices to fight for equality and representation in our professional lives too. Each one of us can play a role.

Difficult conversations at work are essential

At PensionBee we believe our diversity is one of our biggest strengths and are incredibly proud to have achieved gender parity, and around 40% black, asian and minority ethnicity (BME) representation, which is unheard of in the pensions and wider financial services industry. We have a long-term ambition to grow this percentage at the most senior levels of the business, including on our board, and have a strong desire for our team to be the rule, rather than the exception.

Despite our leadership in this area, as a company we’ve had a lot of tough conversations this week on what we can be doing differently, from better supporting our staff who identify as BME, to giving more thought to the brands we work with and what our actions as a company say about us. It’s been challenging and emotional, but also incredibly inspiring, and I’m so thankful to my colleagues for speaking out, sharing their thoughts and ideas, and ultimately helping us evolve as a company.

PensionBee is a truly special place to work, and our desire to campaign for change and make the pensions industry more representative isn’t just lip service, it’s one of the very reasons we exist. We want to do things differently, yet we also acknowledge that real change cannot truly happen in a world where people are discriminated against and killed because of their skin colour. All businesses have a responsibility to speak out against racism and fight for race equality at every opportunity, and the conversation has to begin internally.

One of the things we’re talking about at length is unconscious bias, which undoubtedly exists within every organisation, discussing the things we can do to combat the everyday prejudices that can cloud our decisions. Earlier today our CEO, Romi, shared a great article (written by Dr Nicola Rollock for the FT) with the whole team, titled “it’s time for white people to step up for black colleagues“. While it’s a small and simple act, it’s also a really powerful one, and hopefully gives some insight into our culture at PensionBee and the essential discourse that’s taking place. We have five company values love, honesty, quality, innovation and simplicity; which were chosen by our team and dictate everything we do, from how we interact with our customers to how we work with each other. If you ask anyone in the team, nine times out of 10 they will say that “love” is their favorite. Working for a company with love at it’s centre is highly unusual, but at times like these it’s proving to be both comforting and necessary.

Identifying the things that we do well

PensionBee has two Diversity Champions, myself and my lovely colleague James. Coincidentally we’re in the process of recruiting another, and it couldn’t come at a better time as we’ve got much work to do. The fact that we have Diversity Champions at all speaks to PensionBee’s keen acknowledgement that we all have different life experiences and needs, and it’s the role of myself and James to help us celebrate these differences as a team, facilitating events and creating a safe space where important discussions can take place.

In July we will launch our new brand campaign which, as always, will feature a selection of our wonderful customers. We have two familiar faces, Lynn and Juan, whom you might recognise from previous campaigns, and two new ones, Priya and Nana, who are from BME backgrounds. We’re determined to put something out into the world that better represents our 75,000 strong customer base, and indeed our team. One of our biggest criticisms of the pensions industry is that it’s not representative of society and the people we service, despite our collective goal being that everyone have a pension.

We firmly believe that you can’t always be what you can’t see which is why a few years ago we introduced an initiative called ‘The Program’, a two-year development program for our Customer Success Team, who liaise directly with our customers. ‘The Program’ aims to encourage people, who may not usually do so, to enter the pensions industry. You don’t need previous experience to enter ‘The Program’, and we specifically advertise on jobs boards aimed at those starting their careers without attending university. We want to challenge the stereotype that you need to look a certain way to succeed in the worlds of finance and pensions, whether that be a prescribed ethnicity, gender, sexual orientation, religion or age. Of course there are many other things we do well and these are just some of the highlights, however everything that we have done thus far is a work in progress, and what matters most is what we do next.

Recognising the areas where we must do more

If this week has taught me anything it’s that there’s no time for complacency, and even if you think you’re on the right track there’s always, always room for improvement.

Something we intend to continue exploring is our customers’ views on the companies their pensions are invested in, and how diversity is incorporated, lobbying our money managers to make appropriate changes where we feel necessary. This is how our fossil fuel free pension fund came about. Our customers wanted us to move away from fossil fuel companies which led us to create something bespoke that not only meets their needs, but speaks to the progress we want to see in the world.

Beyond our upcoming advertising campaign, we have also begun reviewing our approach to suppliers. We’re going to make a concerted effort to work with more people from BME backgrounds. We’re also going to spend some time looking for new voices that we can use our platform to amplify, whether that’s our customers or the bloggers we work with on a regular basis. And then there’s our advertising. We need to strive to do better in every decision we make. In my dual roles of Head of Brand and Communications and Diversity Champion I have a responsibility to influence my colleagues to ensure we deliver on this. I implore each and every one of them to help PensionBee continue creating the change we all so desperately want to see.

The pensions industry must speak up

We must all become Diversity Champions to effect meaningful change every day moving forward, from educating ourselves and signing petitions to donating to charities and lobbying our politicians. There is a perception that financial services companies should keep quiet. But how can they, when almost half of their employees do not identify with the label of “white”? While the major banks, including Barclays, RBS and Lloyds have recognised this, standing in solidarity with the Black Lives Matter movement this week, the silence from the pensions industry has been deafening.

As a collective, the pensions industry, the largest steward of our nation’s wealth, has a duty to do more and must reflect on the message it currently sends the world. From reviewing investing policies to changing the hiring processes so those from BME backgrounds have equal access to employment opportunities and career progression, is a start and crucial to ensuring a mixture of voices are always in the room, advocating for change. The time to start is now!

As always, we’d love to hear your feedback and ideas, so leave your comments below or get in touch with the team on Twitter!

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Throughout October we’re proud to be celebrating Black History Month at PensionBee.

The first UK Black History Month took place in October 1987, as a way of recognising the contributions that people of African and Caribbean backgrounds have made to the UK over many generations, while challenging racism and raising awareness of the British history that wasn’t being taught in schools. Today Black History Month is widely celebrated across the UK, from the media and arts to schools and businesses, and PensionBee is no exception.

Black History Month at PensionBee

At PensionBee, we’re incredibly proud of the diversity of our team and believe that this is one of our biggest strengths, enabling us to better understand our diverse customer base and wider community. The concept of diversity and inclusivity encompasses acceptance and respect and is central to our five company values of Love, Innovation, Honesty, Simplicity and Quality.

This month our five diversity champions have been organising a series of events, so we can not only celebrate black history and culture, but also educate ourselves about the work that still needs to be done to achieve a fair and equal society without the blight of systemic racism.

In addition to a series of talks on the History of (anti) racism hosted by colleagues across the business, we’ve also invited in a range of external speakers including Bola Adesina, Founder and Co-Chair, of LGIM’s Culture Club and Steerco member of the Ethnicity worksteam on the Diversity Project, a cross-company initiative championing a more inclusive culture within the savings and investment industries, as well as a prominent Black Lives Matter activist.

We also held an open mic session where two of our colleagues shared original poems with the team. We’ve posted their words in full below.

ROOTS by Alexander Anglin

I’m growing out my roots,

I will always stay rooted,

You may not like my hair, ..but see if I care,

..See if I care,

I will not be muted,

I’m pursuing my own route, of which only I am suited,

*

I’m the only brother at my workplace,

They don’t understand my roots in the first place,

They call it unprofessional, ..a disgrace,

It makes me wonder what else they have misplaced,

*

Truth be told, it makes me think twice,

It seems that when you’ve got black hair, you see the colour of lice,

You might choose to stare, but spare your friendly advice,

Leave it by the cutting-room chair, that will suffice,

*

It’s funny how you weaved on me,

You took another twist and turn,

I guess that’s why the boss-man never made me perm,

We’re not on the same wave - That, I was quick to learn,

..But I know how to treat a little razor-burn.

March by Alex Dodson

Let me pick up a hammer, and bang a nail in this coffin,

Another nail, another nail, something’s blatantly rotten,

Another name on the news, another day it ain’t stopping,

The angels have got em, we’ve heard it and we’re hearing it often,

*

Are we doing enough? I wonder who’ll be the judge,

Are your boots in the mud, or did you choose to give up?

Police unruly as thugs, they just abusing the trust,

And trust, unfortunately the system’s fixed and corrupt,

*

This is usual stuff, hearing names of the fallen,

George Floyd, Breanna Taylor, these names are important,

Stephon Clarke, Botham Jean, hear the pain in their fortune,

We need to face what we’re causing because it’s straight up appalling,

*

Between the streets and rubble, we can teach of the struggle,

And force the media to put down, their leash and their muzzle,

‘Cos there’s people oppressed, suppressed, and people in trouble,

All people should be equal, there’s no peace and I’m puzzled,

*

And it was us on the boats, a British captain and crew,

And we put people in chains, and they were stacked to the roof,

No hope of actual food, we kept em shackled and bruised,

Men, women, kids, attacking famillies too,

*

I’m speaking about horrors, but we need to acknowledge,

That we didn’t solve the problem, when slaves were abolished,

Where’s equal opportunity, for employment or college?

And where’s accountability, for going back on our promise?

*

This ain’t just for those affected, we all need to put work in,

And let em know, rain or snow, there’s no closing the curtain,

These troops are parents and children, these soldiers are hurting,

So give your shoulder to a person while they shoulder the burden,

*

They’ve given culture, music, artists and leaders,

They’ve given athletes, doctors, pastors and preachers,

They’ve given role models, inspirations, fathers and teachers,

They’ve given to every part of it, still there’s answers I’m seeking,

*

Life is harsh and uneven for some it’s ghastly, I’m screaming,

If we’re ignorant, or turn the cheek, it’s darkness we’re feeding,

Long as our arteries bleeding we’ll keep, marching for freedoms,

It goes left right left, long as the heart is still beating.

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Calling all expats: do you know where your UK pensions are?

Lucky enough to be living the expat life away from the rainy British summers? It must be great to be living in a new land with different cultures to explore and new experiences to be enriched by.

We’re jealous! But we’re also aware that living abroad brings its challenges, not least when it comes to managing your UK finances.

Pension anxiety

Whether living at home or abroad, managing your finances can be one of the most stressful aspects of life. In a recent survey, people reported that this keeps them awake at night more than anything else.

In particular, your provision for retirement can cause worry, especially if you’re unsure about where your UK pension pots are and how to access them. There are currently billions of pounds in dormant pensions, and it makes sense to take care that your money doesn’t go missing just because you no longer live in the UK.

The trials of locating your pensions

Perhaps you’ve been living abroad for a while now and have no idea what has happened to the pension money that you accumulated while you were living in the UK. Perhaps you can’t even remember the names of the providers. What’s more, your attempts to find these pensions are sabotaged by the hassle of navigating time zones to make phone calls, posting letters, and wading through paperwork filled with jargon.

We understand that you really don’t feel like interrupting your new life with the bureaucratic nightmare of dealing with the UK pensions industry. You’d hoped to leave these kind of frustrations behind when you left the UK! You just need to know where your pensions are and then you need a more flexible, accessible pension plan that better matches your lifestyle.

Well, here’s where we can help.
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We can help you locate and combine your pensions for you

My fellow BeeKeepers and I have the rewarding job of locating your old pensions and making them accessible for you, by combining them into an online PensionBee plan. We just need some basic pension details - like a provider name or policy number - and we’ll then contact your provider to move your pensions over to PensionBee.

We make it clear for you to understand and easy for you to switch to a better value plan. With a PensionBee plan you can access and manage your UK pension anytime, anywhere, by logging into your online account. It allows you to really take control of your pension, wherever you are in the world.

So, sign up to PensionBee and you can get on with your expat life with one less thing to worry about.

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Our very own BeeKeeper Priyal recently attended the Women In Finance Awards and came away feeling inspired to write about the wonderful women of PensionBee! Find out what makes working at PensionBee so special, and why we’re paving the way for gender equality in pensions and beyond.

The ‘token men’ in the room at the Women in Finance Awards

I was recently lucky enough to accompany our CEO, Romi, to the Women in Finance Awards where she was nominated for the Woman of the Year Award (go Romi!). The event was to celebrate the organisations and leaders working hard to transform the finance industry and create a diverse and balanced workforce – all the way to the top. I particularly enjoyed the moment when a speaker brought attention to the ‘token men’ in the room. What a pleasant change to be part of a majority!

For many, the world of finance is run by profit-hungry, hyper-masculine bankers. They are seen to make reckless decisions with people’s money and get rich while leaving ordinary people in debt and austerity. Some believe that the crisis of 2008 was partly due to the lack of diversity amongst the key decision makers of finance; more women at the top may have prevented it.

As a BeeKeeper, I have a unique view of finance. The people I work with have a strong sense of purpose. We want to help people look forward to a happy retirement by making pensions simple and empowering customers to take control of their finances.

One of the most inspiring aspects of life here is working with the unique and energised women of PensionBee.

Who are the women of PensionBee?

At PensionBee there are no unconscious biases or assumptions about what women can achieve. I was the fifth person to join the company, and the third woman. Gender-wise, I was already part of a majority in this group. I had two amazing role models in Romi and in Tess, our operations manager. I drew confidence and ideas from them as I started to carve out my own professional path.

New female colleagues joined PensionBee, all inspired to help revolutionise pensions. They each brought a unique set of experiences and points of view from a real variety of backgrounds… as well as their own styles! Our discussions about how to solve problems for customers are now enriched with multiple voices and perspectives. We can come to more balanced and nuanced understandings and our diverse perspectives help us relate better to and serve our customers, who come from very different backgrounds themselves.

Before PensionBee, I worked at a boys school where most of my seniors were men. The culture there felt limiting to me as a young woman. Inappropriate comments and behaviours which reinforced deep-rooted gender biases were common. For example, a male teacher disciplined students by saying that they should not cry like girls, another senior colleague called me a princess, which he intended as a compliment. I didn’t see people speaking out even when a colleague had obviously stepped over the line. Experiences like these led me to feeling like I did not have the right nurturing in that environment and I was worried that the culture might slowly erode my confidence.

Then I came to PensionBee. I felt so relieved to find myself here, in an environment where I can focus my energy on working with my teammates to make things happen, rather than struggling against stereotypes.
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How are the Women of PensionBee empowered?

We make up half of the company so we don’t have to deal with the psychological friction of being a minority in a culture that undermines women’s potential. This is a widespread problem in the finance industry (and world), that PensionBee actively counters. We have many role models to inspire us, and not just at the top. I think that we all learn from each other and value each other’s insights.

We’re not held back by the idea that we’ll have to leave work and sacrifice our careers if we decide to have children. Romi had a baby last year, and set an example for how a woman can run a company and be a mother at the same time. All employees have regular meetings in which we can talk about whether we feel happy at work and this presents a platform for discussions about flexibility, work-life balance, and pay. And flexibility is not limited to whether we decide to have families, we are also supported to pursue other personal interests, such as studying.

Socialising and networking does not happen in traditionally male arenas, either. We go to karaoke, crazy golf and dinner together. We have a book club and ‘Show N Tell’ Fridays where we all discuss our ideas and work, and stay in touch with what’s happening throughout the company. It feels very transparent and we’re welcome to get involved in projects outside our own work, which helps us grow.

We wear what we want, and this means that our vital energy is not wasted on trying to fit a mould. We are free to express ourselves how we want through our dress. This gives a strong message that we are valued for our work, rather than judged for superficial attributes (a change from the ordinary in the life of a woman!)

Men at PensionBee don’t hold or circulate disempowering assumptions about women, either. There is real sense of camaraderie here. When we last went to karaoke, we sang a group rendition of Summer Lovin’ from Grease. In our version, though, the men sang the female lyrics and the women sang the male lyrics! There was no resistance to this which might happen in a more limiting or ‘macho’ culture. Instead, we were just having fun and bonding as a team.

How does this compare to the wider industry?

The more I’ve read about the issues for women in finance, the clearer it’s become that what we have at PensionBee is unique. This is sad. There is widespread agreement that the finance industry needs to become more diverse, and the government has recently released a Women in Finance Charter to encourage more companies to commit to good strategies to increase diversity. This is good for business and for society.

But a review of issues for women in finance by Oliver Wyman suggests that there’s a long way to go. It seems that often, initiatives to support women can be counter-productive if the underlying culture is one which sees success in masculine terms. Talking about mentor programmes or female-only networking sessions, the report warns, ‘Some of these programmes risk isolating women further, for example, by teaching women that their own style and approach will be ineffective in the world of financial services and that they must adopt more masculine behaviours to succeed. This sometimes leads women to opt out of such “Women’s Initiatives”, resulting in a lack of uptake, especially in male dominated areas where participation can harm a woman’s professional image’.

I’m free to focus on my work not my gender

I have heard women talk about how they feel that to be successful within finance, they feel a pressure to develop traditionally male characteristics. I am so relieved not to have to navigate such a sad and confusing landscape. Instead, I’m free to focus on my work. PensionBee doesn’t focus on gendered characteristics or notions of success. Here, what feels important is that people are supported to develop their natural talents and capabilities, whatever their own special mix.

Inclusiveness, authenticity and purpose

I think we work as a real team at PensionBee, and this is because there’s a culture of inclusiveness and authenticity. This culture is held up by a keen sense of purpose. We’re here to help make retirement a gift rather than a burden for ordinary people, and we feel passionately about this. We’re ordinary people, free to be ourselves, and we’re celebrated for all our uniqueness and diversity.

Find out more about what it’s like to work at PensionBee in the BeeHive section of our blog.

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I love that my job gives me the opportunity to learn about our customers and their pension experience. I interview them, do quantitative analysis of data, and speak with BeeKeepers on the frontline about their insights – using a variety of tools on a day-to-day basis.

I especially like it when my incorrect assumptions are uncovered and my understanding grows. Here’s some of the biggest things I’ve discovered in my time at PensionBee.

Anyone and everyone can be digitally savvy

Earlier this year I arranged a series of focus groups where we asked groups of customers and non-customers about their thoughts on PensionBee, and retirement saving more generally. I learned that customers across age groups and across the nation prefer to manage their pensions like they would manage their online bank account - digitally and with ease. I had assumed that this would be a clear preference amongst customers under 45 who are based in London, but this was incorrect, and perhaps ageist of me!

When we look at our customer base, we can see that our customers are spread across the UK. When we look at who engages with their pension through our app, we can see similar levels of engagement across age groups. This certainly shattered some perceptions I had around specific areas and ages being more digitally savvy, and it’s very exciting to see!

We’re providing an essential service for the self-employed

22% of our customers are self-employed. The ONS reports that self-employment is increasing across the UK and in 2017 they estimated it was 15.1% of the labour force. It’s interesting to see that we have a higher representation of self-employed people amongst our customers than the national estimation. When I speak to self-employed customers, they say that they are attracted to PensionBee because they want a way to keep track of old pensions, and to make contributions easily.

If self-employment is indeed increasing, there’s a risk that a large proportion of people who work for themselves are not covered by Auto Enrolment and will not save enough to retire. This is a potential pitfall of self-employment that we want to support customers to avoid.

Retirement means different things to different people

When customers reach 55 they can withdraw money from their pensions. Interestingly, about half of our customers don’t take money out, choosing to keep the whole pot invested. I spoke to a customer recently who told me that she wishes to stay working, as at 53, she is just about to move into a new career direction where she will be consulting.

She told me that she feels better knowing that she is making the most of her money by investing into a pension, and getting tax top ups as well as investment growth. She can’t see herself taking money out of her pension for a long time.

Another customer took some money out to use to grow her family business, and kept the rest invested. It’s fascinating to learn that ‘retirement’ can have many different meanings for different people.

PensionBee can help challenge inequality through simplicity

We’re building PensionBee because we want people to have access to a high-quality pension service, without having to be rich. In fact, most of our customers are in the middle-income bracket.

Income inequality is close to my heart as I grew up in Newham, one of the poorest boroughs in the UK. I was fortunate to have access to an education at a prestigious university, where I got to develop myself. Sadly, it’s unusual for people from my childhood neighbourhood to have access to such educational institutions, despite their talents.

These experiences gave me a cross-class perspective, that highlighted how excluded people with lower incomes usually are from high quality services. I often think about this. We want to change this in the world of pensions, and empower everyone to feel confident about their retirement savings, regardless of financial background.

Not having adequate support with building financial capability can disadvantage people throughout their lives, and I think that feeling empowered about their pensions can help people develop confidence with saving, investing, and life in general.

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It’s always fascinating to get to know our customers better, and engaging with them reminds us that we’re building a service for real people with lives full of rich details.

Each month I share a ‘Pulse’ report with the whole company as a way to stay connected with our customer insights, and to influence positive, customer-led change.

The monthly Pulse reports usually contains:

• At least one in-depth customer interview. I use Salesforce to find relevant case studies by filtering to customers in different situations and with different characteristics. This helps us understand customers in their diversity but we can also group them according to common sets of needs.
• Feedback from our BeeKeepers, which I gather during regular focus group sessions and surveys with them. Being on the front line, they can provide valuable insights about our customers and it’s important to amplify their ideas for how we can give our customers an even better experience.
• A summary of positive and negative feedback that we collect through our online NPS survey for new customers, and annually. I highlight the most common pain points to influence change, whereby we address these through product and service improvements. It’s also important that we celebrate the work that customers have expressed happiness about.
• What are customers contacting us about by email and live chat? Understanding these trends can help us prioritise our automations to allow customers to self serve, or to create in-product messaging.
• Interesting behavioural insights. For example, how many new sign ups have we had to our new Fossil Fuel Free pension, and what are their demographics? Or how likely are customers to refer friends if they have left a positive NPS score? How many customers are reading the emails we send them and what links do they tend to click through?
• A summary of complaints. We don’t get many, but where a customer expresses dissatisfaction, we take it as an important learning opportunity and always make changes to our product or service where we can based on what we learn. We try our best to turn an unhappy customer’s experience around. Often when I call customers to check in some months after they have complained, they say that they are much happier with the service now, and were relieved that we dealt with their problems quickly. A complaint can be seen as an opportunity to build trust.

We’re always listening to customers and engaging with their feedback.

We’re always listening to customers and engaging with their feedback. We track information in various ways, for example, through Salesforce dashboards, or through Trustpilotreviews which come directly to our communal Slack channel. We’re in constant dialogue across teams about what we’re learning about our customers and what improvements we can make to provide an even better pension experience.

PensionBee embraces feedback. This aspect of our company culture brings real joy and satisfaction to my role as a researcher and member of the Customer Voice Hub.

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As PensionBee’s Customer Insights Manager it’s my job to get to know our customers better and use their feedback to ensure we’re always building the best pension product for their needs. Recently I’ve been learning a lot about consumers who are aged 55 years and older, and can access the money in their personal pension pots. I’ve been fortunate to work on a research project alongside Dominic Lindley, who is well known for his work on amplifying consumer voices in the pensions industry, and driving positive outcomes.

After saving for most of their lives, consumers can finally legally access money in their pension pots once they reach 55. However, the way that the pensions industry currently operates does not enable them to easily plan, withdraw and enjoy their money as it should.

One insight that surprised and worried me the most, was to learn that many consumers withdraw more of their pension than they need in order to feel a sense of ownership over their money.

Many consumers withdraw more of their pension than they need in order to feel a sense of ownership over their money

Often they move it to a different savings or current account, as they prefer the experience of accessibility that this provides, compared to their pension. They may even knowingly sacrifice long-term financial wellbeing and future investment growth for easy access.

One customer, Juliet, in her forties, informed me that her parents withdrew their entire pension pots (worth hundreds of thousands of pounds) and transferred the money to their current account, in order to feel more secure and in control of their money.

Another customer named Peter, and in his sixties, commented, ‘I want to get the money out because it is currently locked away. That’s the problem with pensions, you may get a better return on your money, but it’s more locked up than normal money in the bank.‘

Interestingly, Peter sees money in his bank account as ‘normal’ compared to money in his pension, and this appears to be a representative view. Almost a third of the consumers we surveyed, who had accessed money from their pensions, informed us that they did so to take control of their pensions by withdrawing their money and putting it into a different account.

65% of respondents reported feeling very confident about using their current accounts, while 53% were confident about using their savings accounts. On the other hand, only about 20% felt confident using their pensions, which was one of the financial products where consumers reported the least confidence in our survey. Only about a third of respondents said that they didn’t find making decisions about pensions and retirement income daunting and complex.

I can understand why Peter, and other consumers, feel that a pension is not like ‘normal’ money in a current account. Whilst they interact with money in a current account on a daily basis, and have instant visibility about how much they have thanks to mobile banking, pensions often feel distant and difficult to engage with, due to the alienating effects of jargon, excessive paperwork and lengthy administrative processes. Many pension providers send an annual statement by post, often to an old address, where a customer has to wade through complex information to see what their current pension balance is. This makes it difficult for consumers to feel connected with their savings.

Sadly, over-withdrawing can be damaging to a saver’s prospects of enjoying a comfortable retirement, because they can lose out on investment growth and pay higher taxes than necessary.

Can innovation drive a sense of pension ownership amongst consumers, and lead to better long-term decision making? At PensionBee, we think so! We want customers to experience the ease of managing their pensions, as they would their online bank account. I am proud that the benefits of digital innovation in pensions are being felt across all age groups, and that a majority of PensionBee customers are engaging with their pensions through their smartphone app.
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The Pension Freedoms, which were implemented in 2015, were welcomed by consumers, as they had been calling for better access to their money and more choice after the age of 55. Unfortunately, these consumers have since been underserved by the market, and innovation tends to be focused on savers with higher than average pots, who are willing to pay extra for advice, which can often be costly.

At PensionBee, we’re keen to change this. In minutes, customers can initiate a free withdrawal from their online Pensionbee account. They can use our online tax calculator to ensure that they’re in control of how much tax they pay. They also have instant access to their real-time pension balance, which can help them plan. Once customers initiate their withdrawals, they usually receive their money into their current accounts within a week. One customer Frank, who is in his sixties, commented, ‘That’s where you guys score highly, the simplicity of it... The capability to just go ahead and put the funds across and get to drawdown, and the simplicity of the funding charges... Getting the drawdown was smooth, took about a week. Future drawdowns should be quick and so that’s good.‘ This feedback brought me joy!

Nevertheless, we feel that the experience of drawdown can be even easier, and can give consumers even more of a sense of ownership of their savings. Please watch this space, as we have an exciting announcement coming very soon!

As always, we’d love to hear your feedback and ideas, so leave your comments below or get in touch with the team on Twitter!

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I feel a strong desire for change amongst my contemporaries, and can see people taking action everywhere. From my friends who buy second-hand clothes, to my family who have switched to a renewable energy supplier, to my colleague Emily, our Head of Talent, who created our generous new parent policy, an important feature of PensionBee’s wonderful approach to being a supportive and inclusive employer.

It’s scary to reflect on the challenges we currently face, such as dangerous levels of climate change and massive wage inequality, with less than half of the FTSE 100 companies paying a living wage. But the energy for change makes me hopeful and optimistic.

The Make My Money Matter (MMMM) Campaign, co-founded by the director of Love Actually, Richard Curtis, CBE, officially launched a couple of weeks ago. It aims to bring awareness to how changing the way a person’s pension is invested can increase their effectiveness in reducing their carbon footprint 27 times, compared to not flying and adopting a vegan diet combined.

The MMMM campaign has the potential to substantially increase consumer demand for more sustainable investments, and thereby redirect much of the trillions invested in the collective UK pension pot to address the challenges of today. The campaign is getting people’s attention, and Gary Lineker, former professional footballer and current sports broadcaster, tweeted to over 7 million followers about how he’s going to engage with his pension providers about how his money is invested.

The campaign aims to educate the public about how most pensions are currently invested; funding fossil fuel, controversial weapons and tobacco producers. It also suggests an alternative vision: for more of the collective pension pot to be invested sustainably, for example, to support clean energy producers, health care providers, and companies with strong records on human rights. MMMM believes that doing good with your money is profitable, ‘investing in businesses that treat their staff well, have a sustainable business model, and consider their impact on people and the planet will be smart investment decisions. There is also a growing body of evidence that shows sustainable pension funds are as profitable - if not more so - than default funds.’

MMMM empowers millions of people to contact their employers and pension funds, and provides digital tools to make this quick, easy and effective. Due to Auto-Enrolment, all employed people in the U.K. are assigned a pension, and so this is an action that almost everyone can take.

We’re proud to be one of the first pledge partners of the campaign, and excited to be involved along with a diverse range of partners such as Oxfam and Triodos Bank.

People are becoming more aware of how their pensions are invested, and our research shows that most want to balance making money with creating positive social outcomes.

The voices of savers are already driving meaningful progress, with our engaged customers leading us to drive the creation of the UK’s first mainstream fossil fuel free fund. After we learned about significant calls from customers for us to remove fossil fuels from their pensions, we initially investigated the market for a mainstream fossil fuel free fund, and found a dearth of suitable options. Therefore we shared our customer feedback with our money managers, who reacted positively to evidence of consumer demand, and Legal & General is currently building the first mainstream fossil fuel free fund. You can join the fossil fuel free pension, and be amongst the first to sign up.

PensionBee shares the MMMM campaign’s vision to live in a world where everyone can look forward to a happy retirement, to be able to enjoy good health in a safe environment, stable finances, and social inclusion. The pensions industry can achieve this using the combined power of many trillions in pension investments. It’s a huge task but there is movement towards this vision, and rapid change is possible.

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I feel blessed as I’m able to spend time speaking to our customers and learning about their rich and unique lives. These conversations help to uncover insights about pensions, more specifically what works for people, and what stands in their way and prevents them from enjoying the journey to a comfortable retirement.

At PensionBee, we think it’s important to amplify our customers’ voices, whether through the national media, industry press, or internally, so that we can help all of our customers achieve better pension experiences.

Looking back over 2020, I feel excited about how our customers have spoken out to a wide audience.

Here are three examples:

28-year-old Sarah is from Stockport and self-employed

The Financial Times recently featured our customer, Sarah, in an article about how pension savers are responding to the pandemic.

The pandemic motivated Sarah to save more. She saw friends being put on furlough and being made redundant, and felt that she should take advantage of the fortunate position she was in, as her company was doing well. “I decided that while I can, I should really pay more money into my pension,” The FT article reports.

Sarah talked to us about the role her family has played in inspiring her to save. She has selected her nephew, who was born last year, as a beneficiary, and her brother initially introduced her to PensionBee.

Her mother also plays a strong role, and has been encouraging Sarah to save into a pension since she was a teenager. Seeing how her mother’s saving decisions had impacted her also highlighted the importance of her pension, “She has to adjust to a lower standard of living in retirement. She didn’t think about her pension until her late thirties,” Sarah told me.

Sarah also described her experiences of increasing her contributions at PensionBee, “When I want to up the payments with PensionBee it’s straightforward. My short-term goal in the next 12-18 months is to up my contributions again. I put it to £280 a month, but my target is £300, because when I was playing around with the tools, that kind of seems like the best amount to be paying in, because that’s what I can afford. If I can do that, it seems like a good outlook for when I come to retirement age”.

Sarah’s story shows that pension providers can support customers by making it easy for them to contribute, and to update their contribution levels as their financial situation changes. Additionally, digital planning tools are effective in helping customers take control of their savings and better plan for retirement

Sarah is one of our many self-employed customers. Our analysis shows that the gender pension gap is least pronounced amongst self-employed customers, at 33%, compared to 38% for employed customers. This grows to 56% for employed women aged over 50, and only 35% for self-employed women in the same age bracket. The self-employed are completely responsible for their finances, and this insight suggests that empowering them with tools that make managing their pensions easy, can help to close the gender pensions gap.

67-year-old Frank is from Hampshire and retired

I spoke to Frank earlier this year, and he told me about his difficulties being able to access his money when he retired, and before he joined PensionBee, “I found it very difficult to get clear information, particularly on charges. Charges are often very complex. Investment charges, fund charges, charges every time you drawdown, and they seem to mount up. My providers insisted that you spoke to what they called their advisors, but when you spoke to them it turned out that they were Independent Financial Advisers. I was not interested in that. I was a chartered accountant by profession and I didn’t feel I needed to speak to them about how to budget and how much money I could spend.”

He also talked about the challenges he faced when trying to understand how much he had already saved, and generally interacting with his pension. “Their systems are just old fashioned. The presentation of it and the amount of information that is available. It is online but looks like something out of the 1980s. It’s on a PC, not an app or a phone. Normally with pension money you don’t look at it that often, so it wasn’t a problem not having it on a phone. Coming up to drawdown I was looking at it more frequently. That’s where PensionBee scores highly, the simplicity of it. The capability to just go ahead and put the funds across and get to drawdown, and the simplicity of the funding charges.”

This experience was shared nationally, in the Sunday Express, in a piece about how pensions are not serving the over-55s well, and Frank was quoted extensively, which helped to bring attention to this issue, and highlight what consumers need.

Findings from our survey of consumers earlier this year echoes the need for simplicity and a sense of control, and indicates that this encourages people to keep more of their money invested, with almost 60% of those who have considered taking their money out agreeing that if they knew they could access their pension easily, they would be more likely to leave it where it was. Almost 50% of those who have considered accessing their pensions say that having a phone app to see their balance and pay in would encourage them to keep their pension invested. Similarly, about 50% of those who considered accessing their pensions feel that taking money out means they would feel more in control of it.

Over 2020 we’ve seen customers respond to the pandemic by keeping more of their money invested. Only 20% of our customers aged over 55 took money out in Q2 2020, compared to 33% during the same period last year. Similarly, only 24% took money out in Q3 2020, compared to 29% at the same time last year. This indicates that giving customers control of their money helps them to respond to changing financial circumstances, and make decisions that are better for them.

49-year-old Lester is from London and employed

Lester is switching into our new Fossil Fuel Free Plan, and recently shared his motivations for doing so. He is being driven by ethical as well as financial concerns, “The idea that I may be inadvertently funding companies that are not investing for the planet concerns me. Secondly, some of the environmentally sustainable funds could actually be good financial investments - some studies are showing that investing ethically could be a good move. I know that there are regulatory changes happening in that space, I know the market, in terms of consumers, is going to vote with its feet in terms of moving more towards these kinds of investments.”

It’s customers like Lester, speaking to us about their concerns with investing in fossil fuel producers, through phone calls and surveys, that gave us clear evidence of customer demand for a new mainstream Fossil Fuel Free Fund, which we’ve created in partnership with Legal & General. We found that a quarter of customers in our existing climate focused, Future World Plan, would prefer to divest from fossil fuel producers at the outset, rather than engaging with companies to drive more sustainable business practices through their existing plan.

We were given a customer mandate to act. We searched the market, and found a dearth of existing options, and that’s why we took our customer feedback to our money managers, who have now produced a new fund. This new plan will exclude companies that own proven or probable reserves of oil, gas or coal, as well as tobacco companies, manufacturers of controversial weapons and persistent violators of the UN Global Compact.

The asset management industry didn’t think there was demand for this type of investment product. Our customers have since shattered this belief by sharing their views on what kind of companies their money should be invested in, and choosing to drive positive environmental change with their pension.

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At PensionBee, I feel loved and can be myself. Our data suggests that my colleagues feel this way too, as we attract and retain diverse people. More than a third of my colleagues identify their racial or ethnic backgrounds as other than white, compared to only 13% across the UK. 53% identify as female and minority genders, compared to 51% nationally. 16% identify as LGBTQA+, compared to only 2.9% nationally.

Twice a year we run a survey to understand the personal characteristics of our colleagues, this helps us ensure that we are maintaining and furthering an inclusive environment. This is one example of how we use regular data analysis to further our goal for PensionBee to consistently be a workplace where everyone feels like they can succeed as themselves.

Championing diversity in the workplace

I am a Diversity Champion at PensionBee, along with four of my colleagues. In addition to our core roles, we drive initiatives to further a culture in which everyone can belong and thrive.

It’s sad to acknowledge that we live in a world where people are often scared about the prejudices they could experience for being who they really are. (Virtual) workplaces, where we spend a lot of our time, especially need to be spaces where people can flow freely, and feel loved and accepted. Research by McKinsey supports the idea that diverse workplaces make more profitable companies. Fostering inclusiveness is also a more just approach to running a business.

Historically, some money managers have asked companies for data that helps them assess progress towards gender equality, such as gender pay gap reporting, to enable them to make more socially responsible investments.

However, this isn’t enough. Money managers should also demand a fairer workplace for ethnic minorities. Just this summer, there was a petition with more than 120,000 signatures, calling on the government to make ethnicity pay gap reporting mandatory. The government is currently analysing responses to a consultation on this theme, and we await results with our fingers crossed.

Despite good initiatives, overall progress is too slow. Earlier this year, a government sponsored independent review of ethnic diversity on the boards of FTSE 100 companies found that almost 40% of companies in the index have no ethnic minority director. We’re far away from a goal set in the 2017 review for all FTSE 100 companies to have at least one ethnic minority director by 2021.

Legal & General Investment Management is one of the first money managers to be taking action. In October 2020, they wrote to all companies in the FTSE 100 as well as the S&P 500, telling them that by January 2022, they are expected to have at least one director of black, Asian or other minority ethnic (BAME) origin in place, and companies who fail to meet this goal will be voted against.

Also in October 2020, the CBI launched a campaign called Change the Race Ratio, which seeks to accelerate racial diversity in businesses. One of the commitments they seek from signatory businesses is to create an inclusive culture, in which everyone can thrive, and one of the ways they encourage this is through fostering safe, open and transparent dialogue and another is to challenge conventional thinking.

Encouraging dialogue and challenging normative perceptions

At PensionBee, it’s important that everyone feels that they can succeed in the company as themselves.We have five core company values that frame everything we do at PensionBee, they are; love, quality, innovation, simplicity and honesty. Our most popular company value is love, and the diversity and inclusion initiatives of 2020 really highlight how much love there is at PensionBee.

The year was packed with cultural initiatives, led by various colleagues, which encourage dialogue and challenge normative perceptions. These included an LGBTQA+ bar where people shared personal stories, gender pension gap research to bring attention to inequality, and ‘about me’ presentations.

I was most involved with anti-racism initiatives over the past year. Here are five of my favourites:

1. A series of talks, led by colleagues

Themes included colonialism and homophobia in Jamaica, a history of anti-racism in Britain and contemporary racism in Latin America. Speakers were a range of colleagues, from people who’ve recently started their careers and are in their late teens and early 20s, to people who have been working for many years, many of whom were brave enough to share their own personal experiences of racism.

Talks were well attended, with 50% of colleagues joining some. This series was created as a response to feedback from colleagues, who requested educational sessions, and expressed a desire to share their own knowledge and experiences. We’ve had positive feedback about these talks, with one colleague, saying that leading a talk made her feel more of a sense of belonging at work. She spoke about her experiences of anti-semitism in Britain.

We uploaded this series onto our digital training platform which is accessible by all staff, and a mention of this series was also recently published by the trade press, allowing it to inspire others in the pensions industry to foster a sense of belonging through inclusion.

2. Poetry performances by colleagues

We have a weekly ‘Show&Tell’ session where all colleagues come together and present to each other. During Black History Month, we invited people to share creative performances, and two colleagues shared poems about anti-racism. One of the performers had only recently joined the company. Their performances were met by love heart emojis and a lot of applause, as we were blown away, I even had shivers!

Sharing that collective experience at work feels radical and transformative. We also published these poems on our blog. Creating a platform for people to share their talents and speak out about issues that are important to them is powerful.

3. Book club discussions

We have regular book club sessions at PensionBee.Our last session was a discussion about a brilliant book called, ‘When they Call you a Terrorist: A Black Lives Matter Memoir”, written by one of the co-founders of the Black Lives Matter movement. Many colleagues attended, including a PensionBee baby! We shared extracts from the book, and invited colleagues to discuss questions that we had formulated beforehand. During the session, colleagues shared their reactions to the extracts, as well as personal experiences that they were reminded of.

4. External speakers

We recently invited two external speakers to PensionBee. The first was the founder of Legal & General Investment Management’s Culture Club, an initiative to increase diversity and representation at the company and beyond.The second was a Black Lives Matter activist. Each spoke for about an hour, and took live questions from PensionBee. It was fascinating to hear two different perspectives, from different positions, in the struggle for diversity and inclusion. Colleagues commented that they valued these sessions and would like more in the future, we think that’s a great idea!

5. Submission to City of London Consultation on statues and historic landmarks

PensionBee has called for statues with links to slavery to be removed from the city of London, where our office is based. Our CEO, Romi, submitted a letter to the City of London Consultation on behalf of our team. Drafts of this letter were shared on Slack so that everyone could participate, share their feedback, and add their voice to the argument.

In the letter, PensionBee acknowledges that the financial sector is diverse and makes a significant contribution to the UK, and exists to make people’s lives better. But the City’s aim to ensure that everyone can thrive as themselves is being undermined by the presence of statues with links to slavery. PensionBee highlights how the City of London played a historic role in the transatlantic slave trade and represented the financial interests of slave owners. For example, it was at Guildhall, which is just a stone’s throw from our office, that an infamous court case ruled in favour of slavers who had deliberately drowned 133 Africans to claim insurance, and the Royal Exchange hosted a slave market.

Given this history, the presence of statues, buildings and street names with links to slavery impedes a sense of belonging to the people that live and work in the City. It’s disrespectful that people have to walk past these glorifications of oppressors on our way to and from work every day, a constant reminder of a traumatic history. In the letter, PensionBee strongly advocates for statues with links to slavery to be removed and placed in museums, and for decision making that leads to a City of London that’s a great place for everyone.

Colleagues celebrated this action, and commented that they want to continue advocating for change outside of PensionBee as well as making progress internally. The City of London closed submissions on 24 November, and we eagerly await a positive result!

We’re now near the end of the year, and shortly we’ll survey our colleagues to understand what they would like to see from the Diversity Champions in 2021. I know they’ll share great ideas and feedback, and we’ll have the honour of helping to make their visions come to life.

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In March, we ran our annual survey of customers in the Tailored Plan, our default plan, to learn more about the kinds of companies that they expect their money to be invested in, and what kind of action they want us to take on companies and industries with controversial business practices.

At PensionBee, we believe that sustainable business practices have a positive impact on long-term pension returns. Therefore we consider it important to regularly seek our customers’ views on how their pension, and the companies it invests in, should evolve in a changing world.

As usual, we received strong levels of engagement, with almost 1,700 respondents. We’ve published a summary of our findings on our website.

Here’s what we learned:

1. Customers believe that companies should treat their workers fairly

Respondents across all age groups and genders rank the treatment of workers in core business and supply chains as a number one priority for voting. Money managers often attend meetings with the companies they invest in and can force change by voting against management.

83% of respondents were clear that companies should pay the Living Wage, and most also want companies to publish their ethnicity and gender pay gaps. One female respondent, aged over 51, commented that companies in her pension should, “Pay people a decent and proper wage and ensure working conditions are adequate as well as their hours,” while one male respondent, aged 30 or under, commented, “Discrimination is a huge deal-breaker for me”.

We know that diversity is important to our customers: 76% of female respondents and 53% of male respondents expect diversity on boards and in senior management teams. Additionally, most customers (66%) expect companies to have a level of diversity in their workforce that is representative of UK society.

2. Pension savers are concerned about the environment

76% of respondents support action on oil companies. The survey reveals changing views on engagement with oil companies, as only 10% of savers support this approach in 2021, less than half of those in 2020 (23%).

One female customer, aged 41-50, remarked that she wants to invest in companies that are “Fair and sustainable. It’s the only way business will offer long-term returns. Not interested in short-term returns”. Additionally, a male respondent, aged 41-50 commented, “Environment is very important to me so any business that is not doing anything to protect the environment is a no from me”.

3. Respondents don’t trust fast fashion

More than half of respondents agree with the view that fast fashion has a negative impact on society, including more than 80% of women aged 30 and under.

In comparison, most savers believe that big tech makes a positive contribution to society (59%), and only 8% believe that it makes a negative contribution. Savers are mostly neutral about nuclear energy (45%) and many also believe that the sector makes a positive contribution (39%). When it comes to the meat and dairy industry, almost half of respondents (46%) believe it makes a positive impact.

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4. The coronavirus pandemic has increased customers’ motivation to save

Most respondents agree that the coronavirus pandemic has made them feel apprehensive about whether they will have enough money to retire, but also that they now feel more inspired to save and build up their pension. Women are slightly more likely to express both views.

5. Most respondents support action on irresponsible business practices

Just a minority of respondents express the view that pension providers should focus only on making a profit. One man, aged over 51, commented, “Despite all participation, sharing ideas, chasing ideals, the main goal must be to ensure, as much as possible, that investors can enjoy their retirement through the funds they have worked for all their lives and the money managers are handling on our behalf”.

At PensionBee, we regularly survey customers to make sure that our pension plans continue to be aligned with the changing investment expectations of savers. In survey feedback in 2020, many of you told us that you no longer wanted to be invested in oil, resulting in the launch of our Climate Plan.

We regularly share these insights with the wider world through the press to inform the debate on what kind of companies pension savers expect to invest in. We also have an excellent working relationship with our money managers, who manage trillions of pounds worth of investments all over the world, as well as PensionBee’s plans. We regularly share our customer insights with them to inform their thinking on stewardship, exclusions, and the changing sentiments of pension savers in the UK.

We believe that spreading awareness of your views will help nudge company leaders to adopt fairer and more sustainable practices.

If you have any thoughts you’d like to share, please email us at engagement@pensionbee.com. We’re very keen to hear from you!

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“If we don’t start to lever change with investments now, the breakdown of ecosystems and society will render investments worthless anyway,” PensionBee Fossil Fuel Free Plan customer.

At PensionBee, it’s our customers who lead on our product development. Over the last few years, many have become increasingly vocal about their desire to address some of the world’s biggest problems, such as climate change, through their investments. In 2020, customer survey feedback led to the creation of the Fossil Fuel Free Fund, a plan that excludes companies with proven or probable reserves of oil and gas, tobacco, and violators of the UN Global Compact. We run an annual survey to understand whether our plans continue to meet their investment expectations. In our most recent survey, Fossil Fuel Free Plan customers told us that they are happy with the plan, but do want us to go further with the exclusions. We took this data to our money managers and secured their agreement to broaden exclusions to companies that provide services to the fossil fuel sector.

A small group of customers also expressed a desire for a plan that only invests in companies that are addressing the world’s biggest social and environmental problems. A positive change or impact fund. We searched the market and found a range of potential options, though we struggled to find any that fully meet our customers’ needs. As just a small number of global companies meet the strict investment criteria requested by our customers, these pension plans can only typically be invested in around 30 to 60 handpicked companies. This level of risk is much more concentrated than PensionBee’s other existing plans, which tend to be invested in thousands of different companies. All plans of this type are actively managed, with a team of analysts picking stocks based on their understanding of impact and value. Actively managed plans tend to have higher costs.

Committed to our practice of always being led by our customers, we took the question to them about which of the four options they like best, as well as their views on the risk, cost, and exclusions. This research helped us understand more about what our customers expect from this type of plan.

Insights from the research include:

• Respondents are broadly aligned in feeling comfortable with taking on more concentrated investment risk as long as it delivers more positive outcomes. However, they also want to balance making a positive impact with securing their own financial futures.
• The most popular option was invested in the highest number of companies (40-60), whilst maintaining a relatively low level of concentration per company. Only up to 4% of the plan can be invested in one company. On the other hand, the least popular option can be invested up to 10% in one company and is only invested in 25 to 50 companies.
• Customers also commented on exclusion criteria, supporting the plan with the highest level of all the options. Respondents believed that plan to be more environmentally focused; as the only plan option that explicitly excluded deforestation, a major cause of climate change (1).

Full survey results are available here.

Our findings suggest that the current options on offer in the market don’t fully meet customer needs. Whilst customers are happy to take more risks to drive more positive change, the default plan is invested in the highest number of companies. Respondents also want to balance their financial futures with investing for good. We want to explore the market to find a plan that has hundreds or thousands of companies but with more stringent exclusions and a focus on impact. Stringent exclusion criteria were praised by respondents, so we want to see if such criteria can be combined with a higher number of holdings in a more diverse range of companies. This, we believe would be a better way to manage risk and cost, whilst meeting customer preferences around exclusions.

Our next steps are to deepen our research to work out how we can best meet our customer needs and build a pension that enables a comfortable retirement whilst going further in creating the kind of world in which savers can enjoy retiring. This includes conducting in-depth customer interviews and focus groups. These findings will also help us continue our talks with money managers and to explore the potential to create a new type of plan. This plan would remove sectors of concern and focus on impact, but without taking on so much concentrated risk. In an era where it’s difficult to separate the greenwash from the genuine, we strongly believe that our customers are leading the way to a transformative and responsible investment system. We’ll keep working very hard to make their approach to investing the future.

If you have any thoughts you’d like to share, please email us at engagement@pensionbee.com. We’re very keen to hear from you!

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I have the immense privilege of working in an environment with people who champion equality, and recognise that women have been disadvantaged by our socio-economic structures for too long.

My colleagues, of whom half are women - with 67% representation at board level - consistently take action to drive forward this equality. PensionBee is unusually diverse compared to the rest of the Technology industry, where 80% of workers are male, and women hold only 5% of leadership positions.

We believe that everyone benefits from gender equality, and our CTO, Jonathan Lister Parsons, alongside our CEO, Romi Savova are huge advocates for this. This makes coming to work incredibly meaningful, and is why, when I think of my workplace, feminism comes to mind.

But when I say we embrace feminism at PensionBee, what do I really mean? Well, recently we’ve learnt and focused on four main business areas.

Including women’s data

Most of the world is designed using men’s data, from medicines to cars, to the retirement savings system, men’s needs and preferences have shaped the world around us. However, this needs to change so women can enjoy better lives and happy retirements.

Last year, PensionBee started working with specialist diversity and inclusion communications consultancy, More Diverse Voices, on consumer workshops. We delved deep into women’s experiences to understand barriers to saving for retirement through focus groups, individual interviews, and surveys. We invited female customers and non-customers to help us reimagine the pension system for women.

We know it’s not enough to simply collect women’s data, organisations need to use it too. Diverse teams, along with data, can ensure that products and services are inclusive and consumers don’t suffer from the blind spots of biased teams. That’s why this project has influenced product and marketing ideas that we’re planning to take forward into this year and beyond.

Data-driven, internal policies that promote equality are fundamental to growing diverse teams. For example, PensionBee offers gender-inclusive paid leave to all new parents. Research supports that this can make a huge impact in eliminating the gender pension gap by encouraging men and women to share childcare and unpaid work equally from the very beginning, giving women more space to participate in paid work and continue their careers.

Embracing intersectionality

To build truly inclusive products, organisations should look beyond data about gender. PensionBee’s Senior Finance Manager, Ginola lead a talk during Black History Month, in which she advocated for embracing intersectionality, a lens for seeing the way in which various forms of inequality often operate together and exacerbate each other.

At PensionBee, we’re blessed to work with colleagues that strongly believe in social inclusion and who strive to build it, both within the pensions industry and beyond. We have 51% representation of women, while 40% of the PensionBee team self-identify as belonging to a minority ethnic group, on par with representation in London, which at the last census, was the most ethnically diverse region in England and Wales. When it comes to socio-economic backgrounds, 31% of our colleagues were eligible for free school meals, compared to 15% of the UK population.

Building and maintaining diversity, in addition to bringing an intersectional lens to our data analysis, is a central point in our mission to become even more inclusive as a pension provider.

Engaging with the industry and regulators

In order to increase the impact of our work so far, we chose to engage with two Financial Conduct Authority Consultations which looked at diversity and inclusion in the financial sector and within listed companies.

Our asks for the regulator included setting more ambitious targets, defining diversity through personal characteristics (such as gender, race, and sexual orientation) rather than personality type and thinking styles, and requiring firms to disclose company-wide data annually through the Workforce Disclosure Initiative (WDI). The WDI questionnaire is the most detailed and comprehensive measurement that currently exists and can expedite progress if all firms complete the survey, particularly if they publish responses on their websites and in their annual reports. This can demonstrate progress over time, and enable stakeholders to hold firms accountable.

With a desire to learn from our peers, we also brought our ideas to various networks such as the Diversity Project, The Social Mobility Commission, and the Fintech Delivery Panel.

Creating dialogues and safe spaces

One of the ongoing initiatives we’re most proud of is our ‘PensionBee Speaks’ series, which provides the opportunity for colleagues, or friends of PensionBee, to lead talks on issues that are close to their hearts and simultaneously raise awareness around the topic. These have included anti-racist and anti-sexist hiring, the body positivity movement, and campaigning for abortion rights in Ireland’s historic 2018 referendum.

By empowering employees to speak up, we’re collectively building PensionBee’s culture, rather than pressuring colleagues to conform to a dominant culture set by the board. Not only does this give our team a greater sense of ownership of our workplace, but it also shapes and influences the direction of our company.

I have a conviction that, despite setbacks, quiet revolutions are happening throughout the world, and collectively we’re moving closer to a world where girls and women can enjoy equal levels of agency and advantage as men. There is much more work to be done, and I look forward to playing my small part, along with my colleagues at PensionBee, where we’ll work even harder to make UK pensions simple and inclusive of all.

We believe that everyone benefits from gender equality. Find out how we’re striving to ensure that we build equality into the heart of our workplace.

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The new Consumer Duty regulation expects businesses to understand their customers. Companies must design product features in a way that helps people.

The User Experience (UX) field contains researchers, designers, product managers and marketers. These professionals focus on improving lives through data-led empathetic design. In other words, outcomes one and three of the new Consumer Duty.

I recently shared my experiences as a UX researcher when Quietroom invited me to speak at their excellent event about pension communications.

Here are my top three tips for making an impact with your research.

Share little and often

Have you ever worried that nobody appears to be reading your research reports? This is a common worry among researchers. Luckily, there’s an easy, though not obvious, solution. To build engagement with your colleagues, involve them from the beginning. Speak to people from across the business.

Ask questions, such as:

• what do they want to learn about customers?
• what are they trying to achieve through their day-to-day work?; and
• what do they believe about customer needs?

Share results as they come in. Don’t wait until you’ve finished the project.

You can bring your colleagues along with you on the learning journey by sharing:

• interview clips;
• survey results;
• external study insights;
• analytics trends; and
• anything else that you learn.

I share research insights on a weekly basis. This ongoing process helps colleagues learn as I learn. This can help them make decisions based on recent insights.

The world is always changing. Sharing insights little and often helps keep everyone informed about changing consumer needs.

Let them hear it from the customer

The power of a < two-minute customer clip is amazing. Even better if accompanied by some supporting stats. I often see colleagues have ‘lightbulb moments’ when watching a clip.

We come to work to make the lives of our customers better in some way. At PensionBee, we focus on making pensions easy. Your workplace most likely focuses on another consumer need.

You might feel at some distance from the people whose lives you’re impacting with your work. Watching customers talk about their experiences can help centre the focus on them.

You can connect with their ways of seeing the world, their pain points, and their hopes for the future.

I show a customer clip when I have a captive audience. This includes:

• all-company weekly Show ‘n’ Tell;
• researcher-led presentation sessions;
• team innovation hour; and
• more where relevant.

This builds customer knowledge across the company little and often.

Treat underrepresented people with care

Diversity in research samples is crucial. We must also take care not to link specific outcomes to inherent characteristics.

For instance, being a woman doesn’t have to mean you’re more likely to have lower pay than men. It doesn’t have to mean that you’re more likely to have a smaller pension pot.

Instead, pay and pension gaps often result from women taking on more unpaid care work. Policies like maternity leave tend to nudge parents into unequal sharing of responsibilities. Women in heterosexual couples are often less able to take part in paid work. This leads to less money, savings, and smaller pension pots.

Social and economic factors impact individuals in different ways based on their characteristics. As Judith Butler noted, gender is a cultural construct, not a product of nature.

As a society, we often make decisions that impact other people’s lives. We create policies, expectations, and products based on our beliefs. Too often, we exclude people from accessing the resources they need. We do this by accident or on purpose. Empathy and research allow us to get closer to ‘seeing’ people as they are, and not through the ideas we already have.

Interpret results from surveys, interviews, or other research methods with care for context. Think about the world around the people you’re learning about. How might it influence the way they behave or the outcomes they have? What pressures do they face that others don’t? Think about your own biases and blind spots. How might this be affecting what you learn and share about people you’re researching?

Human experiences are fascinating. Bring love and care of your fellow humans to your research. Bring your colleagues on the learning journey with you. In this way, you’ll make a positive impact as a researcher.

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There’s no limit to the number of pensions you can have. However, there are annual and lifetime limits on the amount you can pay into your pensions while claiming tax relief; £40,000 and £1,073,100, respectively (for the 2020/21 tax year). These limits may vary based on your circumstances.

How many personal pensions can you have?

A personal pension is a type of pension you can set up yourself, and is common amongst the self-employed. Personal pensions include the Self Invested Personal Pension (SIPP).

There’s no limit to the number of personal pensions you can set up, and you can pay into more than one personal pension at a time.

How many workplace pensions can you have?

A workplace pension is a type of pension set up by your employer. Since employers have been required to automatically enrol their employees into a workplace pension from 2018, the number of workplace pensions people are picking up during their working careers is increasing.

You can belong to more than one employer’s workplace pension scheme. If you work more than one job, each of your employers will have to check whether you’re eligible to join their workplace pension scheme. If you’re eligible, you’ll be enrolled into a workplace pension with them. You can opt out of your workplace pension scheme, and request to opt in if you weren’t automatically enrolled.
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How many stakeholder pensions can you have?

A stakeholder pension is a type of pension that can be set up by anyone, for themselves or others. It was introduced primarily for those who may not meet the criteria of other pension schemes, such as those on low incomes and the self-employed.

There’s no limit to the number of stakeholder pensions you can have, and you can pay into more than one stakeholder pension at a time.

How much can you pay into a pension while receiving tax relief?

So long as you’re an eligible tax payer, the government will grant tax relief on pension contributions. This can work as a tax refund or a tax top-up, depending on how you make your contributions. In either case, the government effectively contributes extra towards your pension. But they’ll only do so up to a certain point, so it’s best to keep this in mind.

Annual pension allowance

The annual pension allowance is the maximum amount you can pay into a pension each year while claiming tax relief. For the tax year 2020/21, you can pay in up to £40,000 or 100% of your salary (whichever is lower). It applies to all types of pension.

However, this limit changes if you have a low salary or have already started drawing down from your pension.

To learn more about the annual pension allowance, read How much can I pay into a pension each year?

Lifetime pension allowance

The lifetime pension allowance is the maximum amount you can receive from a pension without having to pay a tax penalty. Therefore, it’s not advised to pay more than that amount into a pension during your lifetime.

For the tax year 2020/21, the lifetime pension allowance is £1,073,100. It applies to all forms of pension.

What are the downsides of having more than one pension?

If you have more than one job during your lifetime, it’s almost inevitable that you’ll have more than one pension due to new auto-enrollment rules. But while it may feel like having lots of pensions is a good thing, there are significant downsides:

• You may end up paying more in fees than you should, since fees can range wildly between providers.
• Every pension plan has a different investment strategy, so having multiple pensions could dilute the overall effectiveness of each pension.
• Managing and tracking the performance of multiple pensions is inefficient and time consuming, and you may lose track of older pensions as time goes on.

Should you combine multiple pensions into one?

It’s simpler to manage one pension, fees are more transparent, and you’ll be able to choose a pension plan that’s most suited for your goals. However, you’ll first want to check your existing pensions to see if you’d lose any benefits if you transferred them to another provider.

PensionBee allows you to combine your old pensions into one simple and effective plan. You’ll be able to easily manage your pension through the secure app, and our single annual fee keeps costs simple. It’s also free to make withdrawals, unless you drawdown everything within 12 months in which case a full withdrawal fee of £150 will apply.

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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Wealth inequality in the UK is broad and varied. It affects what people earn today, and also what they’ll earn from their pension in retirement.

There are lots of ways to look at wealth disparity, such as the difference in wealth between age, gender and ethnicity.

In this article, we highlight some of the causes of wealth inequality and the measures you can take to best position yourself to receive a good retirement income. However, we fully acknowledge that these are complex topics and we don’t have all the answers. A larger effort from industry and government is required to eliminate these inequalities for good.

How your age affects your future pension income

In the 1960s, the most common company pension was the defined benefit scheme. Also known as the ‘final salary pension’, these schemes were considered generous as the amount paid out during retirement was calculated based on the number of years an employee worked at the company and their salary during that time.

But defined benefit pensions were expensive for companies to run. And after the UK Government introduced the Social Security Act in 1986, which relaxed workplace pension rules, the 1990s saw companies shift towards much more affordable defined contribution pension schemes (which most people pay into today via workplace and personal pensions).

In most cases, the change saved companies a lot of money, but resulted in most employees receiving less into their pension each year.

Not every employee was affected. Often people over a certain age were allowed to keep their defined benefit pension, while younger and new employees weren’t.

In less than a decade, the burden of most people’s pension contributions was moved from the employer to the employee. Today, just over 1 million people are actively contributing to a Defined Benefit pension - down from 8 million people in the 1960s.

The below chart shows the expected annual retirement income of two people retiring at 65, who both earned an average salary of £30,000 for 45 years. The only difference is that one had a defined benefit pension and the other had a defined contribution pension while they were working.(1)

The difference is stark. After working for 45 years, the person with the defined contribution pension could receive £12,700 less each year. And that’s after contributing 4% of their income into their pension as a gross contribution for 45 years, which the other person didn’t have to do.

Even if the person with the defined contribution pension contributed 10% of their income into their pension each year, they’d still receive £300 less than the person with the defined benefit pension.

So what’s this got to do with wealth inequality?

Generations that worked through the 1960s, 70s, and 80s (the Silent Generation and the Baby Boomers) are much more likely to have had defined benefit pensions, and therefore retire with a good pension income. But younger generations that entered the workforce since the 1990s (Gen X, Millennials and Gen Z) are likely to retire with less than a quarter of that income.

Is the wealth gap widening between the generations? The pension gap along with the rise of house prices and student fees certainly isn’t helping.

What you can do about it

Don’t let the generational wealth gap put you off from making the most of your pension.

Defined benefit pensions are a rare find, these days. But some companies do still offer them, particularly in the public sector. But if you’re more interested in following a career path where companies are more likely to offer defined contribution pensions, consider following these tips:

1. Start paying into your pension early. The earlier you start, the more quickly your money is likely to grow in real terms, thanks to compound interest.
2. Pay in as much as you can afford. The more you pay in now, the more your pension pot is likely to be worth when you retire.
3. Pay in lump sums if and when you can. Occasionally, you might receive money from a pay rise or inheritance. By paying that money into your pension, you’ll be helping future you.
4. Find an employer that has a generous pension scheme. Not all defined contribution pensions are the same. Employers are required to contribute at least 3% of your qualifying earnings, but some employers pay much more.
5. Adjust your contributions if you go on maternity or paternity leave. If your monthly income decreases, consider increasing the percentage of your income you pay into your pension so you don’t fall behind.

Despite defined contribution pensions being less generous than their predecessors, it’s still possible to retire with a healthy pension income. See our article, How you could build a million pound pension.

How your gender affects your future pension income

Women in full-time work are paid 7.4% less than men, on average. And when it comes to pensions, the difference is even more pronounced - we analysed our own customer data in March 2021, and found that the average pension pot for women was around 40% less than men.

For both income and pensions, the gap widens as people get older. And there seems to be a range of factors at play.

If you’re paid less, you’re likely to save less. Thanks to the introduction of Auto-Enrolment in 2012, more people are paying into a pension. But the amount people are able to contribute is dependent on what’s left over after other essential costs. While women might not be immediately affected by paying less into their pension, their long-term finances are likely to suffer as they’ll receive a smaller retirement income. And this can impact more than just finances, but their freedom of independence too.

Historically, women have been more likely to take time out of work to raise children. Traditional gender roles and few companies offering adequate paternity leave have likely contributed to this. While there have been positive developments in parental leave, a mother’s earnings will drop during the months they’re at home. With the added financial pressure of caring for a child, women are therefore much less likely to be able to keep their pension contributions at the same level during this period.

Returning to work after maternity leave can also limit a woman’s earning potential. Some may find they’ve been overlooked for a promotion, or learn that their colleagues’ salaries have increased while theirs hasn’t. And while some women may look for a more flexible or part-time working arrangement, most employers aren’t set up for this, limiting the options available for mothers heading back to work.

All this can drastically impact women’s income, both today and in the future when they retire.

What you can do about it

The gender pay gap appears to be narrowing, but the rate of change isn’t fast enough to fix itself anytime soon. Here are some tips that both women and men can consider to help them retire with a good pension.

1. Don’t opt out of your workplace pension. Despite the introduction of Auto-Enrolment, it’s still possible to opt out from paying into your pension. But to do so would be to turn down free money. Not only will your employer pay 3% of your qualifying earnings into your pension, the government will usually top up your contributions too in the form of tax relief.
2. Start saving early. This will give your pension more time to grow. And thanks to compounding returns, it should grow by a slightly faster amount each year.
3. Adjust your pension contributions during parental leave. Most people will contribute a percentage of their income each month. But if your income goes down, the amount you pay in will be smaller too. So consider increasing your contribution percentage to keep your contributions at the same level (you can always lower it again when you return to work).
4. Contribute to your partner’s pension. If you or your partner take time off work to raise a child, the other might consider using part of their income to pay into their partner’s pension. This will prevent the person raising the child (traditionally, the mother) from experiencing a severe dip in pension contributions, and later receiving a smaller pension than their partner.
5. Share caring responsibilities. Our Gender Pay Gap Report shows that if men took responsibility for an equal share of unpaid care work, women could increase their pots by more than £106,000, and the gap would be eradicated.
6. Register for Child Benefit if you have children. To receive the full State Pension, you’ll need to have paid National Insurance for 35 years. If you take time off work to raise a child, you can claim National Insurance Credits which will count towards your State Pension entitlement.
7. Combine any old pensions into one. If you’ve had more than one job, you might have more than one pension. And because fees differ so much between providers, you might find yourself paying more than you need. Combining them into one plan could reduce costs, and you’ll find it much easier to manage too.

The pension gap is a big and important topic. For more details, read the PensionBee Gender Pay Gap Report.

How your ethnicity affects your future pension income

Is there a racial wealth gap? According to the Department for Work and Pensions (DWP), pensioners of non-white backgrounds received less income from both occupational pensions and the State Pension than their white counterparts.

Another report from the DWP showed that a higher percentage of people from non-white backgrounds were likely to fall into the lowest income group (earning less than £9,200 per year after housing costs).

It’s harder to put money aside into a pension when you have less income to work with. And if, for example, you need to spend time at home to raise children (perhaps because you can’t afford child care) or an elderly relative, your work opportunities will be limited.

The rate of unemployment is higher amongst ethnic minorities, and those who do work may find their annual income is below the threshold required to qualify for Auto-Enrolment (£10,000 for the year 2020-2021). People earning less than this - perhaps those in part-time work, for example - would need to voluntarily opt-in to their workplace pension scheme. But if you’re not familiar with the UK pension system, or your first language isn’t English, you’re far less likely to be aware of your options.

Finally, to qualify for the State Pension, a person will need to have paid National Insurance for at least 10 years. To receive the full State Pension, they must pay in for 35 years or more. But as many ethnic minorities will be first generation immigrants, they might not have accrued the necessary contributions to qualify.

What you can do about it

The challenges facing people from ethnic minority backgrounds are diverse, but there are a number of things you could try that might help improve your pension situation.

1. Speak to your employer about your pension options. The first step towards a happy retirement is to engage with your pension. If you don’t have one, or you’re not sure, ask your employer directly. If you earn more than £10,000 a year, and are aged over 22, you should have been automatically enrolled into their pension scheme. But your employer should be able to explain all your options.
2. Ask on behalf of a relative. If you live with someone who doesn’t speak English as their first language, you can speak with their employer on their behalf. The employer should be willing to speak with you, with your relative’s permission.
3. Contribute what you can afford. If you’re on a good salary, you might have more disposable income to put towards your pension. But if you’re on a lower income, you’ll need to balance what you can afford to put into your pension with your daily living expenses. The earlier you start, the more your retirement income will be, so don’t delay.
4. Check your National Insurance Contribution record. To receive the State Pension, you’ll need to have paid National Insurance for at least 10 years. To receive the full amount, this rises to 35 years. You can check your status on the Gov.uk website.
5. Apply for National Insurance Credits. If you receive benefits because you’re too ill to work or you’re otherwise unemployed, you might be able to claim National Insurance Credits. These credits will count towards your State Pension entitlement.

(1) Defined contribution income calculated using our pension calculator, assuming employee and employer both contributed 4% of employee income, and pension drawdown was fully used up in equal annual amounts by age 85. Defined benefit income calculated using https://www.which.co.uk/money/pensions-and-retirement/company-pensions/defined-benefit-and-final-salary-pensions-ajvnw4q07rlm
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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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From necklaces and coins to mobile phones and teeth - gold can be found nearly everywhere. And around $1.6 trillion is privately invested in the precious metal.

So what is it about gold that’s so attractive to investors? And with so many other options available, is gold a good investment? Let’s find out.

Why invest in gold?

Gold is usually invested in strategically, typically making up a small portion of an investment portfolio. There are several reasons why an investor might invest in gold.

To guard against inflation

Inflation occurs when the value of goods increases over time. For example, today’s £10 note isn’t able to buy as much as it did 30 years ago because bread and other items have gone up in price.

Gold, however, doesn’t have a fixed monetary value like a £10 note. Its value is determined by what people are willing to pay for it. And historically, its value has tended to increase over time.

Between 1971 and 2020 the price for an ounce of gold rose from £15 to £1,206 (80 times). Yet £15 in cash buys far less today than it did in the 70s.

That’s not to say that gold will necessarily continue to rise in price. In fact, between 1980 and 2006 it mostly fell in value. And between 2013 and 2016 it fell by around 30%.

But, for the most part, the price of gold has outpaced inflation which makes it an attractive alternative to cash and other higher-risk investments.

To guard against economic instability

Gold has an interesting relationship with the stock market. It tends to rise in value when the stock market’s going through a bad patch, and lose value when the stock market’s doing well.

For example, the chart below shows how the price of gold changed during the 2020-21 Covid pandemic.

The price initially shot up between March and September 2020, as the economy struggled against the impact of the virus on people’s lives. But after the stock market continued to make unexpected gains (contrary to initial expectations), the price of gold fell. Then, as infections began to rise again and the economy looked more fragile, the price of gold started to increase once more.

Part of the reason for this is that investors were moving some money away from the volatile stock market and into gold, which is considered a more stable and lower-risk investment.

To benefit from value growth

As we’ve seen, the price of gold can change a lot over a short space of time. And this often happens at times when the stock market is in decline.

For example, the price of gold grew 12% between the end of January and April 2020. Meanwhile, the S&P 500 (the largest stock index) fell by 11%.

Of course, gold can fall in value too. It fell from £1,464 to £1,323 in the 12 months leading up to September 2021.

Is this a good time to invest in gold?

As we’ve seen, there’s more than one reason to invest in gold. So whether now’s a good time to invest in gold will depend on your goals and circumstances.

If you’re looking to beat inflation over a long period of time, investing in gold might be worth considering. Historically, long-term investments in gold have paid off.

If you’re looking to invest for short-term gains, the risk will be much higher. As of September 2021, the price of gold is near an all-time high. But that’s not to say it won’t increase further, and it could fall in value too.

Can you invest in gold through your pension?

Pension plans carefully balance a mix of investments to manage risk. Because gold is considered a lower-risk investment, it can make up part of a pension’s portfolio.

If your pension plan is a type of target date fund, it will change its mix of investments over time to compliment your expected retirement age. This is so that you benefit from higher-risk assets with higher growth potential while you’re young, and lower-risk assets that are more stable when you’re older. So while your plan may include little or no gold while you’re young, it could start to move some investments into gold as you get older.

You can ask your current pension provider whether gold makes up part of your portfolio. And if it doesn’t, you could look around for a more suitable pension if you’re certain you want to invest in gold.

PensionBee’s Tailored Plan invests in commodities as you approach retirement, including gold (up to 0.6% of total portfolio balance as of September 2021). You can learn more about it and our other pensions on our Plans page.
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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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