The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 42, watch on YouTube or scroll on to read the conversation.

Takeaways from this episode

• Tuition fee cap has increased to £9,535 a year - this applies to UK students taking standard full-time courses in England and Wales from August 2025.
• Maintenance Loan often only covers half of student living costs - the average living costs are £1,104, yet the average Maintenance Loan is £600.
• Where you study can make a big financial impact - in terms of post-rent living costs, the most expensive was University of London at £837 and the cheapest was University of York at £318 on average per month.
• Half of students report receiving money from parents - surveyed students said they received an average of £171 every month from their parents.

PHILIPPA: Today, we’re tackling a topic that resonates with many families. Should parents pay for their children to go to university? It’s not an easy question to answer because university has never been more expensive. A new report from the Higher Education Policy Institute found that students need £61,000 to have a minimum socially acceptable standard of living over a three-year degree. But even the maximum annual Maintenance Loan available to students from the lowest income households, that would only cover half of that. So who’s expected to plug the gap? Students or their parents?

I’m Philippa Lamb. And just before we begin, if you haven’t subscribed to the Pension Confident podcast yet, why not click right now so you never miss an episode?

We’re talking about the financial realities of supporting your children through university. And here with me, I have Tom Allingham, he’s the Communications Director at the student money website, Save the Student. Kia Commodore is the Founder of financial literacy platform, Pennies to Pounds. And from PensionBee, Engineering Manager, Stewart Twynham. He’s a father of four. Not only has he financially supported his daughter through university, he packed up and moved his entire family to be closer to her while she studied.

PHILIPPA: Hello, everyone.

ALL: Hello.

PHILIPPA: Here’s the usual disclaimer before we start. Please remember, anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice. When investing, your capital is at risk.

PHILIPPA: Stewart, impressive.

STEWART: That’s what you do, isn’t it?

PHILIPPA: That’s a high bar for the rest of us, I’ve got to say. This is personal, this subject for me, too. My son’s been through uni, he’s just about to start an MA. It’s all very, very expensive. Did you, you all went to university?

ALL: Yes.

PHILIPPA: Did you leave with a lot of debt?

TOM: Yes. And it’s grown since as well.

PHILIPPA: Do you want to put a number on it?

TOM: Yeah, I can. Yes, I think when I graduated, it was around, I think £55,000, and that was in 2015. And the last time I checked, which was within the last couple of months, it was now over £70,000.

PHILIPPA: Wow. It’s a lot. How do you feel about that? Does it really bear on you?

TOM: It doesn’t really because I’m - and maybe it’s because of the job I do as well - I’m aware that it’s not a debt in the traditional sense, as you always hear people say. And yes, it’s a chunk out of my income every month, but it’s not affecting my credit score. I know that it’s going to be wiped after a period of time. There’s no obligation for me to repay it in full.

And I know as well that in reality, I probably wouldn’t have got this job had I not been to university. I wouldn’t have got the job I got when I got out of university had I not gone. So yes, it’s a lot of debt, and yes, it’s a chunk out of my salary each month, but it probably was worth it for me, at least.

PHILIPPA: Do you feel the same way?

KIA: Good question. I graduated in 2021, but it was delayed a year because of COVID-19. For me, I think it’s a big decision to ask an 18 year old what you want to do the rest of your life.

PHILIPPA: Yeah.

KIA: I had no idea. I was also the first in my family to go to university, so there was an added pressure on my back that there was no other option. I went to university, I studied French and Business - because I didn’t really know what I was going to study. It’s come in handy, thankfully, but I didn’t really know what I wanted to study. I’ve checked, again, like you, in the last couple of months, and I think I’m close to £90,000. Because I did a four-year degree and I had a lot in Maintenance Loan.

It’s a big chunk of money. I’m in two minds. I’ve always said very openly that if I had my time again with the knowledge that I have, I probably wouldn’t have gone down the degree route. I might’ve gone down to a degree apprenticeship or traditional apprenticeship route. I mean, it’s great I’ve got a degree, but I don’t think it has as much of an impact in terms of what I’m doing.

PHILIPPA: As you say, it’s so hard to know at 18, particularly if you’re first generation. Whose advice do you take? [The] job market looks like you’ve got to have one, so off you go. Stewart, how was it for you?

STEWART: Well, very different. I’m from a generation where it was usually a grant. I topped up a loan, probably just over £1,000 in my final year, the first year of student loans. I remember it was a huge debate within the university at the time. We were all saying, “this is a terrible thing. This is a terrible thing”. I was one of the lucky ones, really.

What are Tuition and Maintenance Loans?

PHILIPPA: Tom, where are we now? Because there are tuition fees and there’s cost of living and Maintenance Loans. So should we get tuition fees out the way first? How much are they now?

TOM: I mean, tuition fees, they do tend to grab the headlines. Even though, as I think we’ll probably touch on a bit later, they’re not actually the main issue for most students. But as you say, let’s touch on them now. I guess, tuition fees for this upcoming year, which is 2025/26, have risen to £9,535. That’s for most students.

So it’s free for students who’re from Scotland and go to university in Scotland. And if you’re from Northern Ireland and you go to university in Northern Ireland, it’s around half the cap across the rest of the UK. So it’s £4,855. But as I say, for most students, it’s that figure of just over £9,500 a year.

PHILIPPA: OK. And obviously they started out much lower?

TOM: Yeah.

PHILIPPA: Most students take out loans to cover them, do they?

TOM: Yeah, I think the figure’s about 90% of eligible students take out a loan.

PHILIPPA: But living costs, that’s a completely separate system.

TOM: Yes. Well, it is and it isn’t. You take out and apply for the loan via the same system. So when you apply for your tuition fee loan, you’ll get the option to apply for a Maintenance Loan as well. But, whereas a tuition fee loan covers the cost of tuition in full, a Maintenance Loan won’t cover, in most cases, won’t cover your living costs in full. In a lot of cases, it falls almost below the level of half your living costs.

PHILIPPA: Yeah, we’re really going to get into that because that’s the big issue, isn’t it? And of course, these are loans, aren’t they? Interest rates. How much are they charging now?

TOM: Yes. So again, annoyingly, as with quite a lot of aspects of student finance, it varies depending on where you’re from in the UK. But for students from England who are starting uni this year, so that’s Plan 5, as it’s known, it’s now set at 3.2%. So that’s the rate of RPI [the Retail Price Index] from March earlier this year. That does vary, but the change that came in with Plan 5 compared to Plan 2 is that it’s now just the rate of RPI, whereas on Plan 2 in the past, it was RPI plus up to 3%. Now with just RPI, in effect, you’re never going to repay back more than you borrowed in real terms, but it’s still obviously growing.

PHILIPPA: OK, so it’s stepping in the right direction.

TOM: Yeah, in some respects. Yeah, so one really important thing to note about Plan 5 as well, which is the new repayment plan for students in England that came in in 2023, is that aside from all the other changes, the repayment term has now been extended from 30 to 40 years. You now have to wait 40 years since you first become eligible to repay for that balance to be wiped. For a lot of people, you’re talking about pretty much the vast majority of your working life.

PHILIPPA: This is where the rubber hits the road. What’s the average living costs for students compared to the Maintenance Loans they can get?

TOM: Well, according to our research, the average student is spending just over £1,100 a month on their living costs. But the thing that I always try to say is that that’s reflective of a very poor living standard.

PHILIPPA: And this is including rent?

TOM: This is including rent.

PHILIPPA: So this isn’t London?

TOM: Yeah, in London, the average cost is maybe £200 [or] £300 a month higher than the rest of the UK. But as I say, that’s not reflective of a good living standard. Students tell us that they skip meals, cut back on going out with their friends, all these kinds of things. So that’s what you can survive on, but I wouldn’t say it’s what you should be surviving on.

How families can navigate university costs

PHILIPPA: OK, so we see the problem right there is a huge funding gap here. That brings us, of course, to the bank of Mum and Dad, doesn’t it? Do we know how many students are getting help from their parents?

TOM: Yes, 50% of students said that their parents contribute to them, which -

PHILIPPA: Only 50%?

TOM: Well, this is it. So half do and half don’t. Of those that do, they’re receiving an average of £171 a month, which isn’t nothing, but when you bear in mind that the shortfall between the average loan and, again, that very, very poor living standard living costs, in our survey, that’s £504 a month shortfall. Parents are only contributing £171 a month, so that’s still the best part of £300, £350 that students need to make up from other sources.

PHILIPPA: Yeah, and we’ll get on to how they’re managing that. But why don’t you tell us how it was for you and your family?

STEWART: We made the choice that, well, my eldest daughter wanted to go to university. It was easier to move house to actually be closer, so she could commute in.

PHILIPPA: Where were you?

STEWART: So we were in a remote rural part of Scotland. We moved to the borders. She was studying in Carlisle, so it was a couple of stops on a train. So [she] could be dropped off by Mum, to get to uni when she had studies. It was a much better experience, [she] could live at home.

Not an ideal situation, because that was when COVID-19 hit. So that complicated matters further. But it did make a big difference. She was able to make friends, decide who she wanted to move in with for the second and third year. But it made a huge difference to start that off.

PHILIPPA: She was happy with that? Because obviously not all students would choose to stay at home, or indeed could stay at home.

STEWART: No. She had the choice of different universities, but it just made sense, and it just made it an easier start. We also had been saving for some time as well. We saved for both our eldest, basically from when they were born, putting away a small amount of money. We were lucky, we had a Financial Adviser at the time who said, “right, you’re going to have to start thinking, get some money together”. So we were putting something like £25 a month into an ISA, the price of a takeaway pizza.

And that actually is enough to make up much of that shortfall. It’s not perfect. My daughter still had to go out to work. She had several jobs, through the second and third year, to bring that standard of living up. And you’re right, otherwise you’re into the skipping meals territory.

PHILIPPA: How was it for you at university? I mean, you’re not long out.

KIA: I’m not long out. I’m from London, from East London, but I went to university in Coventry, and I did that purposely. I mean, it’s amazing that your daughter wanted to stay at home. I wanted the opposite. I wanted to enjoy, and I wanted to experience uni to the fullest, I knew that staying at home wouldn’t have given me that. So I moved out to Coventry.

And my first year, I lived in student halls, I think most students do. That was very expensive, £6,000 to £7,000 for the year? I didn’t have enough money, obviously, to pay that. So that was very difficult in [my] first year. However, I made sure that I ate good meals. That was one thing that my dad said, “you have to make sure you eat”. Because there’s this, obviously, perception that students skip meals or you have packet noodles. That’s what I didn’t have.

PHILIPPA: Hard to learn.

KIA: I was the person, you go to supermarkets, and you find those yellow stickers.

TOM: Yeah.

KIA: My dad taught me well. That’s what I did. I made the most of all of that. But [in my] second and third year, I made the decision to find cheaper accommodation. I moved in with friends and my rent dropped down drastically to around £300 a month, which was amazing. Absolutely amazing. I was able to save money for the first time in university.

PHILIPPA: Interesting.

KIA: And again, I was able to be able to do more with my friends. I remember I started going on holidays then because I had more money, and I was working to obviously supplement the lifestyle. But I was able to do a lot more and put money into ISAs because of that drastic cut.

The impact of household income

PHILIPPA: It’s interesting hearing Stewart talk about saving from birth in that incredibly impressive way. I think we’re all impressed about that. That’s not really been a British mindset, has it? In the States, where people have paid for their education for such a long [time]. I mean, forever, really. That college fund idea, I think it’s really in the culture, isn’t it? We don’t really have that, do we? But we need to get it, don’t we?

KIA: Absolutely. I mean, my family didn’t have the extra money, so there was no bank of Mum and Dad for me, unfortunately. They saved for - my dad has two kids, myself and my brother. He saved for us, but it wasn’t necessarily for university. I think because he knew that we could get a loan, that he said, “well, you can - there’s support there, so you don’t necessarily need me to do much”.

PHILIPPA: With the best will in the world, there’s a misconception, isn’t there, about the loan system? You think, yeah, there are Maintenance Loans. It’s going to be OK. We don’t need to fund this. But talk us through how the Maintenance Loans work, because it’s not a lot. The family thresholds of income are low, aren’t they?

TOM: They are, and that’s a really interesting point. It basically works on a sliding scale across most of the UK anyway. But the minimum income threshold in England is £25,000. If you have an income of £25,000 or less, you get the maximum Maintenance Loan for students with your living situation.

PHILIPPA: How much is that? How much do you get?

TOM: It varies depending on whether you’re at home, away from home outside London, away from home in London. But just as an example, if you’re in London in this coming academic year, you’d get just shy of £14,000. Outside London, you’d get about £10,500. At home, I think it’s about £6,500 - £7,000.

As I say, £25,000 or less is when you get that maximum loan. But that figure has been set since 2008. Obviously, salaries have increased since then, inflation since then. I think were it to have increased with average earnings, that figure should be around £33,000, £34,000 now.

PHILIPPA: Wow.

TOM: So fewer and fewer students every year are eligible for the maximum loan.

PHILIPPA: That’s a huge issue, isn’t it?

TOM: Oh, massively. It’s probably the single biggest, but also least known about, issue with the student loan system.

PHILIPPA: Yes! I hadn’t realised that that number had stayed the same for so long. Through a period of high inflation. So a massive problem for the students with the biggest need.

TOM: Yeah, absolutely. I think because it’s slightly past the point of being too complicated to really explain it in a compact sound bite. And it’s not particularly glamorous in the way that tuition fees are.

PHILIPPA: Yes, they grab the headlines, don’t they? Tuition fees. We always hear about that. But we don’t hear a lot about Maintenance Loans, do we? So at the other end of the income scale, as you say, sliding scale. So if you’re earning more, where’s the point at which you can’t have any loan at all?

TOM: Fortunately, there’s no point where you get no loan, but there’s a point where you get the minimum loan. Again, it does vary depending on the living situation of the student. So again, if you’re living at home, it’s just shy of £60,000. If you’re living away from home and outside London, it’s just over £62,000. If you’re living away from home in London, it’s just over £70,000 for the household income.

PHILIPPA: OK, and then you’re getting considerably less.

TOM: You are, yeah. If you’re living at home, you’re getting just shy of £4,000 a year. If you’re living inside London, you’re getting just shy of £7,000. And outside London, just shy of £5,000. In each case, you’re getting roughly half of what the maximum amount is.

PHILIPPA: It’s interesting, this isn’t it? Because we’re talking about household income. There’s various issues there, aren’t there? Because household income, you’ve got two people working, who knows how many children you might have in the family. So even if your household income is £70,000 or more, sounds like a lot? Isn’t necessarily that much. If everyone’s working, you’ve got a bunch of kids to support.

And then, of course, there’s the question of household income has always struck me as a bit dubious, because what if they don’t want to contribute? Not everyone is able to or chooses to, do they? If there’s been a family break up, if there’s a new partner in the household who doesn’t have anything to do with you financially - their money is still counted, isn’t it?

TOM: It is, yeah. The example you bring up of new partner in the household is the one that we always have students contacting us about -

PHILIPPA: Do you?

TOM: - saying, “my Mum’s just got a new partner, but he’s only lived with us for a year. He doesn’t feel like he should be contributing to my university experience”. But in the eyes of the government, in the eyes of the student loan system, that new partner is as equally financially responsible for you as your Mum in that situation. But your other parent, who may not live with you anymore, again, in the eyes of the student loan system, they have no financial obligation to you.

PHILIPPA: That’s a very odd system, isn’t it?

TOM: It is.

Is university good value for money?

PHILIPPA: OK, so I think we’ve laid out the problem, haven’t we?

KIA: Yes, it’s a big problem.

PHILIPPA: All right, well, I guess we’re getting to the heart of it. Is university good value for money?

TOM: I mean, you said that you maybe wouldn’t have done it.

KIA: University was great. I met a lot of amazing people. I had so much growth, and I’m glad I did go to university for that element. But in terms of my degree, if there’s any consolation, I can speak fluent French now - which is great.

PHILIPPA: Always handy?

KIA: Great, but I don’t know if it was worth almost £90,000. I don’t know if it was worth that.

PHILIPPA: It feels quite pricey.

TOM: Could’ve got Duolingo for free.

KIA: I think I could’ve got a private Tutor. It’s a cheap way to do that. But I think it’s the environment that you go to. So I went to a really good sixth form. I managed to get into a really good sixth form, one of the best in the country.

And there was no other option presented to us other than university. So I didn’t even know about it. And then I had friends who went to other sixth forms and colleges who said, “I’m going to go do a degree apprenticeship”. These are all things that we never knew about.

PHILIPPA: They were never discussed with you?

KIA: Never discussed. We never heard about it.

PHILIPPA: That’s interesting, isn’t it?

KIA: Never heard about it.

TOM: I don’t know if they really were with us either, to be honest.

STEWART: No, in our case, our son decided, obviously through COVID-19, going into S5 in Scotland and then looking up options, staying on to S6 and where to go next. He took the view that, actually, “I don’t want to do this. I want to do a vocation”. So he took an apprenticeship, Light Vehicle Technician, and he’s thoroughly enjoyed that and he’s doing really well. But his Headmaster at the time was shocked, because everyone goes off to university. That’s the expectation.

PHILIPPA: So if you’re intellectually capable, you’ve got the grades, you should go?

STEWART: Yes. That’s the assumption.

PHILIPPA: It’s still the zeitgeist. But he didn’t?

STEWART: He didn’t.

PHILIPPA: And he feels that was a good choice?

STEWART: He feels that was a good choice. There’s the social aspect. I think he does feel he misses out on something there, but workwise, no. The world is still his oyster.

PHILIPPA: Yeah, you hear that with degree apprenticeships as well, the social life thing. But then talking to students now, universities are big, big and sometimes unfriendly places, aren’t there? People don’t always leave with great big friendship groups.

TOM: Yeah, and there are, not thinking we obviously want to focus on the money, but students do talk about loneliness and things like that. Also with the financial issues that they’re facing, they’re not actually able to go out and do all the stuff that maybe they would have done 20, 30 years ago as well.

KIA: Yeah, absolutely. I mean, I definitely experienced that, especially in my first year. I think it was a massive change moving anyway. I did make some friends, but I remember there was a point towards the end of my first year where I called up my dad in tears and I said to him, “I just want to come back home. I don’t think I would” -

TOM: I had a similar thing.

KIA: Yeah, “I just don’t think I want to do this”. I just said “it’s not for me”.

STEWART: I can actually remember picking my daughter up on one occasion, exactly the same story.

PHILIPPA: Do you know, I’m going to say, I don’t think I’ve spoken to anyone who’s been through university in recent years who hasn’t had that experience. So that’s something to factor into the decision, isn’t it?

KIA: Absolutely.

PHILIPPA: If you do decide you want to do it, and obviously, I haven’t talked down university. Fantastic. And I mean, it’s fair to say lots of jobs, you’ve got to have a degree, otherwise you’re not in the vicinity of even being considered.

STEWART: True.

Price of a pint across the UK

PHILIPPA: So we’re in this system. A lot of people will feel they’ve got to do it. And if you want to do something vocational like medicine, well, that’s what you’re doing, isn’t it? You’ve got to do it.

The choice of university is a big one. And obviously, your daughter, Stewart, you made choices around where she wanted to go regionally. But the cost, regional cost of universities, there’s a huge disparity, isn’t there? I’ve got a bit of research on this, actually. It was so interesting.

Does anyone want to hazard a guess of the difference between an average pint in the North East of England versus London? If we’re thinking about living costs, I don’t want to say that students are just thinking about pints!

STEWART: It’s a metric, I think.

PHILIPPA: So what do we reckon the cost differential is?

TOM: So we reckon London is what? £7, £8? I’m going to guess a Northeast pint, we’re going to look at £4, shall we say?

PHILIPPA: The number I’ve got here is £4.56. OK. Very good guess. I mean, this data says £5.59 in London, which I’m going to say seems very inexpensive to me.

KIA: That does seem really low.

TOM: I don’t remember the last time I saw that.

STEWART: No. That’s low.

PHILIPPA: So I think we can say at least a £1 difference. And I mean, we’re joking about it, but this is one drink. So extrapolate that over a week, a month, a term, a year. It’s a lot of money, isn’t it? So choosing where you go, that’s an important thing to do, isn’t it? Obviously, as you say, you didn’t go in London, you went up to Coventry.

KIA: I did.

PHILIPPA: And that must have made an enormous difference.

KIA: Oh, it really did. The cost of living was way cheaper up there. Going out was a lot cheaper. What I will say is I did the crazy thing of applying, getting in, and the first time I ever saw Coventry, or ever went into that postcode, was when I moved in.

TOM: Oh, wow!

PHILIPPA: Really? You didn’t go?

KIA: I had no idea what my accommodation was like -

STEWART: That was brave!

KIA: I had no idea what Coventry was like. I hadn’t spent the day walking around.

PHILIPPA: That was bold.

STEWART: Wow!

KIA: My dad’s like, “there’s your nearest shop. There’s this”. I had no idea. No. Two and a half hours away from my house. I said, “oh, yes”.

STEWART: What could possibly go wrong?

PHILIPPA: Because actually, you made a good point because it’s all well saying, “go to a uni. If you live in the South East, if you’re looking at London, obviously it’s going to be incredibly expensive. Look at going far afield”. But then you do have travel costs, don’t you? Significant travel costs if you want to be home more than once a year.

KIA: Which is why I didn’t really come home much. My Dad begs for me. I said, “unless you’re going to pay for my train ticket, I’ve got to stay”.

Can students supplement costs with part-time jobs?

PHILIPPA: Students, obviously, lots of them work. I think it’s 58% of them now have got a part-time job. Don’t know about you. Did you work?

KIA: Yeah.

PHILIPPA: I worked. But it’s getting jobs, isn’t it? It’s all very well saying “students should be working”, but it’s not always that easy in university towns, is it, to get work?

KIA: I think I spent my entire first year trying to find a job. Couldn’t find a job in first year. So in second year, you know you have the summer break. During that break, I was applying aggressively to jobs, and I managed to get a job in London. We already had a problem; I was in Coventry.

TOM: Yeah.

KIA: There was a dilemma. I was in Coventry. But the difference was I was working out the numbers as well, and I got paid a lot more in London. With a rail card, I managed to save, and I’d try and work Thursday to Sunday, and I’d just stay down at home and get a train back home.

TOM: I see you were commuting?

KIA: Yeah.

TOM: Oh, wow.

KIA: Even though I always had university, I’ll just finish my day on Thursday, get the last train, work Friday to Sunday, and then get the train back, and then come back. But I made a lot more money. I think I made something. I was able to supplement an extra £900 a month, or sometimes even £1,000 if I had extra shifts I could pick up.

PHILIPPA: Did you?

KIA: Because I made way more money in London because on average, you get paid more.

PHILIPPA: And you could stay for free?

KIA: Yeah, stay for free. If I booked in advance, I could get a £5 train ticket back home.

TOM: Nice.

KIA: So I was meant to save money, versus the train ticket of about £30. So I’m going to save a lot of money.

PHILIPPA: So you got to be creative on the job front.

TOM: Well, this is what I was going to say, is that’s really impressive. I’m not saying you’re saying this, obviously, but that shouldn’t be the expectation. That shouldn’t be the way that you have to make it work.

Should parents pay for their kids to go to university?

PHILIPPA: This all brings us to the question of, should parents help as well? Because it’s all very well saying if they can, they should, and there’s a moral imperative and all the rest of it.

But parents do have to think about their own money as well, don’t they? And this is a time in life most parents are going to be heading [to being] middle aged, maybe even older with later families. They have to think about their own money. So, Kia, talk us through that dynamic.

KIA: In first year, my Dad and I, we had a lot of conversations around money. He wasn’t able [to], he didn’t have the extra money to support me during university. And it was - I didn’t apply to university with the expectation that he could. But there was points where, like I said, I just couldn’t afford it. I’d call him up and say, “do you have £600 that you could loan me because I need to pay my rent”. He just didn’t have that. I think in first year, obviously, I’m 18, 19, I didn’t understand it. I was very upset towards my dad that he - it felt like he wouldn’t help me.

Then as you get older, and now I’m a lot older, and I realise how much life costs and the expenses. I had my younger brother that my dad was looking after, obviously. I realised that he just physically just couldn’t afford it. We lived in London; he had a house in London. He’s got all these expenses that you need to pay. We already know if you’re in London, it’s just so expensive that there wasn’t extra cash to help me out.

I think for me, I understand that I don’t think I would have wanted my dad to contribute, but at that time when you’re in dire straits, I was like, “oh my gosh, I really need this money. How am I going to get it?” But I remember having a conversation with my dad and he said, “one day you’re going to thank me that I’m not able to help you”. I remember that didn’t end well. That conversation didn’t end well.

PHILIPPA: I’m not really -

TOM: - Not what you wanted to hear.

KIA: - Wrong time.

PHILIPPA: - I don’t quite see how that works.

KIA: No, but now I understand because it did push me -

PHILIPPA: I see what you mean.

KIA: - to really understand. Because I probably wouldn’t have found a job. I wouldn’t have gone as hard as I had to and applied as much as I had to, had my dad was able to bail me out or give me some money.

Financial health check for parents

PHILIPPA: I mean, you must have thought about this, Stewart. You’re a financially organised person. You’ve made this clear to us. Obviously, you wanted to help your daughter. But there are things that families also need to think about. Quite apart from their day-to-day living expenses, there’s the issue of saving for your retirement. Obviously, we’re a pensions podcast. It’s not a thing you can forget about. And all the other expenses that families have.

STEWART: Yes, and those don’t go away when you’re in your 50s, 40s, 50s, when your children are going off to university, that’s a huge challenge for people.

PHILIPPA: And if you’re putting several children through, that’s a long period of time, isn’t it?

STEWART: It is. Looking at the pension statistics for people and the disparity between gender as well.

PHILIPPA: Well, yeah, exactly. I’ve got those numbers in front of me, actually. That whole average pension pot for the over 50s at 66, projected to be about -

STEWART: £88,000.

PHILIPPA: OK, which is not going to give you a huge income.

STEWART: It isn’t. Probably a gender gap of around 44%, so male [savers] you’re having possibly up to almost double.

PHILIPPA: Yeah. So for lone women with children, and I did that myself, and that’s a whole issue. Because if you’re looking at funding your children, or child, through university, and then you’re also realising you’re completely dependent on your own resources for paying all your bills and planning for your future, that’s a big deal, isn’t it? We have so many single-parent households now.

STEWART: The mortgage doesn’t go away, and the electricity bill doesn’t go away, all of those things. That’s the reality.

PHILIPPA: This is monetising the whole choice around universities, about what subject you do. You said yourself that you did a business-related degree Kia, because you’re thinking it’s going to be useful. You can see how that would be a paying proposition. But if you want to do something with a brain stretch, you wanted to read philosophy, that becomes more of a question now, doesn’t it? Whether, really, can you justify it?

TOM: I’d say the flip side of that, though, is, and you already mentioned this, in a lot of jobs, just having a degree is the baseline. It doesn’t necessarily matter what subject you studied. So just to pluck an example out of thin air - Marketing, for example. They’re not going to say you need a degree in Marketing. They’re just going to say you need a degree. In which case, if you do have an interest in History or Philosophy or Geography or whatever, and you know you’re going to need a degree to get into whatever career is you have your eye on, then maybe it’s worth studying a subject that doesn’t have a clear career at the end of it.

PHILIPPA: Yeah. But are you seeing - it seems to me now that there’s that, and then now there’s the, “yeah, but you’ll need a relevant master’s degree”.

TOM: Maybe not necessarily at entry-level, but slightly higher. I think the other thing as well is because so many people are going to university, that actually just having a degree is no longer the silver bullet on your CV that it maybe was in the past. Having a master’s, that’s now the thing that can separate you from other people.

PHILIPPA: So, Kia, if families listen to this, they’re thinking about it, and they’re weighing the cost, the pros and cons. I mean, kind of a financial health check on the whole family finances. It’s got to be a good place to start?

KIA: Absolutely.

PHILIPPA: Run us through it. Where should they start with that?

KIA: It’s understanding what your costs are currently. So if you’re a homeowner and you’ve got a mortgage, how much does that cost? If you’re renting, what are those costs looking like? You make sure you’ve obviously covered things like your bills but also understanding that you’ve covered yourself.

I mean, obviously, I think most parents want to help. My dad, as I mentioned, he wanted to, he just couldn’t afford to. But it’s making sure that you’ve covered yourself. Things like your pension, things like other savings vehicles that you may have, making sure that you’ve covered those. If you have other kids, again, another expense, make sure everything’s covered.

Once you’ve done all that and you’ve understood where you’re at financially, then you’re at a position to decide, “OK, can I afford help?” That might be yes or no. If you can, how much does that help? And then have that conversation with your child because you mentioned that stat earlier, I think it was £170-odd is how much a month, right? That’s how much parents typically give a month. That is for someone -

PHILIPPA: That’s a good chunk of cash.

KIA: That’s a good chunk of cash.

PHILIPPA: Out of tax income?

KIA: Your child will definitely benefit. I can say firsthand, any money that you can give definitely helps. So I think taking off the pressure of “how much can I give?” and just having a conversation of whatever that amount is, your child will definitely be grateful.

PHILIPPA: I’m thinking about for how long as well, because we think about three years, but not all courses are three years. If you’re reading Medicine; it’s a lot longer. Architecture, all the rest.

KIA: Absolutely.

PHILIPPA: It’s a long commitment, isn’t it?

How can student finance be improved?

PHILIPPA: Right. So we have the Autumn Budget coming up in November. It looks like it’s going to be the end of November now. We all understand how tight the public finances are. But what would we like to see happen with student finances, given that the generations we’re talking about are the future of our economy. What would you like to see?

TOM: For us, and we’ve been saying this for years and years and years now, but in particular in the past two or three years where Maintenance Loans have not kept up with inflation. In the last academic year, the maximum loan was, I think, £1,900 less than it would’ve been had loans actually kept up with inflation since 2021, I think it was.

PHILIPPA: So much money.

TOM: Yeah, which is huge. That’s for the students from the lowest income backgrounds as well. They’re the ones seeing the biggest real terms cuts. What we want to see is for loans to rise above and beyond inflation to close that shortfall. It’s worth saying as well that all we’re asking at the moment is for loans to get back to the level they were pre-COVID, which even then they weren’t enough. We’re just asking to get back to that level, and then we can address other problems further on the line. But in the short-term, it needs to get back to just that level.

PHILIPPA: Just the baseline of where it started out, which, presumably, the government thought was a reasonable place.

TOM: Well, exactly.

STEWART: I think for me, the income thresholds, that’s really, really important -

PHILIPPA: Yes!

STEWART: - because £25,000 with this starts to kick in. What’s that? It’s one parent potentially on a minimum wage, and maybe somebody else working part-time, suddenly you’re out of that. You’re starting to lose some of that money. That’s a big difference.

PHILIPPA: Yeah, there’s a real inequity there.

STEWART: That needs to be addressed.

PHILIPPA: Yeah, Kia?

KIA: I’d echo both answers, especially because I have a lot of friends who come from that lower income household. That was a decision, whether or not they could even afford to go to university because they don’t have that extra supplement. If you think about all the amazing great minds who perhaps might have missed out on that, purely because of the financial aspect, I think we’re doing everyone a disservice.

PHILIPPA: Thank you very much, indeed. Such a great conversation. I really enjoyed it.

ALL: Thank you. Thank you.

PHILIPPA: If you’re enjoying this series, give us a rating and a review. It really does help us reach more listeners like you. If you’ve missed an episode, that’s no problem. You can catch up anytime on any podcast app, YouTube, or of course, if you’re a PensionBee customer in the PensionBee app itself.

Next month, we’re tackling a fantasy for many, but a reality for only a few, as we ask: who wants to be a pension millionaire? It’s achievable and we’ll be exploring how to do it from financial strategies to mindset shift, so make a date to listen to that one.

Just a final reminder, anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice, and when investing, your capital is at risk. Thanks for joining us. We’ll see you next time.

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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As the State Pension age rises, many of us could reach our dream retirement age before we’re eligible. But that doesn’t mean you have to wait until your late 60s to stop working. With the right savings strategy and retirement income plan, you can retire on your own terms.

While the current State Pension age is 66, the government plan to increase it to:

• 67 between 2026 and 2028; and
• 68 between 2044 and 2046.

A new pensions consultation is underway that could mean it continues to rise faster and higher. So if you do want to retire before you’re eligible to claim the State Pension, how do you fund those years?

Bridging the gap

For many people, the State Pension is an essential element of retirement planning. It currently pays up to £11,973 a year (2025/26) which makes up a large chunk of the suggested amount needed to achieve a minimum standard of living in retirement. According to Pensions UK and their Retirement Living Standards, for a single person, that’s £13,608.

The savings you’ll need to cover the income shortfall before you can claim the State Pension depends on how many years earlier you want to stop working. For example:

• to retire two years early, you’ll need £24,000;
• to retire five years early, you’ll need 60,000; and
• to retire 10 years early, you’ll need £120,000.

Check your State Pension age with PensionBee’s State Pension Age Calculator. It’ll tell you what date you’ll reach your retirement, plus you can calculate your Pre-State Pension Gap by adding:

• your gender;
• your current pension pot size;
• your ideal retirement age; and
• your yearly contributions.
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How much can you afford to withdraw from your pension?

If you have a six-figure pension it can be easy to assume you can afford to stop working a few years before you hit your desired age. But remember that pot needs to last you throughout your retirement.

Most financial experts use the 4% withdrawal rule when it comes to taking pension money. That means you should be able to withdraw up to 4% of your pot each year for around 30 years.pens

So, how big would your pension pot need to be to sustainably withdraw enough to retire early?

The calculations above illustrate 4% of each pot figure and don’t take into account fees. More on the 4% withdrawal rule.

You’d need a pot worth at least £300,000 to be able to sustainably cover the State Pension gap. You can use PensionBee’s Drawdown Calculator to see how withdrawals could impact your own pot.

What do you need to save to retire before the State Pension age?

The idea of a £300,000 pension pot might seem impossible, but it’s doable. And depending on your current age and how much you already have saved, you may have to put away less than you think. Here’s a breakdown.

The figures above have been calculated using PensionBee’s Pension Calculator, and are inclusive of tax relief and potential employer contributions and assume:

• you have no pension savings;
• you aim to retire at age 66
• assumes investment growth of 5% a year;
• inflation at 2.5%; and
• management fees of 0.70% a year.

Want to see how your current savings are tracking? You can use PensionBee’s Pension Calculator to see how much you might need to bridge your own gap. Plus, you can see how adjusting your contributions could help you achieve your goal sooner.

How can I boost my pension savings?

If the figures seem daunting, remember there are ways to boost your pension savings. Here’s how.

Most UK taxpayers will get tax relief

The benefit of tax relief means you’ll get a top up from the government on your pension contributions up to a certain amount. Usually basic rate taxpayers get 25% - this means HMRC adds £25 for every £100 you pay into your pension making it £125. Higher and additional taxpayers might be able to claim more - head to GOV.UK for more info. And if you’re wondering how much you would need to contribute before tax relief to achieve your pension saving goals, use PensionBee’s our Pension Tax Relief Calculator.

Make the most of employer contributions

If you’re enrolled in a workplace pension, your employer will be making contributions on your behalf too. Under Auto-Enrolment rules, you (the employee) are required to contribute 5% while your employer must pay at least 3% of your qualifying earnings (the earnings you make between £6,240 and £50,270). While this is the minimum, some employers might be more generous. If you can afford to increase the percentage of your contribution, it’s worth asking if they’re willing to match it.

If you earn less than £10,000, but above £6,240, your employer doesn’t have to automatically enrol you in their scheme. However, if you ask to join, your employer will be unable to refuse you and must make contributions on your behalf.

Consolidate any old pensions

If you’ve had several jobs, you may’ve lost track of one or two pension pots. Tracking down any pensions you had with previous employers can make managing your retirement savings much simpler - and you may even save on fees you could be paying across multiple providers. It’s thought there’s over £50 billion in pension savings at risk of being lost, so make sure you aren’t missing any old pots. And if you need a hand tracking them down, read this blog from PensionBee.

Retiring before the State Pension age is entirely possible with some planning. However there’s no one-size-fits-all solution. Retirement planning is very individual and will depend on your circumstances, current age and other factors. Use tools like PensionBee’s Pension Calculator to check your progress and think practically about the ways you can boost your pension savings.

Ruth Jackson-Kirby is a Financial Journalist passionate about making money matters clear and accessible. She’s written for The Mail on Sunday, MoneyWeek, The Sun, and Good Housekeeping, helping readers navigate pensions and personal finance with confidence. She believes everyone deserves financial security and is on a mission to cut through jargon and make finance relatable.

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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It’s Pension Awareness Week - the perfect time to give your future finances a little TLC. Whether you’re just starting out in your 20s or edging closer to retirement, engaging with your pension now can make a real difference later on. The good news is that it doesn’t have to be complicated. Here are five simple steps you can take to boost your pension confidence.

1. Track down old pension pots

If you’ve changed jobs a few times, there’s a good chance you’ve left a pension or two behind. According to our research, billions of pounds are sitting in ‘lost’ pensions across the UK. Taking a bit of time to track them down could mean a very welcome boost to your retirement savings. You can start by contacting your old employers or using the government’s free Pension Tracing Service.

2. Check your pension statement or online account

Your annual pension statement (or your online account) is a goldmine of useful information. It shows how much you’ve saved, what you and your employer have contributed, and how your plan’s performing. If you’re not sure what everything means, don’t worry, guides like this one can help you make sense of it all. And if you’re a PensionBee customer, you can log in to your online account (your ‘BeeHive’) anytime. Once you’re there, you can check your balance, combine old pensions with ease, make flexible contributions and track your progress using your ‘Retirement Planner’.

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3. Use our Pension Calculator

If you want to know if you’re on track for the retirement you’re dreaming of, our Pension Calculator is a quick and easy way to find out. Pop in a few details, like your age, contributions, and retirement goals, and you’ll get an estimate of what your pot could be worth when you come to retire. You can try ours here. It’s a great way to see whether a small change today, like upping your contributions, could make a big difference tomorrow.

4. Start planning for retirement, whatever your age

It’s never too early, or too late, to start planning. If you’re in your 20s, you’ve got the advantage of time on your side. In your 30s and 40s, life is often busier with family and career, but even small steps can really add up. And if you’re in your 50s or 60s, now’s the time to get clear on your goals and make sure you’re retirement-ready. You can find tailored guidance for every stage of life in our Pensions Explained section of our website.

5. Engage with your finances

One of the biggest risks to your pension is simply ignoring it. Our report, The £500,000 Cost of Neglecting your Pension, shows that managing your pension can make a significant difference in your retirement. By staying engaged and taking steps to optimise your savings, you can ensure a more comfortable and financially secure future.

For example, it pays to be aware of annual management fees which can take a toll on your pension growth over time. As you can see below, if fees increase from 0.7% to 1%, your retirement pot could drop from £194,185 to £176,475 by age 68, leading to a loss of £17,711.

What’s the cost of paying higher fees?

*Assumes a starting salary of £25,000 at age 21, average annual salary increases of 2%, 8% pension contributions from age 21 to 54, 3% annual investment growth and no withdrawals during the period.

Pensions might not be the most exciting thing on your to-do list, but taking even 10 minutes this Pension Awareness Week could make a huge difference to your financial wellbeing later on. Luckily, there are lots of ways to stay informed without it feeling like hard work. Listen to a pension podcast on your commute like The Pension Confident Podcast, join an online community, or check out some of the resources on the PensionBee website or app. The more comfortable you feel with your pension, the easier it is to make smart decisions about your future. Think of it as a little gift to your future self.

Risk warning

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

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The following is a transcript of a bonus podcast episode of The Pension Confident Podcast. Listen to the episode or scroll on to read the conversation.

PHILIPPA: Have you ever tried to move a pension and wondered why it’s so hard and stressful? This Pension Awareness Week, we’re looking at how the pension transfer process works, and why it should be improved to give savers like us more control of our money. Does there really need to be all that paperwork, all those phone calls? When you think about how easy it is to switch banks nowadays, it doesn’t make sense for a pension to take months, or even years!

I’m Philippa Lamb and if you haven’t subscribed to The Pension Confident Podcast yet, click right now. You’ll never miss an episode!

Before we get going, here’s the usual disclaimer: anything discussed on this podcast shouldn’t be regarded as financial advice or legal advice, and when investing, your capital is at risk.

What inspired Romi to create PensionBee?

PHILIPPA: Pension switching is a subject close to the heart of PensionBee’s Founder and CEO, Romi Savova. In episode 34, she unpacked 10 years of pension changes so we could hear how PensionBee got to where it is now. Here she is talking about how she ran into problems when she wanted to move her own pension and how that experience made her realise there was a gap in the market.

ROMI: Well, I had a personal problem when it came to pensions. I tried to move my account to anyone who’d take it and I discovered that the whole system just doesn’t work well for consumers. It inspired me to do something about it and to solve that very particular problem of people wanting to have transparency and visibility over their retirement savings.

PHILIPPA: It was a fresh idea, wasn’t it? Did people get it straight away?

ROMI: Well, a lot of people said, “I didn’t really know that I could transfer my money, that I could even move my pension. I thought it just had to stay where it was”.

PHILIPPA: Which really proved there was a problem.

ROMI: Absolutely. The pensions industry back then, and even now, loved paper. Paper would just arrive in people’s mailboxes, and they’d put it in a drawer.

More jobs means more lost pensions

PHILIPPA: The average British worker changes jobs every five years, and every new job can mean a new pension pot. That’s a lot of admin! Here’s Romi again.

ROMI: Oh, it’s absolutely enormous! I mean, the average person switches jobs around 11 times. Every time you switch jobs, you get a new pension. You really have to be quite on top of it to keep your money together.

PHILIPPA: So, you think people do lose track of them?

ROMI: Absolutely. They lose track of them. They pile up the paperwork. Some of them get lost entirely. We estimate there’s around £50 billion of lost pensions.

Take an interest in your retirement

PHILIPPA: So lots of us may have multiple pension pots from different employers all hopefully mounting up as time goes on. So why should you bother to take an interest in them until you start thinking about retirement? Especially when the age you can start taking money out keeps going up and up?

ROMI: I firmly believe that you should be engaging early on because I don’t think that mental shift can just occur at the age of 55. If you’ve never engaged and you’ve lost the opportunity to learn about your pension as you go along, coming in at 55 and suddenly being faced with a lot of daunting decisions.

PHILIPPA: Very significant.

ROMI: Significant, daunting decisions. I think that opens up a lot of scope for people to turn in the wrong direction. The best thing is definitely to look at it early on. I think the pensions industry tells you, “don’t worry about it” because inertia is in their commercial interest. I think, do look at it, do ask what it’s invested in, and do decide if that’s right for you - those are actually important concepts. If someone told you, “don’t look at your bank account, we’ve got it sorted out”. Would you listen to that?

It should be simpler to switch pension providers

PHILIPPA: You can switch banks in a week and send money instantly. But when it comes to pension transfers, as we’ve heard, it’s an altogether different experience; it can take months. In the worst cases, it can take years. Obviously it can be very stressful. I understand that many providers already offer secure, electronic transfers, so something’s not adding up. Calls are growing for reform to make the whole system simpler, faster and more user-friendly for consumers. And Romi, she’s one of the leading voices.

ROMI: We think that a pension is your money, and you should be fully in control of it. [Our] government’s job is to help support you to achieve that.

PHILIPPA: What’s it going to take to make that happen?

ROMI: Well, a ‘Pension Switch Guarantee‘, I think, is the obvious reform that we’ve been asking for many years.

PHILIPPA: How would that work?

ROMI: Well, the same way that if you want to move any other financial asset that you have. You tell one company that you’re joining, and another company that you’re leaving, and they have 10 days to move the money from one place to another.

PHILIPPA: Like swapping your utility provider?

ROMI: Just like that.

Sign the petition for a ‘Pension Switch Guarantee’

PHILIPPA: Wouldn’t that be refreshing! If you’d like to know more about transferring your pensions to a provider of your choice, head over to the PensionBee website - there’s a host of really straightforward blogs, videos and explainers on there.

Plus, if you agree there should be a ‘Pension Switch Guarantee‘, you can sign PensionBee’s government petition in just a few taps. It’s running until January 2026. There’s a link in the show notes. If it gets to 10,000 signatures they’ll get a response from the government. If it gets to 100,000 it may even be debated in Parliament.

You can go back and listen in full to episode 34: Unpacking 10 years of pension changes; wherever you get your podcasts. We’re also on YouTube and in the PensionBee app. And while you’re subscribing, please do give us a rating and a review. It really helps the podcast to reach more listeners like you, and the more people learning about how to plan for a happy retirement - the better!

Just a last reminder before we go that anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice. When investing, your capital is at risk. Thanks for listening!

Risk warning

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

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A staggering statistic recently caught my attention - there are 1.99 million people aged 50-64 who’re out of work and claiming benefits. This has grown 43% from 1.4 million just before the COVID-19 pandemic in 2020.

This sharp rise in unemployment among older workers is deeply concerning. The Midlife Mission report shows much of this is down to health-related exits from employment. In the last 10 years, the number of economically inactive 50-to-64-year-olds with long-term sickness rose by 21%.

I co-founded and run Startup School for Seniors, an online programme supporting business owners over 50. And this trend is both unsurprising and troubling. Over the past two years, we’ve seen more participants with chronic health conditions and neurodiversity, such as ADHD. Many left their jobs due to lack of workplace support - finding it impossible to juggle doctor’s appointments with their roles. One of our participants was expected to work from the office alongside their chemotherapy treatments. These are talented, motivated people who want to work but find the job market stacked against them.

Two key issues stand out for over 50s trying to rejoin the workforce - a mismatch between skills and demand and a lack of support.

Mismatch between skills and demand

Many over 50s have expertise in fields where job opportunities are scarce. Unfortunately, they’re often not supported in adapting their skills to industries that are hiring. There’s also a persistent stereotype that older workers can’t adopt new technologies. This couldn’t be further from the truth. New technology is easier to use than ever. My experience is that, with a little encouragement, older people enjoy the opportunities that come with using it.

Co-Founder of Startup School for Seniors, Suzanne Noble says: “I think there’s this assumption that older people are slower in picking up technology - that older people can’t use the internet. I mean, we invented the internet!“

One of our former participants in her 60s has launched workshops on Artificial Intelligence (AI) web building and has built a protein tracker app. She’s now completely hooked on the opportunities that AI coding presents. This proves there’s no cut-off age when it comes to learning new skills.

Inadequate support

Government programmes, like the Midlife MOT, are available to help people plan for retirement. But they fall short in preparing older individuals for re-entering the workforce. A holistic, forward-thinking approach is missing.

Despite political promises to support over 50s back into work, the reality is stark. There’s minimal funding or action to address the issue. If unemployment among over 50s continues to rise, the cost of sidelining millions of capable individuals will only grow.

What can be done?

If I had my way, meaningful change would begin with making age diversity a priority. Employers should adopt policies to ensure over 50s are represented in the workforce at meaningful levels. One way to motivate employers to act? Including age in diversity, equity, and inclusion statistics, and requiring compliance by law.

The Midlife MOT could also evolve to go beyond financial planning. I’d like to see it incorporate work opportunities, upskilling, and training. For example, it could:

• help individuals explore flexible employment, self-employment or part-time work;
• provide access to retraining programmes for emerging industries and technologies; and
• encourage a holistic approach to planning the next 40 years.

This would allow individuals to consider their lifestyle goals and economic realities. Policymakers must also prioritise retraining and entrepreneurship programmes tailored for over 50s. For many, starting a business offers flexibility and control over their working lives. Particularly when they’re managing health conditions or caregiving responsibilities.

What can individuals do?

Start planning early for the life you want in later years. Engage with your pension savings to see whether you’re on track to retire into the lifestyle you want. PensionBee’s Pension Calculator can help you see how much income your pension could generate in retirement. You can change your contribution amount and retirement age to see the impact this could have on your future retirement income.

This is a really helpful way to see if you might need to top up your savings, or supplement your income. If you have a business idea that’s been on the back burner, now could be the time to explore its potential. Contact your local council for resources and support. Websites like Coursera and Udemy are a great way to start turning your ideas into reality.

Summary

The over 50s are an untapped resource, rich with skills, experience, and potential. Treating this demographic as a ‘lost cause’ isn’t only unfair but economically short-sighted. By investing in their futures, we can empower these individuals to contribute meaningfully to society. The solution is clear: stop sidelining over 50s and start supporting them. The rewards, for individuals, businesses, and the economy, could be transformative.

Suzanne Noble is a serial entrepreneur and the Co-Founder of the award-winning Startup School for Seniors, an online programme that supports over 50s to turn an idea into a business or grow their existing business’s trading income. Featured on BBC News, the Telegraph, the Times, Buzzfeed, amongst others, Suzanne wants to support those over 50 to manifest the life they desire.

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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Paying into a pension as a business owner can sometimes be an afterthought. After all, you may be preoccupied running your business or getting your next side hustle off the ground. It’s a fact well evidenced, with only 16% of UK self-employed workers paying into a pension. At PensionBee, we care about your journey to retirement, whether you work full-time or run your own business.

You might already be saving for life after you finish working, or maybe you’re yet to start paying into a self-employed pension. Here are three PensionBee features that can help you save for retirement, whatever stage you’re at.

Flexible contributions - saving that suits you

With an income that likely varies month-to-month, saving for retirement can be a challenge. In your PensionBee account (your ‘BeeHive’), you can easily set up flexible contributions. With a PensionBee self-employed pension, there’s no minimum amount. You can add whatever you want, whenever you want, to your pension. Whether that’s £20 or £200, it’s up to you.

Unlike those enrolled in a workplace pension scheme who benefit from Auto-Enrolment, self-employed workers have to keep on top of arranging and paying into a pension themselves. With our self-employed pension, you can easily set up a monthly contribution to ensure you’re always growing your pension. Or if you hit a period of lower income, you could pause your contributions and restart them later. However your business income may change, PensionBee’s flexible contributions put you in control of saving in a way that suits you.

If you’re the director of a limited company, you can make both personal and employer contributions into your PensionBee pension.

Learn more about contributing from a limited company.
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Pension Tax Relief Calculator - maximise your self-employed contributions

Receiving tax relief is one of the biggest benefits of paying into a pension. For every contribution you make, the government will usually top it up in the form of tax relief, if you’re eligible. As a self-employed saver with a less predictable income, the added government contributions could be especially important in helping to save towards retirement.

Usually, basic rate taxpayers get a 25% tax top up; meaning HMRC adds £25 for every £100 you pay into your pension, making it £125. For 2025/26, the tax-free annual contribution limit is 100% of your salary or up to £60,000 (whichever is lower). This includes both contributions paid by you and your employer.

Using the PensionBee Pension Tax Relief Calculator

Our Pension Tax Relief Calculator will help you see how much extra you could have added to your pension on contributions you intend to make. For example, if you entered into the calculator a gross annual contribution of £5,000, it’ll show you how much of that amount would be made up of government contributions. Assuming you’re a basic rate taxpayer, you’d only need to contribute £4,000 as HMRC will add a 25% tax top up of £1,000, if eligible.

Self-employed saver benefits of the Pension Tax Relief Calculator

Gaining a better insight into how much tax relief you could receive can help you plan your contributions and avoid under- or over-saving. You could increase or decrease your contributions relative to any changes in income. For example, adding larger contributions in some months could help make up for smaller contributions in other months but still keep you on track to reach your intended annual contribution.

Pension Calculator - a clearer picture of your retirement income after you stop working for yourself

Many people are unsure of how much their pension could be worth or how long it could last in retirement. Our Pension Calculator is designed to help you answer both of those questions.

Using the PensionBee Pension Calculator

To use our Pension Calculator as a self-employed saver, set the ‘Employer monthly contribution’ slider to £0 and adjust the others. For example, add the value of any other pension pots you may have, perhaps you were employed in the past; if so, factor in the value of any workplace pensions you held when adjusting the ‘Current combined pension pot’ slider.

Set the ‘Desired annual retirement income’ slider and move the ‘Personal monthly contribution’ slider to see what different regular contribution amounts could make to how much you could have in your pension and how long it’ll last at your desired retirement age. You’ll see the graph’s projected income and target income lines automatically update, giving you an at-a-glance view of how close you are to achieving your desired pension pot size.

Read more about how our Pension Calculator works.

Self-employed saver benefits of our Pension Calculator

• Make up for a lack of Auto-Enrolment When you work for yourself, there’s no employer automatically topping up your pension to keep your pension growing. Our Pension Calculator helps you see whether your current contributions are on track to reach your desired retirement income. If there’s a shortfall, you can experiment by adjusting your desired annual retirement income and contribution levels, or retirement age, to close the gap.
• Adapt to changes in business income Regularly using our Pension Calculator to adjust the figures can help you update your savings targets based on financial changes that are part and parcel of working for yourself. You can reflect the impact of financial changes in the calculator, such as adding a one-off lump sum contribution.
• Balancing business and retirement goals Having a clear projection of your retirement income makes it easier to set achievable savings targets. This can support you in budgeting your finances and cash flow to help you reach your desired retirement income.

Features to support your self-employed retirement journey

With the demands of running your own business and changes in annual income, prioritising your pension can slip down the list of things to do. However, our range of features can make it easier to grow your pension alongside your business and put you in control of your future.

Future product news

Keep your eye out for our next product blog or catch up on previous blogs. We’re looking forward to spotlighting more of our handy features and free financial tools, plus we’ve got lots of great new updates in the works. Once released, we’ll let you know what they are and how they can help you save for a happy retirement.

Risk warning

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

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This is part of our monthly series. Catch up on last month’s summary here: What happened to global investment markets in July 2025?

Inflation and interest rates are important signs of how the economy is doing. In July, inflation rose a little; yet in August, interest rates were actually lowered. Let’s look at what this means for you and the wider economy.

‘Inflation‘ is the rise in the cost of goods and services over time. For example, if a coffee costs £3 and increases to £3.15 after one year, the annual inflation rate for that coffee is 5%. On the other hand, ‘deflation’ is when prices decrease.

The Office for National Statistics (ONS) tracks the prices of hundreds of everyday items to measure inflation over the previous 12 months. The main measure is the Consumer Prices Index (CPI). In July, the CPI showed an inflation rate of 3.8% - meaning £100 of goods and services last year would now cost around £103.80. In the UK, the economy is slowly recovering from high inflation that peaked at 11.1% in October 2022 - the highest rate for 40 years.

This brings us to ‘interest rates‘. Interest rates are typically calculated annually, but can also be paid monthly or quarterly. For example, if you have £1,000 in a savings account with a fixed 2% annual interest rate, you’d earn £20 at the end of the year.

The UK’s central bank, the Bank of England, has a 2% target for inflation. When inflation is too high, it can raise the base rate - which most commercial interest rates are tied to. Higher interest rates can make borrowing more expensive (such as taking out a mortgage) and saving more rewarding (like the returns on Premium Bonds). The idea is that higher interest rates discourage spending that in turn raises inflation levels. In August, the Bank of England reduced the Bank Rate from 4.25% to 4%.

Keep reading to find out what’s the role of central banks and how interest rates impact the economy.

What happened to stock markets?

In the UK, the FTSE 250 Index fell by almost 2% in August. This brings the 2025 performance close to +5%.

Source: Google Market Data

In Europe (excluding the UK), the EuroStoxx 50 Index rose by almost 1% in August. This brings the 2025 performance close to +9%.

Source: Google Market Data

In North America, the S&P 500 Index rose by almost 2% in August. This brings the 2025 performance close to +10%.

Source: Google Market Data

In Japan, the Nikkei 225 Index rose by 4% in August. This brings the 2025 performance close to +7%.

Source: Google Market Data

In the Asia Pacific (excluding Japan), the Hang Seng Index rose by over 1% in August. This brings the 2025 performance close to +25%

Source: Google Market Data

What’s the role of central banks?

A central bank’s a government institution that manages a country’s:

• currency;
• money supply; and
• interest rates.

Since the post-pandemic supply chain shocks and escalation of Russia’s invasion of Ukraine, most of the world’s been living in a high inflation, high interest rate environment. Slowly, inflation has been stabilising. In response, many central banks have been making several interest rate cuts in the past 12 months.

The US central bank - the Federal Reserve

All eyes remain firmly fixed on the Federal Reserve, the central bank in the US. The Federal Reserve has held interest rates at 4.25% - 4.50% since December 2024. The next interest rate decision is scheduled for 17 September, where it’s widely predicted that interest rates will be cut.

One reason investors are keeping a close eye on US interest rates is ongoing friction between President Donald Trump and Chair of the Federal Reserve, Jerome Powell. President Trump has repeatedly argued that the Federal Reserve should be more aggressive in cutting interest rates to boost growth.

On the other hand, the Federal Reserve has been cautious about acting too quickly, in an attempt to achieve a ‘soft landing’ for the US economy. There’s a possibility that tariffs may increase the cost of goods for US consumers and drive up inflation. This would make a case for maintaining interest rates to contain rising inflation.

How do US interest rates impact global investment markets?

When US rates go up, investing in US bonds looks more attractive because they pay better returns (although older bonds look less attractive now that better interest rates are available on new bonds). As a result, some investors might sell their company shares (also known as equities or stocks) or old bonds to buy new bonds. When rates go down, borrowing money gets cheaper. This can boost the value of company shares, as people go out and spend more in the economy.

What does this mean for you and your money? Well, most pensions are diversified across a range of locations and asset types. This means your retirement savings could be invested in company shares, bonds, cash, property and other assets in the region, depending on the plan you’ve chosen. Many UK pensions invest heavily in US companies because they’re some of the biggest - and in recent years most profitable - companies in the world.

Understanding global economic trends like these can help you better grasp how your investments and pension might perform over time, giving you greater confidence in your financial future.

Have a question? Get in touch!

Do you want to know more about your pension plan with PensionBee? You can check out our Plans page to learn how your money is invested in different assets and locations, or log in to your BeeHive to see your specific plan. You can always send comments and questions to our team via engagement@pensionbee.com.

Risk warning

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

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If you’ve ever tried to move your pension and found it confusing or slow, you’re not alone. Many people in the UK struggle to transfer their pension from one company to another. Sometimes it takes weeks or even months, which can be stressful and frustrating. And the problem is widespread - with pension switching now the second most difficult life admin task after moving house.

A Pension Switch Guarantee would make it easier and faster to move your pension. And with more frequent job switching and pensions being left behind, it’s fast becoming an everyday necessity. We’re currently petitioning the government to make this a reality.

Chief Business Officer UK at PensionBee, Lisa Picardo says: “A 10-day Pension Switch Guarantee would give savers the confidence and clarity they deserve, helping more people prepare for retirement. We’re delighted to see thousands already backing this important cause by signing our petition, and we urge even more people to add their voices.”

Why do pension transfers take so long?

Currently, millions of customers are waiting months in ‘pension purgatory’ to move their money. While others feel nervous or confused by the slow process. According to PensionBee research, nearly half of consumers found the transfer process difficult. While 63% believe these delays are actively harming their retirement planning.

So why are some pension companies taking far too long to complete a transfer?

Outdated paper-based processes

One key reason is providers using inefficient processes. Rather than embracing digital methods, some providers are still relying on manual paperwork to complete transfers. At the extreme end of the scale, XPS Administration recorded an average transfer time of 66.4 days. Two workplace pension administrators, Capita and Aon Hewitt, recorded transfer times of 37.2 days and 24.3 days.

Deliberate stalling tactics

As there are no strict rules that say how fast a transfer has to be, it’s easy for providers to delay things, sometimes for no good reason. It could be that they think customers will be less likely to move to a new provider if the transfer process is difficult. Or it could be because they want to delay transfers for as long as possible while they continue to earn their fee.

PensionBee has consistently recorded a transfer out time of 10 days. This clearly shows that swift and efficient transfers are possible.

The Pension Switch Guarantee explained

Chief Business Officer UK at PensionBee, Lisa Picardo says: “In 2025, people can switch their bank account in a week - so why are pensions still stuck in the Stone Age?”

The Pension Switch Guarantee is a campaign from PensionBee calling for new legislation where pensions must be transferred in 10 days or less. The idea is simple - if we can switch bank accounts in seven days, why not pensions too?

This isn’t wishful thinking. Leading pension providers have already proven it’s possible, with some transfers completing in just six days while others drag on for five months or more.

To drive momentum for change, PensionBee is calling for:

• a 10-working day regulatory standard for pension switches;
• transparent, public reporting on pension provider performance;
• fines for pension providers that don’t meet the deadline; and
• better protections against scams that don’t sacrifice speed.

What do people think?

Currently, transfers that should take days often stretch into weeks or months. Some are left wondering when - or if - their transfers will complete. These delays can be costly, limiting consumer choices and undermining trust in the pension industry.

Support for a simpler pension switch process is clear. The same PensionBee research found that 45% of consumers think transfers should be finished within 10 working days. A further 85% want to be reminded annually when they receive their pension statement that they have a right to choose their pension provider and switch.

Sign our petition today

Too many people face long and frustrating waits when trying to take control of their pensions. This simply isn’t good enough in 2025. But the Pension Switch Guarantee isn’t just about efficiency. Making pension transfers faster and clearer would:

• save people stress;
• make pensions easier to understand; and
• build trust in the pension system.

Ready to make your voice heard? Sign our government petition today and help build a faster, fairer pensions system for everyone. In the first two weeks, our petition reached over 2,000 signatures. Help us reach 10,000 and the government will be required to respond. At 100,000 signatures, the topic will be considered for parliamentary debate. Your signature could be the one that tips the balance!

Visit our 10-day switch guarantee page to find out more.

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It’s estimated that 20 million people could benefit from the government’s new Pension Schemes Bill. The bill aims to simplify pensions and help working people to better plan for their retirement. Yet it doesn’t address the huge gap between the self-employed and their pension pots. Here we look at what the bill promises, what this means if you work for yourself, and how you can boost your pension.

What’s the Pension Schemes Bill?

The Pensions Schemes Bill is part of the UK government’s wider ‘Plan for Change’ programme. It aims to:

• make the pensions industry easier to understand;
• encourage more people to save; and
• help people take an active role in managing their pension pots.

The government says around 20 million working people could see their pension boosted by up to £29,000 by the time they retire, thanks to the reforms. These include consolidating small pension pots, driving down overall costs and ensuring all pension schemes are providing value for money to investors.

The bill had its second reading in parliament on 7 July 2025 and is expected to become legal in 2026.

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What’s in the Pension Schemes Bill?

There are several reforms suggested in the new bill including:

• Collating small pensions - pots worth £1,000 or less will be consolidated into one pension scheme.
• Creating a ‘value-for-money’ framework - preventing savers from being stuck in underperforming pension schemes.
• Changing defined benefit (also known as ‘final salary’) pensions - trustees of some defined benefit pension schemes will be able to reinvest this in the UK economy.
• Redefining ill health - updating the definition of a terminal illness so that when someone’s diagnosed, they can receive payments at an earlier stage.
• Removing restrictions around the Pension Protection Fund (PPF) - reducing its annual levy.
• Giving The Pensions Ombudsman (TPO) legal standing again - leading to quicker customer journeys and shorter waiting times for pensions overpayment cases.
• Creating new rules for defined contribution pensions and Local Government Pension Scheme (LGPS) - enabling them to operate at a ‘megafund level’. This means they’ll be able to invest in a wider range of assets and drive down overall costs for savers.

Chief Business Officer UK at PensionBee, Lisa Picardo: “Through our Invisible Workers campaign, we’ve also called for urgent reform to bring gig economy workers into the scope of Auto-Enrolment. These workers contribute significantly to the economy and represent a growing population, yet are too often overlooked by outdated legislation.”

How will it help self-employed workers?

Despite identifying the self-employed as an ‘at-risk group’ in their new Pensions Commission report, the bill’s been criticised for the lack of support for those in untraditional roles. For example, business owners, freelance workers and contractors.

PensionBee’s Invisible Workers campaign found 57% of gig workers in the UK can’t afford to save into a pension. This includes freelancers, unpaid carers and other non-traditional roles. Alongside an affordability issue, it found that one-in-three either wouldn’t know where to start or found pensions too complicated.

The campaign is calling for more inclusive pension reforms such as bringing gig workers into the scope for Auto-Enrolment. Under Auto-Enrolment law, eligible employees must be enrolled in their workplace pension scheme. It’s been successful in helping more workers save for retirement. However no such legislation exists for the self-employed.

If you work for yourself and are wondering how to get started with retirement planning or want to give your pension a boost, here are four things you can do today.

Chief Business Officer UK at PensionBee, Lisa Picardo: “Retirement shouldn’t be a luxury. It’s a right earned through a lifetime of contribution - whether through freelance work, self-employment or unpaid care.”

4 ways self-employed workers can boost their pension

1. It’s never too late to start - if you’re a small business owner, you may see your company as your retirement nest egg. But there are many benefits to saving into a pension alongside building your business. Remember, the earlier you start saving into a pension, the more opportunity it has to benefit from potential investment growth and compound interest.

2. Take advantage of tax relief - whether you pay into a Self-Invested Private Pension (SIPP) or a self-employed personal pension (like the one offered by PensionBee) you could benefit from tax relief on your contributions. Usually basic rate taxpayers get a 25% top up. This means when you pay £100 into your pension, it’s topped up with £25, bringing the total contribution to £125. If you’re a higher or additional rate taxpayer, you could be eligible for more.

3. Make contributions from your limited company if you can - if your business is structured as a limited company, you may be able to make employer contributions into your self-employed pension. These can be alongside your own personal contributions. Plus, they can usually be treated as a business expense and offset against your corporation tax bill.

4. Check fees and performance - make sure you’re aware how much you’re paying in pension fees and also how your investments are performing. You can do this by checking your annual pension statement, online account or asking your provider for the fund factsheet. It’s a good idea to review your pension at least once a year. Look at things like the risk profile, your contribution amount and the performance of your fund. You might find you need to review more often or as your circumstances change, as with self-employment your earnings may fluctuate.

For more self-employed pension tips, read these blogs from PensionBee.

Rebecca Goodman is an award-winning Freelance Journalist. For the past 15 years she’s been working for national newspapers and magazines including The Guardian, The Independent, The Times, The Mail on Sunday, This is Money, and MoneySavingExpert. Her work is driven by wanting to help people to make their money work harder, exposing wrongdoing in the financial services industry, de-mystifying money issues, and sharing great easy money-boosting tips.

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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When it comes to gambling, the spotlight tends to fall on younger people. Teens online betting or 20-somethings trying their luck on casino apps. But research has revealed another group who might also be vulnerable - retirees.

A study by the University of Glasgow, supported by PensionBee, found that almost one-in-three people over the age of 65 gamble beyond just the occasional lottery ticket. And more than half of them say they do so every single week.

It’s a reminder that gambling isn’t just a ‘young person’s issue’ and that, for some older adults, it may be more than just a bit of fun.

What’s going on?

Gambling rates are actually highest among people aged 55-64. This is right around the time many are thinking seriously about retirement and may be accessing their pension savings for the first time.

Around 2% of people aged 55 and over show signs of gambling-related risk with over 65s gambling the most frequently. Yet support and safeguards for this age group are often lacking, simply because the risks aren’t well-known or widely discussed.

Why retirement can be a trigger

Retirement is a big life transition. After decades of working, your routine changes overnight. You may have less structure in your day, less income, and in some cases, less social interaction. For many it’s a welcome break, but for others, it can be a tough adjustment.

This period of change can create conditions where gambling becomes more tempting or harder to manage. For example:

• tighter finances might make the idea of a big win feel appealing;
• extra time on your hands could lead to more gambling, especially online;
• supporting others e.g. adult children struggling with gambling, can put pressure on your own financial wellbeing; or
• access to pension lump sums could make it easier to overspend or take bigger risks without realising the impact.

Where can individuals find support?

If gambling is starting to feel less like a hobby and more like a worry, either for yourself or someone close to you, there are simple steps that can help. Setting a clear budget for leisure spending, keeping your pension separate from day-to-day money, and balancing screen time with other hobbies or social activities can all reduce risks. Talking to a trusted friend or using tools to block gambling transactions can also provide extra support when temptation feels strong.

When it comes to your long-term savings, remember your pension needs to last you throughout retirement. If you have a defined contribution pension, only 25% of your pot can be taken tax-free. After this, any withdrawals will be taxed at your usual Income Tax rate. Using tools like the Pension Calculator can show how far your money might stretch, while giving yourself time to think before taking lump sums can prevent hasty decisions.

Even small steps like these can make a big difference, and free support is always available from services such as MoneyHelper, StepChange, and GamCare.

What the financial services industry can do

This isn’t about pointing fingers or discouraging responsible fun. It’s about making sure the right support is available if and when it’s needed.

A simple first step for pension providers could be to ask a quick, non-judgemental question when customers access their pension. Something like whether they’ve ever been worried about gambling, either for themselves or someone close to them.

From there, providers could offer:

• tools to pause or limit withdrawals, if someone wants to set boundaries for themselves;
• clear signposting to expert help, like the National Gambling Helpline;
• staff training to spot warning signs and respond sensitively;
• stronger safeguards to protect customers from financial exploitation or harm; and
• regular reviews to keep these tools effective and relevant.

Joining the dots

Gambling in retirement isn’t always visible. It doesn’t fit the usual narrative. But that’s exactly why we need to talk about it.

Staying financially healthy in later life isn’t only about avoiding risks, it’s about feeling confident that your money will support the lifestyle you want. That might mean keeping a close eye on spending habits, building in routines that give structure and purpose to your days, or getting guidance before making big financial choices.

Most importantly, remember you don’t have to figure it all out alone. Whether it’s talking things through with family, using free planning tools, or reaching out to expert organisations, support is always available. By combining good habits with the right guidance, you can protect your pension and focus on enjoying retirement to the fullest.

Risk warning

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

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This page contains information for Tailored Plan customers, born between 1972 and 1977. It accompanies an email related to their future switch to the 4Plus Plan in July 2025.

Other vintages of the Tailored Plan will be notified of their upcoming switch later in 2025, please see our FAQ below on staged rollout dates.

Why are you updating the Tailored Plan?

As part of our mission to build pension confidence, we regularly review our plans to ensure that their objectives continue to align with changing customer needs and expectations, as well as the regulatory landscape.

Over the past few years we’ve listened to what our customers have said about the Tailored Plan, focusing on the experiences of different age groups. Customers told us they found the fixed de-risking approach to the Tailored Plan to be too rigid. Specifically, younger customers didn’t want to be moved away from higher-risk investments from the age of 35. Some older customers told us that a fixed retirement age of 65 wasn’t right for their situation either. Many of these customers still wanted growth opportunities in their later years, but with some element of protection to market volatility.

A key part of our decision making was that older customers said they’d prefer a plan that better responds to the unexpected events occurring in the financial system. For example, proactively moving money to lower-risk assets in times of great market volatility.

Years of customer feedback has offered us valuable insights into how they use and feel about the Tailored Plan. As a direct response to this feedback, we’ve decided to offer different default plans for our younger (under age 50) and older (age 50 and above) customers. Our new offering of two default plans has been designed to better suit customers expectations and reflect their views in a changing world.

What are PensionBee’s new default plans?

Earlier in 2025, we introduced two separate default options, the Global Leaders Plan and the 4Plus Plan.

Our Global Leaders Plan is the default plan for customers under 50 years old. It focuses on greater growth and transparency in the years before retirement, by investing in around 1,000 of the world’s largest and most recognised public companies - the global leaders in their field.

Our 4Plus Plan is the default plan for customers aged 50 and over. This actively managed plan offers a balance between growth and stability. It responds to market developments where necessary but targets a long-term (over five years) growth target of 4% above cash.

Why did you select the 4Plus Plan as an alternative for customers over 50?

We’ve offered the 4Plus Plan since 2018, as one of our Financial Conduct Authority (FCA) Investment Pathways. We’ve observed the way this plan has responded to different market cycles and events since 2018, and believe that its actively managed approach brings additional certainty for those nearing or in their retirement phase.

The plan is managed by State Street Global Advisors, one of the largest money managers in the world. At its core, the 4Plus Plan aims to strike a balance between growth and stability for savers over 50 years old.

This balance is achieved through a target return objective of 4% above cash over the long term (greater than five years), allowing for more predictable drawdown planning. A key feature of the 4Plus Plan is its responsive asset allocation strategy, designed with the aim of protecting your savings during turbulent times.The team of money managers behind the plan meet weekly to make necessary and tactical adjustments based on changing market conditions.

The long-term asset allocation is reviewed annually to ensure it remains relevant, but strategic adjustments are also made on a monthly basis. This dynamic management, combined with the target return objective, provides a powerful tool for navigating market volatility.

What are my options if I don’t want to be switched to the 4Plus Plan?

If you think the 4Plus Plan isn’t the right plan for you, you might want to consider switching to one of our other plans.

For example, our Global Leaders Plan could be suitable for anyone who is seeking to grow their pension in the years and decades before they retire. It aims to grow your pension savings by investing in around 1,000 of the world’s largest and most recognised public companies. The annual fee for the Global Leaders Plan is 0.70%.

Alternatively, our Tracker Plan could be suitable for anyone looking for a cost effective way to invest in global shares and bonds. This plan offers both growth and diversification, following the world’s markets as they move. The annual fee for the Tracker Plan is 0.50%.

You can switch to any PensionBee plan of your choice. To switch, log into your BeeHive (your online account) and select ‘Account’ and then ‘Switch plans’. With PensionBee you can switch to any new plan of your choice at any time, just note that the switch will take around 12 working days to complete.

If you don’t actively request a plan switch to another plan, you’ll be automatically switched into the 4Plus Plan in July 2025.

How does the 4Plus Plan differ from the Tailored Plan?

We’ve decided to transition from the Tailored Plan to the 4Plus Plan as our default option for customers aged 50 and above.

There are two key differences between the plans:

• investment strategy; and
• risk management.

The 4Plus Plan is an actively managed plan. This means money managers are adjusting your investments in response to any market movements or volatility. The plan offers an active and dynamic approach to managing your retirement savings. While the Tailored Plan provides a passive strategy based on your target retirement date.

This active component requires more research, analysis, and trading, which leads to a higher management fee. The 4Plus Plan also has a target return objective of 4% above cash over the long term (greater than five years).

The Tailored Plan is a target date fund, using a ‘glidepath’ approach, which is passively managed. This means the mix of investments are automatically adjusted over time, becoming more conservative as you approach your target retirement date, which is fixed. This means that the money managers don’t have discretion to change the asset allocation or investment strategy during turbulent market conditions.

How will performance compare for the 4Plus Plan?

Past performance shouldn’t be used as an indicator of future performance. However, we do have historical performance data that can be used to guide our understanding of how the 4Plus Plan performs in times of extreme market volatility. For example, the COVID-19 pandemic or the UK’s 2022 Mini-Budget crisis, which you can see in the table below.

The table below shows how the 4Plus Plan has demonstrated resilience during periods of market turbulence. In almost every market event listed, the declines for the 4Plus were significantly smaller than those experienced by the FTSE World TR benchmark, which is a global stock market index.

This suggests that the 4Plus Plan’s dynamic diversification strategy has been effective in softening the impact of various key market events. Including geopolitical conflicts, economic crises, and trade escalations.

4Plus Plan performance during key market events

Source: State Street Global Advisors

Please also see the Morningstar pages for performance data for the 4Plus Plan and Tailored Plan 2037 - 2039.

How do the fees compare for the 4Plus Plan?

At PensionBee, we only charge one simple annual fee. The 4Plus Plan annual fee is 0.85% (Tailored Plan: 0.70%).

Additionally, if you have more than £100,000 in your pension pot, your fee will be halved on the portion above £100,000.

Please note the 4Plus Plan is actively managed. This means the portfolio is being frequently adjusted by a team of experts, based on changing market conditions. You can read more about the 4Plus Plan’s approach to volatility management.

You can also see our other plan options on our dedicated ‘Plans’ page, where you can learn more about the Global Leaders Plan (0.70% annual fee) and the Tracker Plan (0.50% annual fee).

Can I switch plans earlier if I want to?

Yes, you can switch to another PensionBee plan, including the 4Plus Plan, at any point before mid-June 2025.

You can view all PensionBee Plans on our plans page and you can request a plan switch in your BeeHive. Please be aware that from mid-June we need to prepare for switching by freezing activity in or out of the fund.

Can I continue to make contributions?

All your regular and ad hoc contributions will continue to be paid into your Tailored Plan until your switch begins. Once the switch begins, your BeeHive balance will be frozen until it completes.

If you have a regular contribution set up, your funds will still be collected during this period and will be invested in your new plan once the switch is complete.

Will the value of my pension be impacted?

During the time of the switch, your balance will appear frozen and the graph on the ‘Analytics’ tab in your BeeHive will indicate a straight line. We’re working to minimise out of market exposure during the time of the switch and will update customers on this. Please check this page for regular updates.

During the switch your pension will be subject to some market movements, and its value may go down as well as up while the switch is in progress. Any changes in your pension’s value that occur during this period will be reflected in your balance once the switch has been completed.

What are the costs of switching?

We have a commitment from BlackRock and State Street Global Advisors to minimise any costs associated with moving funds. By staging the rollout of the switches, we can also keep a sharp focus moving funds in the most efficient way.

There are always small subscription and redemption costs associated with fund switches. This is both the case if you decide to switch earlier or we move the funds for you. These small costs are an unavoidable feature of the market when moving money between different funds. PensionBee doesn’t profit from the transaction costs associated with switches.

Owing to the dynamic nature of the 4Plus Plan, the underlying investments could vary significantly from today to the trade date. Currently, the estimated cost of this transfer will be around 0.17%, although it could change on the day. This means the estimated cost for a pension pot size of £20,000 would be £34.

What if the stock market is volatile, will you still switch me?

We’re working closely with BlackRock and State Street Global Advisors to optimise the switching process for customers. If any extreme market turbulence occurs in the run up to the fund switch date, we’d review the switch timeline and notify customers of any changes.

Why are you staging the rollout?

We’re switching customers in stages to minimise out of market risk.

We’ll be moving customers vintage by vintage throughout 2025. Although customers can switch to the 4Plus Plan - or any other PensionBee plan - earlier should they wish.

Our staged rollout approach aims to promote good outcomes for all our customers in the Tailored Plan. We’ll be contacting customers in groups in the coming weeks and months to share the timeline for their vintage.

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.

The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 38 or scroll on to read the conversation.

Takeaways from this episode

• Career change is increasingly common - societal shifts and evolving job markets are leading more people to consider and make significant career transitions.
• Transferable skills are key - identifying and leveraging existing skills can smooth the transition into a new field, even if the industries seem vastly different.
• Age presents both challenges and opportunities - while older career changers might face biases, their accumulated experience and soft skills are highly valuable.
• Thorough financial planning is non-negotiable - carefully assessing affordability, budgeting, and understanding long-term financial implications are critical steps.
• Exploration and self-reflection are vital - considering personal interests, values, and even pastimes can uncover unexpected and fulfilling career possibilities.
• Taking action, even small steps, builds momentum - overcoming inertia and actively exploring options is crucial for turning the desire for change into reality.

PHILIPPA: Hi, welcome back. Were you at work today? How was it? Same old, same old? Well, maybe it’s time for a change. Maybe it’s time to do something completely new. Work is work, right? We all have good days and bad days. But if you’re stuck in a job that bores you, or you’ve hit your earnings ceiling, or you can’t work as flexibly, maybe, as you’d like - you don’t have to sit there and take it.

Since the [COVID-19] pandemic, about four million Brits have already taken that leap: they’ve changed careers. And with [artificial intelligence] (AI) putting some jobs at risk, another 285,000 people might have to make that switch as soon as 2030. Now, of course, changing careers, it’s a big step. Especially if you’ve spent years in one industry. Where can you find tools and guidance to help you? And, because we always want you to be thinking about your financial future, how can you keep your money on track?

I’m Philippa Lamb, and if you haven’t already subscribed to The Pension Confident Podcast - why not click right now so you never miss an episode? We’re talking about career change. Here with me, I have Suzanne Noble, she’s the Co-Founder of the Startup School for Seniors. Hannah Martin is here, too. She’s the Founder of the Talented Ladies Club. And from PensionBee this time, we have Senior Software Engineer, Anindya Bhattacharyya - better known as Bat. Hello, everyone.

BAT: Hi there.

HANNAH: Hello.

SUZANNE: Hello.

PHILIPPA: Here’s the usual disclaimer before we start. Please do remember, anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice. And when investing, your capital is at risk.

What would your instant career swap be?

PHILIPPA: Now look, I want to ask all of you, if you had the chance to swap careers right now, no retraining required, what would your dream job be?

SUZANNE: I’d be a travel blogger.

PHILIPPA: Would you?

SUZANNE: Yes.

PHILIPPA: Yeah, that’s quite a tempting thought, isn’t it? Being paid -

SUZANNE: - just being paid to travel. That’s what I’d do, yeah.

PHILIPPA: Mine is quite similar actually I think, I’d sit at home all day and write novels. That really sounds very appealing to me. Any others?

BAT: Yeah, go somewhere hot. I think. Go, go work somewhere hot.

PHILIPPA: Doing?

BAT: Something that’s not strenuous - reading? Something like that. Can you get paid for that?

PHILIPPA: That’s not a job. Well, proofreading, maybe.

BAT: I used to do that. That is strenuous - and badly paid.

HANNAH: I’d be a private eye because it’s got travel, digging up secrets. Every day is different. It’d be quite exciting. I’d love it.

Transferable skills and portfolio careers

PHILIPPA: We’re talking here about not just finding a new job, we’re talking about finding a whole new career. There’s a lot to think about, but a lot more people do it now. [The] data says a lot more people do it. Why do we think that is?

HANNAH: I think we have a much more portfolio idea of careers. Certainly, when I was younger, people would expect to see you stay in the same job for four or five years. If you moved jobs every year or so, your CV would look really bad. But I think today, it’s the opposite, actually. If you interviewed someone who’d been in one job for eight years, you’d question why they’d stayed there. I think culturally, we do change careers a lot more than we used to, at least jobs, and that would extend to careers as well, potentially.

PHILIPPA: So, it’s attitudinal then. Bat?

BAT: I think the thing about changes in society driving it, that was certainly the case for me. I trained as a Journalist and newspapers were an integral feature of people’s lives. Britain had the second-highest newspaper readership in the world after Japan. Everybody read a paper. You might as well describe a horse and cart to young people nowadays.

PHILIPPA: That’s so true.

BAT: That’s just completely changed.

PHILIPPA: So, when did you change?

BAT: 2014, 2015. After a period of extremely ineffectual freelancing, I decided “no, come on”. I learned to code. I was always interested in tinkering about, hobbying, hobbyist computing. It wasn’t a massive jump for me, but I went off and did a 12-week boot camp course and retrained as a Programmer and then joined PensionBee shortly thereafter.

PHILIPPA: It’s a big change, isn’t it? I mean, they’re very different jobs.

BAT: You’d have thought so. They’re culturally presented as quite different, but I’m actually quite surprised at the number of random skills that transfer. I mean, like being able to spot where a semicolon is missing in a block of text is a skill that transfers from newspaper journalism to -

PHILIPPA: - to coding.

BAT: To coding, yes.

The end of the 40-year career

PHILIPPA: I get it. I mean, I guess other common reasons back in the day, it always used to be people moved jobs, at least, and sometimes careers, because they really didn’t like their boss. That was top of the list, wasn’t it? Do we think it’s often about high stress work?

SUZANNE: When you’ve got quite complex lives nowadays where a lot of the people that I know have caring responsibilities, they just can’t cope with the intense work that they’re being asked to perform.

PHILIPPA: So, the combination of pressures.

SUZANNE: They’re looking at their life and thinking: “I just can’t fundamentally deal with all of this. I’ve got to go visit my mum this weekend because she’s having problems. I might still have a kid at home“. This whole ‘sandwich generation‘ now is getting bigger and bigger and bigger. With that comes a lot of different types of responsibilities.

PHILIPPA: I think there’s quite a lot in that.

HANNAH: I think. Also, there’s more of an expectation today that we should enjoy what we do.

PHILIPPA: Yes, true.

HANNAH: This idea, again, a job for life, you just stick with it for better or worse. But today, we don’t have to do that. If work is intolerable, the idea that you must stay there and put in that time - isn’t there. It gives you more freedom to make that move, I think, or more permission.

PHILIPPA: We’ve got higher expectations, haven’t we?

HANNAH: We do.

PHILIPPA: We want to enjoy our work.

HANNAH: We should.

PHILIPPA: When I think about our grandparents, a job is a job, right? It’s just about the money. But now it’s about a whole bunch of other stuff, isn’t it? Work has changed a lot, as we said in the last 20 years. We’re generally thinking then that it’s easier to make a switch now?

HANNAH: In some ways, the more choice you have, the harder it is. I think because especially with remote working, the idea that you have to look for jobs in your town no longer exists. The whole world literally is your oyster, potentially.

PHILIPPA: Sure.

HANNAH: I think that creates extra pressure. All this idea with social media and people posting about how much they love their lives -

PHILIPPA: Oh, yes. Everyone else’s ‘perfect life’.

HANNAH: Exactly. If you’re not loving what you do, then you’re thinking: “there’s something wrong with me. But then what do I do? Because there’s a million things I could do”. I think in some ways; it’s a bit harder.

Most common age for making a career switch

PHILIPPA: I was interested to see that the most common age for switching is 31. Why do we think that is?

SUZANNE: I was going to say it must be early 30s because you’ve got some experience behind you. You have a much clearer idea of the direction in which you might want to go and you’re still viewed as having lots of energy, lots of enthusiasm, being able to pick up technology quickly.

I know that it takes a person over 50 at least twice as long as any other age group to get a job once they’ve left their former job. So switching isn’t easy. And often it’s switching into consultancy or switching into self-employment or switching into something where they have more control over what they do every day rather than switching into a full-time role - because frankly, they’re just not available.

PHILIPPA: Interesting.

BAT: I actually did a sort of mini switch at 31.

PHILIPPA: Did you?

BAT: Yes, because in my 20s, I was a Financial Journalist and I wrote about technology in the city, which was quite lucrative, but also very boring at parties. I think in my early 30s, I was just too bored of it. I’d just been doing nothing but that for 10 years. I’d figured out how it all worked, which was the curiosity. You need curiosity to be a Journalist, and that had gone. I switched into much more general news.

PHILIPPA: A mini career switch?

BAT: Yeah.

Pitching yourself as an older employee

PHILIPPA: But as you say, doing it older can be much, much tougher. It’s just the way it is. There’s no point denying it. What can we say that’s useful there? How would you pitch the idea of yourself as an older worker to a new employer?

SUZANNE: Ah, that’s a good question. I think what people fail to realise is that lots of their skills are transferable, as you said.

PHILIPPA: What things are we talking about?

SUZANNE: Soft skills, especially. Being able to work with people, being able to manage people, knowing how to run departments, for instance, which are skills that are developed over time as you go up through the hierarchy of, say, a corporate environment. Those sort of skills can be useful in lots of different environments and often they’re underestimated by people who are trying to switch roles. I also think that just generally, the people that I come across, the thing that they lack is confidence. Because they look at some of these ways, new ways of being interviewed, these automated ways where they just have to speak into a computer and answer questions.

PHILIPPA: Everyone hates that, don’t they?

SUZANNE: Yeah, but I suspect that if you haven’t ever done it before and you’re looking at this person with wrinkles now and applying for jobs, then that can be quite scary.

PHILIPPA: Yeah.

SUZANNE: Also, what people fail to realise is that they can retrain. I think there’s this assumption that older people are slower in picking up technology. Older people can’t use the internet. I mean, we invented the internet!

PHILIPPA: It’d be weird if you were in your 50s and you couldn’t use the internet.

SUZANNE: But I do find people say to me, “I’ve never used Zoom before”. And I say to them, “you know what? You’re going to click that link right now”. They say, “is that all I have to do?”. And I say, “that’s all you have to do. Your camera’s turned on, your mic is on. Look, here you are”.

PHILIPPA: You’re good to go.

Retraining for a new role

PHILIPPA: But if we’re talking about actual retraining for a role, how easy is it to access retraining when you’re older? Because we think of training as stuff that people do at the beginning of their careers or in a job role. If you’re starting cold at, I don’t know, post-50, what’s out there for you?

SUZANNE: I mean, there’s lots of - You work in technology. There’s a huge amount of free courses available via Google, for instance. In learning AI, learning cybersecurity, learning some of the new skills that people are going to need to know for this new environment of work, like artificial intelligence, for instance.

So Udemy, Coursera - there’s so many platforms now where they’ll teach you these skills: learning social media, social media management, content creation. I mean, there’s a host of opportunities to retrain in all of these fields, and none of them are particularly difficult.

PHILIPPA: And that’s what you did, Bat. You did it online?

BAT: No.

PHILIPPA: No?

BAT: No. I found that I had a decent hobbyist knowledge. I’d done a few courses, but no employer was going to hire a Junior Programmer with zero experience, who was in his 40s, who’d been a newspaper Journalist for the past 20 years. I had to go and do the boot camp and that’s what taught me the career skills. That’s what got me the first job.

PHILIPPA: What did you learn at this boot camp?

BAT: What was expected of a Junior Programmer? What tools do you use? What are the standard industry techniques? Which, of course, were completely different from the last time I programmed a computer professionally - which would’ve been 25 years previously.

PHILIPPA: OK.

BAT: That map of the territory that I was going into I found the most [useful]. Because that’s the bit I was useless at. I’ve never been very good at the hustle of job interviews. I spent about six months just firing off interview applications, having made the decision to switch, before I came across that [boot camp].

HANNAH: I think retraining at any age, you need the same thing. You need to be resourceful. You need to go outside your comfort zone. You need to take risks. You need to leverage your network. I don’t think in a way it’s any different if you’re 50, 55 or 30. I think you’re going to have to put yourself out there. You’re going to have to research. You’re going to have to do some groundwork yourself.

PHILIPPA: So, it’s mindset?

HANNAH: It is. Absolutely, yes.

PHILIPPA: I guess if you’re highly motivated, you can find that, can’t you? But in practical terms, I’m thinking about things like apprenticeships. Are there any age limits around those? You think of them as something for young people, don’t you?

SUZANNE: Some apprenticeships have age limits -

PHILIPPA: They do?

SUZANNE: - and some of them don’t.

PHILIPPA: They shouldn’t, should they? Why do they have age limits? Because when you think about it, when we have anti-age discrimination legislation, so I’m wondering why there’s age limits on things like apprenticeships. Because ideally, you should be able to retrain at any stage, shouldn’t you?

BAT: When I was young, I remember growing up and Open University was on BBC Two. And there was this future promised, of higher education, all of this stuff would just be delivered to everyone universally over these hot new technologies like television. Has that really happened? I just feel that given the potential, what we have is a fraction of what - We could live in a world where it’s perfectly normal to just start a degree in literature in your late 40s at the local poly[technic college].

Can you afford to switch careers?

PHILIPPA: This does bring us to the crunch question, doesn’t it? Can you afford it? Because it’s all very well. We can sit here and say, “wouldn’t it be great if I was a novelist and wouldn’t it be great if you were sitting on a beach?” and, as I understand it, Bat, not really doing anything but getting paid is the plan.

But more realistically, there’s a lot of groundwork to do on the money front, isn’t there, before you think about this? Particularly if you’re doing it when you’re a bit older, because at that stage, most of us have financial responsibilities. So, thinking about training, I guess it’s worth remembering, you don’t necessarily have to give up the job or career you’ve got right now in order to retrain, do you? So, talk to me about options there. I’m guessing there’s quite a lot you can do.

SUZANNE: For the people that I teach who want to start something for themselves, I always say to them, “the best time for you to do it is when you’re still in work. Because you’ve got that financial security and you can start playing with this idea that you’ve got, which you might have had for years, but without that fear that suddenly your income is just going to disappear”.

If you’re not in work and you’re thinking about, again, moving into something for yourself, then I always advise people that it’s not going to be quick. That starting up on your own, you’re generally looking at a two-year window in which you’re going to be building up your salary slowly to try to get it to the point, whatever point that is that you’re looking for.

Now, not everybody wants to replace their full-time salary, especially when they’re older. They might have some savings, they might have a pension, for instance, and wanting to supplement that, but it’s never going to be quick. The longer you have as a runway to move into that place that you want to get to, the better. Because I suspect that for a lot of people, they think that it’s just going to be this instant thing, and they’re suddenly going to make all that money. Then when they don’t, there’s a huge amount of disappointment that comes with that, and often people then give up.

PHILIPPA: Yeah and get very dispirited.

HANNAH: I think that there’s a lot of messaging around today, again, on social media about how easy it is to make money. How people are making six figures instantly, and it just doesn’t work like that. I totally agree. It takes quite a long time. But also as a counterpoint to that, because there won’t be people listening who don’t maybe have the luxury of long-term planning, is that sometimes when you have a safety net, if you plan too well, you never really take risks. Because it’s like if you were learning to fly the trapeze and you had a safety net underneath you, if you fall, you’re going to live. But if there was no safety net, you’d learn a lot faster -

PHILIPPA: Or die.

HANNAH: - because you’d make that much sure. Sometimes we can plan too much, and we can get too stuck in the, “I’m only going to make the move when it’s perfect”.

Financial checklist before making the leap

PHILIPPA: I must say I’m a real planner, just by nature. A risk taker, but a planner. It’s a planned risk, isn’t it? It’s that whole thing of sitting down and evaluating where your finances are, what your absolutely unavoidable outgoings are, all the usual budgetary stuff we often talk about on the podcast. What money do you have to have? How much less could you manage on?

Because think about long-term consequences of this. Obviously, there’s loads of positives we can think about, but I’m going to raise all these cautious things like, most people have a - It’s a workplace pension. So, if they ditch their job, those contributions stop. And that’s going to have a serious knock-on effect when you’re older.

You’re not going to feel it right away. But so those things need to be factored into your thinking, don’t they? And can you maintain pension contributions yourself, even when you’re retraining, even if it’s at a lower level? Do you find people think about that thing, Suzanne, or do they just want to leap, or they just have to leap.

SUZANNE: We do actually bring in Pension Advisers to give talks to people -

PHILIPPA: Do you?

SUZANNE: - about the impact of all of this on their pension. It’s not something that’s commonly spoken about.

PHILIPPA: No.

SUZANNE: When you realise what the impact could be, it’s substantial.

PHILIPPA: Yeah, you might have medical insurance.

SUZANNE: Exactly.

PHILIPPA: There’s all sorts of benefits. Workplace benefits can just disappear, admittedly, maybe just for a period of time. But they’re gone, aren’t they?

SUZANNE: Exactly. I don’t think people think about this enough. They just jump into things sometimes without thinking about the consequences.

PHILIPPA: Do you sit them down and teach them how to budget, essentially, how to create a budget for this move?

SUZANNE: Absolutely. Yeah. We ask them to look at their overheads. We ask them to look at what their day-to-day expenses look like. We ask them to look at - We ask them to put together basically a financial plan, a very simple financial plan, but a financial plan, nonetheless. Then we ask them to create an action plan so that they can think about what are those steps that they need to take to get to where they want to be.

Finding possible funding opportunities

PHILIPPA: Realistic planning about this budget, about this financial plan, and what you can realistically expect to earn when you’ve actually established yourself. It’s quite hard to know what that number is, isn’t it?

HANNAH: But if you don’t know, you’re walking blindly, aren’t you? You could spend five years devoting yourself to getting there and then finding out that it was never something that was sustainable for you.

SUZANNE: Absolutely.

PHILIPPA: I guess that’s where things like teaching, retraining as a teacher, that’s quite helpful because you can look at salary bands. You have a reasonable expectation of understanding what you’re likely to earn. Or for you, Bat.

BAT: Yeah.

PHILIPPA: Presumably, you knew what you could potentially earn.

BAT: In terms of funding the course, I took out a ‘Careers Development Loan‘. Even with someone with a slightly spotty credit history, because it was a loan tied to careers development, the bank was like, “OK, he’s going to get a job. Fine”.

PHILIPPA: Have you got platforms you can recommend for where people would go to find out about money, grants, the stuff they could apply for?

SUZANNE: I myself got a startup loan years ago.

PHILIPPA: From the bank?

SUZANNE: From Virgin StartUp, which are still there. Startup loans are still available, so that’s good. They’re one of the few loans available. If you’re looking at starting a business and you have a bit of a spotty credit history.

HANNAH: They give you a mentor as well.

SUZANNE: And they give you a mentor.

HANNAH: They still do that.

PHILIPPA: Do they?

SUZANNE: There are grants if you want to set up social enterprise businesses through funds like Unlimited or School of Social Entrepreneurs is another one, or the Big Lottery also [does] grants. There aren’t that many business loans available, sadly, anymore. If you want to set up a business, probably startup loans are one of the few that’s more readily available.

Available support for getting started

PHILIPPA: I’m thinking about people who are listening to this thinking, “I really hate my job. I’d love to do this, but I’m not quite sure what I should aim at”. Where would we suggest they go to game out a few career ideas, think what might suit them? Is it free? I mean, there must be. There must be loads of stuff online they could do where they could test their suitability for alternative careers.

SUZANNE: Startup School for Seniors is specifically aimed at people who have ideas (or too many ideas) and trying to help them sift through all of those to try to find the one that actually looks the most feasible, the most suitable for them, the one that they’re actually going to stick with.

There are obviously the National Career Services, which will help you explore your career options, rebuild your CVs to think about that move. The other thing that we haven’t spoken about that I think is really important to mention is volunteering, because we get a lot of people who decide to make that move as a result of volunteering.

PHILIPPA: While you’re still working, but ideally -

SUZANNE: Absolutely.

PHILIPPA: - presumably, on the side?

SUZANNE: Yeah, definitely.

PHILIPPA: How easy is it, though, to segue a volunteer job into a job?

SUZANNE: Well, I think it’s one of the ways that we certainly see that people have rebuilt their confidence. The win there is about confidence building and feeling capable about making that career shift. Because often the lack of confidence is what’s preventing people from actually shifting careers.

PHILIPPA: Yeah. Is that what you find, too?

HANNAH: Absolutely. It’s a taster of it, isn’t it? I think, and also just exposing yourself to different jobs that you maybe hadn’t even thought about. To speak to people, ask people what they do. Even watching TV programmes and seeing what kind of jobs people have.

One of the things that if someone is really stuck, I often get people to do is think back to when you’re a child. Before we do things because we should do them. Think about when you played, what games you played. Were you creative? Were you outdoors? There’s often lots of clues in the patterns of things you were naturally drawn to and then go and look.

I’ve done workshops with people where a woman really hated her job. She worked in a basement for a micromanaging boss. When she did this exercise, she said, “oh, I can’t see any patterns”. I looked at it and it was all climbing trees, building dens. It was all outside and it was all free. She was in a job that was the opposite.

PHILIPPA: Polar opposite of that.

Are your passions a good guide?

HANNAH: Exactly. It’s tapping into your innate passions because I think we often lose touch with actually who we are and the things that we love to do. And the idea that we have a right to be doing things that we really enjoy, because I think ultimately that’s what we should be doing.

BAT: The point about what someone actually wants to do being completely not obvious to that person. When I was, I needed to get out of journalism, my first thought was academia.

PHILIPPA: Was it?

BAT: I did a Masters, a part-time Masters course, and that was enough to remind myself about why I left.

PHILIPPA: Why didn’t you become an academic?

BAT: Why I was running away from academia in the first place. It was like, it took me a little while of chasing actually quite inappropriate self-diligence before realising.

PHILIPPA: Did it? How much did you spend doing that?

BAT: It was a part-time Masters. I was working at the time. It was over a period of two years.

PHILIPPA: But it sounds like it was quite a useful process.

BAT: It was, yes. I quite enjoyed writing my dissertation and stuff like that. I mean, it was fun. But it was like, “I’m not going to make my money this way”.

HANNAH: I think that’s an important point, because it’s as important to eliminate things that are wrong as it is to find the things that are right. I think volunteering is a really great way to do that. You might think, “I’d love to work with animals”. Then you go and volunteer one day a week in an animal shelter and realise, “oh my god, I’m terrified of animals. I hate it. It’s all dirty”.

PHILIPPA: What you don’t want as well, because we all write wish lists of what we’d like. But I think in some ways, is it quite useful to write a wish list of stuff you definitely don’t want to do? Which might be you don’t want to manage people, or you don’t want to work outside, or you don’t want to have a long commute.

SUZANNE: Or work in an office.

BAT: Use Microsoft Word.

PHILIPPA: Other software is available.

SUZANNE: I was reminded of your conversation that years ago I said, “I want to run a small boutique hotel in Mexico, where I swan around in a kaftan and just ask people what they want to eat every day. While I instruct the Michelin starred chef what to -

PHILIPPA: To make?

SUZANNE: - to do”. Then I started doing Airbnb.

PHILIPPA: Ah ha! And how was that?

SUZANNE: Then I realised that I’ll never run a boutique hotel in Mexico.

PHILIPPA: Or anywhere else?

SUZANNE: Or anywhere else for this.

HANNAH: That maybe saved you an expensive lesson.

SUZANNE: A very expensive lesson.

BAT: I’m impressed at the level of detail in the original fantasy.

HANNAH: Clearly well thought out.

BAT: You’ve been thinking about this, haven’t you?

SUZANNE: I’ve been thinking about it for a really long time.

Tips for how to switch careers

PHILIPPA: Just recapping here. I’d say first things first: budget. Would we agree?

SUZANNE: Yes, definitely.

PHILIPPA: Budget. Realistic budget about what you’ve got, what you need, what you’re likely to earn in future. Then what gave me this idea of what you want, what you don’t want?

SUZANNE: Take those steps to find out, because often, like my Mexican adventure, it’s an idea swirling around in my head. You have to start at least taking some steps to think, “am I actually going to like this?”. Don’t let it sit around in your head for too long. Actually do something about it.

HANNAH: Maybe even do things like go online and research, look on Glassdoor, what do you people say about the jobs? Or even go on a forum and ask people, let’s say you want to be a physiotherapist, “what’s great about being a physiotherapist and what’s terrible about it?”.

PHILIPPA: Now, I like that idea because that’s real people doing the job telling the truth. Absolutely. Bat, what else?

BAT: I mean, the point made earlier about whatever step you take, do it already. Every single thing that I ever did to shift careers was the correct thing to do, except I should’ve done it beforehand -

PHILIPPA: Really?

BAT: - and stopped sitting around twiddling my thumbs and dithering about it. It was the confidence to get it rolling. Once you start to move the boulder, it takes up momentum and it takes off. Looking back, that was that. If there’s one piece of advice I’d give, it’s like, move fast.

HANNAH: Don’t be afraid. Because we’re so afraid of making mistakes. “What if I do it and it doesn’t work out?”.

But the Susan Jeffers’ book, ‘Feel the Fear and Do It Anyway’, has this great thing where she says, “we think it’s like two choices: right and wrong. But actually, it’s get what I expect and then go somewhere new and find out new things”. So even if the thing that you try isn’t the thing ultimately you love, you’ll have learned a lot, met different people, and acquired new skills along that way.

PHILIPPA: And a new perspective, ideas that you didn’t have before. I’m going to close this by just asking about support systems along the way. Because it’s all very well, we start off with this, “I’m going to do it, jack in the job or retrain or whatever”.

But I’m thinking, I mean, this can be a long process, as we’ve said, particularly starting with retraining or volunteering or finding your way through this big, bold step. You’re going to people around you, aren’t you? A little SWAT team to help you along the way, because I’m guessing it’s quite easy to lose heart with it, actually, when things don’t necessarily work out as soon as you might hope.

HANNAH: You do, but there’s also that thing that sometimes when we’re at rock bottom, that we make the bravest choices. Absolutely, I think always having a team around you is important. But if anyone’s listening who doesn’t and thinking, “therefore, I don’t have that to do it”. Like I say, sometimes when you’ve got nothing else to lose, you can make bolder things. And you have to take that risk and that can work out as well. In an ideal world, yes, absolutely. But if you don’t, it’s still OK.

PHILIPPA: I’m thinking, if this sounds tempting, people listen to this and they’re thinking, “yeah, I like this idea”. How can they be sure it’s not just a bad week wobble, or midlife wobble, and it actually is something that they should do?

BAT: It’s when you have that idea over and over and over and over again.

PHILIPPA: OK. Any other thoughts?

HANNAH: I think, yeah, exactly that. If you literally, you’re generally OK and you have one bad week, then that’s just one bad week. But as Bat said, if it’s every day and you hate it. And even if your friend starts saying, “oh my god, you’re not going to talk about your job again, are you?”. Often, people around us notice before we do.

ALL: Yeah.

HANNAH: That thing, if you throw a frog in boiling water, it jumps out. But if you heat it up slowly, it won’t. Sometimes maybe we don’t realise. But I think if your friends and family are like, “oh my god, you hate your job” - then maybe that’s a clue.

PHILIPPA: That’s great. Thank you so much, everyone. I’ve really enjoyed it.

SUZANNE: Thank you.

HANNAH: Thank you.

BAT: Thank you.

PHILIPPA: If you’re enjoying the series, please do give us a rating and a review. If you’re watching on YouTube, why not leave us a comment about your own career switch story or aspiration? We’d love to hear it.

If you missed an episode, no problem. You can catch up anytime on your favourite podcast app, YouTube, or of course, the PensionBee app for PensionBee customers.

Next month, we’ll be answering a big question: how can you turn market volatility into an opportunity? Investing can feel like a roller coaster right now, so we’ll be explaining how you can navigate ups and downs without making rash decisions. It’s going to be a fascinating discussion. Don’t miss it.

Just a final reminder, anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice. When investing, your capital is at risk. Thanks for being with us. We’ll see you next time.

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.

This blog was last updated on 10 June 2025.

When it comes to planning for retirement, private pension savings can be a great way to enhance your income beyond what the State Pension offers. But you might be wondering: how far will your savings really go?

Let’s break down the potential income you could take from a £400,000, £500,000 or £600,000 pension pot.

What kind of retirement lifestyle do you want to have?

Before we can put numbers on your savings goals, it helps to visualise what different size pension pots can buy you in terms of holidays, cars and dinners out.

Thanks to research from the Pensions and Lifetime Savings Association (PLSA), you can visualise how far your money can go in retirement. Its Retirement Living Standards are categorised into ‘minimum’, ‘moderate’ and ‘comfortable’, and showcase the lifestyle you could achieve at three different income levels.

Source: The Pensions and Lifetime Savings Association (PLSA) Retirement Living Standards report. Assumes a single person.

To help picture the kind of lifestyle you could have at these income levels, the PLSA has matched up common goods and services with each living standard:

• A minimum lifestyle - covers the cost of all your basic needs, and some left over for fun. A self-catering or half-board holiday in the UK, eating out once a month and some affordable leisure activities with family and friends once or twice a week.
• A moderate lifestyle - provides more financial security and flexibility than the Minimum. An annual overseas holiday and a long weekend off peak break in the UK, and a take-away a week and eating out a couple of times a month.
• A comfortable lifestyle - allows more spontaneity to the Moderate lifestyle, including a fortnight abroad, extra-long weekends away in the UK, some day trips plus extra spending allowance on eating out and social activities.

It could be worth budgeting with these income levels in mind as the more you save now, the more financial freedom you can expect to enjoy in the future.

How to take retirement income

Most personal and workplace pensions these days are defined contribution, which you can usually access from age 55 (which is rising to 57 in 2028). Many people opt to wait until they reach their State Pension age to retire (currently 66, rising to 67 by 2028).

If you have a defined contribution pension, you can choose to withdraw your savings gradually through a method called ‘drawdown‘. This allows you to take an income from your pension while leaving the rest invested in the stock market.

Back in 1994, Financial Adviser William P. Bengen created the ‘4% rule’ as a guideline for retirement spending based on historical stock and bond returns. It assumes you adjust for inflation each year and withdraw for 30 years.

With this in mind, let’s look at what that 4% withdrawal figure means in reality.

Income from a £400,000 pension pot

With a £400,000 pension pot you could take an income of £16,000 a year using the 4% rule. Add the full new State Pension and this jumps up to £27,973 a year. This would exceed the £13,400 required for a minimum standard of retirement - but not meet the level for a moderate standard - for a single person, according to the PLSA.

Notes: The figures are rounded and pre-tax. Assumes retirement at 66 with a full new State Pension entitlement as of the 2025/26 tax year. The calculations use the 4% withdrawal rule (the pot size divided by 25 as an annual income in retirement, then adjusted for inflation in subsequent years to maintain its purchasing power).

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Income from a £500,000 pension pot

With a £500,000 pension pot you could take an income of £20,000 a year using the 4% rule. This could be topped up to £31,973 a year with the full new State Pension. In practice, this lines up neatly with the £31,700 amount required for a moderate standard of retirement for a single person, according to the PLSA.

Notes: The figures are rounded and pre-tax. Assumes retirement at 66 with a full new State Pension entitlement as of the 2025/26 tax year. The calculations use the 4% withdrawal rule (the pot size divided by 25 as an annual income in retirement, then adjusted for inflation in subsequent years to maintain its purchasing power).

Income from a £600,000 pension pot

Finally, with a £600,000 pension pot you could take an income of £24,000 a year using the 4% rule. After including the full new State Pension this becomes £35,973 a year. This comes closer to meeting the £43,900 amount required for a comfortable standard of retirement for a single person, according to the PLSA.

Notes: The figures are rounded and pre-tax. Assumes retirement at 66 with a full new State Pension entitlement as of the 2025/26 tax year. The calculations use the 4% withdrawal rule (the pot size divided by 25 as an annual income in retirement, then adjusted for inflation in subsequent years to maintain its purchasing power).

How to build a £400,000, £500,000, £600,000 pension pot

Assuming you have no pension savings and aim to retire at age 65, the below table shows how much should go into your pension each month to achieve total savings of £400,000, £500,000 and £600,000 by age 65.

It assumes investment growth of 5% a year, inflation at 2.5% and management fees of 0.70% a year. It also assumes Auto-Enrolment contributions of £210 a month being made into a workplace pension - that’s later consolidated into one main pot.

Source: The figures have been rounded and calculated using PensionBee’s Pension Calculator. Contribution amounts are inclusive of basic rate tax relief.

Listen to episode 11 of The Pension Confident Podcast as our guests discuss what a happy retirement looks like and how you can get there. Listen on all major podcast platforms, watch on YouTube, or read the transcript.

Summary

Here are some key points to remember:

• private pension savings can boost your retirement income beyond the State Pension;
• you could receive tax relief on contributions, plus employer contributions through Auto-Enrolment, helping you grow your pension pot quicker; and
• the sooner you start saving, the longer your money will have to grow thanks to compound interest - putting you on track for a more comfortable retirement.

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.

A pension is one of the most important financial commitments, yet many people hardly think about it. Workplace pensions simplify saving by automatically deducting contributions from eligible employees’ salaries.

Since the 2012 introduction of Auto-Enrolment, the number of people with workplace pensions has doubled. However, this system often leads to a ‘set and forget’ mindset, causing pensions to be neglected for years.

This lack of attention can have a major impact on how much money you’ll have in retirement. Many workers miss out on golden opportunities to increase contributions, combine old pensions, or switch to better-performing funds.

Those who actively manage their pensions, such as higher earners or those with multiple pots, often feel more confident about their financial future. But for most, this disengagement can lead to smaller savings and fewer options later in life.

At PensionBee, we’ve examined the effects of pension disengagement. Our report, The £500,000 Cost of Neglecting your Pension, shows that small, regular adjustments can greatly boost your retirement savings.

By taking action now, you could add up to £500,000 to your pension pot by retirement. Here are six simple things you can do to give yourself the best chance of a comfortable retirement.

1. Don’t opt out of free money

Behavioural Expert and Co-Founder of Shaping Wealth, Neil Bage says: “As humans, we have a really interesting challenge with our ‘present self’ and our ‘future self’. And the future self, it’s a stranger to me. And so, we’ve always as a species had a really difficult time to put ourselves into a future state and make decisions today that will ultimately benefit me in the future.”

Auto-Enrolment has helped millions save for retirement, but opting out can have serious consequences. While most people stay enrolled, opt-out rates tend to rise during economic hardship like the cost-of-living crisis. Career breaks, whether for health, caring for family, or switching to self-employment, can also lead to gaps in saving.

What’s the cost of opting out of your workplace pension?

Assumes a starting salary of £25,000 at age 21, average annual salary increases of 2%, 8% pension contributions when contributing, 3% annual investment growth, 0.7% in annual management charges and no withdrawals over the period.

For instance, taking a three-year break from saving at age 30 could reduce your pension pot by £17,445. Combined with low contributions and starting late, these gaps could leave you nearly £192,000 short by retirement. Regular, consistent saving is key to securing your future.

2. Know what you’re paying in fees

Even small annual management fees can take a toll on your pension growth over time. For example, if fees increase from 0.7% to 1%, your retirement pot could drop from £194,185 to £176,475 by age 68, leading to a loss of £17,711.

What’s the cost of paying higher fees?

Assumes a starting salary of £25,000 at age 21, average annual salary increases of 2%, 8% pension contributions from age 21 to 54, 3% annual investment growth and no withdrawals during the period.

While specialised funds that align with personal values or offer better performance often come with higher fees, it’s crucial to carefully consider the balance between costs and potential returns when selecting a fund. Regularly reviewing your pension contributions and understanding the fees involved is key.

3. Keep track of your pension pots

Head of Consumer PR at PensionBee, Laura Dunn-Sims says: “When it comes to my pension, I’m going to have a ‘home pot‘ approach. I’m going to have one pot that I keep throughout my career. Then as I go through all my old pots, I’m just going to move into the home pot. The idea is I should hopefully always have only one to two pensions.”

Many workers may not realise the potential losses from losing track of their pension pots. Research shows that nearly one-in-ten people believe they may have misplaced a pension worth around £10,000.

What’s the cost of losing a £10,000 pension?

Assumes a starting salary of £25,000 at age 21, average annual salary increases of 2%, 8% pension contributions from age 21 to 54, 3% annual investment growth, 0.7% in annual management charges and no withdrawals during the period.

If someone loses a pension of this value at age 30, it could lead to a reduction of £23,544 in their overall savings by the time they retire. If you have multiple jobs, you could be accumulating multiple pension pots throughout your career. Losing sight of these assets can result in significant losses in retirement wealth.

4. Start early to build compound interest

Starting early is just as important. Most people begin saving in their 20s or 30s, but those who start younger have a big advantage. The earlier you save, the more time your money has to grow thanks to compound interest.

What’s the cost of starting a pension at age 30 instead of 21?

Assumes a starting salary of approximately £30,000 at age 30, average annual salary increases of 2%, 8% pension contributions from age 30 to 54, 3% annual investment growth, 0.7% in annual management charges and no withdrawals during the period.

Waiting until age 30 to start saving, instead of beginning at 21, could leave you with £53,085 less by the time you retire. The longer you delay, the harder it becomes to catch up.

5. Make additional pension contributions

Financial Adviser, Money Columnist and Author, Bola Sol says: “Automation is important. So, wherever you can automate money and contributions to your pension. I’d say that’s key. And potentially, if you can add more in manually yourself, maybe set quarterly reminders on top of the automation, that way you have two different sets of reminders.”

Putting money into your workplace pension is vital, but many people stick to the bare minimum. Research shows that fewer than half of private-sector workers contribute more than the required 8% of their earnings, which includes 5% from their own pay and 3% from their employer.

What’s the cost of sticking to the default contribution levels?

Assumes a starting salary of £25,000 at age 21, average annual salary increases of 2%, pension contributions from age 21 to 54, 3% annual investment growth, 0.7% in annual management charges and no withdrawals over the period.

Yet, increasing contributions can make a huge difference. For example, someone saving 13% of their income - either by adding more themselves or asking their employer to contribute more - could end up with £121,366 more by retirement compared to someone sticking to 8%.

6. Evaluate your default fund

A recent report from the Financial Conduct Authority (FCA) highlights that over 90% of pension savers stick with their scheme’s default fund. While this may seem like an easy option, these default funds often take a broad approach that might not be the best fit for everyone.

This is especially true for younger savers, who have the advantage of time on their side and can weather market fluctuations. For them, funds that invest more in ‘equities’ (company shares) could lead to significantly better returns over the years. The difference in potential returns can be quite astonishing.

What’s the cost of remaining in a poor-performing fund?

Assumes a starting salary of approximately £25,000 at age 21, average annual salary increases of 2%, 8% pension contributions from age 21 to 54, 0.7% in annual management charges and no withdrawals over the period.

The amount of money invested in company shares usually plays a big role in performance. Generally, funds that invest more in company shares tend to grow faster over the long term, thanks to the magic of compound interest. But, company shares are also considered higher risk investments. As savers get closer to retirement, it makes sense to gradually derisk to protect their savings.

But for those just starting out, taking on a bit more risk can open the door to greater growth. That being said, just because a fund has performed well in the past doesn’t mean it’ll continue to do so. Savers should always consider whether a fund aligns with their goals and personal situation before making any investment decisions.

Summary

Proactively managing your pension can make a significant difference in your retirement. By staying engaged and taking steps to optimise your savings, you can ensure a more comfortable and financially secure future.

Remember, the earlier you start and the more actively you manage your contributions and investments, the better prepared you’ll be for the years ahead. Taking control of your pension today can lead to a brighter tomorrow, allowing you to enjoy the retirement you deserve.

Listen to episode 37 of The Pension Confident Podcast as our expert guests share insights into how to overcome disengagement and retire with more money. You can also read the full transcript or watch the episode on YouTube.

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.

This is part of our quarterly plan performance series. Catch up on last quarter’s summary here: How PensionBee’s plans are performing in 2024 (as at Q4).

After the strong economic performance of 2024 and hope around President Trump’s pro-business policies, markets entered 2025 with optimism. However, Q1 was much more eventful than anyone anticipated, largely due to geopolitical developments across the globe.

In January, China launched DeepSeek, a cost-effective artificial intelligence (AI) model that disrupted the US-led AI industry. This sparked a new global competition, challenging American tech giants like OpenAI and NVIDIA.

In Europe, Germany’s February elections brought Friedrich Merz of the Christian Democratic Union to power. His government swiftly changed limits on Germany’s government borrowing, allowing defense spending above 1% of Gross Domestic Product (GDP), in response to the ongoing Russian-Ukraine war.

In March, the US stock market declined following President Trump’s first tariff announcement on Canada, Mexico and China and concerns around a wider trade war and the economic consequences. Shortly after the quarter ended, the announcement by the Trump administration of tariffs on ‘Liberation Day’, and a string of further updates from the US, and other countries in response, have continued to cause uncertainty around trade and the global economic outlook, leaving the global stock markets unsettled.

Keep reading to find out how our PensionBee plans have performed in Q1 2025. For more information on how global stock markets have impacted your pension in April, you can read our latest market performance blog.

Q1 2025 performance figures cover the calendar year period between 1 January and 31 March 2025.

This blog is only meant to provide information. The data comes from our money managers or plan factsheets. Performance figures are before fees. Past performance isn’t an indicator of what will happen in the future. As with all investments, capital is at risk.

PensionBee’s default plans

4Plus Plan

PensionBee’s 4Plus Plan is managed by State Street Global Advisors with an equity proportion of 40.5% ^. It’s our over 50s default plan. The plan seeks to reduce volatility compared to equities in times of market stress, whilst targeting a 4% above cash return over a minimum five year period.

^Equity % at 31 March 2025, asset allocation changes on a weekly basis due to the plan’s actively managed component.

Global Leaders Plan

PensionBee’s Global Leaders Plan is managed by BlackRock with an equity proportion of 100%. It’s our under 50s default plan. The plan invests in approximately 1,000 of the world’s largest and most recognised public companies. It aims to grow your pension savings in the years before retirement.

The plan launched in February 2025 and the first quarterly performance update will be available in July 2025.

In the meantime, you can find out more about the current plan performance on Morningstar.

Tailored Plan

PensionBee’s Tailored Plan is managed by BlackRock.

PensionBee’s sustainable plans

Climate Plan

PensionBee’s Climate Plan is managed by State Street Global Advisors with an equity proportion of 100%. The new Paris-aligned strategy was launched in September 2024, and the full calendar year performance will be available after Q4 2025. In the meantime, we’ll continue to report quarterly and year-to-date performance.

You can find out more about the current plan performance on Morningstar.

Shariah Plan

PensionBee’s Shariah Plan is managed by HSBC and traded by State Street Global Advisors with an equity proportion of 100%. The plan invests in the 100 most publicly traded, Shariah-compliant global

PensionBee’s other plans

Tracker Plan

PensionBee’s Tracker Plan is managed by State Street Global Advisors with an equity proportion of 80%. The remaining 20% is allocated to fixed income.

Pre-Annuity Plan

PensionBee’s Pre-Annuity Plan is managed by State Street Global Advisors with a fixed-income proportion of 100%. The plan invests in bonds to provide you with returns that broadly correspond with the cost of purchasing an annuity.

Preserve Plan

PensionBee’s Preserve Plan is a money market fund managed by State Street Global Advisors. The plan makes short term investments into high creditworthy companies with the aim to preserve your money.

Impact Plan

PensionBee’s Impact Plan is managed by BlackRock with an equity proportion of 100%. We launched the plan in 2023, therefore we don’t have three and five year performance data. Additionally, the Impact Plan will be closed in Q2 2025, you can find more about it on this blog.

Learn more about how your pension is invested

Your pension is typically invested in a range of assets like company shares (also known as stocks and equities), bonds, property and cash. The value of your pension depends on how these investments are performing. Learn more about these assets and how they performed during Q1 2025 below.

What are company shares?

Company shares are also known as ‘stocks’ or ‘equities’, and they’re commonly traded on stock markets. Company shares are units of ownership in a company. When a company wants to raise money, it can issue shares to investors who pay a certain amount of money for each share. By buying shares, investors become part-owners of the company and can enjoy its profits or growth. But, they also take on the risk of a decline in share prices if the company performs poorly or even goes bankrupt.

How did global stock markets perform in Q1 2025?

European and UK markets had one of their strongest quarters in years. This was driven by Germany’s debt brake reforms and a €500 billion infrastructure investment plan. Sectors like industrials, energy, and utilities experienced gains, with large-cap companies driving overall market performance. This was boosted by the German government’s spending expansion announcement.

US markets were more volatile as geopolitical tensions and new tariffs caused sharp declines. The tech and consumer goods sectors were affected most due to concerns over supply chain disruptions.

The Japanese market posted negative returns, mainly due to uncertainty around US tariffs. This included a 25% tariff on imported cars that affected Japanese automakers.

The Chinese government’s fiscal support from late 2024 continued to drive economic growth into 2025. The launch of DeepSeek further boosted investor confidence, signaling China’s rising influence in the global tech sector.

Source: Google Market Data

What are bonds?

Bonds are a type of debt investment where you lend money to an organisation, like a government (sovereign bonds) or company (corporate bonds). In return, they agree to pay you back with interest over a fixed and pre-agreed period of time, this is known as the coupon. A bond yield is the anticipated rate of annual return that an investor gets from a bond for its duration (maturity of the loan).

Bonds have different ratings, with AAA grade also known as ‘investment grade’. This signifies the highest quality with minimal risk of default. The risk of default is the probability that a borrower fails to make payments. Due to their historical stability and predictability, bonds are a popular choice for shorter-term investors. In particular, retirees who plan to draw down in the near future. Bonds are also known as ‘fixed-income securities’ or debt.

How did UK bond markets perform in Q1 2025?

Over Q1, the bond market remained stable while the stock market was more volatile. Investors sought safer assets amid concerns about tariffs and a potential recession, particularly in the US.

In February, the Bank of England (the UK’s central bank) cut interest rates by 0.25% to 4.5%. This decision was made as there has been good progress in reducing the inflation rate. Despite this, the yield on long-dated UK government bonds rose slightly, driven by concerns over government spending and debt sustainability. UK corporate bonds also faced challenges from rising yields. However, they showed resilience, with tighter yield spreads indicating investor confidence in corporate earnings stability.

Source: Morningstar and FTSE Russell

Have a question? Get in touch!

Do you want to know more about your pension plan with PensionBee? Learn more about the top 10 holdings in your pension fund on our blog, which is regularly updated. You can also look at our Plans page to learn how your money is invested in different assets and locations, or log in to your BeeHive to see your specific plan. You can always send comments and questions to our team via engagement@pensionbee.com.

Risk warning

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

This page contains information for Tailored Plan customers born between 1966 - 1971. It accompanies an email related to their future switch to the 4Plus Plan in July 2025.

Other vintages of the Tailored Plan will be notified of their switch timeline by email in the coming weeks and months, please see our FAQ below on staged rollout dates.

Why are you updating the Tailored Plan?

As part of our mission to build pension confidence, we regularly review our plans to ensure that their objectives continue to align with changing customer needs and expectations, as well as the regulatory landscape.

Over the past few years we’ve listened to what our customers have said about the Tailored Plan, focusing on the experiences of different age groups. Customers told us they found the fixed de-risking approach to the Tailored Plan to be too rigid. Specifically, younger customers didn’t want to be moved away from higher-risk investments from the age of 35. Some older customers told us that a fixed retirement age of 65 wasn’t right for their situation either. Many of these customers still wanted growth opportunities in their later years, but with some element of protection to market volatility.

A key part of our decision making was that older customers said they’d prefer a plan that better responds to the unexpected events occurring in the financial system. For example, proactively moving money to lower-risk assets in times of great market volatility.

Years of customer feedback has offered us valuable insights into how they use and feel about the Tailored Plan. As a direct response to this feedback, we’ve decided to offer different default plans for our younger (under age 50) and older (age 50 and above) customers. Our new offering of two default plans has been designed to better suit customers expectations and reflect their views in a changing world.

Why did you select the 4Plus Plan as an alternative for customers over 50?

We’ve offered the 4Plus Plan since 2018, as one of our Financial Conduct Authority (FCA) Investment Pathways. We’ve observed the way this plan has responded to different market cycles and events since 2018, and believe that its actively managed approach brings additional certainty for those nearing or in their retirement phase.

The plan is managed by State Street, one of the largest money managers in the world. At its core, the 4Plus Plan aims to strike a balance between growth and stability for savers over 50 years old.

This balance is achieved through a target return objective of 4% above cash over the long term (greater than five years), allowing for more predictable drawdown planning. A key feature of the 4Plus Plan is its responsive asset allocation strategy, designed with the aim of protecting your savings during turbulent times.The team of money managers behind the plan meet weekly to make necessary and tactical adjustments based on changing market conditions.

The long-term asset allocation is reviewed annually to ensure it remains relevant, but strategic adjustments are also made on a monthly basis. This dynamic management, combined with the target return objective, provides a powerful tool for navigating market volatility.

What are my options if I don’t want to be switched to the 4Plus Plan?

If you think the 4Plus Plan isn’t the right plan for you, you might want to consider switching to one of our other plans.

For example, our Tracker Plan could be suitable for anyone looking for a cost effective way to invest in global shares and bonds. This plan offers both growth and diversification, following the world’s markets as they move. The annual fee for the Tracker Plan is 0.50%.

You can switch to any PensionBee plan of your choice. To switch, log into your BeeHive (your online account) and select ‘Account’ and then ‘Switch plans’. With PensionBee you can switch to any new plan of your choice at any time, just note that the switch will take around 12 working days to complete.

If you don’t actively request a plan switch to another plan, you’ll be automatically switched into the 4Plus Plan in July 2025.

How does the 4Plus Plan differ from the Tailored Plan?

There are two key differences between the plans:

• investment strategy; and
• risk management.

The 4Plus Plan is an actively managed plan. This means money managers are adjusting your investments in response to any market movements or volatility. The plan offers an active and dynamic approach to managing your retirement savings. While the Tailored Plan provides a passive strategy based on your target retirement date.

This active component requires more research, analysis, and trading, which leads to a higher management fee. The 4Plus Plan also has a target return objective of 4% above cash over the long term (greater than five years).

The Tailored Plan is a target date fund, using a ‘glidepath’ approach, which is passively managed. This means the mix of investments are automatically adjusted over time, becoming more conservative as you approach your target retirement date, which is fixed. This means that the money managers don’t have discretion to change the asset allocation or investment strategy during turbulent market conditions.

How will performance compare for the 4Plus Plan?

Past performance shouldn’t be used as an indicator of future performance. However, we do have historical performance data that can be used to guide our understanding of how the 4Plus Plan performs in times of extreme market volatility. For example, the COVID-19 pandemic or the UK’s 2022 Mini-Budget crisis, which you can see in the table below.

The table below shows how the 4Plus Plan has demonstrated resilience during periods of market turbulence. In almost every market event listed, the declines for the 4Plus were significantly smaller than those experienced by the FTSE World TR benchmark, which is a global stock market index.

This suggests that the 4Plus Plan’s dynamic diversification strategy has been effective in softening the impact of various key market events. Including geopolitical conflicts, economic crises, and trade escalations.

4Plus Plan performance during key market events

Source: State Street

Please also see the Morningstar pages for performance data for the 4Plus Plan and Tailored Plan 2031 - 2033.

How do the fees compare for the 4Plus Plan?

At PensionBee, we only charge one simple annual fee. The 4Plus Plan annual fee is 0.85% (Tailored Plan: 0.70%).

Additionally, if you have more than £100,000 in your pension pot, your fee will be halved on the portion above £100,000.

Please note the 4Plus Plan is actively managed. This means the portfolio is being frequently adjusted by a team of experts, based on changing market conditions. You can read more about the 4Plus Plan’s approach to volatility management.

You can also see our other plan options and their fees on our dedicated ‘Plans’ page.

Can I switch plans earlier if I want to?

Yes, you can switch to another PensionBee plan, including the 4Plus Plan, at any point before July 2025.

You can view all PensionBee Plans on our plans page and you can request a plan switch in your BeeHive. Please be aware that from early July we need to prepare for switching by freezing activity in or out of the fund.

What if I want to withdraw funds at this time?

We understand the importance of withdrawals to your financial planning and want to ensure you’re properly informed of these upcoming changes.

Once the switch begins, your BeeHive balance will be frozen until it completes. We estimate this will take around three weeks. This means that you won’t be able to make any withdrawals, and any regular withdrawals you have scheduled won’t be processed during this time.

If you anticipate needing a withdrawal in the period of the fund switch, we recommend that you make any necessary arrangements as soon as possible, before the switch begins. This could mean increasing the size of your withdrawal in the month before the switch.

We’ll send a dedicated email on withdrawals in the coming weeks. We’ll also share more information and the deadline to make any changes to your withdrawal if you have regular withdrawals set up on your account.

Please note that if withdrawal requests are made before 12pm on a working day, we’ll aim to make a trade request on the same day. Requests made after 12pm may be processed the following working day. As long as there are no issues verifying your bank details, it should take around 12 working days for you to receive your money.

Can I continue to make contributions?

All your regular and ad hoc contributions will continue to be paid into your Tailored Plan until your switch begins. Once the switch begins, your BeeHive balance will be frozen until it completes.

If you have a regular contribution set up, your funds will still be collected during this period and will be invested in your new plan once the switch is complete.

Will the value of my pension be impacted?

During the time of the switch, your balance will appear frozen and the graph on the ‘Analytics’ tab in your BeeHive will indicate a straight line. We’re working to minimise out of market exposure during the time of the switch and will update customers on this. Please check this page for regular updates.

During the switch your pension will be subject to some market movements, and its value may go down as well as up while the switch is in progress. Any changes in your pension’s value that occur during this period will be reflected in your balance once the switch has been completed.

What are the costs of switching?

We have a commitment from BlackRock and State Street to minimise any costs associated with moving funds. By staging the rollout of the switches, we can also keep a sharp focus moving funds in the most efficient way.

There are always small subscription and redemption costs associated with fund switches. This is both the case if you decide to switch earlier or we move the funds for you. These small costs are an unavoidable feature of the market when moving money between different funds. PensionBee doesn’t profit from the transaction costs associated with switches.

Owing to the dynamic nature of the 4Plus Plan, the underlying investments could vary significantly from today to the trade date. Currently, the estimated cost of this transfer will be around 0.15%, although it could change on the day. This means the estimated cost for a pension pot size of £20,000 would be £30.

What if the stock market is volatile, will you still switch me?

We’re working closely with BlackRock and State Street to optimise the switching process for customers. If any extreme market turbulence occurs in the run up to the fund switch date, we’d review the switch timeline and notify customers of any changes.

Why are you staging the rollout?

We’re switching customers in stages to minimise out of market risk.

We’ll be moving customers vintage by vintage throughout 2025. Although customers can switch to the 4Plus, Global Leaders - or any other PensionBee plan - earlier should they wish.

Our staged rollout approach aims to promote good outcomes for all our customers in the Tailored Plan. We’ll be contacting customers in groups in the coming weeks and months to share the timeline for their vintage.

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.

For many self-employed workers, the freedom of being your own boss can be reduced slightly with the financial instability it can bring. Without the structure of a fixed salary, holiday and sick pay and a workplace pension, the dream of early retirement can feel out of reach. However, it’s nowhere near impossible. With the right plans and careful discipline, retiring early is something any self-employed worker can aim for.

Whatever financial goal you have in mind - here are some things you can do to retire on your terms.

Set clear lifestyle and financial goals

Like with many things in life, retirement planning is a lot easier when you’re working towards a specific target. Early retirement means different things to different people. So think about at what age you’d like to stop working - but keep in mind the age at which you can access your pensions.

If you have a defined contribution pension, whether that’s an old workplace pension or a personal pension, you can start accessing the money from 55 (rising to 57 from 2028). Whereas if you’re eligible for the State Pension, you have to wait until you’re 66 (rising to 67 from 2028). If you’re not sure at what age you’re eligible to the State Pension from, you can check your State Pension age using PensionBee’s State Pension Age Calculator.

With your retirement age in mind, start mapping out what you want those years to look like. For example, would you want to travel the world, spend time with family or learn new skills? This helps you to work out how much money you’ll actually need. Need somewhere to start? The Pensions and Lifetime Savings Association (PLSA) have developed a set of Retirement Living Standards that can help you visualise retirement at three different income levels.

Once you have a rough annual figure, multiply it by the number of years you expect to spend in retirement. Make sure you factor in things like life expectancy, inflation and potential healthcare and caring costs.

Now you have your retirement goal, you can work backwards and break it down into monthly or yearly savings goals. PensionBee’s Pension Calculator can be a helpful tool at this stage in helping you to see how much you need to save and how long it’ll take you to get there. It’s a good idea to review this on a regular basis and adapt if your income or retirement goals change using the sliders.

Take advantage of tax relief

You may already be aware but it’s worth a reminder - pension contributions (up to a limit) are eligible for *tax relief. Think of this as a bonus for saving into a pension.

Most basic rate taxpayers usually get tax relief of 25% - which means a £100 contribution to your pension pot is topped up £25 by HMRC making it £125. If you’re a higher or additional rate taxpayer, you can claim further tax relief through a Self-Assessment tax return. PensionBee’s Tax Relief Calculator can help you work out how much tax relief you could get and whether you need to file a Self-Assessment.

If you’re the director of a limited company, you can make company contributions as well as personal contributions to your pension. Company contributions count as an allowable business expense (though they must be wholly and exclusively for business purposes). This could save you corporation tax. Depending on your company profits this will be up to either 19% or 25%.

You’ll also get National Insurance (NI) relief, as the contributions come from your pre-tax income. Just remember that there’s a limit - the standard annual allowance for pension contributions is £60,000 (2025/26). For personal pension contributions eligible for tax relief, this is further limited to 100% of your salary (whichever is lower).

Further guidance on pension contributions as a business expense can be found in HMRC’s Business Tax Manual.

Adapt your pension pot

As a self-employed worker, you might worry that you won’t always be able to make pension contributions. Without the structure of a fixed salary, there could be times when you want to reduce or pause your contributions.

However, there are flexible options available. For example, PensionBee’s self-employed pension allows you to adjust contributions as and when you need to.

In higher-earning months you can save more, while in slower months you can reduce contributions. If you really need to, it’s also possible to pause them for a while with no fee or penalty.

Think about where your pension is invested

Something you may not have thought about is where your pension gets invested. You’ll need to think about your risk tolerance as well as your age when looking at your investments. Some people like their pensions to be invested in higher risk funds while they’re a few decades away from retirement, with the risk level then being reduced as they get older. So it’s definitely worth looking at the fund you’re invested in and speaking to your pension provider if you aren’t sure. PensionBee customers can find their plan information by logging into the app or the website and looking at the ‘Account’ section of their BeeHive.

If you aren’t sure where to start, consider working with a financial adviser who specialises in working with self-employed workers. They can help you maximise your returns and avoid any pitfalls, and the right one can be worth the fee. You can find a qualified independent financial adviser (IFA) using the Financial Conduct Authority’s (FCA) register, Unbiased or MoneyHelper.

Build passive income streams

Passive income can be a game changer for early retirement. These are income sources that require little to no involvement once you’ve done the initial set up. An example could be investing in property that you can rent out, giving you a regular monthly income. Building these passive income streams and creating a portfolio career is becoming more popular. For those approaching retirement, the more diverse your income sources are, the less you’ll be relying on your pension savings alone.

Retiring early as a self-employed worker might sound like an ambitious goal - but it’s an achievable one. By having a structured plan, taking advantage of the benefits that come with saving into a pension, and diversifying your income streams - you can put yourself on a smoother path to financial freedom.

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

*The value of tax relief(s) to any individual or limited company will depend on their financial circumstances. Contributions can be a complex area so if you’re not sure how making contributions will impact you or your business, seek advice from a qualified independent financial adviser (IFA).

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.

It’s 2025, and while many strides have been made towards gender equality, one stubborn gap remains - the way women talk about money and pensions. In fact, according to a study by Hearst UK, women aged 18-34 are more comfortable talking about mental health than they are their finances.

Despite women being better savers and investors than men, steering clear of financial conversations comes at a large financial cost for women - in missed opportunities, lower pensions, and financial insecurity later in life.

It’s time for that to change. Here’s why women should embrace open conversations about money and pensions in 2025, and how to start talking.

It’s essential for breaking the taboo - and the financial gender gap

Money talk has long been taboo. Many of us grew up in households where discussion around salaries, investments and pensions were silenced. The stereotype of the ‘good girl’ who doesn’t concern herself with ‘complex’ matters like money remains for women, whilst men are often encouraged to be assertive and take charge of their finances.

This has infiltrated the financial gender gap. According to research by Boring Money, women are missing out on a potential £567 billion - which is greater than the GDP of Poland. This confidence gap perpetuates disparities like the investing gap, where there are an estimated 6.8 million female investors compared to 9.9 million male investors. The same logic applies for budgeting, salary negotiations and pensions – if women don’t talk about them, these gaps will just keep widening. So talking openly about money isn’t just empowering, it’s essential.

Why pensions should be part of the conversation

Pensions might not seem like the most glamorous topic to discuss at brunch, but they’re crucial. PensionBee’s research revealed a 38% gap between male and female pension pots, with women averaging £14,631 and men averaging £23,474. This can be for many reasons including women being more likely to work part-time, take career breaks to raise children or care for elderly relatives, and live longer than men.

So by not discussing pensions more openly, women miss out on opportunities to make informed choices, like:

• opting into a workplace pension scheme;
• increasing contributions; or
• exploring private pension options.

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By normalising conversations about money and pensions, women can share tips, highlight pitfalls, and support each other in planning for the future. So let’s get started.

How to build confidence around money talk

Talking about money might feel uncomfortable at first, but practice makes perfect. Here are some tips to help get the conversation flowing:

1. Find a money buddy

Everything feels easier with a friend, right? Choose someone you trust and agree to share your financial goals, worries, or questions. You don’t have to reveal every tiny detail - just start with small steps. For example, you could discuss how much you’re contributing to your pension each month or compare pension providers.

2. Join women’s financial communities

There are plenty of online forums and social media groups, such as Girls That Invest, Vestpod, Financielle and Talented Ladies Club where women can discuss finances in a supportive environment. These open spaces are perfect for learning from others and finding inspiration.

3. Turn money talk into a social activity

Why not combine finances with fun? Host a money-themed book club or ‘pensions and prosecco’ evening where friends can learn and share knowledge. Keeping the atmosphere casual can help ease any awkwardness you might feel around money talk.

4. Start with hypotheticals

If diving into your own financial details feels too personal, start with hypothetical scenarios. For example, “if you won £10,000, what would you do with it?” or “if you had to retire tomorrow, would your pension cover your needs?” These conversations can naturally lead to more personal (and light-hearted) money discussions.

5. Educate yourself together

If pensions or investments feel overwhelming, team up with a friend to learn. Attend a workshop or take an online course together. Sharing the learning process can make it feel a lot less daunting. You could always start with following a financial influencer or listening to a podcast to get inspired.

The benefits of money conversations

Talking about money isn’t just about numbers - it’s about empowerment. When women share financial knowledge, they can:

• Boost confidence - knowledge is power and understanding finances can help women feel more secure and in control.
• Break down barriers - open conversations help to challenge the societal norms that keep women in the dark about money matters.
• Create opportunities - sharing tips and experiences can lead to better financial decisions. Whether it’s negotiating a salary, investing wisely, or maximising pension contributions.
• Build community - talking about money fosters a sense of solidarity and support, showing women they’re not alone in facing financial challenges.

Looking ahead

By talking more openly about money and pensions, women can take control of their financial futures and close the gender wealth gap for good. It starts with one simple step - opening the conversation. Whether it’s with a friend over coffee, a colleague at work, or a group of like-minded women online, every conversation helps to change the narrative. Because when women talk about money, women’s financial futures become stronger.

Maria is a Freelance Editor and Writer who previously worked as Global Editor at Female Invest. Her writing focuses on gender equality in finance. She’s also written for a variety of other publications including Harper’s Bazaar, The Telegraph, inews, Metro, Glamour and more.

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.

The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 39, watch the video or scroll on to read the conversation.

PHILIPPA: Hi, welcome back. This time, stock market volatility. Everyone’s talking about it. What is it and what could it mean for your savings?

If you’ve been reading the news lately, you’ll know there have been lots of ups and downs in global stock markets. Now, why? Well, those recent swings are mostly down to a blizzard of announcements from the new Trump administration in the US about spending cuts and trade tariffs.

Now, not being able to predict what might be announced next has been making investors all over the world nervous. Nervous investors, that usually means volatile stock markets. But times like these can also present opportunities, and we’ll get into that later.

First, though, we’re going to break down what’s been happening and talk about the ways this uncertainty can impact your investments now and into the future.

I’m Philippa Lamb, and just before we make a start, if you haven’t subscribed to The Pension Confident Podcast yet, why not click right now? If you turn on notifications, we’ll let you know the minute there’s a new episode.

Now with me today, I have Financial Coach, Founder of The Money Whisperer, and good friend of the podcast, Emma Maslin.

Personal Finance Reporter at the Daily Mail, Lucy Evans, is here for the first time, too. And from PensionBee, another old friend of the podcast, Chief Engagement Officer, Clare Reilly. Hello, everyone.

ALL: Hello.

PHILIPPA: Now, here’s the usual disclaimer before we start. Please do remember, anything discussed on this podcast shouldn’t be regarded as financial advice or as legal advice and when investing, your capital is at risk.

For this episode, in particular, it’s really important to remember, past performance isn’t an indicator of future performance.

Now look, you all know your way around the financial markets. You all know about money. But different personality types, they deal with volatility and anxiety in different ways, don’t they? I’m interested to know how you’ve all been dealing with this uncertainty lately. I mean, are you checking your pension investment daily or are you super calm?

CLARE: I don’t get an emotional reaction when I see market volatility or my balance moves around. I’m used to it. I’ve worked in pensions for many years, so I’m used to it moving around. I’ve not changed my behaviour. I’ve not logged in to check my balance more than normal. I’ve continued to make my regular contributions through this period, and I know that they’ll have a greater impact in the longer term because the market’s on sale at the moment.

PHILIPPA: You see, she’s a real professional. Come on, Emma. I mean, people are worried. I’m sure a lot of people are looking a lot more often than they used to.

EMMA: I’m pretty similar to Clare. I’m sure people are. My husband is one of these people that’s really feeling the fear. A little drop, and he’s on the phone to me. He’s sending me screenshots of the markets, his pension balance, telling me we’re going to have to work five, 10 years longer. I have to really calm him down. But on a personal level, I’m the nice balance to him, and I’m really not doing anything differently to how I have been forever.

PHILIPPA: I don’t know what you’re supposed to do with those screenshots - stress or laugh?

EMMA: Laugh. Well, laugh and impart some of my wisdom that we’re going to be imparting today as well.

PHILIPPA: Yeah, exactly. Lucy?

LUCY: I’m pretty similar, actually. I’ve not been checking any more than usual. I just think I’ve got a while to go before I retire, and there’s a long time for the markets to recover before then. I think it’s best to just have the hands-off approach, keep making contributions, and trust that it’ll recover at some point.

History of market volatility

PHILIPPA: OK, so the top-line message here is calm, which is good. Stock market volatility, it’s nothing new. I’m thinking we might start with a little bit of history, Lucy. Of course, the big fear is always about, does this mean there’s going to be a financial crash?

People will have heard about the Wall Street crash back in 1929, 10 years of depression after that. I mean, a lot more recently for most people, I’m thinking about 2008 and the global financial crisis. I mean, at that time, I was looking at the numbers and it was amazing. I mean, one of the big US stock indexes, the S&P 500, which is always thought about as a bellwether of what’s going on in stock markets, it lost half its value. I mean, it was just horrifying. Just remind us why that happened.

LUCY: Yes, so obviously this isn’t the first time we’ve seen market volatility, and it’s been far worse in the past. To understand the 2008 financial crisis, we need to understand, really, it was about the US housing market. It was down to these things called subprime mortgages. Housing prices in the US were tipped to soar, and a lot of investors overseas poured lots of money into the housing sector. These subprime mortgages were given out to households in the US that maybe could default on their mortgages. Usually, there’s a lot of checks that go into making sure that a household can afford those mortgages and can afford those payments. Even sometimes loans were given out to pretty close to the house value or even above the house value because everybody thought that US house values would just continue to soar. Investors just thought, well, worse comes to worse, if the borrower defaults, they can just sell the home for more than they lent out.

PHILIPPA: But it didn’t work out like that, did it?

LUCY: It didn’t work out like that. Investors, including a lot of British banks, had heavily invested in the US housing market through something called mortgage-backed securities. These weren’t rated as risky, even though they should’ve been. Eventually, when the subprime borrowers started to default, a lot of the investments started to plummet. It caused the credit markets to freeze. I’m sure you can remember people queuing to get their money out because they had a lot of interest in these mortgage-backed securities. Then obviously, Lehman Brothers collapsed in the wake of all this and caused the markets to crash.

PHILIPPA: Everything went down like a pack of cards, like a house of cards, didn’t it? Though, as you say, it started in the US. On this occasion, again, it’s news in the US, which is freaking out the markets, but it’s a global market. Confidence is key, isn’t it? When something happens, other investors get nervous, other countries, other markets get nervous, and the whole thing starts to feel like it’s teetering a bit, even if it isn’t necessarily teetering, I think is the point here, isn’t it? The impact here was very bad for us, the UK went into a deep recession, didn’t it? It took a long time to recover.

LUCY: Yeah, it did. There was a mass panic and fear among investors, and everybody started to pull their money out quite quickly because they didn’t know which other firms were impacted by these risky subprime mortgages. And yes, it’s key to remember that just because it happened in the US, a lot of UK investors are also invested in the US. A lot of people’s pensions were invested in the US. The S&P 500, like you said, lost almost half of its value. The FTSE 100 on the day Lehman Brothers fell lost 4%, but across the year, it was a third. It was really bad news for people’s investments and people’s pensions.

PHILIPPA: It was really severe, and we all felt that chilly wind for a long time, didn’t we? But thinking about it, this obviously was not the first recession we ever had. As I said, there were recessions in 2000, there were recessions in 1990. Are they happening more often now?

LUCY: Not necessarily. We didn’t necessarily have one here in the 2000. It was over in the US, although our stock market was quite impacted by it. But I think it’s important to understand the difference between a recession and a technical recession. A technical recession is when the GDP (Gross Domestic Product) falls for two successive quarters. Then there’s recession in the way we all think of it, where there’s a massive economic downturn. I think it’s Bloomberg that said we might get more of these technical recessions more often, but it’s not in the way we all might think of a recession in the massive mass unemployment and economic downturn.

PHILIPPA: Hey, it’s me, Philippa. Just interrupting briefly to remind you to click on that subscribe button so you never miss an episode of The Pension Confident Podcast. Remember to share, rate, and review, too. Now, I’ll leave you to enjoy the rest of this month’s conversation. Happy listening.

What’s happening with Trump and tariffs

So thinking about what’s happening now, Clare. The causes are different. It’s the same idea, something’s happening in the US which is freaking everyone out around the world. But in the last few years, we’ve seen other big geopolitical events, haven’t we? We’ve seen the pandemic, we’ve seen the invasion of Ukraine, we’ve seen conflict in the Middle East. There’s a lot going on. It unsettles the markets, doesn’t it, generally? Now we’ve got the US President, Donald Trump. He’s settling in for his second term, and he’s doing what he likes to do most. He’s shaking things up, isn’t he?

CLARE: Yeah, I think it’s really - when he stood up on 2 April on Liberation Day with his big board of all these countries that he announced there’s going to be reciprocal tariffs on goods coming out of these countries to the US.

PHILIPPA: So this is taxes. He’s taxing imports.

CLARE: Yes. I think the big realisation there - when we saw global markets respond - so global markets following that day, across Asia, across Europe, across the UK, and some parts of Africa, America, all the markets went down. You might’ve sat in London thinking, what difference does this tariff on goods coming out of Vietnam to the US have on me?

PHILIPPA: Yeah.

CLARE: But actually the interconnectedness of global supply chains now has a huge impact on you. If we just look at Vietnam, for example, If we take one example out of the thousands of companies that would’ve been impacted by these tariffs. Let’s look at Nike. Nike manufactures around half its shoes in Vietnam. If we put a tariff on all of those shoes coming out of Vietnam and going across to the US, that significantly raises Nike’s cost of sales, which has an impact on Nike’s future revenue, Nike’s future business prospects. It introduces huge uncertainty for Nike’s management because they don’t know how much cash they’re going to have coming at their business in the future. Their share price drops. So back in London, if you have Nike in your pension, along with all of the thousands of other companies who are in a similar situation to Nike and are very impacted by these tariffs, your pension balance goes down.

And so suddenly, I think, something that was very interesting about Liberation Day was this ability now for people to watch the news, watch Trump, and connect it back to their pension in that way and watch their pension go down as a result.

PHILIPPA: Which can be very frightening. Lucy, we’ve been talking about shares, but it isn’t just shares is it? This volatility in the market, it affects all sorts of investments, bonds, commodities, all sorts of things.

LUCY: Yes, on bonds, these are effectively government IOUs, and it’s when the government uses it as a way to borrow money and you get back the face value at the end and interest payments along the way.

PHILIPPA: It feels like it should be a sure investment.

LUCY: Yes, absolutely. Especially US Treasury bonds, they’re considered safe haven assets because it’s very unlikely the US Treasury is going to default on its interest payments. During times of market volatility, bonds are seen as safe, and a lot of people pour money into them. But something really interesting happened after Liberation Day. All of a sudden, interest rates increased on them, and that shouldn’t really be happening. It spooked economists and investors because -

PHILIPPA: It was illogical.

LUCY: Yes, absolutely. There could be several explanations for this. One is that tariffs could push up US inflation, so people want more in return for their investments, really, for lending the government money. But like I said, that shouldn’t be happening. We don’t know why Donald Trump announced that 90-day pause, but it did come at the time when the bond market started to freak out a little bit.

What happens next?

PHILIPPA: So there’s unpredictable all around. It’s widespread, it’s different sections, it’s different countries. I mean, it’s all in a state of flux, and there’s no point denying that right now. But what’s interesting, I think, is that this is more complicated than a story of shares and bonds going up and down on one day or the next day. It’s about trends, isn’t it? It’s about the anxiety of a long term trend. Clare, what’s your sense about where this trend might be heading? I know it’s a big ask because no one really knows what’s going to happen in the short term.

CLARE: I think the only thing we can really be sure of is more uncertainty. I think you’ve mentioned the 90-day pause on 9 July, that’ll end. There’s going to be another announcement there. It feels like - you used the word blizzard earlier. It does feel every morning there’s a blizzard of news coming at us, whether it’s geopolitical, it’s connected to wars globally, whether it’s Trump tweeting on social media with his opinions on another topic. I think what we need to do in this period, the main thing to focus on, is just learning a bit more about volatility and being better prepared for it in the future, because there will be more volatility. We’re all long-term savers. There will be more of it. If we understand it and we understand why it happens, we understand how markets react to it, we’re going to be in a better place to handle it next time and we won’t have such an emotional reaction.

How might the UK government respond?

PHILIPPA: And obviously, it’s not a short-term problem, this. Our government is looking at it thinking, how do we respond? How do we keep things on an even keel with the tools at our disposal? I suppose I’m looking forward to the Autumn Budget, which is the next big thing, the next moment when we’re going to be hearing from the Chancellor with a raft of whatever she has in mind at the time. Is there anything they can do to insulate Britain from this?

LUCY: I do think the Bank of England could have a key role to play in this. It makes regular decisions on interest rates, and it’s poised to cut interest rates this month. Maybe by the time this is broadcast, they’ll have cut interest rates. When Trump did announce these tariffs, the expectation of more base rate cuts this year, that was the expectation we’d have, I think, three or four further ones this year as they try to combat that low growth and combat that volatility as well.

What does this mean for pensions?

PHILIPPA: This is impacting our pensions, as we’ve said. None of us wants to see our pension balance falling and all these headlines about potential recessions. It’s natural to feel, I think, that we should take action. There’s that rush to action. [Like] you’ve got to do something about this - like your husband, Emma, [saying] “Look at the screenshot. Look what it says. We need to do something!”. But pensions in particular, it’s the biggest investment most of us have, isn’t it? The key message there surely must be the risk is real, but the risk is spread in a pension pot, isn’t it? It isn’t just about shares, it’s invested in a whole array of things to insulate us from risk.

EMMA: It is. I think it’s really important to come back to that when we’re starting to get overwhelmed by some of the anxiety in the media and what’s going on. Remember, when you’re investing in a pension, you’re investing in a diversified portfolio of what could be lots of different assets.

PHILIPPA: Just remind everyone what sort of things might be in there.

EMMA: OK, so we might have equities, so stocks and shares. We might have some bonds. We might have a little bit of cash. We could have anything from commodities to real estate. I like to think of it like a shopping trolley with lots of different things in there. I think looking across the globe, different markets, different industries, different sectors can have different reactions. It’s just something to bear in mind that the more diversified your pot - your shopping trolley - the less reactive it is to what’s going on.

PHILIPPA: Thinking about the diversity of pension funds, can you put a bit of detail on that for us? For example, in one or two of the PensionBee funds, what mix are we talking about?

CLARE: Yeah, I mean, for example, in Global Leaders, which is our under 50s default [plan], you’d have approximately 1,000 of the world’s largest and most successful public companies. At any one time, you’d be invested across all geographies, across a range of sectors. You’d have that huge diversification, global diversification of the equity basket there.

PHILIPPA: Yeah, I mean, that’s the point, isn’t it, Clare? Fund managers, that’s what they do. They look at that shopping trolley and they think, “do we need more of this or less of that?”.

CLARE: Yeah, they’re doing that all the time. They’re doing that all the time.

PHILIPPA: Yeah, this rush to action, it’s a strong urge, right, isn’t it?

CLARE: Yeah, and I think if you haven’t experienced market volatility before, you might get an emotional reaction to seeing your pension balance going down.

PHILIPPA: It’s a fight or flight, isn’t it?

CLARE: Yeah, but I think most people would caution against [having] a rash action as a result of that. If you’ve got 20 years ahead before retirement, there are going to be many more of these ups and downs ahead of you that you need to be there for the down and the up.

The impact of age and lifestage

PHILIPPA: I mean, you talk about age, and it’s fair to say any decisions you take, they’re going to factor in your age and stage, aren’t they? Because as Lucy says, she’s young, she’s relaxed, she’s got a long time for her pension pot to grow. So these swings, even if they’re really acute, [she has] plenty of years to absorb that and take advantage of that growth. If you’re older, if you’re getting to the point where you’re thinking, actually in the next few years, I want to take that pension, is that a different situation?

CLARE: Yeah, you’re in a different situation. If we look at COVID, so when the market dropped suddenly in March 2020, some people lost 20% off their pension. It felt like overnight out of the blue. There was a lot of key messaging then and guidance from the Financial Conduct Authority (FCA) for people who were in retirement and needed to make withdrawals. The guidance was, if you need money when the market has fallen, try and use alternative sources first. Try and use your State Pension. If you have a rainy day fund, try and take that money first and use it first. Because if you do take money out of your pension when the market’s down, again, you realise the losses. So that was the messaging. But of course, if you’re in retirement and you’re experiencing volatility, it might be that you’d be better off in a plan that manages volatility. So at PensionBee our over 50s default is actually the 4Plus Plan, which is a plan that balances growth with stability. It targets a 4% above Bank of England cash rate over a minimum five-year period. But it also has a team over at State Street, the money managers who’re seeking to reduce volatility compared to equities at the same time by adjusting the mix of assets in the portfolio on a weekly basis to respond to these big changes that we see in markets. Because there are opportunities and challenges in those.

Other investments and emergency funds

PHILIPPA: Emma, it probably is just worth talking about investments you can access regardless of age. I’m thinking about things like Stocks and Shares ISAs. I mean, obviously, we can’t give advice, but are there things that savers should be thinking about there, too?

EMMA: Yeah. I mean, if you’re invested in a Stocks and Shares ISA, let’s think about my analogy of the shopping trolley. Essentially, you might have a shopping trolley that’s from Sainsbury’s and a shopping trolley that’s from Tesco’s. One is your pension, one is your Stocks and Shares ISA. They could be full of roughly the same things. They’re just a different shopping trolley. So your Stocks and Shares ISA could’ve been impacted in the same way as your pension through all this volatility. So I think, as Clare’s just mentioned, we need to be aware of where the assets are that you might have in your portfolio that can be accessed that haven’t been impacted by volatility first. So more traditional cash savings if you’re looking for money that you need to be able to access right now.

PHILIPPA: So emergency fund, and we often talk about that on the podcast, don’t we? The idea of holding a little cash cushion. I mean, how big [of] a cash cushion? Obviously, this isn’t an ideal world where people can afford to put money away, but how big a cash cushion do we think people should ideally be trying to have in terms of several months spending?

LUCY: I actually wrote a piece a few weeks ago on this in light of the volatility. Obviously, it’s really good because then you don’t have to rely on your investments. It’s typically around three-to-six months for most people.

PHILIPPA: It’s quite a lot of money, isn’t it?

LUCY: It’s a lot of money. We did the calculations per age, and it’s a sizable amount you have put aside. But that means then you don’t have to access all of your investments when they’re down, if you have an emergency. But when you’re coming up to retirement age and in retirement, it’s worthwhile having two years in a cash buffer. That’s because if your only income is drawdown, you don’t want to have to rely on that. Two years is typically enough time for markets to recover. That’s why you’re meant to have a bit more.

PHILIPPA: That’s a really interesting thought. Can you remember the numbers in your article about how much money we were talking about for younger people?

LUCY: I can’t remember the exact numbers, but it’s in the tens of thousands. If you’re thinking about six months worth of spending, especially for someone in their 40s and 50s when spending is their highest, that’s - six months is a lot of money.

PHILIPPA: That’s cash you put somewhere, you can get at it straight away.

LUCY: Yes, absolutely. It might be premium bonds, for example, or everybody loves premium bonds. You get the chance to win money and you can access it quite quickly, or just an easy access savings account.

PHILIPPA: It’s interesting that, isn’t it? Because we also say, make your money work for you, invest your money, don’t just save your money. But is that a strategy people might think about right now if they’re worried about market volatility? Rather than thinking they need to do anything with their investments they have right now, they might just think, well, maybe I’ll save a little bit more cash. So it cushions them against having to draw on their investments if things stay tricky for a long time.

LUCY: I think it’s a bit counterintuitive when you want to make your money work really hard for you. You think, “oh, actually, I’m going to leave it in a cash account where it’s not going to grow as much”.

PHILIPPA: Because with falling interest rates, it doesn’t seem like a good thing to do, doesn’t it?

LUCY: No, but I think it’s really important because if you have to take money out of your investments instead of - if you don’t have that cash buffer, then the losses are probably going to be more than what you’ve missed out on by keeping it in cash.

PHILIPPA: Yeah, so something to think about.

EMMA: I think there’s probably something to be said at this juncture about what we call ‘lifestyling‘, where with pensions, as you get closer to retirement age, at that point when you’ll want to be able to access your money. The pension fund managers are taking investments out of more risky assets and putting the money into less risky assets. I’d advise everybody to take a look at what plan they’re invested in. It might be in discussion with a financial advisor or through your own research that you may want to think about some - obviously, it doesn’t help right today in terms of what’s going on. But if you’re of a younger age but approaching retirement age, I think it’s something to really bear in mind that the process of what we call lifestyling can enable you to be less at risk of some of the volatility through that reduction of equities within your portfolio.

PHILIPPA: Yeah. So in this idea of insulating yourself in volatility, but at the top of the podcast, I did talk about potential opportunities in all this market uncertainty. I mean, that is how markets operate. Professionals in the market, they make the most of these highs and lows, don’t they? I mean, it’s a big subject. If we stick with pensions, is it, for example, a moment when you might think about increasing your contributions to your pension?

CLARE: Yeah, it absolutely is. But I would say that because I work for a pension company, wouldn’t I?

Pension contributions and tax relief

EMMA: One of the things that I tell people all the time is we always have to remember the great thing about pensions is tax relief. For every £80 that you put in as a basic rate taxpayer, £100 is ending up in your pension pot. There’s nowhere else -

PHILIPPA: Because the government contributes?

EMMA: Because of tax relief. I always say, even if you’re a little bit worried about volatility, you’re getting that instant uplift through the benefit of tax relief. It’s free money. It’s the greatest thing on offer in our financial market. I think that’s something really key to help people switch their thinking from a more negative view of, “oh, everything’s a bit crazy, and I’m not really sure, and I’m a bit fearful”, to, “well, there’s a known certainty that when you put some money into your pension, you’re getting that tax relief”, and it can help just temper some of that feeling of uncertainty that people may have.

PHILIPPA: Obviously, the longer you can leave it there, the more it grows, ideally.

EMMA: Correct.

Where to find guidance

PHILIPPA: Now, look, these are big decisions. I think we should talk about where people can get good guidance.

CLARE: So over 50s can get a free telephone appointment with Pension Wise, which is an impartial and free government guidance service telephone appointment to talk you through all your options once you reach 50.

PHILIPPA: We’ve talked about that on the podcast before. It’s excellent, isn’t it? Really comprehensive.

CLARE: It’s excellent. It’s really comprehensive. Then, of course, the PensionBee website. We have loads of blogs and content on all sorts of topics. We’ve got lots of topical ones at the moment which get updated all the time in relation to what’s happening with the tariffs, the impact that has on your pensions. There’s a regular series there.

PHILIPPA: Emma?

EMMA: Well, as a PensionBee customer, in talking to my husband as well and trying to get his nerves to reduce a little bit.

PHILIPPA: Calming your husband!

EMMA: I’ve looked at my plan fact sheet. I think for everybody out there, looking at what you’re invested in and getting some clarity on what that looks like, how diversified you are. I’m relatively young. I know that I’ve got a long period of time to ride out these ups and downs. I’m still 100% in equities within the plan that I’ve chosen.

PHILIPPA: Because you think you’re happy to ride the risk because you’ve got a long time before you want to take your pension.

EMMA: I know that I’m not going to access the pension for a while. But I think that for anybody, it makes sense to really understand what you’re in for. Just having a look at your plan fact sheet is a really good starting point.

PHILIPPA: Because we’ve talked about this before on the podcast, to this idea that at times of stress, people are often, quite understandably, and I think we’ve all done it, I know I have, just inclined to not look at their finances. If you see the news is bad, just don’t look, pretend it’s not happening, do the ostrich thing. But actually, I’m going to say the thing we always say, which is the more you know, the more reassured you can feel, even if times are turbulent.

LUCY: Absolutely. I really like the MoneyHelper website, and I use it a lot just for my own research. But also the importance of independent financial advice can’t be overstated. As much as you can do your own research, if you can afford advice, I think it’s really, really important to just get someone to look at your plan and your financial arrangements, and they can help you.

PHILIPPA: Yeah, before you do anything rash. And talking of people doing rash things. There has been a lot of talk in the press about people turning in their pensions and liquidating them for cash. I mean, that’d be a very radical thing to do, surely?

LUCY: Yeah, I think any financial adviser would tell you not to make any rash decisions. Don’t listen to the noise and consolidate those losses. So yeah, absolutely.

PHILIPPA: I think we can all agree the worst place for your cash is in a biscuit tin under the bed?

ALL: Yep!

PHILIPPA: What should people think about if they’re even flirting with the idea of doing that?

EMMA: Just remember that it’s very hard for anybody to predict the bottom. I think if we could all make these predictions, we probably wouldn’t be sitting here. We’d be on a desert island with a pina colada.

PHILIPPA: Sunning ourselves.

EMMA: Unless you’re in desperate need of the cash, history shows us that some of the best days follow some of the worst days. I think finding ways to remain calm, finding those other ways to relieve some of your fear, if it’s fear, be that research, be that speaking to an independent financial adviser, is the best course of action.

PHILIPPA: There’s an age factor here. There’s an age barrier to when you can take your pension anyway.

EMMA: Yes, there is. Obviously, if you’re under the age of 55, it’s very, very tricky to take that money out anyway.

PHILIPPA: Thank you, everyone. That was really, really helpful at a tricky time. It’s very reassuring to hear from all of you. Thank you.

Market volatility, of course, it’s an evolving story, and it’s an important one which, as we’ve been discussing, impacts most of us. We’re keen to hear what you think about it. If you’ve got questions about volatility or comments about anything you’ve heard in the discussion today, why not email us? Here’s the address, podcast@pensionbee.com. Or if you’d rather DM, just search PensionBee on whichever platform you like to use.

Remember to rate and review the series wherever you listen and catch up with any episodes you missed on any app, YouTube, or the PensionBee app, of course, if you’re already a PensionBee customer.

Next time, we’re going to be talking about ADHD and finances, from the realities and challenges to tips for staying organised and in control of your money.

A final reminder, anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice, and when investing, your capital is at risk. Thank you for joining us. We’ll see you next time.

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.

This page contains information for Tailored Plan customers born between 1960 - 1965. It accompanies an email related to their future switch to the 4Plus Plan in August 2025.

Each vintage of the Tailored Plan will be notified of their switch timeline separately by email, please see our FAQ below on our staged rollout dates. If you have any switch-related questions please contact us on engagement@pensionbee.com.

Why are you updating the Tailored Plan?

As part of our mission to build pension confidence, we regularly review our plans to ensure that their objectives continue to align with changing customer needs and expectations, as well as the regulatory landscape.

Over the past few years we’ve listened to what our customers have said about the Tailored Plan, focusing on the experiences of different age groups. Customers told us they found the fixed de-risking approach to the Tailored Plan to be too rigid. Specifically, younger customers didn’t want to be moved away from higher-risk investments from the age of 35. Some older customers told us that a fixed retirement age of 65 wasn’t right for their situation either. Many of these customers still wanted growth opportunities in their later years, but with some element of protection to market volatility.

A key part of our decision making was that older customers said they’d prefer a plan that better responds to the unexpected events occurring in the financial system. For example, proactively moving money to lower-risk assets in times of great market volatility.

Years of customer feedback has offered us valuable insights into how they use and feel about the Tailored Plan. As a direct response to this feedback, we’ve decided to offer different default plans for our younger (under age 50) and older (age 50 and above) customers. Our new offering of two default plans has been designed to better suit customers expectations and reflect their views in a changing world.

Why did you select the 4Plus Plan as an alternative for customers over 50?

We’ve offered the 4Plus Plan since 2018, as one of our Financial Conduct Authority (FCA) Investment Pathways. We’ve observed the way this plan has responded to different market cycles and events since 2018, and believe that its actively managed approach brings additional certainty for those nearing or in their retirement phase.

The plan is managed by State Street, one of the largest money managers in the world. At its core, the 4Plus Plan aims to strike a balance between growth and stability for savers over 50 years old.

This balance is achieved through a target return objective of 4% above cash over the long term, which should be considered as a period of five years or more. This long-term perspective allows for more predictable drawdown planning.

A key feature of the 4Plus Plan is its responsive asset allocation strategy, designed with the aim of protecting your savings during turbulent times.The team of money managers behind the plan meet weekly to make necessary and tactical adjustments based on changing market conditions.

The long-term asset allocation is reviewed annually to ensure it remains relevant, but strategic adjustments are also made on a monthly basis. This dynamic management, combined with the target return objective, provides a powerful tool for navigating market volatility.

What are my options if I don’t want to be switched to the 4Plus Plan?

If you think the 4Plus Plan isn’t the right plan for you, you might want to consider switching to one of our other plans.

For example, our Tracker Plan could be suitable for anyone looking for a cost effective way to invest in 80% global shares and 20% bonds. This plan offers both growth and diversification, following the world’s markets as they move. The annual fee for the Tracker Plan is 0.50%. .

You can switch to any PensionBee plan of your choice. To switch, log into your BeeHive (your online account) and select ‘Account’ and then ‘Switch plans’. With PensionBee you can switch to any new plan of your choice at any time, just note that the switch will take around 12 working days to complete.

If you don’t actively request a plan switch to another plan, you’ll be automatically switched into the 4Plus Plan in August 2025. We’ll confirm the exact date by email in the coming weeks.

How does the 4Plus Plan differ from the Tailored Plan?

There are two key differences between the plans:

• investment strategy; and
• risk management.

The 4Plus Plan is an actively managed plan. This means money managers are adjusting your investments in response to any market movements or volatility. The plan offers an active and dynamic approach to managing your retirement savings. While the Tailored Plan provides a passive strategy based on your target retirement date.

This active component requires more research, analysis, and trading, which leads to a higher management fee. The 4Plus Plan also has a target return objective of 4% above cash over the long term, which should be considered as a period of five years or more.

The Tailored Plan is a target date fund, using a ‘glidepath’ approach, which is passively managed. This means the mix of investments are automatically adjusted over time, becoming more conservative as you approach your target retirement date, which is fixed. This means that the money managers don’t have discretion to change the asset allocation or investment strategy during turbulent market conditions.

How will performance compare for the 4Plus Plan?

Past performance shouldn’t be used as an indicator of future performance. However, we do have historical performance data that can be used to guide our understanding of how the 4Plus Plan performs in times of extreme market volatility. For example, the COVID-19 pandemic or the UK’s 2022 Mini-Budget crisis, which you can see in the table below.

The table below shows how the 4Plus Plan has demonstrated resilience during periods of market turbulence. In almost every market event listed, the declines for the 4Plus were significantly smaller than those experienced by the FTSE World TR benchmark, which is a global stock market index.

This suggests that the 4Plus Plan’s dynamic diversification strategy has been effective in softening the impact of various key market events. Including geopolitical conflicts, economic crises, and trade escalations.

4Plus Plan performance during key market events

Source: State Street

Please also see the Morningstar pages for more data on the 4Plus Plan and Tailored Plan 2025 - 2027.

How do the fees compare for the 4Plus Plan?

At PensionBee, we only charge one simple annual fee. The 4Plus Plan annual fee is 0.85% (Tailored Plan: 0.70%).

Additionally, if you have more than £100,000 in your pension pot, your fee will be halved on the portion above £100,000.

Please note the 4Plus Plan is actively managed. This means the portfolio is being frequently adjusted by a team of experts, based on changing market conditions. You can read more about the 4Plus Plan’s approach to volatility management.

You can also see our other plan options and their fees on our dedicated ‘Plans’ page.

Can I switch plans earlier if I want to?

Yes, you can switch to another PensionBee plan, including the 4Plus Plan, at any point before mid-July 2025.

You can view all PensionBee Plans on our plans page and you can request a plan switch in your BeeHive. Please be aware that from mid-July we need to prepare for switching by freezing activity in or out of the fund.

What if I want to withdraw funds at this time?

We understand the importance of withdrawals to your financial planning and want to ensure you’re properly informed of these upcoming changes.

Once the switch begins, your BeeHive balance will be frozen until it completes. We estimate this will take around three weeks. This means that you won’t be able to make any withdrawals, and any regular withdrawals you have scheduled won’t be processed during this time.

If you anticipate needing a withdrawal in the period of the fund switch, we recommend that you make any necessary arrangements as soon as possible, before the switch begins. This could mean increasing the size of your withdrawal in the month before the switch.

We’ll send a dedicated email on withdrawals in the coming weeks. We’ll also share more information and the deadline to make any changes to your withdrawal if you have regular withdrawals set up on your account.

Please note that if withdrawal requests are made before 12pm on a working day, we’ll aim to make a trade request on the same day. Requests made after 12pm may be processed the following working day. As long as there are no issues verifying your bank details, it should take around 12 working days for you to receive your money.

Can I continue to make contributions?

All your regular and ad hoc contributions will continue to be paid into your Tailored Plan until your switch begins. Once the switch begins, your BeeHive balance will be frozen until it completes.

If you have a regular contribution set up, your funds will still be collected during this period and will be invested in your new plan once the switch is complete.

Will the value of my pension be impacted?

During the time of the switch, your balance will appear frozen and the graph on the ‘Analytics’ tab in your BeeHive will indicate a straight line. We’re working to minimise out of market exposure during the time of the switch and will update customers on this. Please check this page for regular updates.

During the switch your pension will be subject to some market movements, and its value may go down as well as up while the switch is in progress. Any changes in your pension’s value that occur during this period will be reflected in your balance once the switch has been completed.

What are the costs of switching?

We have a commitment from BlackRock and State Street to minimise any costs associated with moving funds. By staging the rollout of the switches, we can also keep a sharp focus moving funds in the most efficient way.

There are always small subscription and redemption costs associated with fund switches. This is both the case if you decide to switch earlier or we move the funds for you. These small costs are an unavoidable feature of the market when moving money between different funds. PensionBee doesn’t profit from the transaction costs associated with switches.

Owing to the dynamic nature of the 4Plus Plan, the underlying investments could vary significantly from today to the trade date. Currently, the estimated cost of this transfer will be around 0.13%, although it could change on the day. This means the estimated cost for a pension pot size of £20,000 would be £26.

What if the stock market is volatile, will you still switch me?

We’re working closely with BlackRock and State Street to optimise the switching process for customers. If any extreme market turbulence occurs in the run up to the fund switch date, we’d review the switch timeline and notify customers of any changes.

Why are you staging the rollout?

We’re switching customers in stages to minimise out of market risk.

We’ll be moving customers vintage by vintage throughout 2025. Although customers can switch to the 4Plus, Tracker - or any other PensionBee plan - earlier should they wish.

Our staged rollout approach aims to promote good outcomes for all our customers in the Tailored Plan. We’ll be contacting customers in groups in the coming weeks and months to share the timeline for their vintage.

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.