Why fintech startups should embrace recent data security breaches

Each month, the data breach of another large company makes headlines. In July, dating site Ashley Madison hit the news when over 30 million usernames and (encrypted) passwords were leaked online. Carphone Warehouse followed in August, when the personal details of 2.4 million customers were leaked. September was relatively quiet, but October brought another slew of breaches, with TalkTalk, Marks & Spencer and British Gas all admitting major incidents.

The immediate worry is about compromised bank account information, credit card details and personal data, but you also have to step back and wonder why large companies are having these problems so regularly when they have ample resources to make sure their systems are watertight. And, besides reputational damage, what might the consequences be for these companies?

Working out the financial cost from bad publicity is always tricky, but one thing that is clear is the potential to be fined. In the UK, the Information Commissioner’s Office has the power to fine companies up to ^{_higher_rate_personal_savings_allowance},000 for breaching the Data Protection Act. For big companies like British Gas, that is not a life-changing event, but for an early-stage startup, it could be fatal. So it is all the more important that startups get security and privacy right from the start.

However, startups have an advantage over larger companies in that they are not plagued by a myriad of out-of-date software that is difficult and expensive to maintain, and probably hard to upgrade in a timely manner. Many large companies are still using the same systems they used ten or fifteen years ago, and projects to migrate onto more modern platforms can take many years to come to fruition. If a company rolled out their own software, it’s not unusual for no single person to fully understand the systems and the consequences of changing any given part. If they are reliant on vendors, those vendors are probably trying to shift focus to their latest and greatest product, meaning support and bug-fixes for older software is not as responsive as it needs to be.
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Seen through that lens, startups are in a great position, as they are generally investing in a software estate that is brand new, and shaped by an elegant design rather than years of accretion. And these days, startups are often building their applications on top of cloud platforms, run by people whose full-time job it is to make these platforms secure. Bug fixes and upgrades are a non-event for the most part, as they just happen as part of a managed infrastructure. Added to this is the fact that the plethora of platforms and open-source frameworks means a small team can be hugely more productive than the same number of people working in a large company (or even a startup just five years ago).

At the same time, startups can easily overlook important details. When you are not serving many customers and your databases are fairly empty, you are unlikely to attract the attention of many hackers. But if you do not build in security and privacy from the start, it can be hard to retrofit these down the line.

Fintech startups are more exposed to personal data risk than many startups, just due to the nature of the industry. At PensionBee, we have thought carefully about how to respond to the problem of security and privacy. As a new brand dealing with pensions, we have taken the decision to regularly commission external penetration testing and be transparent about the results of those tests. Our first test results are now in and the feedback has already had an effect on how we design our systems. If we build something, we will always make sure it is rigorously tested by a qualified third-party and shown to be secure. This is part of taking security and privacy seriously - if a system is only as secure as its weakest link, why not shore up all the links?

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At this year’s F8 developer conference, Facebook announced its plans to open up an app store for “chatbots” , or intelligent software programs that communicate with customers over existing instant messaging apps such as WhatsApp and Facebook Messenger, rather than the familiar company website or mobile app. Could this new use of technology reshape the way we manage our finances?

Using your messaging app to place orders

Facebook’s announcement marks a turning point in the fledgling chatbot economy, which has been seeing developments over the last 12 months. Workplace chat app Slack made a similar announcement in late 2015, allowing developers to build apps that talked to its 2m customers. You can now order a Taco Bell through Slack, and in the US it’s been possible to use Facebook Messenger to order an Uber since last Christmas. As of last month you can check-in or rebook your KLM flight using Facebook Messenger too.

Some commentators have already been likening Facebook’s announcement to the opening of the Apple app store in 2008, which brought simplicity and convenience to the struggling field of native app development, generating many new jobs and oodles of cash both for developers and Apple. Only time will tell whether this marks the start of Facebook’s takeover of the chatbot space, but this is a watershed moment nonetheless.

Financial chatbots of the future

Companies and customers are just starting to imagine a future where WhatsApp, Siri, Cortana, Alexa, Slackbot, Amy and the rest merrily chat to you, booking your flights, ordering you pizza, rearranging meetings with your colleagues, sending an Uber Courier to pick up your dry cleaning, all whilst humming away doing the same for thousands of other people at the same time. It is interesting to reflect on what this means for people and their money.

One of the big opportunities is dealing with that interminable problem of just wanting to speak to someone about something related to your mortgage, loan, savings account, etc. Waiting in call centre queues or struggling through huge corporate websites looking for a phone number or email address are some of the least enjoyable day-to-day experiences customers have with financial companies. The immediacy and flexibility of a conversation with a chatbot will be a huge boon to customers and companies alike, providing a better experience and allowing companies to cut costs.

Immediacy also has a beneficial effect in the area of impulsive savings. At the moment, putting money away when you are suddenly motivated to do so can be a tricky exercise — at best, it means logging in to online banking having written down the sortcode and account number of the service you want to pay into. Switch this for a simple one-liner in a messaging app and you can imagine how much easier it will be for people to make good on those oh-so-rare moments of financial parsimony. The infrastructure to support this will be necessary to handle WhatsApp pizza ordering anyhow.

Finally, the ability to have conversations with customers will completely change the face of purchasing financial products. Imagine applying for a loan with a few upfront questions, with supplementary queries arriving over Facebook Messenger as and when the bank’s processes require them. How much better for everyone than a high-pressure, 30-minute form-filling exercise, with one yes or no answer after much waiting and no opportunity to appeal. Obviously banks and other financial institutions will have a lot to change to make this sort of experience possible, but there will be a strong incentive in the form of superior customer retention and sales.
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Overcoming security and trust issues

As with any new technology, there will be concerns. Security and trust are big hurdles. Financial companies spend a lot of time building up a trustworthy brand, and dispersing this and all the associated security paraphernalia you get on a website, in favour of one-line exchanges with customers over someone else’s messaging platform is a big ask for some companies, and many customers too. But banks were slow to adopt mobile apps for the same reasons and now they are indispensable.

At PensionBee, we want to be a positive force in people’s lives when it comes to their long-term savings. For me, chatbots are an exciting development. The most successful financial services companies in the future will be the ones that are able to put themselves where their customers are. We’d better get used to emojis.

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Yesterday, the theme of Bailey Kusar’s #onefintechjob meetup was “Money and Mental Health”. Three speakers gave their perspectives on the challenges that people with mental health problems face when dealing with their finances.

Financial firms and mental health

Polly McKenzie, from the Money and Mental Health Policy Institute, pointed out that one in four people experience mental health issues at some point in their life. People in poor mental health have a higher chance of getting into trouble with their finances, engaging in behaviour they regret later. This can range from compulsive spending on e-commerce or ignoring bills, through to more permanent decisions such as taking out a personal loan or emptying out a savings account and giving it away to charity. Polly called for financial services firms to add “friction” where appropriate, for example not processing large withdrawals in the middle of the night.

The jam jar approach to saving

Following closely on from Polly’s talk, Emanuel Andjelic talked about Squirrel, a product that helps to avoid the temptation to spend. Emanuel picked up on “jam-jarring” from Polly’s talk, the idea that if you lock your money away in specific pots, you are less likely to raid it. Squirrel takes money directly from your employer and puts it towards savings goals you set. This simple mechanism of reducing the amount of money that people receive, rather than trying to persuade them to part with it later, means they are more likely to meet their goals.
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A new way of credit scoring

Aneesh Varma talked about “credit scoring for humanity”. His company Aire is aiming to build a credit scoring system that has the same capability as a human interviewer to judge whether someone is a good or bad credit risk. This will help bring credit-based products to many people who are currently passed over. As a self-employed immigrant who has changed jobs many times, Aneesh is very familiar with the problems of not fitting into the cookie cutter.

A pension as the ultimate ‘jam jar’

Speaking to various people afterwards, there was definitely a sense that many people are working in fintech to help consumers have a better relationship with finance, whatever their level of mental health. You don’t need to have a diagnosed mental health problem to engage in compulsive e-commerce spending and leave unopened utility bills on the kitchen counter. Many people (myself included) have felt the urge to splurge when our rational selves know that the urge to save would be a better long-term decision.

We created PensionBee to help people take control of their money and save for their future. In many ways, a pension is the ultimate “jam jar” - once the money has gone in, it’s usually many years before you can get it out, which gives it a meaningful amount of time to grow. And what many don’t realise is that for every £1 you put in, the Government gives you (at least) 25p extra because of pension tax relief.

We’re excited about changing the perception of pensions away from something that happens to old people. It makes a lot of sense to save throughout your life in preparation for when your income drops in later life, and even if it’s only small amounts, the earlier you start the better. It’s also exciting to know that we’re part of a vibrant community of companies who similarly feel that the established institutions have failed the consumer and it’s time for something new.

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We read yesterday on Money Marketing that the Department of Work and Pensions (DWP), after taking over the Pensions Dashboards project from the Treasury in October, has continued to explore and question the direction the project will go. These explorations could result in a decision to take the dashboard in-house and provide a single, Government-run portal for customers.

One of the most exciting outcomes for the dashboard, from a consumer and technology perspective, is that “the dashboard” is in reality a multitude of dashboards appearing in products and services catering to different individuals. Here’s why this ecosystem approach is so important, and why the Pensions Dashboards project must continue to be built as an open platform.

AOL & CompuServe were media titans in the early days of the Internet. They assembled content and services into “walled gardens”, only accessible to their subscribers. As everyone who built a personal homepage or made a MySpace page knows, this model was overthrown by the open access and publishing model of the World Wide Web. Anyone could publish content accessible by anyone else around the world.

In technical terms, this is an example of putting innovation into the edge of the network - core capabilities are centralised (such as the DNS system and internet connectivity), whilst firms and inviduals are free to create products and services that make use of these core capabilities. Because consumers come in all shapes and sizes, firms are best able to cater to their needs by building as many products and services as necessary, each finding their own commercial niche.

It is a model that has stood the test of time, not only in the web as a content platform, but also in the trend towards large digital data platforms - Facebook, Google, Twitter and many other services offer APIs that allow ecosystems to flourish that build on their services.

Huge numbers of pages in the business press have been dedicated to the power of platforms and APIs. And the UK government has many times championed the value of innovative ecosystems to drive growth and productivity in our economy. Its own Government Digital Service has even been using the term “Government as a Platform” to describe its new standard approach to technology and public services.

It is into this 21st century climate of openness and ecosystem-building that the DWP is exploring its options with the Pensions Dashboards. As mentioned above, this could include centralising the service and limiting how the dashboard can be used.

This would be a mistake. As a participant in April’s Pensions Dashboards TechSprint, I could see first hand how much potential there is for myriad products and services to be built on, or incorporate, data about an individual’s pension arrangements. Without the open platform originally envisioned by the Treasury, the exciting ideas prototyped during the 48-hour event are dead in the water.

This is more than just an argument about exciting new services. Without the ability to build for specific niches that differentiate their firms, providers will have little to no commercial incentive to cooperate on the building of the Pensions Dashboards data set, beyond the threat of fines and legislation. This puts the whole project at risk.

The UK Government, in particular its Digital Service, has a great recent track record of genuine innovation - the DWP must listen to industry on this one and not risk killing the Pension Dashboards before it is even off the ground.

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Last week, PensionBee’s CEO Romi laid out our argument for why unnecessary delays to the launch of commercial Pensions Dashboards would have a detrimental effect on the consumers these dashboards are supposed to help. In this post, I take a look at the proposed technical architecture for the overall system and conclude that an approach based on familiar design patterns, open APIs and mechanisms for accessing data directly from providers is preferable to the centralised model described in the feasibility study.

The study lays out three architectural design principles which are intended to promote the best outcome for consumers:

1. put the consumer at the heart of the process by giving people access to clear information in one place online;
2. ensure that individuals’ data are secure, accurate and simple to understand – minimising the risks to the consumer and the potential for confusion; and
3. ensure that the individual is always in control over who has access to their data.

In service of these goals, the system is designed to route all pension provider data through a single “Pension Finder Service” (PFS), which would be industry funded. The PFS would be responsible for handling requests from dashboards, making sure these are authenticated via a separate Identity Service, and then forwarding the requests on to the pension providers, who would send their data back to the dashboard initially making the request. Individuals would grant consent to advisors and other trusted third parties to have delegated access to their data.

So, what are the problems?

There are three main problems with the approach that the government has proposed. Firstly, the study takes a naive and narrow view of what constitutes a dashboard, drawing its technical conclusions from a use case that focuses on displaying to a single individual a read-only summary of information about their pensions. This view of how pension data will be used contains a self-defeating level of expectation about the innovation that will be produced as a result of wide access to this data. We just can’t know what a “dashboard” will do and be in 2021, when this is likely to be rolled out. Technical design principles that flow from this narrow expectation, such as preventing dashboards from storing any data, and not allowing for APIs that write data back to pension schemes (e.g. to set up new contributions or change your personal details), erect barriers to future consumer-friendly innovation. A lesson from Open Banking, and the history of Open Data more generally, is that you cannot plan for the myriad uses of data once you have put it out into the wild, so you should focus your attentions on designing a secure and consistent model for data access and exchange, and sufficient governance and technical standards to ensure all parties can be trusted to the extent they need to be.

A distributed model is more fault tolerant than a centralised system

The second problem is the restriction to only having a single PFS connecting to provider APIs. The justification for this is partly security and partly cost. The claim that this produces superior security seems to rest on a flawed assumption that the security of a system is defined by the number of participants in the system; in fact, it rests on the security of the weakest connection. In a model with a single PFS centralising all communication between providers and consumers, the PFS is a single point of failure. Compromising the PFS would mean either unacceptable downtime or redirection of the flows of personal information and pension information by hackers. The architecture of the internet itself shows that a distributed model is more fault tolerant than a centralised system. If consumers, dashboards and any intermediary PFSs are all treated as equally untrusted third parties by the providers, there is a higher chance that the security of these links will be strong. Conversely, in a system where there is a trusted pool of providers connecting to a single PFS, the chances for bugs and vulnerabilities to go undetected until it is too late is much higher.

How is an ISP really any different to an additional PFS?

The suggestion that a single PFS is the lowest cost way to set up the system is a red herring. We should be looking for ways that building a service that aggregates pension data produces economic value and therefore pays for itself. If the providers have to build APIs to connect to the PFS, there is no technical reason why they cannot subsequently connect to commercial PFS/dashboards directly, and there will be an economic incentive for this opening up to innovative market solutions – this trumps a model where the industry is forced to pay for a single service. The suggestion that a single PFS would be cheaper ignores the very likely possibility that the market would deliver cheaper, more effective solutions. As a side point, restricting the system to a single PFS is inconsistent with a suggestion that providers who cannot build their own APIs make use of “Integrated Service Providers” (ISP) - technically speaking, how is an ISP really any different to an additional PFS?

This is worse than reinventing the wheel

The third major issue with the proposed design is that it is unfamiliar and overly complex, without any clear economic gain arising from this. It is not clear how you would implement a system where the PFS handles an initial request from a dashboard but then has no knowledge of the data being passed back, without some serious compromises being made around peer-to-peer security. This is not how Open Banking works for example, where data flow back to whichever authenticated party made the request. This is worse than reinventing the wheel, so why do it? At a high-level, we have a set of consumers accessing personal finance data from a disparate set of sources, which is a problem that is currently being admirably solved by the Open Banking Implementation Entity, and has already attracted a huge amount of funding, experimentation, testing and development of genuinely interesting and innovative use cases, that the underlying technical framework encourages. If key design principles are to keep security high and costs low, you want a system that builds on what others have done and reuses common data exchange mechanisms and protocols. To protect consumers further, you want them to find data access and sharing systems familiar too, so they can rely on behaviours they have learnt for keeping their personal data secure.

The solutions

We see three solutions to the problems stated above. First of all, relax statements about arbitrary and limiting use cases and data storage rules, focusing instead on data exchange standards, good governance and a model that encourages innovation. Where innovations can be introduced that increase competition and justify investment in good APIs, there should not be barriers to this. If a provider can support write APIs to allow information to flow back into their pension schemes, that will allow them to differentiate themselves, increasing competition in the sector.

Secondly, providers should be required to open up API connections to their data and treat all consumers of those APIs equally (see diagram below). The government’s focus should be on making sure that any third party has a consistent and secure means to access this data on behalf of an individual, leaving the market to sort out the rest. Make use of existing regulatory devices for assuring third parties, such as requiring ISO certification before granting regulatory permissions, and reminding pension providers of their obligations under GDPR to execute comprehensive Data Processing Agreements with the third parties consuming and processing their customers’ data.

Lastly, explicitly build on the work of the Open Banking Implementation Entity, in terms of the standards used in data exchange, authentication systems, protocols, and governance. Industry-wide groups such a FDATA have completed research into the consequences of moving to an API-driven economy, and this has value for the pensions industry, so this should be incorporated into our starting point. There are a lot of technical ingredients out there to reuse: OpenID Connect for authentication; OAuth 2.0 for authorization; the Open Banking API Standard for consistent data exchange; and as a model for ISPs and PFSs, we have new companies such as TrueLayer and Token, and the established membership of FDATA, who have plenty of commercial experience relevant to these challenges. Only by bringing all financial services participants under a common technical umbrella can we put behind us the fragmentation of the industry’s past, and move to a world where consumer-focused innovation can flourish on top of open standards – much like the internet itself.

The last piece in the puzzle is the question of the right model for governance of this ecosystem, and is this subject that Clare Reilly, PensionBee’s Head of Corporate Development, will turn to in the next post of this series.

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The business landscape is continually evolving, becoming more technology-dependent than ever before. Many companies have embarked on digital transformations, and while off-the-shelf software exists for many common use cases, such as simple websites and online storefronts, companies are increasingly turning to teams of software engineers to create custom applications that are tailored to their business. As a result, the UK software development industry has grown by 6.4% in the last year alone.

Despite the high demand for these roles, there are still many barriers to entry preventing talented individuals from pursuing a career in technology. Tech Nation’s 2021 report on diversity in the UK found disparities in various groups, including people from ethnic minorities and women, being underrepresented in the industry.

At its heart, this is a supply and demand problem. Technology’s a skill that can be shared, learnt and taught. Companies are calling out for skilled employees, but are often only looking to university graduates with computer science degrees, without considering how they could upskill their existing employees into those roles, or set up an apprenticeship scheme. Sadly, routes into technology careers aren’t made accessible to everyone, which has a direct impact on diversity in the sector. So, what can we do about it?

The industry shortage

Businesses are carried by employees and when shortages in any sector occur, the disruptions can be felt by us all. Take the recent union action by railway workers for example - employee action has been taken due to shortages in the industry, and consumers and individuals across the board are affected, even those beyond the sector. So imagine what a nationwide shortage of software engineers is doing to the UK economy and the companies within it. When innovation slows down, consumers are left to pay the price.

Opening up technical roles to a broader group of people is crucial in welcoming a wider range of transferable skills and experiences into the sector. Businesses need to address biases, nurture talent early and provide more role models within the industry if they’re to build a workforce that’s representative of today’s society.

The knowledge gap

Another aspect of this issue is the knowledge gap. At a glance, the situation appears to be improving, as students studying A-level Computing have increased over 13% this year. Engagement in technology’s widespread, and as a result children are becoming ‘tech literate’ from an early age. However, taking a closer look, we find that less than 20% of A-level Computing students are female. Sadly, this mirrors the current tech industry average of 19% female representation.

It’s no secret that the technology industry has a history of low diversity and, beyond gender, many groups continue to be underrepresented. Gaining exposure and experience within the technology sector proves to be more difficult for people from disadvantaged backgrounds, as they’re less likely to have access to the latest technology. Following the nationwide lockdown in March 2020, it was found that only 51% of households earning between £6,000 and £10,000 had home internet access, compared with 99% of households with an income over £40,000.

Leading the change at PensionBee

At PensionBee, we believe the only way to offer our customers the best possible product experience is by investing in a team that reflects our customer base and a modern technology platform that supports them. That’s why promoting diversity and inclusion within our team culture and hiring processes is a key focus of PensionBee, echoing our commitment to achieving wider representation and equality in the technology sector.

As a member of the Tech Talent Charter (TTC), a non-profit organisation leading a movement to address inequality in the UK tech sector, we regularly report publicly on our team’s diversity. We’re pleased to see 30% female representation within our technology team, but we know more needs to be done when it comes to achieving equal opportunities.

PensionBee supports talented team members to grow their careers into new areas as they progress in the company. Employees joining PensionBee in our Customer Success Team are enrolled in ‘The Program’, an initiative where they’re exposed to training and numerous educational activities to support their career development. Having the opportunity to collaborate on projects, while being mentored by senior leaders in our technology teams has inspired several team members to take online courses in software development and data analysis, with some going on to become Junior Software Engineers. To date, almost 50% of PensionBee’s Technology Team were trained internally after starting in a non-technology role.

Outside of our internal support, we’ve recently partnered with Makers to take on our first Software Engineering Apprentices. Apprenticeships offer a fantastic way to access many disciplines that are experiencing skills shortages, and because they’re open to anyone over the age of 16 and do not require specialist experience and funding to train, a significantly wider pool of people are able to apply. According to the ONS, for the 2021/22 academic year, the number of people starting a higher apprenticeship (which is equivalent to a foundation university degree) increased by 27%, when compared to the previous year. And this number’s likely to continue to grow, with the government currently funding apprenticeship training, making this a cost-effective route for companies when it comes to upskilling staff and finding employees.

Engineers at PensionBee tackle a wide variety of challenges across multiple technologies while enjoying a balanced and inclusive culture. We’re proud to have been awarded ‘Employer of the Year’ at the Financial Adviser Diversity in Finance Awards in 2020, 2021 and 2022, which shows that investing in both your people and your culture makes good business sense.

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From contribution levels to drawing your pension, we answer the most popular pension questions.

Your 30s is likely to be a pivotal time. It’s the time of life that many get married and take other steps to settle down: the average age for a woman to have her first baby is 30, and the average age for buying a first home is 31.

These leaps into adulthood may also prompt you to think about your finances in a more serious way than you ever have before. We’ve delved into the search engine data to find the most common questions that people like you are asking online about pension planning.

How much money should I pay into my pension?

This is a tricky question because it really depends on what you think your income should be at retirement. Consider at least the following:

• balance of your existing pension(s) (you probably have some pension pots from previous jobs)
• number of years left working
• your planned retirement age
• your ideal retirement income

There’s more information about pension contribution levels in our Pensions Explained centre. You can also play with our pension calculator, which can estimate your pension at retirement age based on your current pension balance and contributions. This provides a good basis for calculating how much you should be contributing to reach your target.

How much will I get from my pension?

Your pension income is based on the state pension and your own pension plans, often from multiple employers. When you retire, you can choose to take out a lump sum, withdraw money as it suits you, or buy an annuity. This way you’ll get a monthly income from your pension.

A better way to look at your pension is to focus on the projected end-value of all your pension pots. There are a lot of pension calculators online that help you to estimate the end-value of all your pensions.

How do I keep an eye on my pension?

If you’re unsure how much you’ve got in your pension pot, or how many pots you’ve paid into, there are different ways to find out:

• pension statement - your provider should send you this once a year
• online - many providers let you track your pension on their website
• contact your pension provider(s)

You may have paid into more than one pension pot. You’ll need to contact each provider separately to find out how much is in each one.

You can let PensionBee do the hard work by telling us where you’ve worked and when, and giving us any pension information you have to hand. We can then locate your old pensions and combine them into a new, online PensionBee plan. Get started.
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When will I be able to take money from my pension?

With all the pension changes, it’s now possible to access your pension pots from the age of 55. You can choose to take a lump sump, drawdown money from your pension as and when you need to, or buy an annuity.

However, the state pension is set and paid by the state. If you’re born after 5th April 1977, the retirement age is set at 68. As life expectancy is increasing, it’s likely that the retirement age will continue to rise.

Should I contribute to a pension scheme or should I save into a savings account?

A personal pension offers significant benefits over a standard savings or ISA cash account. As a start, your employer matches your contributions (the mininum amount is 1% until September 2017, rising to 3% in October 2018). The government will contribute too by refunding the income tax you’ve paid on your contribution straight into your pension.

A savings account won’t offer employer contribution and government tax relief, making pension contributions an attractive option to plan for retirement. Interest rates are at an historic low, often failing to keep up with the rate of inflation.

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It’s February 2020, the phone rings and it’s Jon Mackenzie from Brentford FC calling me to see if I’m interested in exploring a partnership with the Brentford Bees. Jon Mackenzie works for the Bees Commercial team and is enthusiastic, so I’m instantly intrigued: PensionBee and Brentford Bees, how did I not click sooner that they go together?! I live in Brentford, I should have known but I didn’t make the connection.

Since that phone call over two years ago, we’ve been on a journey with an English football club, ending up as one of their main sponsors in the Premier League. So how did we get to this place? And why is there so much more to this partnership than just the name gimmick?

Building a financial consumer brand is not easy

Anyone who works in financial marketing will agree that building a financial brand from scratch is hard. How do you convince customers to move your pensions to a startup? I wouldn’t be easily convinced, so why would you? Another element of complexity is the fact that we don’t sell a fancy car: it’s a pension product. Although taking action to improve your pension as early as possible in your life is important, consumers tend to disagree. Complacency in pensions is rife and pension companies are guilty of not engaging with their savers as they should.

So how do you turn a cold purchase into a warm and exciting experience? How do you build trust? A good product is one element to this, but a distinctive brand that’s advertised on TV or on a billboard equally contributes to trust and helps bring a financial product to life. Once you’re on TV, you’re not being seen as a one-day-fly, you’re a brand that is here to stay.

After PensionBee became a public company, listed on the London Stock Exchange in April 2021, it was time for PensionBee to reach as many customers in the UK as possible. Suddenly sport advertising became an option and we joined the Brentford Bees on their journey.

Brand fit

Pensions and football don’t have many similarities but PensionBee and Brentford FC do have a lot in common. These similarities go beyond the Bee association (Brentford Bees and PensionBee).

PensionBee’s TV ad shoot at the Brentford Community Stadium in May 2022.

Brentford FC are the new kids on the block, bringing a 2022 spin to fantastic football. After 74 years Brentford were promoted to the Premier League in 2021, a huge achievement. As newcomers they’ve shown what great football looks like and that they’re here to stay as a Premier League football club.

PensionBee is also well under way to becoming a household brand in pensions. We started PensionBee in 2014 to make pensions simple so everyone can look forward to a happy retirement. That has meant approaching pensions in a completely different way. We’re showing what a modern pension product should look like. In everything we do with Brentford FC, you can see a challenger and a ‘new kids on the block’ mentality shining through. Both brands bring a new and refreshing outlook to what they do.

Values

Diversity and inclusivity are hugely important to PensionBee. We have a diverse workforce mirroring the UK population and we fight for gender equality in pensions. When we were looking at sport sponsorships, not a lot of clubs and organisations were matching our values.

A family-orientated club with lots of initiatives in the community through the Brentford Community Trust, we felt that we were aligned. Brentford aims to be the most inclusive club in the Premier League. If you go to a Brentford match you’ll be greeted with an energetic and positive vibe with families and people from all walks of life. It truly feels like a community.

Reach and club willingness

14.5m people in the UK visited a Premier League match in 2021 and an even bigger crowd will watch Premier League matches on TV. It’s no wonder that football is an interesting marketing channel for brands to build brand awareness and to maximise reach.

You could of course pick up the phone to some of the major clubs, but a brand our size would be quickly disappointed. It’s a multi-million pound industry and our modest budget would not stand against big brands with incredibly high budgets. With Brentford FC, we started with a relatively small budget, gradually increasing our commitment when we saw traction with our activity. As we became more ‘Brentford Confident’ we were able to commit to more. The Brentford Commercial team has been crucial in being inventive, flexible and willing to look at ways to work. A big shout out to Charlie Raven, Jon Mackenzie, Adam Ward and others at Brentford.

This spring we recorded our latest TV ad. We always had the dream to feature the club, flying over West London into the stadium (but I don’t want to give away too much). We ended up with a drone above the stadium during the Southampton FC fixture. It’s incredibly difficult to arrange this as you have to contend with a Heathrow flightpath and strict Premier League rules. But we did it, thanks to the Brentford Commercial team. I don’t think this would have been possible with any other Premier League club.

And that’s where we ended up. The intent of a club such as Brentford FC, who were willing to work with a brand like us, combined with the fact that they reach millions of savers in the UK. The result? A pension brand sponsoring a Premier League football club. An unlikely brand marriage some may say, but we’ve been going strong for two years and counting!

As a CMO, it has been such a privilege to make this partnership happen and it’ll definitely go in the books as an experience never to forget.

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Have you seen our ‘Believe in the Bee’ campaign yet? Our multi-channel brand campaign will run for the next six to eight months across the UK. So why did we decide to invest in such a big campaign, and how did it all come about? Let me give you some behind-the-scenes knowledge on how we came to agree on an expensive bee animation, and why it was a no-brainer to involve a Premier League football club as part of the script.

Investing in your brand make sense

At any time in a company’s growth cycle, especially for a fintech company like PensionBee, there’ll be a time where simply growing through digital channels isn’t enough. Digital marketing channels are typically designed to convert customers who are actively looking or searching for your product. When your brand awareness is low and you’ve not built up brand equity, you’ll find yourself exhausting those conversion channels quickly and you’ll experience diminished returns on your marketing investments.

Investing in your brand will help to make more people brand aware, which in turn will widen your marketing funnel. As a result, more people will become aware of your brand, meaning that more people will consider using your business or service down the line. This will help to bring down your acquisition costs on those conversion channels.

When to start with your brand campaign?

The timing of that decision is precarious. Going too early means your brand investment won’t result in a more efficient customer acquisition. Starting too late means you’ve wasted a lot of money on expensive customer acquisition and you’ll have lost customers you simply weren’t able to retain.

At PensionBee we started with a small investment, a daytime TV campaign in January 2019, measuring the impact of each spot and looking at the impact on our channel mix the following months. We measured uplifts across the board and the costs to acquire a customer through performance channels started to drop. This was what we were looking for! Since then we’ve steadily increased investments in our brand channels with a mix of TV, OOH and Radio.

Moving on from your Minimum Loveable Ad (MLA)

Our first brand campaign was small and the creative we used came with a small price tag too. Although the team at our creative partner Builders Arms managed to produce a great TV creative, it was all done on a shoestring budget.

But that was OK, we dared to test TV as a channel by using a viable creative whilst resisting splashing the cash. We called it our “Minimum Lovable Ad”. As we were starting to see huge benefits of this brand investment, our next campaigns became larger and were spread out over a longer period. It was from here that our ‘Pension Confident’ tagline was born. Starting with our floating customers on nationwide billboards, and then moving to our Feels So Good wave in 2021 and our Yellow Chair customer campaign in January 2022. With every campaign we executed, the size, budget and results increased.

The first location the bee flies to is a coffee shop near Richmond Bridge.

The bee passes the house of a young family in Twickenham.

The bee is born

Compare The Market has got their meerkat, and PensionBee now has its bee. But how did that all come about?

The PensionBee bee.

Consistent use of distinctive brand assets increases the likelihood of your creative being noticed and helps you be instantly recognisable. It’s one of the best ways to build brand awareness. This ranges from the font you use, the message you communicate and also includes other elements such as using the same voice-over and grading of your assets.

Our new Believe in the Bee campaign combines all of those distinctive brand assets into one campaign. We continue to be clear about what we do: bringing multiple pension pots together in a simple online plan. We continue to use the same ‘Be Pension Confident’ tagline, and we continue to use the same voice-over artist.

Our Believe in the Bee campaign combines all of our usual distinctive brand assets, but it was time to bring out the big guns: a bee. Yes, a real-looking, animated honey bee. Our bee was carefully created pixel by pixel by a Swedish animation studio. It took months to build so we’re proud to finally release it onto your TV screens.

Our bee also makes a visit to a car dealership in North London where we demonstrate you can spend your pension anytime you choose.

Janelt (pictured), Wissa and Norgaard from Brentford FC in shot while our bee makes a visit to the stadium.

Why a bee? Beyond the bee brand reference, honey bees are perceived as hard-working, loving creatures that bring warmth too. Bees collect honey and bring it to the hive. Much like the way we collect money from your old pension pots and bring them together into your PensionBee plan, or as we call it, your BeeHive. And because everyone these days has old pensions to consolidate, the bee flies to customers from all walks of life. For the bee, all customers are equal.

The positivity the bee brings is so important to the message we want to get across: we make pensions simple so you can look forward to a happy retirement. Pensions should be something positive to contribute into, not some abandoned and forgotten paper-based product that lies hidden somewhere in your admin drawer.

And to top it all off, through our partnership with the Brentford Bees, we used brand equity from another brand to strengthen PensionBee as our bee was able to fly into their stadium during match day. Many people will be familiar with Brentford FC as an emerging Premier League football club. And of course, it was a great day out for our PensionBee colleagues who are all cheering in the audience. Did you spot our Founder and CEO Romi Savova sipping on her coffee at the beginning of the ad too?

From storyboarding, it’s taken our team (with the help of many talented professionals), six months to bring this campaign to life. Many thanks goes out to them and I’m immensely proud that we were able to gather so many skilled people around one common goal: making pensions simple so we can look forward to a happy retirement.

Our Believe in the Bee ad premiered during the Great British Bake Off on 20 September, but you can also view it on our YouTube channel.

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If you’ve seen our new ‘Believe in the Bee’ TV ad you’ll have noticed our new distinctive brand asset - the PensionBee bee. Find out why Fablefx animation studio’s ‘digital zoo’ made them the perfect partner for the creation of our beloved honey bee, and learn about the painstaking process of animating it from scratch.

Building out the team

Selecting a visual effects studio was a thorough process. Thankfully our friends at The Builders Arms, a creative agency who we’ve worked with since the early days, have the valuable experience of working with specialist companies like this.

But, this wasn’t going to be a simple project - we wanted a super-realistic bee that would become our brand character for years to come, so there were many things to consider from budget to studio location and artistic skills.

Creative Partner at Builders Arms; Steve Hanratty says: “Decamping to Los Angeles for months to work with the guys who did the live-action version of Jungle Book wasn’t practical or realistic.”

After much time spent considering the different options, Steve Hanratty, Creative Partner at Builders Arms, Dom Slade, Managing Director at Builders Arms, and Mike Facey, Head of Production at Brave Spark, knew that Fablefx were the clear standout.

Fablefx and the ‘digital zoo’

Fablefx is a Stockholm-based visual effects (VFX) studio, with a team of talented artists and producers collaborating from many different corners of the world to produce some truly amazing animation.

Not only did Fabelfx have an impressive portfolio of clients, from Coca-Cola and Three Mobile to Netflix, their ‘digital zoo’ gave us all the confidence to know they would be the perfect partner with which to create our bee.

Their digital zoo is a portfolio featuring over 80 animals of various breeds and shapes - all of which have been meticulously researched, analysed and built by the Fablefx team. Their capabilities to create computer graphics (CG) animals and characters is unrivalled. Each animal’s built with every characteristic in mind - from getting the anatomy just right to optimising the fur, feathers and even muscles of the animal. It was this attention to detail that was crucial to creating the PensionBee bee.

Creative Partner at Builders Arms; Steve Hanratty says: “They have created everything from elephants to monkeys, squirrels to birds - so they completely understand how animals move and react, and how to make things like fur look real - they were the perfect partner.”

The making of the bee

It took 10 highly skilled artists from Fablefx, and three months of hard work to produce our honey bee. Our core team of Steve, Mike and Dom, along with Dominic O’Riordan, Freelance Film Director, worked closely with the team at Fablefx to produce a brief detailing the all-important characteristics of our bee - it needed to be friendly, accessible, graceful, and most importantly for our brand, a honey bee not a bumble bee.

Unusual as it might sound, the journey started with a highly detailed computerised tomography (CT) scan of a real life honey bee, which is not a typical asset used by a VFX team during the process of creating CG characters.

“3D bee model.”)

Using the images from the CT scan, the modellers at Fablefx created a wireframe rendering and from that, they could build a 3D model. Lots of work goes into perfecting the movements at this stage, to ensure the model mimics an anatomically correct bee. 3D rendering of the bee from every angle was shared with Builders Arms to ensure all the movements were realistic, but non-aggressive - this detail was important as the bee was going to be seen close-up. The mandibles of an anatomically correct bee might have felt a little too aggressive close-up, so while keeping the bee realistic, the team softened specific characteristics to achieve this.

Creative Partner at Builders Arms; Steve Hanratty says: “Looking back, one of the interesting conversations we had with FableFX was - how do we imbue the bee with personality?”

A brilliant example of the attention to detail applied by the Fablefx team is how they achieved the vision of giving the bee a personality. The team observed that while animals and humans have eyebrows, which deliver a great deal of expression, bees don’t. Bringing movement to the bee’s antenna enabled us to achieve a similar effect, and our friendly bee was given just a dash of humanity and emotion with this seemingly small detail.

Once the model was made, it was time to look at how to control our bee. The animation team built a control system, called a rig, inside the bee. The rig essentially controls the different parts of the bee by determining how the body of the bee is distorted when limbs and other body parts move. Pretty cool, right?

Next, it was onto the grooming artists to fine tune the bee’s colours and textures. From the body and head to legs, all the body parts were considered when it came to creating the bee’s digital fur, which we hope you’ll agree is a key distinctive feature of our new brand character. After this, ‘look development’ is applied which means the honey bee is tested in different lighting to ensure the digital fur is complete.

Now, it might seem as though the honey bee in its physical form is ready - but what happens when you add a background scene, like the ones in our TV ad?

During the animation process, 20, 30 and 40-second versions of the live-action commercial were shared with the Fablefx team so that they could understand how the bee would play out in each scene. The scenes were analysed alongside the bee to refine the lighting and, at this stage, the lighting from the scene is actually applied to the bee to get the contrast just right.

Steve and Dom received weekly animation updates and versions of the bee in every scene. Many versions of rendering were scrutinised before the final animation you see today. In conjunction with this, the animation team refined the bee’s movements step-by-step to ensure subtle reactions to the goings on of each scene.

Finally, it’s the compositing artist’s job to achieve an overall balanced look. So, they added the final touches on the honey bee to ensure it integrates well into the scene, which is called a ‘plate’ in the world of VFX.

We’re so proud of everyone’s efforts in building our honey bee, from our friends at Builders Arms and Brave Spark to Dominic O’Riordan and the magical team at Fablefx and our own colleagues at PensionBee.

Creative Partner at Builders Arms; Steve Hanratty says: “Bottom line, we got a great bee. Everything we could have wanted. And hand on heart, we don’t think those Jungle Book guys in LA could have done any better.”

From the storyboard ideation to the very first broadcast of the ad during The Great British Bake Off on 20 September, our ‘Believe in the Bee’ campaign took just short of a year in the making. If you’re still yet to spot it on your screens, you can watch the ad on YouTube.

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This page contains information for Tailored Plan customers, born between 1990 and 1995, who have received an email indicating they’ll be switched to the new Global Leaders Plan in February 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 plan range to ensure that their objectives continue to align with changing customer needs and expectations, as well as the regulatory landscape.

PensionBee is launching a new accumulation default plan, Global Leaders, to allow our customers aged under 50 the opportunity to invest in growth, for longer. This change is designed to give you greater control, clearer understanding, and better alignment with your retirement goals.

Why did you select the Global Leaders Plan as an alternative?

The Global Leaders Plan has been developed in response to customer feedback and aims to bring more transparency and growth opportunities to customers in their accumulation years - the years before they reach retirement. This plan will be the default choice for new customers under 50 who join PensionBee and don’t pick one of our other plans.

The Global Leaders Plan invests in around 1,150 of the world’s largest and most successful companies, spread across 48 developed and emerging market countries. It follows a customised MSCI index, built specifically for PensionBee. The plan is structured as a life fund, meaning your savings will continue to have the same protection you currently benefit from under the Financial Services Compensation Scheme (FSCS), with no upper limit should BlackRock, the money manager, fail.

The plan is focused on the world’s biggest and most recognised companies - the ‘global leaders’ - giving customers the chance to be part of their success journeys. It’s a simple and easy to understand 10^{_personal_allowance_rate} equity plan, bringing complete transparency over where and how your money is invested. You’ll be able to see how the events in global markets and companies such as Apple, Microsoft, NVIDIA and Amazon influence your pension.

Additionally, PensionBee will share details on how it votes at the company AGMs (Annual General Meetings), showing how your feedback, gathered through our annual surveys, influences decisions on important issues.

How does the new Global Leaders Plan differ from the Tailored Plan?

The Tailored Plan 2055-57 and the Global Leaders Plan are both higher risk plans investing 10^{_personal_allowance_rate} of your money into riskier equity-like investments.

However, two key differences between plans are:

• the number of holdings; and
• the future behaviour of the plan.

The Tailored Plan 2055-57 invests in around 7,500 companies, of which approximately 40-5^{_personal_allowance_rate} of those are small-cap companies, worth between $250 million to $2 billion. The Global Leaders Plan only invests in approximately 1,000 large or mega-cap companies, which are the world’s largest by value and are worth more than $10 billion.

The other key difference is around future behaviour of the plans. The Tailored Plan is a target date fund, which means it starts slowly moving away from equities and derisking to bonds from age 35 onwards. The Global Leaders Plan doesn’t change its risk profile over time, meaning you’ll stay invested in the world’s biggest companies until you decide to switch plans.

As you can see from the table below, the top 20 holdings for the two plans are very similar, however the weightings are slightly different.

Top 20 companies and their weights in each plan as at 31 January 2025.

How will performance compare to the Global Leaders Plan?

As shown, the starting position for the top holdings in the Tailored Plan, BlackRock LifePath 2055-57 and your new Global Leaders Plan are very similar, although the weights or the percentage each company comprises in your pension, will be slightly different. This means we expect the returns to be broadly comparable in the short to medium term.

However, performance will be different in the longer term. The Global Leaders Plan will stay heavily invested in global equity markets and remain a higher risk 10^{_personal_allowance_rate} equity plan. This is different from the Tailored Plan which slowly starts to derisk from 35 onwards, moving your money to more historically stable asset classes, like gilts and bonds. This asset class, also known as fixed income, seeks to reduce risk by generating regular interest payments as you approach retirement.

How do the fees compare for the Tailored Plan?

Your one simple annual management fee won’t change. The Tailored Plan costs 0.7^{_personal_allowance_rate} annually and the Global Leaders Plan will also have an annual management fee of 0.7^{_personal_allowance_rate} of your pension balance.

Additionally, if you have more than £100K in your pot, your fee will continue to halve on the portion above this.

What are the costs of switching?

We’re working with BlackRock’s transition team to minimise all costs associated with the switch. This means the majority of your funds will not be out of the market during this time but it does mean there will be a “blackout” period when you can’t make contributions.

BlackRock estimates that the cost of this transfer will be around 0.^{_corporation_tax_small_profits}, although it may be lower. At this higher estimate, the average cost for customers, based on an average pension pot size of £20K would be £38. The annual management fee will remain unchanged at 0.7^{_personal_allowance_rate} of your pension balance.

What are the risks of switching?

Your money manager will remain BlackRock, the world’s largest asset manager, with $11.5 trillion in assets under management as of 31 December 2023.

We’ll seek to minimise the risks of this switch by working closely with the team at BlackRock to keep most of your funds invested throughout the switch.

We’ll share more details on the dates that the switch will take place, and the associated “blackout” period, which will be in the first weeks of February 2025. During this time your balance will be unavailable but the majority of your funds will remain invested in the market.

In addition, there is no guarantee that the Global Leaders Plan will perform better than the Tailored in the short, medium or long term. However, based on the feedback we have obtained from customers, we’re confident that the Global Leaders Plan better aligns with our customers’ needs and expectations.

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

If you don’t want to be automatically switched into the Global Leaders Plan, you can switch into one of our other plans. If you want to switch plans, please log into your online account, your BeeHive. Switches take around 12 working days to complete.

The deadline for switching to a different plan is mid-January 2025. We’ll give you further notice of this in December 2024.

Why are staging the rollout?

In order to remove out of market risk for customers, and ensure all customers stay invested in the market throughout, we’re conducting our default transition in stages. This means we’ll move customers across to Global Leaders vintage by vintage throughout 2025, although the new plan will be live from February 2025 and customers can switch into it earlier should they wish.

Our staged rollout approach promotes good outcomes for all our customers in the Tailored Plan.

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. We estimate this will take around three weeks.

We’ll give you around six weeks notice and then two weeks notice before the switch begins, so you have advanced warning to make contributions before or after this happens.

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

We’re working in close partnership with BlackRock 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, make changes to the approach and notify customers.

Risk warning

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

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This article was last updated on 28/05/2025

As interest in simple, growth-focused investing continues to rise, so do the options available to savers. This includes pension plans designed to help customers benefit from the success of the world’s largest and most recognised companies. Along with our 4Plus Plan for savers aged 50 or over, we’re introducing a new default option for savers under 50 - the Global Leaders Plan - launching in February 2025. This upgraded accumulation plan reflects our customers’ desire for greater transparency and further growth opportunities in the years before retirement.

Read on to find out about the Global Leaders Plan.

The Global Leaders Plan at a glance

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Objectives and investment focus

The Global Leaders Plan aims to grow your pension savings by investing in approximately 1,000 public companies. The plan is designed for customers under 50 who want to grow their pension over the long term. It invests primarily in equities (shares of publicly traded companies), which offer higher growth potential but can also fluctuate more in value.

Management style and fees

The plan is managed by BlackRock and follows a passive, index-tracking approach. It uses a customised MSCI Index built specifically for PensionBee, focusing on large and mega-cap companies valued at over $10 billion.

The plan excludes investments in:

• tobacco;
• weapons;
• gambling;
• thermal coal;
• tar sands; and
• companies that violate the United Nations Global Compact (UNGC), ensuring a diversified and transparent investment strategy.

Holdings and fees

The plan invests in companies like Apple, Microsoft, NVIDIA, and Amazon, representing global industry leaders and providing opportunities for long-term growth.

The annual fee for the plan is 0.70%, and this fee is halved on the portion of your pension balance over £100,000.

Investing in the Global Leaders Plan allows you to benefit from the success of the world’s largest companies while maintaining a straightforward and transparent investment strategy.

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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Why is the Impact Plan being closed?

The Impact Plan was created in 2022 in collaboration with the money manager BlackRock. It was initially selected on the basis of its ability to deliver a diversified portfolio of high quality impact investments.

Last year BlackRock informed us that they intend to modify the investment strategy of the Impact Plan due to market changes and internal considerations. This means that the current impact investing strategy, which closely engages with investee companies, will be replaced by a sustainable strategy that will use advanced computing systems with human oversight for stock selection.

After careful consideration, we believe this means the future of the Impact Plan no longer aligns with our customers’ expectations.

Despite extensive research, we haven’t been able to identify a suitable new impact investing plan that we believe meets our customers’ objectives, without introducing additional undue risk and cost.

As a result, we’ve made the difficult decision to close the Impact Plan in early May 2025.

BlackRock will continue to manage the Impact Plan in line with the current objectives and the strategy won’t change prior to the plan switch occurring in May. This means we’ll leave the Impact Plan before any changes are made.

Why did you select the Climate Plan as an alternative?

The Climate Plan is our newest sustainable plan, created in partnership with State Street. It’s an upgraded sustainable plan that reflects customers’ feedback and goes beyond climate investing to exclude other industries that negatively impact the environment and society.

While the Climate Plan and the Impact Plan have different investment objectives, the Climate Plan is closely aligned with the Impact Plan in terms of exclusions.

Our Climate Plan is designed to reduce investment in polluters and heavy carbon-emitting companies over time, by continually reducing the total intensity of greenhouse gas (GHG) emissions produced by companies in the plan by at least 10% annually. So, even if the global economy uses more carbon over time, the Climate Plan will move in the opposite direction.

The plan’s objective is to align with the goals of the Paris Agreement to keep the rise in global surface temperature well below 2°C. Additionally, it seeks to take advantage of the financial opportunities associated with the low-carbon transition by investing more in green revenues.

The Climate Plan also excludes investing in other industries that harm the environment and society, by removing:

• unsustainable palm oil use;
• controversial, nuclear and other weapons;
• adult entertainment;
• alcohol;
• gambling;
• for-profit-prisons;
• tobacco; and
• environmental controversies.

View the Climate Plan’s top 10 holdings.

Why isn’t there a new alternative for impact investing?

Despite extensive research we haven’t been able to identify a suitable new impact investing plan that we believe meets our customers’ objectives. Other plans on offer would introduce either substantial additional risk or cost, or both.

Impact investing is more time-intensive due to the rigorous nature of due diligence and impact measurement. The smaller and niche markets many impact companies operate in come with higher risks, adding additional cost and the need for active management. Most impact investing funds therefore only invest in 30 - 40 total stocks. It’s this high concentration, along with the inability to offer 100% FSCS protection in line with our other investments, that brings additional risk.

Given these challenges, we don’t believe other impact investing options currently available are appropriate for our customers’ retirement needs.

How do the fees compare for the Climate Plan?

The Impact Plan costs 0.95% annually and the Climate Plan will have an annual management fee of 0.75% of your pension balance.

Additionally, if you have more than £100,000 in your pot, we’ll halve the fee on the portion above this amount.

How will the performance of the Climate Plan compare to the Impact Plan?

The new Climate Plan strategy launched on 30 September 2024. You can see the performance of the plan from that date using the Morningstar link.

You can also find the Climate Plan’s factsheet on our plans page. Please note the Climate Plan performance data begins from 30 September 2024.
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What are my options if I don’t want to be switched to the Climate Plan?

If you don’t want to be automatically switched into the Climate Plan, you can switch into one of our other plans. To switch, log into your BeeHive (your online account) and tap ‘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.

Can I switch plans earlier if I want to?

Yes, you can switch to a new plan, including the Climate Plan, at any point before mid-April. 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-April 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 Impact 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 the Climate Plan once the switch is complete.

What if I want to withdraw funds at this time?

Once the switch begins, your BeeHive balance will be frozen until it completes. We estimate this could take up to 20 working days. You won’t be able to withdraw funds during this time. If you have regular withdrawals set up on your account we’ll contact you separately to discuss this.

If you were planning to make an ad hoc withdrawal in April or May this year, we’ll give you around six weeks notice before the switch begins, so you can make any necessary withdrawals then.

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.

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. However, the majority of your funds invested will remain in the market at this time.

Therefore, your pension will still be subject to 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.

However, there are always small subscription and redemption costs associated with fund switches. These are usually in the region of 0.06% of your pot, but can be higher or lower. 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.

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

We’re working in close partnership 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. We will delay the plan switch in extreme market conditions.

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 retirement approaches, pension savers often prioritise stability when it comes to their investment choices. The 4Plus Plan is designed for those aged 50 and over, offering a carefully managed pension solution.

At PensionBee we offer two default plans depending on your age:

• under 50s will be invested in our Global Leaders Plan designed for the ‘accumulation’ (or growth) years; and
• over 50s will be invested in our 4Plus Plan designed for the ‘decumulation’ (or withdrawal) years.

With a focus on balancing growth and stability, the 4Plus Plan aims to deliver consistent performance, helping savers confidently transition into retirement while optimising their hard-earned savings.

Read on to find out about the 4Plus Plan.

The 4Plus Plan at a glance

Objectives and investment focus

The 4Plus Plan is designed to support savers aged 50 and over as they approach and enter retirement.

The plan takes a medium-risk approach by investing in a mix of asset types:

• growth-oriented assets such as equity (company shares), commodities, real estate and others;
• moderate assets such as corporate bonds; and
• defensive (capital preservation) assets such as cash.

The 4Plus Plan asset allocation is well diversified and adjusted on a regular basis by a team of experts. This approach provides investors with stronger levels of control than passive index-tracking funds during highly volatile periods.

The plan aims to deliver long-term growth of 4% above the Bank of England’s base rate over a minimum five-year period, balancing growth and stability to meet savers’ needs.

Management style and fees

The 4Plus Plan follows an actively managed investment strategy, with its asset allocation adjusted weekly by State Street to reflect market developments. This dynamic approach ensures the plan remains aligned with the needs of savers who are nearing retirement, balancing growth opportunities with stability.

Holdings and fees

The plan invests in a diversified mix of assets, including equities, bonds and cash, to provide a balance of growth and stability. Equities offer higher growth potential, while bonds and cash traditionally reduce volatility and offer lower and steadier returns. To view the top 10 holdings in the 4Plus Plan, along with our full range of plans, check out our blog: Top 10 holdings in your pension.

Investing in the 4Plus Plan offers a dependable and responsible path to retirement, offering savers peace of mind as they prepare for the next stage of their financial journey. The annual management fee for the plan is 0.85%, and this fee is halved on the portion of your pension balance over ^{_high_income_child_benefit}.

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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As lockdown loosens, so has my spending!

I kept a spending diary during the first month of lockdown, and then again for the month from June 15 as lockdown loosened, and boy there’s a big difference. As a personal finance journalist and money blogger, I’m a fan of spending diaries as a tool for seizing control of your cash.

Over on my blog, Much More With Less, I spilled the beans on how spending for our family of four changed when coronavirus kept us cooped up at home. It’s been fascinating to see how our spending changed all over again once things started to re-open.

It’s also been fascinating to see how another family coped financially, by comparing spending diaries with fellow blogger and mum of three Lynn Beattie over at Mrs Mummypenny. (Check out Lynn’s posts during lockdown and after lockdown).

Like me, Lynn is self-employed, and lives in a four-bed house outside London - I’m in Suffolk, Lynn in Hertfordshire. Lynn is recently single but our kids are similar ages: my two are 12 (Isabel) and 10 (George) while Lynn has 12-year-old Dylan, 10-year-old Josh and Jack, aged 7.

Read on to find out where I saved, where I blew my budget, how it stacked up with Mrs Mummypenny - and what I’ve learnt since lockdown.

Overall

My spending definitely reflects the changes in lockdown, shooting up almost 85% compared to the first month in quarantine. Suddenly, whole categories of spending have reappeared: holidays, eating out, car costs and personal care as, for example, hairdressers re-opened.

As a result, my spending rocketed from £2,360 for the month after March 21 to nearly £4,365 in the month after June 15.

Meanwhile Mrs Mummypenny cut right back when lockdown started, limbo-ing lower than £1,800 for the month. But more recently, Lynn’s outgoings soared to £8,400 in the month since lockdown loosened - nearly double mine!

However, Mrs Mummypenny’s headline figure wasn’t all spending. Lynn actually stashed away far more cash than I did, pouring ^{_basic_rate_personal_savings_allowance} each into fixed-term savings, stocks and shares individual savings account (ISA) and pension, and investing a chunk of nearly £1,333 in her business.

Strip out those savings, investments, pensions and work expenses, and our monthly spending comes down to a virtually identical £4,144 for me and £4,074 for Mrs Mummypenny.

Within those totals, we have taken different approaches. Lynn has got right back out there, spending much more than I did on eating out, new clothes and new beds and bedding.

My big splurge was on holidays, now we can finally get away, and I forked out for the annual insurance policy for our two cars. The pandemic has also affected many people’s mental health, and we’ve spent money on counselling - something we’re incredibly lucky we can afford, faced with lengthy NHS waiting times.

Otherwise, I’m still taking a more cautious approach to our family finances, concerned about the continuing impact of coronavirus. Here’s where we spent and saved on different categories.

Bills

Bills and groceries are still two of my top five biggest spending categories, although my bills were lower than in the first month of lockdown, at nearly £590 compared to £906, because we didn’t have to fill the oil tank again. I finally caved in during lockdown, and signed up for Netflix, which adds £5.99 a month to our total. Our monthly payments for electricity went up, reflecting increased use with all four of us at home all the time. Next month, this will be lower as a friend switched to Bulb using my referral link, so we both get £50 credits.

We also had to pay our annual bill to the council, for emptying the garden waste wheelie bin.

Mrs Mummypenny’s bills were lower, while she’s taking advantage of a mortgage repayment holiday. Thankfully, we cleared our mortgage by moving from London to Suffolk, and don’t have any debt payments.

Groceries

I hoped to see my groceries bill fall after lockdown, but that hasn’t really materialised.

As I started going back to supermarkets, rather than relying on deliveries, I was able to start buying some cut-price short-dated food again, and also picked up a £3.09 Too Good To Go box from Morrisons.

However, starting Plastic Free July, and trying to buy food locally without plastic wrapping, has kept my food spending not far off lockdown levels: £456 compared to £478, so only 5% lower. Lynn’s grocery bill was almost identical, at £447 in the month after lockdown.

Eating out

Eating out has returned after lockdown, for the bacon sandwiches and ice cream when we were first allowed to drive to destinations further afield and headed to the beach at Walberswick. We also treated ourselves to a rare takeaway from a local Indian restaurant. £68.60 well spent.

Meanwhile Mrs Mummypenny has been delighted at the chance to grab drinks and eat out again, racking up nearly £337 including a Chinese takeaway, several lunches at Café Vero, Subway, Wagamamas, a pub and a celebratory meal out in London.

Holidays

Holidays surged from zero during lockdown to more than a third of our monthly spending - far and away our biggest spending category at a chunky £1,520. Spot the peak prices during school summer holidays!

As holiday accommodation re-opened, we booked a week in a holiday cottage on a farm in Yorkshire, with access to a shared swimming pool. We also picked up a last-minute vacancy on a gorgeous glamping site locally.

The nearest I got to a saving was using Snaptrip.com to search for a holiday cottage, with a best price guarantee and the chance to earn £45 cashback from TopCashback on the booking. After months and months of being stuck at home it feels amazing to stay somewhere else overnight.

Mrs Mummypenny also spent just over ^{_basic_rate_personal_savings_allowance} on holidays, for a week in Norfolk, train to Penzance and a hotel there, plus a flight to the Scilly isles and deposit on accommodation.

Car

After spending zip all on cars during lockdown, the annual car insurance bill for our two cars, plus finally needing petrol, pushed this category over £370. At least the premium was lower than last year, with a longer no-claims bonus now we’ve owned our hybrid second car for over a year.

Lynn spent pretty much the same during lockdown as afterwards – £186 versus £199 – with her regular monthly payments for car financing and insurance.

Personal care

Personal care came from nowhere during lockdown to become my third highest spending category. My husband and I were delighted to get to the hairdressers, after they reopened, and my husband also had a physiotherapy appointment for back problems working at our dining table. The impact of lockdown also showed in the cost of counselling, pushing the total up to just under £550 for the month. Tough times.

Lynn also paid for counselling in the aftermath of her divorce, taking her personal care category to a little over £184.

Leisure and fun money

Our spending on leisure and fun fell since lockdown, from nearly £265 to just over £200, perhaps because once we could go further afield, I made fewer guilt-driven purchases trying to keep the kids entertained.

My own ‘fun money’ went on flute lessons and WeightWatchers membership, plus a novel and a china plate on my first visit to a charity shop since lockdown, while my husband’s fun money went on bass guitar lessons and subscriptions to Apple music and the Guardian.

On the leisure side, with cinemas still closed, I spent a few pounds on DVDs during my trip to the charity shop, and we downloaded a couple of films onto a tablet before heading to the glamping site.

We also booked timed tickets to Ickworth, the National Trust site where we met a friend for a picnic for her birthday. Wonderful to be able to meet up with people outside our family once again!

Mrs Mummypenny’s spending on leisure and her personal fun money went from just under £180 to £164, including getting her nails done, as salons reopened, hair dye and supporting local businesses with a Standon calling poster.

Children

Expenses for my children mainly went on my son’s piano lessons by Zoom, and weekly work packs preparing for 11+ exams for secondary school. I also got my daughter a new top.

Otherwise neither of my children returned to school before the end of the summer term, so I’m holding off buying new school shoes and uniform until just before term restarts in September, in case they grow even more.

Clothes and shoes

I still haven’t spent anything on clothes or shoes, but Lynn really went for it at just over £^{_pension_age_from_2028}6, including a couple of fab dresses from Retro Revival.

Cleaner

I carried on paying my cleaner during coronavirus, but it’s been a big relief now she’s able to return each week. Our home is now a distinctly nicer place to live. We spent nearly £100 over the month, while Lynn spent half as much on a couple of visits.

Household

Our household spending nudged up from £58 to £80 odd, mainly because we could finally get the boiler serviced once non-emergency appointments resumed. I also paid to get shampoo and conditioner bottles refilled, as part of Plastic Free July.

Meanwhile Mrs Mummypenny spent roughly the same £250 during and after lockdown, driven up this month by a couple of new beds and bedding.

Other categories

My spending on presents went up a little after lockdown, from nearly £50 to £78, celebrating three birthdays including my sister’s and a friend’s son’s 18th – no chance of a big 18th birthday bash! Lynn spent a bit on a present for one of her children’s teachers, tea and face masks, rising from £18 during lockdown to £23.

Otherwise, we both spent minimal amounts on pet food, and I picked up poo bags and puppy snacks when a local shop re-opened. I donated a tenner to Concern Worldwide for Syrian refugees, while I brace myself before taking the Ration Challenge again, while Lynn spent £26 on a ticket to a charity event.

Work expenses

My work expenses came down compared to lockdown, at £41 compared to £156, as I didn’t buy anything major this month: printer paper, software and newspaper subscriptions.

Otherwise I spent a little opening a Transferwise card and account, as increased blog traffic during lockdown mean I’ve been able to join an ad agency, Mediavine. Transferwise should help cut costs when transferring ad earnings paid in US dollars into pounds.

Normally I work from home in glorious peace, but it’s been tricky juggling work and home schooling with my husband and children around 24/7. Lockdown may have loosened, but my husband and kids still aren’t back in the office or at school.

Meanwhile Lynn made the most of the time her children spent with her ex and invested big time in her business, with work spending up from £254 to £1,333. This included expenses of nearly ^{_basic_rate_personal_savings_allowance} for a website redesign and photo shoot for new profile pics, plus editing costs for her new book, The Money Guide To Transform Your Life, business coaching, accounting software and subscriptions for software, Zoom and podcast hosting.

Savings, investments and pension

During lockdown I finally set up a small monthly pension payment, so that went out, plus regular transfers into an investment app I’ve been testing. These outgoings were similar during and after lockdown: £1^{_state_pension_age} versus £180. I’m intending to top up both investments and pensions with lump-sums later in the financial year, depending on my freelance work flow.

Lockdown really focused Mrs Mummypenny’s mind on setting aside money for the future. When lockdown started, Lynn was keen to conserve cash, and only put £120 in savings. Since then, taking a three-month mortgage payment holiday freed up £3,600 that would normally go to her lender, so Lynn was able to split £3,000 equally between fixed-term savings, her stocks and shares ISA and her pension. Lynn is delighted that she’s been able to build up her emergency fund to six months of essential expenses.

Lockdown learnings

Lockdown was a great leveller. As so much shut down, spending focused on essential bills and groceries for me and Mrs Mummypenny.

Since restrictions loosened, I’ve seen my spending surge, driven by different categories of holidays, car costs and personal care. I remain keen to support small businesses where possible, such as buying food from the local butchers, fish van and Hadleigh market, birthday presents on the high street and music lessons from local teachers.

However, I’m still cautious about splashing much cash on non-essentials. I’m so grateful we had enough savings, and our finances were stable enough, to afford the holidays but we won’t be visiting many shops or restaurants.

Meanwhile Lynn has spent much more on eating out, clothes and household expenses, seized the chance to invest in her business and also set aside large sums towards her financial future.

Lockdown rules may have changed, but life hasn’t returned to normal yet, and nor has our spending. With the potential for a second wave of coronavirus, and further damage to the wider economy, I’m still keen to keep up my spending diary and keep my spending down.

Faith Archer is a Personal Finance Journalist and Money Blogger at Much More With Less. Check out Faith and Lynn’s videos about spending during lockdown and after lockdown.

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Hundreds of thousands of retired women are due almost £3 billion in underpaid State Pensions. While some women on small State Pensions are owed tens of thousands of pounds in backdated payments, plus higher pensions every week in future.

For women born before 6 April 1953, who are married, divorced or widowed, and get less than £82.45 a week in State Pension, it’s worth checking if you’re entitled to more, particularly if your husband, ex-husband or late husband had a full basic State Pension.

State Pension based on the husband’s contributions

The State Pension provides a financial lifeline for millions of retirees but changing rules have created a tangled mess. I find it particularly infuriating that for those reaching State Pension age before April 6, 2016, the whole system was designed around married couples, where the woman was financially dependent on a male breadwinner.

Under this previous system, married women are entitled to State Pension payments based on their husband’s National Insurance Contributions (NICs). Many older women only built up low State Pensions in their own right, if they made little or no NICs or paid Married Women’s Stamp at a reduced rate. Instead, married women were entitled to a top up once their husband turned 65, dragging the wife’s payments up to 6^{_personal_allowance_rate} of her husband’s basic State Pension.

Where the husband is on the full basic State Pension - currently £137.60 a week - the wife would be entitled to £82.45 a week. Where the husband gets less, the wife would get 6^{_personal_allowance_rate} of the lower amount.

Why did women get underpaid?

Many missed out on extra money either due to government computer glitches or because they didn’t realise they needed to claim once their husband hit pension age. How much you’re owed depends on whether your husband reached 65 before or after 17 March 2008. If he reached State Pension age afterwards, when the increase should have been automatic, you’re entitled to a lump sum worth all your underpayments right back to your husband’s 65th birthday.

Some women over 80, regardless of marital status, may also have missed out on an ‘over 80s’ top up that ought to have been added automatically.

This money should now be paid without you lifting a finger, as a team of civil servants at the DWP is now trawling through the records to identify who’s owed what. The Office for Budget Responsibility estimated that it may cost almost £3 billion over the next six years to sort out these underpayments.

However, if your husband turned 65 before 17 March 2008, you can only backdate your claim for a year - and will need to contact the Pension Service to get any uplift.
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Who else could be missing out on State Pension payments?

The underpayments aren’t restricted to women who are still married. In rare cases, husbands may have been due extra State Pension due to the wife’s National Insurance record. Divorced women may have missed out on extra money based on their ex-husband’s NICs. Widows may have been underpaid while their husband was alive, and not have received extra due after his death. Finally, families of those who were underpaid their State Pension but have since died, may be able to claim too.

If you think you might have been underpaid your State Pension, contact the Pension Service on 0800 731 0469. Phone lines are open Monday to Friday, from 9:30am to 3:30pm.

Faith Archer is a Personal Finance Journalist and Money Blogger at Much More With Less. Check out Faith and Lynn’s videos about spending during lockdown and after lockdown.

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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Tens of thousands more women have been underpaid their State Pension than previously expected, according to the Department for Work and Pensions (DWP) – but yet more may have missed out.

In its annual report, the DWP now estimates that 237,000 pensioners have been underpaid the State Pension they were due, with the total now totting up to £1.46 billion in arrears, with underpayments dating back as far as 1985. This is an increase of 105,000 people and £429 million compared to last year’s estimates.

The problems mainly affect women born before 6 April 1953, and the change is mainly due to a hike of over half a billion pounds owed to widowed pensioners. The average amounts returned to widows in the UK came to just over ^{_money_purchase_annual_allowance}, which could make a big difference during the current cost of living crisis.

The DWP is midway through a massive correction exercise, to identify errors stretching back more than 30 years and put them right. It’s thrown 460 staff at the underpayments problem, as of March 2022, to process cases and sort out the errors. However, the DWP isn’t even pretending that it will repay all the arrears, confessing that it doesn’t expect to be able to trace the next of kin for all the underpaid pensioners who have since died.

Who is affected?

There are three main groups of people who are affected:

• Married pensioners who reached State Pension age before 6 April 2016 with little or no pension in their own right, but who were entitled to more based on their spouse’s National Insurance record (‘spouse top up’ or ‘category BL uplift’). The wife’s payments should have been pushed up to 6^{_personal_allowance_rate} of her husband’s basic State Pension, once he turned 65. Since 17 March 2008, this increase should have been applied automatically, but computer failures mean it didn’t always happen. Before then, married women had to claim the increase when their husbands turned 65, but many didn’t.
• Widowed pensioners, who should have inherited extra State Pension payments after their spouse died (‘missed conversions’).
• Pensioners over 80 on low pensions, who were entitled to 6^{_personal_allowance_rate} of the basic State Pension after turning 80 (‘category D uplift’).

Who else has now been identified as affected?

Recently, The DWP has admitted that even more people have been underpaid their State Pension, due to a new error where credits for time at home looking after children were missing from National Insurance records. For people who reached State Pension age before 6 April 2010, Home Responsibilities Protection (HRP) reduced the number of qualifying years needed to get a State Pension, where someone stayed at home to look after children for whom they received Child Benefit, or to look after someone who was sick or disabled.

Apparently, HMRC failed to record some periods of HRP, which could really reduce State Pension payments to parents and carers. However, the DWP can’t work out how much has been underpaid or correct payments, until the HMRC identifies those affected.

The Public Accounts Committee warned that yet more groups of pensioners may have been underpaid, but not yet detected, such as divorcees, while the DWP hasn’t ruled out that even more groups may be identified.
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How to check about underpaid State Pensions

The DWP launched a new page on 8 July to help families of people who were underpaid their State Pension, but sadly died before the problem was corrected. The new page allows next of kin to ask for more information if they think someone who died was owed extra State Pension – and potentially claim the missing money.

It should help families of those who were married, divorced or widowed when they died, or died when over 80, but didn’t get the automatic increases to their State Pension they were owed. Usefully, the page includes a table showing how much people should have received, at 6^{_personal_allowance_rate} of the basic State Pension, in previous years.

The people the DWP are most likely to have problems tracking down are:

• Married women, whose husband claimed his State Pension before 17 March 2008, but they reached State Pension age before their husband and didn’t make a new claim for extra pension.
• People who were already claiming their State Pension and then got divorced or had their civil partnership dissolved, but didn’t tell the DWP about it.
• A member of a couple where both had reached State Pension age, but the husband, wife or civil partner of the person who has died hadn’t yet claimed their State Pension.

For more about who missed out and why, see the previous post: Are you or retired female relatives owed thousands of pounds in underpaid State Pension?

If you think you may have been underpaid your State Pension, or someone you know may have been that has now deceased, you can contact the Pensions Service on 0800 731 0469.

Backto60 women

These new problems that have been identified with State Pension underpayments come in addition to all the women born in the 1950s who suffered financially and emotionally, when the age they were due to receive their State Pension was hiked up further and faster than expected, from 60 to as high as ^{_state_pension_age}.

Faith Archer is a Personal Finance Journalist and Money Blogger at Much More With Less.

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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Since the Autumn Statement was delivered on 17 November, pensions and individual savings accounts (ISAs) have become more important than ever before. The economy’s in crisis, inflation‘s soaring, households face rising energy costs, bills and interest rates. The latest Chancellor, Jeremy Hunt, has had to make tough choices.

Freezing tax thresholds, cutting tax allowances and even increasing Child Benefit in line with inflation all make pension payments more attractive, if you’re lucky enough to have the spare money to invest. Read on to find out how paying more into pensions and ISAs could help you reduce the amount of tax you pay.

Protection from dividend tax and capital gains tax

The Chancellor announced cuts to the amount of dividends and capital gains people can earn before they start paying tax. Capital gains are the profits earned from selling assets that have gone up in value, such as shares, a second home or artwork. While dividends are profits paid out by limited companies to their shareholders.

The capital gains tax (CGT) allowance will be cut from £12,300 to £6,000 in the tax year 2023/24. It’ll take another cut in 2024/25 when it drops down to £3,000. Similarly, the dividend allowance will be reduced from ^{_tax_free_childcare} to ^{_basic_rate_personal_savings_allowance} from the tax year 2023/24, and it’ll be further reduced to just ^{_higher_rate_personal_savings_allowance} from the tax year 2024/25.

If you want to escape tax on gains and dividends, you could consider taking advantage of pensions and ISAs rather than investing via general accounts. Pensions and ISAs have the superpower that means any investments inside them are able to grow untouched by the tax man, so you can hang onto more of your own money.

More people will be able to get higher tax relief on pensions

The Chancellor extended the freeze on the amount that can be earned before paying ^_basic_rate basic rate tax, known as the ‘Personal Allowance’, so that it will be stuck at £12,570 per year until the tax year 2028/29. Similarly, the threshold when ^_higher_rate higher rate tax kicks in will also be frozen at £50,270 a year until the tax year 2028/29.

Rather than scrapping the ^{_additional_rate} additional rate income tax altogether, as previous Chancellor Kwasi Kwarteng proposed, Jeremy Hunt’s actually making more people pay it, by reducing the threshold from £150,000 to ^{_lower_earnings_limit},140 a year from the tax year 2023/24.

Freezing thresholds is a way of ensuring people face higher tax bills in the future, as wage rises push millions over the thresholds. By 2027/28, an extra 1.6 million people are likely to be paying income tax, up from 34 million to 35.6 million, according to forecasts by the Institute for Fiscal Studies. The number of higher or additional rate taxpayers is also expected to shoot up by 1.7 million.

The silver lining of landing in a higher income tax bracket is that you’ll then get higher tax relief on your pension contributions. To encourage people to save for retirement, the government adds tax relief to pension payments, based on your highest income tax rate.

Most basic rate UK taxpayers automatically get a ^{_corporation_tax} tax top up on their pension contributions, but eligible higher and additional rate taxpayers can also claim an extra ^{_corporation_tax} and 31% tax top up via Self-Assessment. Even those pushed into paying income tax for the first time will potentially be able to pay more into their pensions and nab extra tax relief. Non-taxpayers can put a maximum of £3,600 a year, including tax relief, into a pension. But once you start paying basic rate income tax, most people are allowed to stash away up to 10^{_personal_allowance_rate} of earnings, to a maximum of £40,000 a year.

Protection from inheritance tax

Pensions could also save you money on Inheritance Tax (IHT), as the Chancellor also froze the IHT thresholds until the tax year 2028/29. Few families actually pay IHT, but when they do, the ^_higher_rate tax hits hard. In the tax year 2019/20, only 4% of deaths resulted in an IHT bill, but the average bill topped £216,000, according to the Office for National Statistics (ONS).

Inheritance Tax is charged if your ‘estate’ – that’s the value of your property, money and belongings at your death – is worth more than ^{_iht_threshold}, after debts are settled. There’s also a £175,000 ‘residence nil rate band’, which applies when leaving your home to your children or grandchildren. Anything that married couples or civil partners leave to each other, up to £1 million, passes free from IHT.

While the thresholds are frozen, rising house prices and inflation will push more families into paying IHT, with potentially bigger bills. However, any money left in your pension fund when you die passes to your nearest and dearest without IHT, so long as you’ve named them as beneficiaries. So topping up your pension pot is one way to avoid paying extra tax.
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Hang onto more generous Child Benefit

The Chancellor announced that the State Pension and assorted benefits, including Child Benefit, will be increased in line with inflation at 10.1% from the tax year 2023/24. This means a family with two children will see their weekly payments go up from £36.25 to £39.90.

Child Benefit is withdrawn for higher earners, by 1% for every £100 in income over £50,000 a year brought in by the highest earner in the household. However, you can deduct pension contributions from your income before calculating the High Income Child Benefit Tax Charge. If paying more into your pension brings your income below ^{_annual_allowance} a year, you can hang onto more of this increased Child Benefit, and if it dips below £50,000 a year, you’ll be able to keep the full whack.

Warning signs about State Pension age

The Autumn Statement also hinted that the State Pension age may be increased further and faster than expected, by calling for a review to be published in January 2023.

Currently, those that are eligible for the State Pension can claim from the age of ^{_state_pension_age} (rising to ^{_pension_age_from_2028} in 2028). The review‘s due to consider whether the rules around pensionable age are appropriate, based on the latest life expectancy data and other evidence, and whether the increase to age 68 should be brought forward.

If you don’t fancy staggering on at work until your late 60s, stashing extra cash in pensions and ISAs can bring the freedom to retire earlier. Right now, you can get your hands on private and workplace pension money as early as 55 (rising to 57 in 2028), while money from your ISA can be withdrawn at any time.

Thanks to the Autumn Statement, paying more into your pension can help you:

• Stay within the new thresholds for capital gains and dividends, when their tax-free allowances are cut in the tax years 2023/24 and 2024/25.
• Nab extra free money in tax relief, as thresholds frozen until 2028 will push more people into paying income tax, and more into paying higher rates.
• Save money on Inheritance Tax, with IHT-free thresholds also frozen until 2028.
• Hang on to Child Benefit, which is going up by 10.1% in the tax year 2023/24.

Faith Archer is a Personal Finance Journalist and Money Blogger at Much More With Less.

Risk warning

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

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This article was last updated on 06/04/2025

Get your retirement planning off to a great start by checking your State Pension forecast. The State Pension may not be megabucks, but it’s definitely worth discovering how much you’ll get and when, as this can vary. Read on for a step-by-step guide to get your forecast.

How much is the State Pension?

The State Pension is regular money you get paid by the government after reaching retirement age. This is currently 66 and rising to 67 in 2028, and the amount you’ll get depends on your National Insurance record. The full new State Pension is currently £230.25 a week, which tots up to just over £11,973 a year for tax year 2025/26, and it goes up every April. Right now the government is committed to pushing it up each year due to the triple lock on the State Pension by whichever is highest of three figures:

• average earnings growth;
• inflation based on the Consumer Price Index (CPI); or
• 2.5%.

It’s worth noting that you only get the full whack if you’ve racked up enough National Insurance contributions, whether as payments while working, or as credits while unable to work, for example when receiving certain benefits or caring for children under 12. Typically you need at least 10 ‘qualifying years’ on your National Insurance record to get anything, and you need 35 qualifying years to get the whole lot.

When will I get my State Pension?

Right now, State Pension payments kick in from the age of 66, unless you choose to delay it, but that retirement age is a moving target. It’s due to increase to 67 by 2028, and to 68 by 2046, although the government has been murmuring about whether to speed up the increase to 68. If you’re not sure what age you’ll be able to access your State Pension, PensionBee’s State Pension Age Calculator can help.

How can I check my State Pension forecast?

The easiest way is to head online. But if you’re at least 30 days away from State Pension age, you can also fill in a BR19 application form and send it by post, or request a forecast from the Future Pension Centre on 0800 731 0175 or 0800 731 0176. You can ask the Future Pension Centre to send you a copy of a BR19 form too.

Pop in your Government Gateway details

To access your State Pension forecast online, click on ‘Start now’ and then put in a Government Gateway user ID and password. If you’ve ever filed a Self-Assessment tax return online, you’ve probably already got these details.

Creating a Government Gateway account

If you don’t already have a Government Gateway account, you’ll need to click on the link to ‘Create sign in details’, put in your email address and pop in the code sent to your email address. If you then enter your name and create a password, it’ll generate a Government Gateway user ID. Make sure you print out your user ID or make a note of it somewhere safe.

If you’re doing this to check your State Pension forecast, click on the option to set up an individual account, decide how you want to receive verification codes and then verify your identity (you’ll need your National Insurance number to hand).

Usually, you can choose between answering questions about your passport or information from your payslips or a recent P60. If you can’t, you can opt for questions based on your credit report – so about bank accounts, mobile contracts, loans, past addresses and so on.
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Accessing the Government Gateway

Once you’ve entered your Government Gateway user ID and password, you’ll be asked to choose how to get an access code, whether by text or a phone call.

Select the option you prefer, click ‘continue’ and then pop in whatever six digit code you get sent:

View your State Pension summary

Bingo, you’re through to your State Pension summary! At the top, it tells you the date your State Pension is due to start, and how much pension you’re forecast to get by then. The amount is based on current State Pension payments, rather than guessing how much the State Pension will be in years to come. As it says, there’s no increase based on inflation, but you can weigh up what the forecast would buy at today’s prices.

The screen grab shows my forecast, and (many cheers) it looks like I’m on track to get the full amount.

State Pension based on National Insurance contributions (NICs)

Scroll down your forecast, and you’ll see how much State Pension you’re entitled to based on your current National Insurance record, and how many more years you need to contribute to get a higher State Pension. Thankfully, I only need to pay NICs for another four of the next 15 years before April 2038 to qualify for a full new State Pension, which sounds eminently possible. Sadly, I won’t be able to stop paying NICs as soon as I qualify for the whole lot – if I keep on working, I’ll have to keep paying NICs right up until I hit the State Pension age.

Scrolling further down reveals the caveat that, although I’m currently due to reach State Pension age in 2038, this may increase by up to a year.

View your National Insurance record

It’s worth clicking on ‘View your National Insurance record’, as this lists all your NICs by year, including whether you have full years or didn’t contribute enough.

Remember how you need 35 qualifying years to get the maximum State Pension?

If you have gaps in your National Insurance Record, you might consider making extra payments to qualify for more pension. Normally, you can only make voluntary contributions to fill any gaps in the previous six years. However, until April 2025, there’s the chance to make up the difference much further back, for years between April 2006 and April 2018. This potentially applies to men born after 5 April 1951 and women born after 5 April 1953.

Don’t assume you have to top up any gaps. If you’ve got loads of time before retirement, and will easily rack up the 35 years needed before then, it’s probably not worthwhile. But if, for example, you’re close to retirement but aren’t on track for a full State Pension, or have years which would be super cheap to top up because you only missed out by a few weeks, it could be worth plugging some gaps.

Give the Future Pension Centre a call on 0800 731 0175 if you haven’t yet reached State Pension age, and want to find out if you’ll get more pension by paying for extra years. I have six years when I didn’t contribute enough, while I was at university and during a year out. But my gaps were too long ago to top up, and it wouldn’t be worth paying anyway, as I only need to rack up five years of NICs during the next 15 to get the maximum State Pension.

Checking your State Pension forecast sooner rather than later gives you the chance to plug any gaps before it’s too late, as well as discovering how much you’re likely to get and when.

Faith Archer is a Personal Finance Journalist and Money Blogger at Much More With Less.

Risk warning

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

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This article was last updated on 26/09/2025

Juggling income in retirement is rarely as easy as swapping a salary for a pension.

In theory, it sounds so simple: pay into a pension while working, to provide an income when your salary stops. In practice, it can be more complicated if you have multiple pensions that kick in at different ages, plus other investments.

My husband and I, for example, are lucky enough to have reached our 50s with a host of different workplace and personal pensions. Plus, we’re both eligible for the State Pension. We’re not alone – today’s average workers will have 11 different jobs in their lifetime, according to the Department for Work and Pensions (DWP). Each one could come with a different pension pot attached, although you can choose to combine them for easier management. Plus, pensions aren’t the only way to fund retirement. We also have some cash savings, investments in Individual Savings Accounts (ISAs) and rent from a small buy-to-let property.

A combination of different pensions and investments makes managing money in retirement trickier. But it can also give you more flexibility around when you retire and how you tap into your savings. With careful planning, it may be possible to retire a bit earlier, trim your tax bills and, most importantly, avoid running out of money.

Choices about when to retire

As I tear my hair out over retirement planning, I sometimes wish our pension arrangements were as simple as hitting one long-awaited day when our retirement starts. In practice, our mishmash of pensions have start dates strung out over an entire decade - unless we choose to defer any of them.

Currently, the State Pension age is ^{_state_pension_age}, but it’s getting older - in fact it rises to ^{_pension_age_from_2028} in 2028 and may even rise again beyond that. My husband and I will only qualify after turning ^{_pension_age_from_2028}, and younger people face waiting even longer. If you’re not sure what your State Pension age will be, use the PensionBee State Pension Age Calculator to see when you can begin drawing this government benefit.

You can typically get your hands on personal pensions around a decade earlier, from the age of 55, rising to 57 from 2028. With workplace pensions, it’ll depend on the rules of the individual scheme. Personally, I have:

• a couple of pensions I can access from 2029 (when I’m 58);
• a workplace pension that starts from 2036 (when I’m 65); and
• my State Pension, which I can access from 2038 (when I’m ^{_pension_age_from_2028}).

Meanwhile my husband, who’s a bit older, has a couple of pensions that he can tap into from 2028, four due to start in 2033, and another due in 2035 alongside his State Pension.

Our mixed bag of pensions and investments means we may be able to afford to retire before State Pension age. We could potentially make ends meet before then by either:

• withdrawing the ^{_corporation_tax} tax-free lump sum from some or all of our personal and workplace pension pots;
• starting to take regular withdrawals or ad-hoc withdrawals as and when you need; or
• running down other savings and investments.

This flexibility can be a major benefit if you want to go part-time or stop working earlier. Or if you’re forced to do so for example due to job loss, ill health or caring responsibilities.
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Choices about how to use our pension money

Our jumble of pensions also widens our options when it comes to managing our retirement income.

Regular income from State Pension and defined benefit pensions

My husband and I are both on track to amass the 35 years’ worth of National Insurance contributions needed for a full new State Pension. If we were retiring today, we’d each get ^{_state_pension_weekly}, which adds up to just under £24,000 a year between us (^{_current_tax_year_yyyy_yy}). The State Pension should increase every April, but who knows what this will look like when we retire in 2038!

Fortunately for my husband, three of his pensions are defined benefit schemes racked up from his first jobs. Defined benefit pensions, often known as ‘final salary schemes’, have the advantage that they pay a guaranteed pension income for the rest of your life. You don’t have to worry about what the stock market is doing, or whether you might run out of money in retirement. Two schemes start when my husband reaches 60, with another at 65, and all three are due to increase each year in line with inflation based on the Retail Price Index (RPI).

The combination of defined benefit pensions and the State Pension means we’ll have a reliable bedrock of rising income to cover our essential household bills. Many cheers! Our buy-to-let property will also hopefully provide regular income but there’s always the risk of unexpected bills and time between tenants with no rent coming in.

Transforming defined contribution pension pots into income

The State Pension and defined benefit pensions are the easy ones - they pay a regular income. You might have to decide whether to delay their start dates, and whether or not to take ^{_corporation_tax} of any defined benefit pension as a tax-free lump sum, but otherwise: job done.

With defined contribution pensions, which the majority of modern personal and workplace pensions are, you end up with a pot of money, and then have to decide how to turn that into income. Imagine your employer dumping a bunch of cash on your desk, and saying ‘here, use that to get by for the next few decades’. That’s a defined contribution pension! The size of any defined contribution pension pot will depend on how much you (and any employer) have paid in and how your investments have performed.

After reaching retirement, you can choose whether to:

• delay taking your pension pot and leave it invested;
• withdraw the whole lot, of which ^{_corporation_tax} is tax-free;
• use the money to buy an annuity, which pays a guaranteed income for as long as you live or for a fixed term. You also have the option of taking ^{_corporation_tax} of your pension pot tax-free prior to purchasing an annuity;
• leave the money invested and take a flexible income via pension drawdown. This also gives you the option of taking ^{_corporation_tax} of your pension pot tax-free;
• leave the money invested and take it as a number of lump sums. ^{_corporation_tax} of each withdrawal will be tax-free and the rest is taxable; or
• you can use a mix of all of the above options.

In our case, knowing we have some guaranteed income from the defined benefit and State Pensions means we’re willing to take more risk, in the hope of greater returns, with our defined contribution pension money.

I’m up for moving our defined contribution pensions into what’s called ‘pension drawdown’, and then withdrawing money as and when needed. With pension drawdown, your money stays invested in the stock market, which historically has delivered higher growth over the long term than sticking it in a savings account. However, it also means our balance will bounce up and down with stock market movements and there are some risks. If we withdraw too much, especially after share prices fall, we could run out of money. To avoid this, we’ll need to keep a decent cushion of cash savings, which we can use to top up our income if markets plummet, rather than being forced to sell drawdown investments at a bad time when they are worth less.

Choices affecting our tax bills

Just to throw another bunch of decisions into the mix, the way you access your pension money can affect your tax bills. With pensions, only the first ^{_corporation_tax} can be withdrawn tax-free - the rest is taxable as income. Any regular income from defined benefit and State Pensions? You’re likely to pay Income Tax if you earn more than the tax-free Personal Allowance, currently £12,570 for tax year ^{_current_tax_year_yyyy_yy}, and get hit by higher rate income tax on anything over £55,270 for tax year ^{_current_tax_year_yyyy_yy}.

With defined contribution pensions, you have more flexibility about how much money you take and when. If you withdraw a large lump sum, and it pushes your income into a higher tax band, you could end up with a bigger tax bill than if you made smaller withdrawals over several years. If you keep working after retirement age, you might choose to withdraw less from your defined contribution pensions while earning, and then bump up withdrawals afterwards. No point being taxed on money you don’t need, especially when keeping it invested can provide an opportunity for further growth.

You may also be able to trim your income tax bill in retirement if you use money from ISAs to top up your pension income, as withdrawals from ISAs are totally tax-free.

If Inheritance Tax is likely to be an issue, spending ISA money first can make sense, because ISAs do get counted for Inheritance Tax purposes, while pensions don’t. However, in the Autumn Budget 2024, it was announced there would be a change to Inheritance Tax (IHT) coming into effect from April 2027. From then, most death benefits and unused pensions will likely be included as part of someone’s estate when they die and will therefore be subject to IHT. There are some exemptions, for example, the transfer of assets between spouses and civil partners. Income Tax will continue to be payable by your beneficiaries if you pass away aged 75 or over.

See our Pension beneficiaries article for full details.

So in our situation, if we retire before ^{_pension_age_from_2028}, we’re intending to use ISA money to plug some of the gaps before our State Pensions kick in, because any money left in our defined contribution pensions when we die can pass to our kids free from Inheritance Tax.

Where to get help

Thinking about which pension and ISA money to use and when makes my head hurt, even though I’m a Personal Finance Journalist. If you want to get help, the first port of call, if you’re over 50, is to book a free appointment with Pension Wise. This government-backed service provides guidance on your pension options. You can hear all about my appointment with Pension Wise over on PensionBee’s YouTube.

However, if you want specific suggestions for your personal circumstances, you’ll need to pay for financial advice. Ask around for recommendations or find a qualified local Independent Financial Adviser (IFA) via Unbiased.co.uk or VouchedFor.co.uk. We asked an IFA to plug our figures into a cash flow model, to get an estimate of when we could afford to retire. You can also browse PensionBee’s new retirement hub to learn how to make your retirement dreams a reality as you prepare and adjust for life in retirement.

Faith Archer is a Personal Finance Journalist and Money Blogger at Much More With Less.

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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