Find out more about the top 10 holdings in your pension, companies which are carefully selected by the world’s biggest money managers.

The ‘top holdings’ in your pension are simply the companies you have the largest investments in. When your pension’s invested through PensionBee, these companies are carefully selected by some of the world’s biggest money managers.

Putting your pension under a microscope, you’ll see that you probably own a miniscule percentage of a multitude of companies. This may include the big players in the technology sector, known as the ‘Magnificent Seven‘.

How does your pension grow?

Pensions are designed to grow over decades by investing in a mix of assets types, such as ‘bonds’ and ‘equities’. This mix, called diversification, helps balance the risk and reward of each asset type.

The main asset classes are:

Bonds - essentially loans to companies or governments, where you earn a fixed interest rate over an agreed period.
Cash - money held for stability, offering low risk but typically very low returns compared to other assets.
Equities - shares in companies, where the share price reflects the company’s value divided by the number of shares available.

Does your age impact how you should invest?

When you’re younger, you can usually take more risks with your pension because there’s plenty of time to recover from market ups and downs. Investing heavily in equities, sometimes even 10^{_personal_allowance_rate}, can help maximise growth through compounding - where your returns generate even more returns over time.

As retirement approaches, usually from around 50 years old, it’s wise to gradually reduce risk by shifting into safer assets like bonds or cash. This process, called de-risking, helps protect your savings from market fluctuations, ensuring they’re ready when you need them.

Keep reading to find out the top 10 holdings of your PensionBee plan.

The following represents the equity holdings only and portfolio weights are normalised. Please note that holdings can change at any time and are provided for informational purposes only.

PensionBee’s default plans

Global Leaders Plan

PensionBee’s Global Leaders Plan aims to grow your pension savings by investing in approximately 1,000 of the world’s largest and most recognised public companies. This is our default plan for savers under 50 years old.

	Top 10 holdings	% of equity portion
1	NVIDIA	6.5%
2	Microsoft	4.8%
3	Apple	5.3%
4	Amazon	3.1^{_personal_allowance_rate}
5	Broadcom	2.2%
6	Alphabet Class A	2.1%
7	Meta	1.8%
8	Alphabet	1.8%
9	Tesla	1.7%
10	Taiwan Semiconductor Manufacturing	1.6%

Holdings as of 31 October 2025.

With this plan you’ll benefit from:

one simple annual fee of 0.7^{_personal_allowance_rate}; and
fund management by BlackRock.

4Plus Plan

PensionBee’s 4Plus Plan invests your money in a range of assets that are adjusted on a weekly basis depending on market conditions by experts at State Street. This is our default plan for savers aged 50 years old and over.

	Top 10 holdings	% of equity portion
1	NVIDIA	2.2%
2	Microsoft	1.8%
3	Apple	1.7%
4	Amazon	0.9%
5	Taiwan Semiconductor Manufacturing	0.8%
6	Broadcom	0.7%
7	Alphabet Class A	0.7%
8	Meta A	0.6%
9	Alphabet Class C	0.5%
10	Tesla	0.5%

Holdings as of 31 October 2025.

With this plan you’ll benefit from:

one simple annual fee of 0.85%; and
fund management by State Street.

PensionBee’s sustainable plans

Climate Plan

PensionBee’s Climate Plan aims for the total carbon emissions produced by the plan’s companies to be reduced by at least 1^{_personal_allowance_rate} each year.

	Top 10 holdings	% of equity portion
1	NVIDIA	5.8^{_personal_allowance_rate}
2	Microsoft	4.4%
3	Apple	4.6%
4	Amazon	2.6%
5	Alphabet Class C	2.1^{_personal_allowance_rate}
6	Broadcom	1.8%
7	Tesla	1.7%
8	Meta	1.6%
9	Alphabet Class A	1.4%
10	Taiwan Semiconductor Manufacturing	1.3^{_personal_allowance_rate}

Holdings as of 31 October 2025.

With this plan you’ll benefit from:

one simple annual fee of 0.75%; and
fund management by State Street.

Shariah Plan

PensionBee’s Shariah Plan invests your money only into Shariah-compliant companies. The plan tracks the Dow Jones Islamic Market Titans 100 Index, an index of the 100 largest global stocks that comply with Islamic investment guidelines as approved by an independent Shariah committee.

	Top 10 holdings	% of equity portion
1	Apple	9.1%
2	NVIDIA	8.7%
3	Microsoft	7.9%
4	Amazon	6.4%
5	Broadcom	4.7%
6	Alphabet Class A	4.4%
7	Meta	3.8%
8	Alphabet Class C	3.6%
9	Tesla	3.4%
10	Eli Lilly and Co	1.8%

Holdings as of 31 October 2025.

With this plan you’ll benefit from:

one simple annual fee of 0.^_rate; and
fund management by HSBC Global Asset Management and State Street.

PensionBee’s other plans

Tracker Plan

PensionBee’s Tracker Plan invests your money in global shares and bonds, with investments that follow the world’s markets as they move.

	Top 10 holdings	% of equity portion
1	NVIDIA	4.2%
2	Apple	3.5%
3	Microsoft	3.4^{_personal_allowance_rate}
4	Amazon	2.1%
5	Broadcom	1.5%
6	Alphabet Class A	1.4%
7	AstraZeneca	1.3%
8	Meta	1.2%
9	Alphabet Class C	1.1^{_personal_allowance_rate}
10	Shell	1.1%

Holdings as of 31 October 2025.

With this plan you’ll benefit from:

one simple annual fee of 0.5^{_personal_allowance_rate}; and
fund management by State Street.

Preserve Plan

PensionBee’s Preserve Plan is a money market fund that makes short-term investments into creditworthy companies. This reduces risk and preserves your money.

There’s no equity component to this plan, so there’s no top 10 company holdings.

With this plan you’ll benefit from:

one simple annual fee of 0.5^{_personal_allowance_rate}; and
fund management by State Street.

Pre-Annuity Plan

PensionBee’s Pre-Annuity Plan invests your money in investment grade corporate bonds to provide you with returns that broadly correspond to the cost of purchasing an annuity.

There’s no equity component to this plan, so there’s no top 10 company holdings.

With this plan you’ll benefit from:

one simple annual fee of 0.7^{_personal_allowance_rate}; and
fund management by State Street.

Will my top 10 holdings change?

Yes, your holdings are constantly changing, as the financial fates of the world’s biggest companies play out each day. Currently we’re living in a time where the technology sector is highly lucrative for investors. ‘Big tech’ like Apple and Microsoft have held the top spot of the world’s most valuable companies for over a decade, but this hasn’t always been the case.

We know from historical data that the companies of today may not be the companies of tomorrow. Before that oil and gas giant, ExxonMobil, was the biggest company. And even further back the multi-industry company, General Electric Company, held the top spot. Your money is in experienced hands as our money managers are some of the biggest in the world and make informed decisions based on global appetite and change your holdings accordingly.

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.

What happened to pensions in March 2025?

How did the stock market perform in March 2025 and how does that impact your pension plan? Find out all this and more.

This is part of our monthly pension update series. Catch up on last month’s summary here: What happened to pensions in February 2025?

In March 2025, US President Donald Trump escalated his trade policies. This included sweeping tariffs on key US trading partners like Canada, Mexico, and China. Effective from 4 March, these measures introduced a ^{_corporation_tax} tariff on imports from Canada and Mexico, and ^_basic_rate on Chinese goods.

His administration justified these actions by citing concerns over illegal immigration and drug trafficking. In particular the influx of fentanyl into the United States.

This has caused global stock markets volatility, which is why you may see your pension balance fluctuating more than normal.

Keep reading to find out what these tariffs mean for your pension savings.

What happened to stock markets?

In the UK, the FTSE 250 Index fell by 4% in March. This brings the 2025 performance close to -6%.

Source: Google Market Data

In Europe (excluding the UK), the EuroStoxx 50 Index fell by 4% in March. This brings the 2025 performance close to +7%.

Source: Google Market Data

In North America, the S&P 500 Index fell by 6% in March. This brings the 2025 performance close to -5%.

Source: Google Market Data

In Japan, the Nikkei 225 Index fell by 4% in March. This brings the 2025 performance close to -11%.

Source: Google Market Data

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

Source: Google Market Data

Market reactions and global impact

The announcement of these tariffs led to immediate volatility in global financial markets. This is because stock markets don’t like the uncertainty that these tariffs bring. Major US stock indices experienced significant declines; for instance, the S&P 500 fell by 1.75% on the day of the announcement.

In response to US tariffs, China introduced additional tariffs ranging from 1^{_personal_allowance_rate} to ^_ni_rate on American imports, including agricultural products such as soybeans, pork, and beef. China also implemented export controls and added 12 American companies to its ‘unreliable entities‘ list. This is a list of organisations that are thought to harm China’s national security and interests. Canada announced plans for ^{_corporation_tax} tariffs on $155 billion worth of US goods, while Mexico considered its own set of retaliatory measures.

European markets, however, showed resilience in March. The EuroStoxx 50 Index, representing leading blue-chip companies in the Eurozone, recorded gains. This reflects investor optimism about the region’s economic prospects despite global trade tensions.

How US politics is affecting UK pensions

For UK pension savers, these developments highlight the importance of understanding where pension funds are invested. Whilst many pensions have exposure to US company shares (also known as equities), most are globally diversified. This means your investments are spread across different asset classes and regions. Volatility in American markets has meant a downturn in the S&P 500 during March, and this may have a short-term impact on pension valuations. However, diversification can help mitigate these effects. Notably, European and Asian markets have shown relative stability, which may offset some of the negative impacts from US market fluctuations.

While the long-term consequences of these trade policies are uncertain, it’s essential for pension holders to maintain a long-term perspective. Historically, pension investments have demonstrated resilience, recovering from short-term market disruptions over time. However, past performance isn’t an indicator of future results.

This is part of our monthly pension update series. Check out the next month’s summary here: What happened to pensions in April 2025?

Have a question? Get in touch!

Risk warning

7 ways to spring clean your finances

Spring is the perfect time to declutter - and that includes your finances. Here are seven simple things you can do to spring clean your finances.

Saving for the future as a self-employed worker

Learn about the challenges faced by self-employed workers, what their pension options are and what they should they think about when contributing and withdrawing.

This article was last updated on 24/07/2025

Self-employed people make up ^_ni_rate of the total workforce in the UK - that’s around 4.8 million people. However, only 16% of self-employed people pay into a pension. When we look at the participation rate for workplace pensions in the UK, we see quite the opposite. In 2023, 88% of eligible employees - or 20.8 million workers - contributed to a workplace pension, in part due to the introduction of Auto-Enrolment in 2012.

So what are the challenges faced by self-employed workers, what are their pension options and what should they think about when contributing and withdrawing?

The challenge for self-employed workers

Self-employment can bring flexibility, independence, and ownership. However, you might find that you lack much of the support that comes with paid employment. The reality is, if you work for yourself, you have to open a pension for yourself. This is something that all too often gets overlooked by the day-to-day demands of being a business owner.

When you work for yourself, you might find these three common challenges that work against you when you’re saving towards retirement:

An irregular income - fluctuating earnings can make consistent pension contributions challenging.
A lack of time - much of your efforts are going towards running the business, rather than building your wealth outside of work.
No employer support - unlike employees, you won’t benefit from employer contributions to boost your pension savings.

Saving for retirement as a self-employed person may seem overwhelming, but despite these challenges there are several options available to help you save towards your future as you build your business.

Self-employed pensions

There are two options for self-employed workers - a self-employed pension or a Self-Invested Personal Pension (SIPP). Both are defined contribution pensions that you need to open yourself, but a SIPP allows you to choose your own investments. Whereas with a self-employed pension - like the one with PensionBee - you choose a plan and the investments are made on your behalf.

All pensions (including PensionBee’s self-employed pension) are subject to an annual allowance which limits the amount you can contribute each year without paying tax. This is currently ^{_annual_allowance} (^{_current_tax_year_yyyy_yy}). However, the annual allowance can be reduced for higher earners through a process called ‘tapering’ or for those who’ve started to access their pension. Personal contributions are also limited to 10^{_personal_allowance_rate} of your earnings (whichever is lower).

There’s no limit on the number of self-employed pensions you can have open at any one time. Although, if you have a few, you may prefer to consolidate them into one easy-to-manage plan and potentially save on fees. This may also make things easier for you in retirement as all your savings will be in one place.

If you haven’t used the full annual allowance mentioned above in previous years, you may be able to take advantage of any unused allowances from up to three prior tax years thanks to the carry forward rule.

The age of access for a personal or workplace pension is also earlier than the State Pension age, it’s currently 55, although it’s due to rise to 57 by 2028. So for many retirees, the reality is that they’ll first be able to access their personal or workplace pension savings from their mid 50s, and then their income will be supplemented by their State Pension (if they’re eligible) in their mid 60s.

When you make personal contributions to your self-employed pension, you get what’s called tax relief. This is where the government adds in extra money on top of your contributions. In England, most basic rate taxpayers usually get tax relief on their personal contributions, so for every £100 you contribute, the government adds an extra £25, making it ^{_lower_earnings_limit}. If you’re a higher or additional rate taxpayer, you can claim back even more of your pension contributions via a Self-Assessment tax return. The rules are slightly different for taxpayers in Scotland.

If your business is a limited company, you may be able to make employer contributions into your self-employed pension (alongside personal contributions), which can be treated as a business expense. So if you make employer contributions from your limited company to your pension of £30,000, you still have £30,000 left of your annual allowance to make in personal contributions. Just keep in mind that you can’t receive tax relief on personal contributions above what you earn. So if you only earn ^{_isa_allowance}, the maximum amount your personal contributions can be is ^{_isa_allowance} gross. This works out at £16,000 net income and £4,000 tax relief.

One of the best things about paying into a self-employed pension? The contributions you make either from your limited company or in your personal name reduce the amounts of capital gains tax (CGT) or income tax you have to pay. This is a powerful tax incentive to start saving towards your retirement!

How often should you pay into your self-employed pension?

You can pay into a self-employed pension via lump sums or monthly deposits, much as you would a monthly subscription. With PensionBee’s self-employed pension, you can contribute flexibly and add as much or as little as you like as often as you like.

While there’s no set amount you ‘should’ pay into a self-employed pension, the general principle when investing - the money is invested remember - is that the earlier you start contributing the more you’ll be able to benefit from compound interest. This is where not only do your contributions grow over time, but the ‘growth’ you receive grows as well, creating a powerful snowball effect!

You also need a retirement savings goal to understand not only how much you could have in retirement, but if you’re on track to achieve it too. Handily, Pensions UK have developed their Retirement Living Standards which show retirement lifestyles at three different income levels. These can give you a good idea of what you might need in retirement whether you’re single or in a couple. The table below shows the figures for ^{_current_tax_year_yyyy_yy}.

	Minimum lifestyle	Moderate lifestyle	Comfortable lifestyle
Single	£13,400 per year	£31,700 per year	£43,900 per year
Couple	£21,600 per year	£43,900 per year	£60,600 per year

To achieve the following, pension savers could be looking at the following *pension pot sizes to be able to achieve the above levels of income:

For example:

if you take £4,000 a year out of your ^{_high_income_child_benefit} pension pot and you receive the full new State Pension (^{_state_pension_annually}, ^{_current_tax_year_yyyy_yy}), you could achieve just over the PLSA’s minimum lifestyle with a yearly retirement income of just under £16,000. This would last you beyond your 100th birthday.
if you take around £19,500 a year out of your ^{_threshold_income} pension pot and you receive the full new State Pension (^{_state_pension_annually}, ^{_current_tax_year_yyyy_yy}), you could achieve around the same as the PLSA’s moderate lifestyle with a yearly income of just over £31,300. This would last you around 20 years.
if you take around £32,000 a year out of your £395,000 pension pot and you receive the full new State Pension (^{_state_pension_annually}, ^{_current_tax_year_yyyy_yy}), you could achieve the PLSA’s comfortable lifestyle with a yearly retirement income of just under £43,000. This would last you around 20 years.

*These calculations assume your current and desired retirement age is 65 years old, you have a defined contribution pension pot and you don’t take ^{_corporation_tax} of your pot as tax-free cash. Source: PensionBee’s Pension Calculator.

How can you access the money in a self-employed pension?

When you come to access your pension pot, which you can currently do from age 55 (rising to 57 from 2028), you can take ^{_corporation_tax} of the money as a tax-free lump sum. You’ll then pay income tax on the rest. This is called pension drawdown. You can also buy an insurance product called an annuity, which pays you a fixed income for a term or for the rest of your life.

To work out the best options for you, and to see whether you’re on track to reach your projected retirement savings goal, you can:

use PensionBee’s Pension Calculator;
call the government-backed Pension Wise service from MoneyHelper (for those aged 50 and over with a defined contribution pension); or
seek regulated independent financial advice.

Getting the State Pension when you’re self-employed

Finally, let’s talk about the State Pension. All self-employed individuals are entitled to the State Pension, you just need to have a sufficient National Insurance (NI) record.

You need a minimum 10 qualifying years on your NI record to get any State Pension at all, and 35 qualifying years to receive the full new State Pension amount.

For the ^{_current_tax_year_yyyy_yy} tax year, the full new State Pension is ^{_state_pension_annually} or ^{_state_pension_weekly} a week in the ^{_current_tax_year_yyyy_yy} tax year thanks to the ‘triple lock’.

The age of accessing the State Pension is currently ^{_state_pension_age} for both men and women, but it’s scheduled to increase to ^{_pension_age_from_2028} between 2026 and 2028. To find out when you’re eligible to receive the State Pension, use PensionBee’s State Pension Age Calculator.

However, while the State Pension provides a foundation for retirement income, it’s unlikely to be sufficient for a comfortable retirement. The age of access will almost certainly be higher than it is today by the time many reading this reach their mid-sixties. That’s why self-employed individuals must build additional savings to maintain their desired lifestyle in later years.

Saving for retirement as a self-employed can seem daunting, and requires a lot of dedication and planning. But thanks to modern technology, the opening and management of a self-employed pension itself is something you can do from the palm of your hand. And the ability to make small contributions as and when means you can get started even with small sums, making it ideal for business owners. If you’re interested in opening a self-employed pension, then sign up to PensionBee and start saving towards your retirement today.

Rotimi Merriman-Johnson - also known as ‘Mr MoneyJar‘ - is an award-winning Content Creator, Qualified Financial Advisor and Founder of Mr MoneyJar Limited, a UK-based financial education company. He offers accessible, practical financial education, through digital content, events and one-to-one coaching. Rotimi covers topics such as personal finance, investing, getting on the property ladder and regularly comments on financial and political news events and has been featured on the BBC, The Financial Times, ITV News and Sky News.

Risk warning

Pensions and tariffs: what you need to know

Pensions have experienced some ups and downs lately. The main driver of these changes has been fast-moving news around President Trump, tariffs and trade.

This article was last updated 30/04/2025

Pensions have experienced some ups and downs lately, with balances rising and falling on a daily basis. The main driver of these changes has been fast-moving news around President Trump, tariffs and trade, and knock-on implications for inflation, interest rates and the economy. Here’s a recap of what’s happened this month:

2 April - President Trump begins introducing a number of tariffs (taxes on imported goods) on almost all countries, including key US trading partners like Canada, Mexico, China and the UK. This caused global stock markets to experience a sharp downturn.
9 April - a 90-day pause is announced with tariffs for most countries reduced to a baseline 1^{_personal_allowance_rate} - other than for China, where a rate of up to 1^{_additional_rate} remains on Chinese-made goods.
10 April - stock markets respond positively to the tariff pause announcement.
12 April - China responds with a 1^{_corporation_tax} tariff on US goods, but says that it’ll not respond to any further US increases.
21 April - countries including Japan and South Korea continue to try to negotiate on tariffs while China warns them against making trade deals with the US that would be at the expense of China’s interests.
22 April - President Trump indicates that the 1^{_additional_rate} tariffs on Chinese goods “won’t be that high” and will “come down substantially”, expressing hope that the Chinese President, Xi Jinping, would come to the negotiation table.
29 April - stock markets show signs of recovery, with the S&P 500 posting its best weekly gains since early April.

The most recent market rally appears to be primarily driven by optimism that the worst of the tariff escalation may be over. Investors have responded positively to signals that President Trump may be willing to negotiate and reduce tariffs, particularly with China. However, trade deals are yet to be agreed, and uncertainty remains about the long-term trade policy direction and its economic impact.

The clash between President Trump and the Federal Reserve also continues to cause concern about the central bank’s ability to run monetary policy independently:

21 April - President Trump calls on the Federal Reserve (the US central bank) to lower interest rates. His ongoing criticism of the Federal Reserve - and in particular its Chair Jerome Powell - causes further market instability.
22 April - President Trump doubles-down on his criticism of the Federal Reserve, but states that he has “no intention of firing” Jerome Powell.

The Federal Reserve is in charge of setting the nation’s interest rates - but it hasn’t lowered rates yet this year. President Trump called for lower interest rates in an attempt to offset the impact his tariffs are having on the likelihood of a recession. Lower interest rates make borrowing cheaper, stimulating demand and economic activity, but potentially pushing prices up. The Federal Reserve remains cautious about lowering interest rates as it risks causing a rise in prices (inflation), at a time where tariffs are already having an inflationary impact. The US interest rate range has remained unchanged at 4.25-4.5^{_personal_allowance_rate} since December 2024. The Federal Reserve’s next board meeting takes place on 6-7 May.

The impact of Trump’s tariffs

Tariffs impact all countries as they make it harder to trade. That means companies could experience less growth and lower profits. When initial tariffs were announced, there was a sharp downturn across global stock markets due to many companies experiencing a decline in share price.

Seven leading US tech companies - also known as the Magnificent Seven - were particularly vulnerable to tariffs as a large number of their suppliers are based overseas. For example, Apple and Amazon both heavily rely on manufacturing and supply chains in China.

The Trump administration has since temporarily exempted smartphones, computers and certain other electronic devices from ‘reciprocal tariffs’, but has said that exemptions for technology from China could be short-lived.

While a partial stock market recovery occurred after the 90-day pause was announced, markets remain volatile. Financial markets don’t like uncertainty and can often react to news quickly, meaning sharp swings in the prices of company shares and bonds, which all pensions are invested in.

The table below shows recent performance data for the Magnificent Seven alongside their five-year performance. You can read more about Apple, Amazon, Meta, Microsoft and NVIDIA’s share prices in our new blog series to see how they might be affecting your pension balance.

Source: IBD data as of 31 March 2025 and MarketWatch 31 March 2020, 31 March 2025

So what does this mean for your pension?

We understand it can be worrying to see your balance fall, but history shows that markets do recover. It’s important to remember that pensions are designed for long-term growth. The Financial Conduct Authority (FCA) encourages pension savers to avoid making hasty decisions during periods of market turbulence. Staying invested and focused on the long term is usually the best course of action.

It’s important to remember that this kind of market volatility is normal during uncertain times, and it’s not unusual to see fluctuations day-to-day. When looking through history, we’ve seen many periods of fluctuation that look similar to this one. The exhibit below shows the maximum decline seen in historical years:

Source: Carson Investment Research, S&P 500 year-to-date move through April 8

Whilst past performance isn’t an indicator of future results, historical data shows that every decline in stock markets has been followed by a subsequent recovery and new historical highs. The chart below shows S&P 500 performance over the last 30 years.

Source: marcotrends

Why hasn’t my pension balance recovered yet?

The recovery of pension balances depends on how quickly global markets stabilise. This should start to happen once there’s more certainty around the economic changes proposed by President Trump. It’s also important to remember that your balance isn’t shown in real-time as it often takes several days to reflect market movements.

It might feel like there’s been a lot more volatility than usual over the last few years with the pandemic, the invasion of Ukraine, and now the uncertainty caused by tariffs. But historically, markets have always recovered from even bigger declines than we’re seeing now. That’s why the length of time that you’re invested in the market is so important. Staying invested means you’re in the best position to benefit and be part of the market recovery, when it comes. Keeping a cool head and thinking long term is key.

It may surprise you to learn that some investors would argue that downturns can provide a great opportunity to grow their investments, particularly if they increase their pension contributions during this time. That’s because the underlying value of each investment is lower, meaning investments go further and more units can be bought, leading to greater returns during market recovery.

Where to find pension information and support

Our default plans are designed to support you depending on your age.

If you’re under 50, our default is the Global Leaders Plan - a predominantly equity based plan that focuses on growth in your accumulation (or growth) years. The plan invests in around 1,000 of the world’s largest and most recognised public companies to offer a greater opportunity to grow pension savings before retirement.

If you’re over 50, our default is the 4Plus Plan which is designed for the decumulation (or withdrawal) years. This plan aims to achieve long-term growth of over 4% by investing your money into a mix of assets, including equities, bonds, cash and other asset classes. This plan is actively managed, meaning that the holdings may be adjusted weekly depending on market developments, as it seeks to balance growth and stability.

If you’re not sure where other pensions you may have are invested, you can usually find information online via your provider’s website or portal. Or, you can contact your provider and ask for a breakdown.

It could also be worth looking at resources like MoneyHelper. If you’re over 50, you can book an appointment with Pension Wise for free and impartial guidance.

Risk warning

Your guide to Lifetime ISAs and pensions

Both pensions and Lifetime ISAs are long-term savings solutions for retirement, but how do they compare?

Company spotlight - how does NVIDIA’s performance affect my pension?

Current geopolitical events are affecting NVIDIA’s performance, which in turn could affect your pension. Keep reading to find out more.

Your pension is likely invested in some of the largest companies in the world - including NVIDIA, a key global player in the graphics processing unit (GPU) and artificial intelligence (AI) sectors. Current geopolitical events are influencing NVIDIA’s performance, which in turn affects your pension. Let’s take a look at why this is.

How does NVIDIA’s performance affect my pension?

Shares represent a unit of ownership in a company. When you buy shares, you become a part owner of that company, and your ownership is proportional to the number of shares you hold.

The value of a share is worked out by taking the company’s value and dividing it by the number of shares in issue. This then forms the individual share price. It’s this share price that goes up and down in value over time. The price can move according to current market conditions, historic performance and potential growth opportunities.

If you were to look at your own pension closely, you’ll see that you probably own a small percentage of many of the world’s largest and most successful companies. The top holdings in your pension refer to the companies you have the largest investment in. For most pension savers, NVIDIA will likely be one of the top 10 holdings in your pension fund.

What is NVIDIA?

NVIDIA was founded in 1993 by Jen-Hsun Huang, Chris Malachowsky, and Curtis Priem in California. With a vision to revolutionise computing, they initially focused on GPUs (these are computer chips that render images and videos) for the gaming market. Its first product, the NV1, was released in 1995, marking the beginning of its journey in high-performance graphics.

Today, NVIDIA is the third largest company in the world with a market capitalisation (total value) of $2.7 trillion. ‘Market capitalisation’ is calculated using the present share price multiplied by the total number of shares.

NVIDIA is also one of the seven leading technology companies in the US (also known as the ‘Magnificent Seven‘) recognised for its innovation and strong performance.

How much of a typical UK pension is invested in NVIDIA?

Pensions typically put a large portion of your funds into company shares (equities) through the stock market. This strategy aims to grow your wealth over the long term, as company shares are typically one of the best performing asset types.

As NVIDIA is currently one of the largest companies in the world, it’s a common holding in many investments.

While the exact percentage of NVIDIA in a typical UK pension fund varies, NVIDIA makes up around 4% of the MSCI World Index, a widely followed global stock market index which tracks the performance of many established companies across 23 developed countries worldwide.

As such NVIDIA could represent a small percentage of the typical UK pension plan. Current geopolitical events are influencing NVIDIA’s share price performance, which in turn could affect your pension balance.

How is NVIDIA affected by President Trump’s tariffs in 2025?

The return of US President Donald Trump has brought renewed attention on tariffs - which are taxes on imported goods. His administration has escalated the trade war with China, announcing a steep 1^{_additional_rate} tariff on Chinese-made products.

These tariffs harmed NVIDIA’s supply chain as it relies heavily on Chinese factories for manufacturing semiconductor and GPUs for computers. In the table below you can see how short-term uncertainty from US tariffs have shaken the value of NVIDIA shares. However, the long-term trajectory shows strong growth.

Company	3-month performance	1-year performance	5-year performance
NVIDIA	-^{_corporation_tax_small_profits}	+^_basic_rate	+1,5^{_additional_rate}

Source: Market Watch. Data as of 31 March 2025.

Fortunately, the Trump Administration later removed ‘reciprocal tariffs’ for smartphones, computers and other electronic devices - although these exemptions could be temporary.

However, NVIDIA now faces additional challenges as the US government tightened export rules. The rules require licenses to export one of its most popular products - its H20 AI chip - to China. This new restriction is expected to cost NVIDIA $5.5 billion due to inventory commitments.

These tariffs are part of Trump’s wider strategy designed to reduce the trade deficit and boost domestic manufacturing. Founder and CEO, Jensen Huang, has committed several billion dollars to make products in the US over the next four years.

What could make the NVIDIA share price go up and positively impact your pension balance?

Over the next three months, the share price could rise if:

NVIDIA exceeds expectations in its next quarterly earnings report (this looks at the profits and losses for the prior three months). This could lead to a short-term spike in the share price;
NVIDIA announces new product launches or partnerships in the AI or gaming sectors, which could excite investors and signal future growth opportunities; and/or
the Federal Reserve, the Central Bank in the US, decreases interest rates. This could boost consumer spending power and encourage businesses to borrow at a lower interest rate and allow them to consume more goods.

Over the next year, the share price could rise if:

NVIDIA continues to dominate the AI hardware market with its GPUs, boosting its profitability;
NVIDIA expands into emerging markets, such as India, where demand for gaming and AI technologies is growing; and/or
NVIDIA boosts its profitability by increasing its software and subscription-based offerings.

Over the next five years, the share price could rise if:

NVIDIA achieves breakthroughs in new industries, such as autonomous vehicles or edge computing, where its GPUs and AI expertise could play a critical role;
there’s sustained demand for NVIDIA’s products and it maintains its leadership in AI and gaming technologies; and/or
strong cash flow allows NVIDIA to reinvest in innovation, buy back shares, or pay dividends, which could support long-term stock price appreciation.

What could make the NVIDIA share price go down and negatively impact your pension balance?

Over the next three months, the share price could fall if:

NVIDIA misses revenue or profit targets in its quarterly earnings report. This could lead to a ‘short-term sell-off’, as investors react quickly by selling its shares, leading to a short-term decline in the share price;
supply chain disruptions occur, such as delays in manufacturing or shipping due to geopolitical tensions or reliance on Taiwan for computer chip production; and/or
rising interest rates or fears of a global economic slowdown negatively impact tech stocks, including NVIDIA.

Over the next year, the share price could fall if:

NVIDIA faces increased competition from other chipmakers, such as AMD or Intel, which could harm its market share in AI and gaming industries;
regulatory challenges arise, such as antitrust scrutiny or export restrictions on advanced chips, which could limit NVIDIA’s growth potential; and/or
an economic downturn weakens demand for high-end GPUs, particularly in gaming and data centres, which are significant revenue drivers for NVIDIA.

Over the next five years, the share price could fall if:

NVIDIA faces increased competition in AI and GPU technologies;
geopolitical tensions disrupt NVIDIA’s supply chain with Taiwan, or limit access to key markets like China; and/or
the AI market experiences slower-than-expected growth, reducing demand for NVIDIA’s products and impacting its long-term growth trajectory.

Conclusion

Your pension likely has a small investment in NVIDIA - most pensions invest a portion of your retirement money in NVIDIA because it’s one of the largest and most successful companies in the world.
When you invest, you own a portion of the company - the value of these company shares will fluctuate based on market conditions, affecting the value of your pension on a given day.
Current events can impact your investments - geopolitical events, such as tariffs imposed by the Trump Administration, can affect NVIDIA’s costs and share price. This in turn impacts your pension balance.
Politics is short-term and investing is long-term - while current events can cause short-term volatility in share prices, successful investing typically focuses on long-term growth.

Staying informed about current events, and their impact on your pension, can help you invest with confidence - even in a changing market.

Have a question? Get in touch!

Risk warning

Company spotlight - how does Microsoft’s performance affect my pension?

Current geopolitical events are affecting Microsoft’s performance, which in turn could affect your pension. Keep reading to find out more.

Your pension is likely invested in some of the largest companies in the world - including Microsoft, a key global player in the technology and software industries. Current geopolitical events are influencing Microsoft’s performance, which in turn affects your pension. Let’s take a look at why this is.

How does Microsoft’s performance affect my pension?

Shares represent a unit of ownership in a company. When you buy shares, you become a part owner of that company, and your ownership is proportional to the number of shares you hold.

If you were to look closely at your own pension, you’ll see that you probably own a small percentage of many of the world’s largest and most successful companies. The top holdings in your pension refer to the companies you have the largest investment in. For most pension savers, Microsoft will likely be one of the top 10 holdings in your pension fund.

What is Microsoft?

Microsoft was founded in 1975 by Bill Gates and Paul Allen in Albuquerque. The pair recognised an opportunity to create software for the Altair 8800, one of the first personal computers. Their initial product, a version of the BASIC programming language, laid the foundation for the software industry as we know it today.

Today, Microsoft is the second largest company in the world with a market capitalisation (total value) of $2.9 trillion. ‘Market capitalisation’ is calculated using the present share price multiplied by the total number of shares.

Microsoft is also one of the seven leading technology companies in the US (also known as the ‘Magnificent Seven‘) recognised for their innovation and strong performance.

How much of a typical UK pension is invested in Microsoft?

As Microsoft is currently one of the largest companies in the world, it’s a common holding in many investments.

While the exact percentage of Microsoft in a typical UK pension fund varies, Microsoft makes up around 4% of the MSCI World Index, a widely followed global stock market index which tracks the performance of many established companies across 23 developed countries worldwide.

As such Microsoft can represent a small percentage of the typical UK pension plan. Current geopolitical events are influencing Microsoft’s share price performance, which in turn could affect your pension balance.

How is Microsoft affected by President Trump’s tariffs in 2025?

The return of US President Donald Trump has brought renewed attention on tariffs - which are taxes on imported goods. Tariffs on imported materials like aluminum and steel increase hardware costs for companies like Microsoft. These hardware supply chains are concentrated in Asia - where many countries have been hit with tariffs.

Microsoft relies on these materials for its cloud and artificial intelligence (AI) infrastructure - the latter of which is a critical area of investment for the company. The tariffs and rising costs have directly impacted its plans to build AI data centres in Ohio - a project reported to be worth $1 billion.

In the table below you can see how short-term uncertainty from US tariffs have shaken the value of Microsoft’s shares. However, the long-term trajectory shows strong growth.

Company	3-month performance	1-year performance	5-year performance
Microsoft	-11%	-11%	+138%

Source: Market Watch. Data as of 31 March 2025.

The Trump Administration later exempted smartphones, computers, and certain other electronic devices from ‘reciprocal tariffs’ - although these exemptions could be temporary. These tariffs are part of Trump’s broader strategy designed to reduce the trade deficit and boost domestic manufacturing.

What could make the Microsoft share price go up and positively impact your pension balance?

Over the next three months, the share price could rise if:

Microsoft exceeds expectations in its next quarterly earnings report (this looks at the profits and losses for the prior three months). This could lead to a short-term spike in the share price;
Microsoft continues to innovate and announce new products in the AI space, attracting investors and increasing the share price; and/or
the Federal Reserve, the Central Bank in the US, decreases interest rates. This could boost consumer spending power and encourage businesses to borrow at a lower interest rate and allow them to consume more goods.

Over the next year, the share price could rise if:

Microsoft announces company acquisitions (like its recent purchase of Activision Blizzard) enhancing its growth and attracting investors; and/or
Microsoft sees continued growth in AI, particularly through its partnership with OpenAI.

Over the next five years, the share price could rise if:

Microsoft continues to integrate AI into core products such as Microsoft 365 and Azure. This would drive substantial revenue growth, increasing the share price;
Microsoft remains at the forefront of technological innovation by investing in research and development; and/or
strong cash flow means Microsoft can buy back its own shares and pay dividends, which could help its stock price go up over time.

What could make the Microsoft share price go down and negatively impact your pension balance?

Over the next three months, the share price could fall if:

Microsoft misses revenue or profit targets in its quarterly earnings report. This could lead to a ‘short-term sell-off’, as investors react quickly by selling their shares, leading to a short-term decline in the share price;
supply chain disruptions continue to occur impacting manufacturing or shipping; and/or
rising interest rates or fears of a global economic slowdown negatively impact tech stocks.

Over the next year, the share price could fall if:

the costs associated with scaling AI continue to rise. This could weigh on profitability for Microsoft in the short term;
increased or new regulations limit Microsoft’s ability to expand or innovate; and/or
an economic downturn reduces consumer demand for products and services like enterprise software and cloud computing.

Over the next five years, the share price could fall if:

Microsoft fails to execute AI integrations and expansions in cloud services risking its reputation as an industry leader;
challenges in the gaming market (particularly with Microsoft’s acquisition of Activision Blizzard) impact its overall revenue; and/or
increased competition in cloud computing from Amazon Web Services and Google Cloud harm Microsoft’s market share.

Conclusion

Your pension likely has a small investment in Microsoft - most pensions invest a portion of your retirement money in Microsoft because it’s one of the largest and most successful companies in the world.
When you invest, you own a portion of the company - the value of these company shares will fluctuate based on market conditions, affecting the value of your pension on a given day.
Current events can impact your investments - geopolitical events, such as tariffs imposed by the Trump Administration, can affect Microsoft’s costs and share price. This in turn impacts your pension balance.
Politics is short-term and investing is long-term - while current events can cause short-term volatility in share prices, successful investing typically focuses on long-term growth.

Staying informed about current events, and their impact on your pension, can help you invest with confidence - even in a changing market.

Have a question? Get in touch!

Risk warning

Company spotlight - how does Meta’s performance affect my pension?

Current geopolitical events are affecting Meta’s performance, which in turn could affect your pension. Keep reading to find out more.

Your pension is likely invested in some of the largest companies in the world - including Meta, a key player in the social media and tech sectors. Current geopolitical events are influencing Meta’s performance, which in turn affects your pension. Let’s take a look at why this is.

How does Meta’s performance affect my pension?

Shares represent a unit of ownership in a company. When you buy shares, you become a part owner of that company, and your ownership is proportional to the number of shares you hold.

If you were to look at your own pension closely, you’ll see that you probably own a small percentage of many of the world’s largest and most successful companies. The top holdings in your pension refer to the companies you have the largest investment in. For most pension savers, Meta will likely be one of the top 10 holdings in your pension fund.

What is Meta?

Meta (formerly Facebook), was founded in 2004 by Mark Zuckerberg, along with his college roommates. Initially launched as a social networking site for college students, it quickly expanded, transforming the way people connect and communicate online. Meta now owns and operates Facebook, Instagram and Whatsapp among other products and services.

Today, Meta is the sixth largest company in the world with a market capitalisation (total value) of over $1.3 trillion. ‘Market capitalisation’ is calculated using the present share price multiplied by the total number of shares.

Meta is also one of the seven leading technology companies in the US (also known as the ‘Magnificent Seven‘) recognised for their innovation and strong performance.

How much of a typical UK pension is invested in Meta?

As Meta is currently one of the largest companies in the world, it’s a common holding in many investments.

While the exact percentage of Meta in a typical UK pension fund varies, Meta makes up around 2% of the MSCI World Index, a widely followed global stock market index which tracks the performance of many established companies across 23 developed countries worldwide.

As such Meta can represent a small percentage of the typical UK pension plan. Current geopolitical events are influencing Meta’s share price performance, which in turn could affect your pension balance.

How is Meta affected by President Trump’s tariffs in 2025?

Fortunately, the US later exempted smartphones, computers, and certain other electronic devices from ‘reciprocal tariffs’ - although these exemptions could be temporary.

While these tariffs have mainly targeted manufacturing, there have been some side effects on Meta’s advertising business. The tariffs have made it more expensive for international advertisers to sell their products in the US.

In particular, Chinese advertisers, who have been impacted, make up roughly $10 billion of Meta’s revenue. This increase in costs could lead to reduced advertising budgets, which would have a knock on effect to Meta’s revenue.

In the table below you can see how short-term uncertainty from US tariffs have shaken the value of Meta shares. However, the long-term trajectory shows strong growth.

Company	3-month performance	1-year performance	5-year performance
Meta	-2%	+^{_corporation_tax_small_profits}	+246%

Source: Market Watch. Data as of 31 March 2025.

While Meta isn’t directly involved in manufacturing or trade, the tariffs have created ripple effects across the global economy. These tariffs are part of Trump’s broader strategy designed to reduce the trade deficit and boost domestic manufacturing.

What could make the Meta share price go up and positively impact your pension balance?

Over the next three months, the share price could rise if:

Meta exceeds expectations in its next quarterly earnings report (this looks at the profits and losses for the prior three months). This could lead to a short-term spike in the share price;
Meta continues to cut costs and as a result, excite investors; and/or
the Federal Reserve, the Central Bank in the US, decreases interest rates. This could encourage advertising businesses to borrow at a lower interest rate and therefore increase their budgets and ability to spend.

Over the next year, the share price could rise if:

Meta continues to see strong growth in advertising revenue through its core platforms Facebook, Instagram and Whatsapp; and or
Meta makes progress in artificial intelligence (AI) tools and platforms, attracting more investors.

Over the next five years, the share price could rise if:

Meta makes breakthrough innovations in virtual reality (VR) and augmented reality (AR) through its Reality Labs arm of the business, attracting more investors;
internet and smartphone usage increases in emerging markets and Meta expands their global user base; and/or
strong cash flow means Meta can buy back its own shares and pay dividends, which could help its stock price go up over time.

What could make the Meta share price go down and negatively impact your pension balance?

Over the next three months, the share price could fall if:

Meta misses revenue or profit targets in its quarterly earnings report. This could lead to a ‘short-term sell-off’, as investors react quickly by selling their shares, leading to a short-term decline in the share price; and/or
Meta are hit with fines following antitrust and data privacy investigations; and/or
tariffs from the US continue to disrupt Chinese advertising businesses harming Meta’s revenue.

Over the next year, the share price could fall if:

Meta fails to innovate within the VR and AR space which impacts its revenue;
its advertising revenue across Facebook, Whatsapp and Instagram continues to decline; and/or
rising interest rates or fears of a global economic slowdown negatively affect tech stocks.

Over the next five years, the share price could fall if:

regulations on tech companies continue to intensify. This could restrict Meta’s business practises and reduce profitability;
Meta’s reputation is damaged following antitrust and data privacy investigations which could lead to a decline in users and interest from investors; and/or
there’s increased competition in AI with tools and platforms from Apple, Google or Microsoft outperforming Meta.

Conclusion

Your pension likely has a small investment in Meta - most pensions invest a portion of your retirement money in Meta because it’s one of the largest and most successful companies in the world.
When you invest, you own a portion of the company - the value of these company shares will go up and down based on market conditions, affecting the value of your pension on a given day.
Current events can impact your investments - geopolitical events, such as tariffs from the Trump Administration, can affect Meta’s costs and share price. This in turn impacts your pension balance.
Politics is short-term and investing is long-term - while current events can cause short-term volatility in share prices, successful investing typically focuses on long-term growth.

Staying informed about current events, and their impact on your pension, can help you invest with confidence - even in a changing market.

Have a question? Get in touch!

Risk warning

Company spotlight - how does Apple’s performance affect my pension?

Current geopolitical events are affecting Apple’s performance, which in turn could affect your pension. Keep reading to find out more.

Your pension is likely invested in some of the largest companies in the world - including Apple, a key player in the global technology market. Current geopolitical events are influencing Apple’s performance, which in turn affects your pension. Let’s take a look at why this is.

How does Apple’s performance affect my pension?

Shares represent a unit of ownership in a company. When you buy shares, you become a part owner of that company, and your ownership is proportional to the number of shares you hold.

If you were to look at your own pension closely, you’ll see that you probably own a small percentage of many of the world’s largest and most successful companies. The top holdings in your pension refer to the companies you have the largest investment in. For most pension savers, Apple will likely be one of the top 10 holdings in your pension fund.

What is Apple?

Apple was founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne in California. With a vision to make computers accessible to everyone, they began with the ‘Apple I’ - a personal computer kit designed and built by Wozniak in his garage.

Today, Apple is the largest company in the world with a market capitalisation (total value) of over $3 trillion. ‘Market capitalisation’ is calculated using the present share price multiplied by the total number of shares.

Apple is also one of the seven leading technology companies in the US (also known as the ‘Magnificent Seven‘) recognised for its innovation and strong performance.

How much of a typical UK pension is invested in Apple?

As Apple is currently the largest company in the world, it’s a common holding in many investments.

While the exact percentage of Apple in a typical UK pension fund varies, Apple makes up around 5% of the MSCI World Index, a widely followed global stock market index which tracks the performance of many established companies across 23 developed countries worldwide.

As such Apple can represent a small percentage of the typical UK pension plan. Current geopolitical events are influencing Apple’s share price performance, which in turn could affect your pension balance.

How is Apple affected by President Trump’s tariffs in 2025?

These tariffs impacted Apple’s supply chain as it relies heavily on Chinese factories for manufacturing iPhones and other products. In the table below you can see how short-term uncertainty from US tariffs have shaken the value of Apple shares. However, the long-term trajectory shows strong growth.

Company	3-month performance	1-year performance	5-year performance
Apple	-11%	+3^{_personal_allowance_rate}	+249%

Source: Market Watch. Data as of 31 March 2025.

Apple was particularly vulnerable in this situation, as approximately 8^{_personal_allowance_rate} of iPhones for US consumers are manufactured in China. Fortunately, the Trump Administration later exempted smartphones, computers, and certain other electronic devices from ‘reciprocal tariffs’ - although these exemptions could be temporary.

These tariffs are part of Trump’s wider strategy designed to reduce the trade deficit and boost domestic manufacturing. However, Apple has indicated they intend to diversify its manufacturing to India - and not the US for the time being, although this too could change.

What could make the Apple share price go up and positively impact your pension balance?

Over the next three months, the share price could rise if:

Apple exceeds expectations in its next quarterly earnings report (this looks at the profits and losses for the prior three months). This could lead to a short-term spike in the share price;
Apple announces a new product launch or cost-saving update that could excite investors; and/or
the Federal Reserve, the Central Bank in the US, decreases interest rates. This could boost consumer spending power and encourage businesses to borrow at a lower interest rate and allow them to consume more goods.

Over the next year, the share price could rise if:

Apple sees continued growth in high-margin, low device services like Apple Music, iCloud, and the App Store, therefore boosting profitability;
Apple successfully expands in emerging markets like India; and/or
the launch of subscription bundles or new devices enhances the Apple ecosystem.

Over the next five years, the share price could rise if:

Apple makes breakthrough innovations in new industries. This could include autonomous vehicles or augmented reality;
the company achieves sustained success in underdeveloped markets with affordable devices and services; and/or
strong cash flow means Apple can buy back its own shares and pay dividends, which could help its stock price go up over time.

What could make the Apple share price go down and negatively impact your pension balance?

Over the next three months, the share price could fall if:

Apple misses revenue or profit targets in its quarterly earnings report. This could lead to a ‘short-term sell-off’, as investors react quickly by selling its shares, leading to a short-term decline in the share price;
supply chain disruptions occur, such as delays in manufacturing or shipping due to geopolitical tensions and tariffs; and/or
rising interest rates or fears of a global economic slowdown negatively impact tech stocks.

Over the next year, the share price could fall if:

Apple loses market share to increased competition from Android manufacturers, particularly in emerging markets;
increased or new regulations could target Apple’s business practices; and/or
an economic downturn weakens consumer demand, meaning less is spent on premium products.

Over the next five years, the share price could fall if:

Apple fails to deliver new successful products, risking its reputation as an industry leader;
tensions between the US and China disrupt Apple’s supply chain or limit access to significant markets; and/or
there’s increased competition in the technology sector. For example, a competitor introducing a new product or platform that reduces demand for Apple’s offerings.

Conclusion

Your pension likely has a small investment in Apple - most pensions invest a portion of your retirement money in Apple because it’s one of the largest and most successful companies in the world.
When you invest, you own a portion of the company - the value of these company shares will fluctuate based on market conditions, affecting the value of your pension on a given day.
Current events can impact your investments - geopolitical events, such as tariffs imposed by the Trump Administration, can affect Apple’s costs and share price. This in turn impacts your pension balance.
Politics is short-term and investing is long-term - while current events can cause short-term volatility in share prices, successful investing typically focuses on long-term growth.

Staying informed about current events, and their impact on your pension, can help you invest with confidence - even in a changing market.

Have a question? Get in touch!

Risk warning

Company spotlight - how does Amazon’s performance affect my pension?

Current geopolitical events are affecting Amazon’s performance, which in turn could affect your pension. Keep reading to find out more.

Your pension is likely invested in some of the largest companies in the world - including Amazon, a key global player in the technology and e-commerce sectors. Current geopolitical events are influencing Amazon’s performance, which in turn affects your pension. Let’s take a look at why this is.

How does Amazon’s performance affect my pension?

Shares represent a unit of ownership in a company. When you buy shares, you become a part owner of that company, and your ownership is proportional to the number of shares you hold.

If you were to look closely at your own pension, you’ll see that you probably own a small percentage of many of the world’s largest and most successful companies. The top holdings in your pension refer to the companies you have the largest investment in. For most pension savers, Amazon will likely be one of the top 10 holdings in your pension fund.

What is Amazon?

Amazon was founded in 1994 by Jeff Bezos in Seattle. Starting as an online bookstore, Bezos envisioned a platform that’d offer a vast selection of products. The company’s first website went live in July 1995 and it quickly expanded its offerings beyond books to include electronics, clothing, and much more.

Today, Amazon is the fourth largest company in the world with a market capitalisation (total value) of over $1.9 trillion. ‘Market capitalisation’ is calculated using the present share price multiplied by the total number of shares.

Amazon is also one of the seven leading technology companies in the US (also known as the ‘Magnificent Seven‘) recognised for its innovation and strong performance.

How much of a typical UK pension is invested in Amazon?

As Amazon is currently one of the largest companies in the world, it’s a common holding in many pension plans.

While the exact percentage of Amazon in a typical UK pension fund varies, Amazon makes up around 3% of the MSCI World Index, a widely followed global stock market index which tracks the performance of many established companies across 23 developed countries worldwide.

As such Amazon can represent a small percentage of the typical UK pension plan. Current geopolitical events are influencing Amazon’s share price performance, which in turn could affect your pension balance.

How is Amazon affected by President Trump’s tariffs in 2025?

These tariffs have affected Amazon’s supply chain, as the company relies heavily on Chinese manufacturers for a variety of goods sold through its platform. In the table below you can see how short-term uncertainty from US tariffs have shaken the value of Amazon shares. However, the long-term trajectory shows strong growth.

Company	3-month performance	1-year performance	5-year performance
Amazon	-13%	+5%	+^_rate

Source: Market Watch. Data as of 31 March 2025.

A large portion of Amazon sales come from independent sellers, rather than direct sales. Many of these independent sellers are reliant on Chinese manufacturing and have been directly impacted by the tariffs. While the Trump Administration later exempted certain electronic devices from ‘reciprocal tariffs’ - this doesn’t make a significant impact for Amazon’s business model.

These tariffs are part of Trump’s broader strategy designed to reduce the trade deficit and boost domestic manufacturing. With Amazon, it’s the third party sellers who have more control over this situation than Amazon itself. Chinese sellers can choose to hike prices or even exit the US as tariffs damage their profits.

What could make the Amazon share price go up and positively impact your pension balance?

Over the next three months, the share price could rise if:

Amazon exceeds expectations in its next quarterly earnings report (this looks at the profits and losses for the prior three months). This could lead to a short-term spike in the share price;
Amazon announces a new product launch or cost-saving update that could excite investors; and/or
the Federal Reserve, the Central Bank in the US, decreases interest rates. This could boost consumer spending power and encourage businesses to borrow at a lower interest rate and allow them to consume more goods.

Over the next year, the share price could rise if:

Amazon continues to grow its high-margin businesses, such as Amazon Web Services (AWS), which is a major driver of profitability;
Amazon successfully expands into emerging markets and gains new customer bases in regions like India, South East Asia, or Africa; and/or
Amazon introduces new subscription services or enhances existing ones, such as Prime memberships, which could increase customer loyalty and recurring revenue streams.

Over the next five years, the share price could rise if:

Amazon makes breakthrough innovations in new industries, such as autonomous delivery systems (drones or robots), healthcare services, or artificial intelligence (AI). These could open up entirely new revenue streams;
Amazon expands its customer base in underdeveloped markets by offering affordable products and services tailored to local needs; and/or
strong cash flow means Amazon can buy back its own shares and pay dividends, which could help its stock price go up over time.

What could make the Amazon share price go down and negatively impact your pension balance?

Over the next three months, the share price could fall if:

Amazon misses revenue or profit targets in its quarterly earnings report. This could lead to a ‘short-term sell-off’, as investors react quickly by selling its shares, leading to a short-term decline in the share price;
supply chain disruptions occur, such as delays in shipping or increased costs due to geopolitical tensions, tariffs, or natural disasters. These could hurt Amazon’s e-commerce operations; and/or
rising interest rates or fears of a global economic slowdown negatively impact consumer spending, which could hurt Amazon’s retail and cloud businesses.

Over the next year, the share price could fall if:

Amazon faces increased competition in its core markets, such as e-commerce or cloud computing, from rivals like Walmart, Microsoft Azure, or Google Cloud;
Amazon’s business practices are targeted by regulations, such as antitrust concerns or labor policies. This could lead to fines or operational restrictions; and/or
an economic downturn weakens consumer demand, reducing spending and impacting Amazon’s retail sales.

Over the next five years, the share price could fall if:

Amazon fails to innovate or adapt to changing market trends, risking its position as a leader in e-commerce and cloud computing;
geopolitical tensions disrupt Amazon’s global operations, such as trade wars or restrictions in key markets like China or India; and/or
increased competition in the technology sector harms Amazon’s market share, particularly in high-growth areas like cloud computing or AI-driven services.

Conclusion

Your pension likely has a small investment in Amazon - most pensions invest a portion of your retirement money in Amazon because it’s one of the largest and most successful companies in the world.
When you invest, you own a portion of the company - the value of these company shares will fluctuate based on market conditions, affecting the value of your pension on a given day.
Current events can impact your investments - geopolitical events, such as tariffs imposed by the Trump Administration, can affect Amazon’s costs and share price. This in turn impacts your pension balance.
Politics is short-term and investing is long-term - while current events can cause short-term volatility in share prices, successful investing typically focuses on long-term growth.

Staying informed about current events, and their impact on your pension, can help you invest with confidence - even in a changing market.

Have a question? Get in touch!

Risk warning

What to do when interest rates rise

Read our top tips on how best to navigate potential interest rate rises and what they could mean for your finances.

This article was last updated on 07/08/2025

Interest rates can affect the amount you’d earn on your savings and the amount you’d need to repay on your debts. A change in interest rates can create a ripple effect throughout a country’s economy.

When interest rates rise, the cost of loans (such as mortgages) increase meaning you’d pay more in interest over time. On the flip side, higher interest rates can benefit savers, as they earn more on the money saved in any savings accounts.

What’s an interest rate?

Interest rates are typically calculated annually, but can also be paid monthly or quarterly. For example, if you have ^{_basic_rate_personal_savings_allowance} in a savings account with a fixed 2% annual interest rate, you’ll earn £20 in the first year. If you leave that money untouched, in the second year, you’ll earn £20.40, and in the third year, £20.81.

This method of earning interest on both your initial savings and any interest already earned is called compound interest. It can make both savings and debt grow like a snowball rolling down a hill - as it rolls, it picks up more snow and grows larger.

What’s the relationship between inflation and interest rates?

In moderation, inflation and interest rates are key to growing the prosperity of a country. The difficulty occurs when one experiences instability and becomes too high or low. The danger of leaving inflation and interest rates untreated is a recession.

High inflation is an economic ‘fever’ where symptoms include:

a loss of appetite to spend money (due to rising prices); and
a weakness in currencies.

Central banks (such as the Bank of England) try to provide the financial stability needed for a healthy, growing economy. So when inflation is running high, central banks may prescribe raising interest rates to lower the levels of inflation.

This antidote of raised interest rates doesn’t correct inflation overnight and may have side effects of its own, such as:

it being more costly for you to borrow money for loans or mortgages; and
more attractive interest rates for cash savers.

What causes interest rates to rise?

Here are two common reasons why a rise in interest rates happens.

1. Increased demand for credit

When more people and businesses want to borrow money, the demand for loans increases. Lenders can raise interest rates because there are more borrowers competing for the same amount of money. For example, during ‘economic booms’ businesses often seek loans to grow, which can push interest rates higher.

2. Inflationary pressures

Central banks often raise interest rates to combat rising inflation. When prices go up, the purchasing power of money decreases, so lenders want higher interest rates to compensate for the reduced value of future repayments. This helps keep inflation in check and can slow down an economy that is growing too quickly.

How are interest rates set?

The Bank of England reduced the Bank Rate from 4.^{_corporation_tax} to 4% in August 2025. This decision reflects the Bank of England’s ongoing efforts to manage inflation, which has been gradually stabilising since it peaked at over 11% in October 2022.

The government has tasked the Bank of England to keep inflation at around 2% a year. The Bank of England provides loans to high street banks and other financial institutions at a certain interest rate, known as the Bank Rate.

What is the impact of the Bank Rate?

When the Bank Rate changes, it may impact how much financial institutions:

charge for loans; and
pay on savings accounts.

For example, if the Bank Rate is 3% a bank may lend money to customers at an interest rate of 4% and pay customers an interest rate of 2% on their savings. The difference (called a margin) is one of many ways that banks earn money.

What to do when interest rates rise?

When interest rates go up, savers and borrowers are affected in different ways. Here’s how to handle these changes easily.

Savers

When interest rates rise, banks often increase the rates on products like cash savings accounts. This means you could earn more interest on your easy-access or emergency fund savings. To ensure you’re getting the best deal, consider using a comparison website to check current rates.

Consider saving more

With higher interest rates, it’s also a great opportunity to get better returns on your savings. If your bank isn’t offering competitive rates, it might be a good time to switch so you can take advantage of the increased interest earnings.

Borrowers

If you have existing loans, such as a mortgage or student loan, rising interest rates could lead to higher monthly payments, especially if you have a variable rate loan. Those with fixed-rate loans will be shielded from immediate increases, but variable rate borrowers may see their payments rise quickly.

Pay off debt faster

In light of rising rates, it may be wise to pay off your debts as quickly as possible. This can help you avoid accumulating more interest over time, making your overall repayment more manageable.

Shop around for better deals

As interest rates rise, the market ‘reshuffles’ as older deals are replaced by new ones that may be more favourable. Take the time to shop around for better deals on loans or refinancing options that could save you money in the long run.

How do interest rates affect pensions?

Pensions usually invest your money in the stock market and other assets, which can grow faster than the interest earned in a bank account. While interest rates don’t directly impact the stock market, they can have indirect effects.

When interest rates are high, people may choose to save more instead of spending, leading to lower sales for companies. This can make companies less attractive to investors, which may reduce their share prices.

On the other side, if a company has a lot of debt then higher interest rates will increase their debt payments. This can negatively affect the company’s share value and, in turn, the investment returns on your pension savings.

Before retirement

Typically when interest rates are high, it’s bad news for your investments in the stock market - as they often move in the opposite direction. Higher interest rates can lead to lower share prices because borrowing costs rise and consumers may spend less.

However, the stock market is affected by various factors, not just interest rates. For example, strong company earnings, investor confidence and economic growth are likely to move share prices - even in a rising interest rate environment.

After retirement

After retirement, interest rates can impact pensions and retirees. Pension funds usually invest in assets like bonds, shares and real estate. When interest rates rise, newly issued bonds provide better returns, which can help pension funds grow.

On the other side, low interest rates can reduce returns. In a low-interest environment, retirees may have to withdraw more from their savings to maintain their standard of living, as their investments may not generate enough income.

Summary

Now’s a great time to start looking at your pension contributions and ensure you’re on track to retire with enough money. To see how much your pension could be worth at retirement and how long it could last you, try our Pension Calculator.

Once you turn 50, you’re able to book an appointment with Pension Wise, a government service set up to help people understand what their options are when they retire. The great thing about Pension Wise is the appointments are free and completely impartial. You can read Personal Finance Journalist Faith Archer’s blog, What happens in a Pension Wise appointment, to understand the step-by-step process.

Have a question? Get in touch!

Risk warning

What happened to pensions in August 2024?

How did the stock market perform in August 2024 and how does that impact your pension plan? Find out all this and more.

This is part of our monthly pension update series. Catch up on last month’s summary here: What happened to pensions in July 2024?

Mergers and acquisitions are methods of combining companies or their major assets together. A merger brings two companies together to form a new one; while an acquisition happens when one company buys another. The bought company might keep operating on its own or become part of the buying company.

The outcome of mergers and acquisitions can influence stock prices, so investors may keep a close eye on these developments.

Historical data suggests that increases in mergers and acquisitions have often had a positive impact on the stock market. For example, during the dot-com boom of the late 1990s, a surge in mergers and acquisitions coincided with a ^_higher_rate rise in the NASDAQ Composite Index.

After years of caution, this summer has seen a big return of mergers and acquisitions - in both the US and Europe.

Keep reading to find out which mergers and acquisitions have been shaking up the stock market.

What happened to stock markets?

In the UK, the FTSE 250 Index fell by over 2% in August. This brings the year-to-date performance close to +7%.

Source: BBC Market Data

In Europe (excluding the UK), the EuroStoxx 50 Index rose by almost 2% in August. This brings the year-to-date performance close to +1^{_personal_allowance_rate}.

Source: BBC Market Data

In North America, the S&P 500 Index rose by over 2% in August. This brings the year-to-date performance close to +18%.

Source: BBC Market Data

In Japan, the Nikkei 225 Index rose by over 1% in August. This brings the year-to-date performance close to +16%.

Source: BBC Market Data

In the Asia Pacific (excluding Japan), the Hang Seng Index rose by almost 4% in August. This brings the year-to-date performance close to +6%.

Source: BBC Market Data

The impact of mergers and acquisitions

When a company’s acquired, its stock price usually rises. This is because the acquiring company often pays a premium to encourage shareholders to sell their shares. For example, if Company A buys Company B, investors may expect Company B’s stock to rise as the deal is completed.

On the other hand, the stock price of the acquiring company may fluctuate. It can drop if investors believe the cost of acquiring the target company is too high or if there are concerns about integrating the two companies. The market reaction will depend on how well the merger is perceived to create value for both companies.

Company spotlight: Mars

Despite Nestlé owning The Willy Wonka Candy Company; the real chocolate giant in today’s supermarkets and corner shops is arguably Mars. This family-owned company is home of many of the UK’s household favourite chocolate brands, including:

Mars;
Snickers;
Bounty;
Twix; and
Milky Way.

Back in November 2023, Mars expanded its chocolate monopoly with the acquisition of Hotel Chocolat. But it’s not just cocoa the company offers. Mars primarily operates in three areas: pet care, snacking, and food. This August, Mars announced the acquisition of cereal and snack company, Kellanova.

This acquisition marks a snack monopoly in the making, as Mars will now own:

Pringles;
Kellogg’s; and
Nutri-Grain.

As part of the deal, Mars will buy all of Kellanova’s shares for $83.50 each in cash; which adds up to a total value of $35.9 billion for the entire company. With the acquisition of these beloved brands, Mars is poised to remain a key player in the snack market for the foreseeable future.

It’s not just good news for Mars. Following the acquisition announcement, there was a ^_higher_rate increase in the value of Kellanova shares - officially making it the best performer in the S&P 500 for August. As most pensions invest in the S&P 500, it’s possible you may have benefited a little bit from this big deal.

This is part of our monthly pension update series. Check out the next month’s summary here: What happened to pensions in September 2024?

Have a question? Get in touch!

Risk warning

Should you pay off your child’s student loan?

You might have saved a nest egg, received an inheritance, or taken 25% of your pension as tax-free cash. It can be tempting to use those savings to help your kids reduce their student debt, but should you?

Six ways to put together your emergency fund

Having a financial safety net can make all the difference should the unexpected happen. Find out how you can build an emergency fund.

E31: How can I improve my credit score? With John Webb, Clare Seal and Luis Mejia

Find out all about your credit score and how to improve it.

The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 31, watch on YouTube or scroll on to read the conversation.

PHILIPPA: Hello, welcome back to The Pension Confident Podcast. My name is Philippa Lamb. This time, we’re talking about a money topic you may never have thought about, your credit score. It’s an easy thing to forget about, but we all have one, even if we’re not aware of it. Why does it matter? Well, in the 12 months to April last year, more than nine million people were turned down for credit when they applied for it. Why? Well, most likely because their credit score just didn’t look good enough.

So today, we’re going to find out everything about how credit scores are calculated, how to check yours, and vitally, how to put right any mistakes you might uncover in your credit report. To help us understand all things credit scores, we have John Webb, who’s Consumer Affairs Manager at credit reporting company Experian. Clare Seal is an Author and a Columnist and a Content Creator. And from PensionBee, their VP Data, Luis Mejia. Hello, everyone.

CLARE: Hello.

LUIS: Hello.

JOHN: Hello.

PHILIPPA: Thanks for coming in.

JOHN: Great to be here.

The usual disclaimer before we start. Please do remember anything we discuss on the podcast shouldn’t be regarded as financial advice or legal advice and when investing, your capital is at risk.

What is a credit score and why does it matter?

PHILIPPA: Before we get into the dark arts of the credit score, I thought I did want to ask you because I’ve got to confess, I had to look up my credit score to find out what it is right now. Do you know what yours is? I bet you do.

JOHN: I know.

PHILIPPA: But do you know? John should know, working for Experian. But do you know?

CLARE: Yeah, I know what mine is.

PHILIPPA: You don’t have to tell us.

CLARE: No, no.

LUIS: I think I checked it recently.

PHILIPPA: Did you?

LUIS: Yeah, I do know.

PHILIPPA: OK. Any shocks or happy surprises?

CLARE: I do a little financial check-in every month where I go through like a checklist of things. So check my credit score in all three places that it matters, go through a sort of spending plan etc.

PHILIPPA: OK, so no surprises for you then?

CLARE: No, never any surprises for me.

PHILIPPA: OK. Let’s start with the basics. John, what is a credit score?

JOHN: Yeah, great question. So I’ll try and keep this as simple as I can.

PHILIPPA: Sure.

JOHN: Because the credit score is a number that we, ‘we’ being a credit reference agency like Experian, will give you. That number just represents the information that’s on your credit report. So it’s how well you have managed credit in the past, usually for the last six years, and how well you’re currently managing credit, so you know your current outstanding debt and things like that, so that when you apply for credit, although the lender won’t see that exact number, generally, it’s a good indicator of how they’ll view the information on your credit report.

PHILIPPA: Clare, you check it every month. Why does it matter so much?

CLARE: Well, I think there are a few different ways in which it matters. There are times in your life when you might need to apply for credit, crucially, things like a mortgage or car finance, so things that are going to really impact your everyday life. So making sure that it’s reasonably good is going to give you access to better products, maybe better rates on things like loans. So it’s a really good idea to just make sure that you’re aware of it, doing small things that you can do to improve it.

PHILIPPA: OK, so, it’s an important number. It’s changing all the time. So who, apart from you, gets access to it?

JOHN: So if you apply for credit, then you’re giving a lender permission to view the information on your credit report. When they look at the information, they’ll calculate their own score for you when you do that because they include other bits of information that aren’t included on your credit report. So that process of you know, when you make your application for credit, they’ll look at the information on there. But as for the score you see from a credit reference agency, that’s personal to you. You see that and that’s just, you know, that’s your indicator of how well you’re doing in terms of your credit history and borrowing.

PHILIPPA: But if you’re applying for a mortgage, your mortgage provider is going to be able to see it. If you’re looking for store credit the store is going to be able to see it.

JOHN: They won’t see the number, they’ll see the information, and that will get fed into their own calculation. So, that creates the number. Well, they create the number for you when you apply.

PHILIPPA: So, Luis, I had heard, and I don’t know if this is true or not, that potential employers can check it. Is that right?

LUIS: I’m not exactly aware of the privacy on the terms, but what I just want to say is apart from credit score, there might be some other information that is available from you that already is building your profile.

JOHN: Yeah, so that’s a good point. Actually, when you apply for a job, now, quite often they’ll do a background check. Some of that might include some type of check. Now, it varies depending on the company. So you might do a background check and that includes a search of public record information. So they want to know things like court judgments or bankruptcies, things like that, for example. But if you apply for certain roles in certain companies, now that’s usually financial services…

PHILIPPA: Trust roles?

JOHN: Then that will involve a deeper check into your credit report, and they might see more information than, you know, if you just applied for any other type of role.

PHILIPPA: Got it.

Credit score jargon explained

PHILLIPA: That does bring me to a key point, I think, actually, the jargon around this, because we’ve already thrown around quite a lot of phrases and words and I wonder if it would be good to just clarify some of that jargon. We’ve talked about credit score, credit rating, they’re the same thing?

JOHN: Same thing. Yeah.

PHILIPPA: OK. Credit file, credit report?

JOHN: Same thing.

PHILIPPA: OK. Luis, credit invisible? Tell me about that. That’s a phrase not everyone will know.

LUIS: Yeah, it’s a very familiar term for me, which I just came across because I was trying to understand my own situation. So I’m originally from Mexico, so I came here to this country 10 years ago as an immigrant. Just like many other immigrants, I think we face the reality of the barriers that the financial system in any country can put across. So I understand that even opening a bank account would be difficult for me just because there wasn’t enough information.

PHILIPPA: So they have no data about you? They don’t know whether they can trust you with a bank account or credit or a loan of any kind?

LUIS: Yes, exactly. It’s just a realisation that even if I was already a ‘known person’ in my country, here I was invisible. It’s been 10 years for me to build that visibility and history and really build up that profile that now gets me to a point where I feel comfortable accessing financial products. But there’s millions of people that fall into that category, and they don’t know how to get out of that.

PHILIPPA: Because it’s important, isn’t it, Clare? It’s a lot of people, five million people in the UK, described as credit invisible.

CLARE: Yeah and I think there’s another term that we’d use, which is having a ‘thin file’. If you haven’t got very much information available in your credit file and that’s where this, sort of, received wisdom of “get a credit card because it’ll improve your credit score” comes from. But obviously, that tip on its own can be quite dangerous because what you have to do is manage that credit well to build up your credit file, give lenders more information about how you manage your borrowing so that you can be trusted with, you know, bigger financial products like a mortgage, like a car loan. So you know, adding the right information to your file, if you’re credit invisible or you’ve got a ‘thin file’, is key. Not just adding any information whatsoever.

PHILIPPA: Yeah, because a ‘thin file’ sounds like a bad thing, doesn’t it? But it isn’t necessarily a bad thing. It just means that you haven’t applied for credit, and so they don’t know much about you. It’s not necessarily that you’re a bad risk. They just don’t know.

CLARE: A ‘thin file’ is an opportunity, I think.

PHILIPPA: Nice way of putting it.

CLARE: It’s an indication that you’re just starting out.

PHILIPPA: So this might be things like putting utility bills in your name, that sort of thing, just to build your presence.

JOHN: Exactly. So if you think about it this way, you need, like Luis said, a history of managing credit so that when you go to a lender and you say, “I want to borrow this for a mortgage” or “I want a loan”, they look at it and say, “Actually, you know what? You’ve used accounts before, credit accounts. You’ve paid them on time and you’ve repaid them. That’s great. That’s what we love to see.” So it’s about building the history behind it. So never go out and take certain types of credit just to build your credit report. So not things like loans, mobile phone contracts, really anything that just you might be charged for, pays interest for, for example. Credit cards, like you said, was a really great way to do it if you manage it in the right way. So keeping your balance as low as possible, repaying it every month so you don’t pay interest on it.

But if you start building history over time, and like you said, utilities, if you get to the point where you’re renting a property or you get the opportunity to do that, adding things like the gas, electric, water, that all counts. If you get to the point where you need other things like home broadband, TV subscriptions, maybe, that’s all the stuff that then in time starts to come onto your credit report. And as long as you repay on time, that’s where you build a really positive history.

PHILIPPA: OK, so it’s about looking reliable, demonstrating you’re reliable, not necessarily about borrowing money?

JOHN: Demonstrating that you’re low risk, which means you open a credit account and repay it on time. That’s the crux of it.

PHILIPPA: Registering to vote? Good thing?

JOHN: Yes. Very good thing.

PHILIPPA: Does that help?

JOHN: Actually, it helps in a couple of ways, but the primary way is actually identity checks. So you explained you came in [to the UK], you might struggle to open a bank account, for example. But actually, if you’re not registered on the electoral roll, lenders can struggle to confirm your identity, and they - that might end up with a credit refusal just because you’re not registered.

PHILIPPA: And that refusal, then presumably goes into your record and doesn’t necessarily look like a good thing, does it?

JOHN: It does for a year. The refusal doesn’t actually, just the application for credit does. But more of those in a short space of time can lower your score.

LUIS: I’ve been in this country 10 years with already a credit history. I have established myself financially here, but I still can’t register myself to vote because I don’t have British nationality. So I think for me, I definitely agree in terms of the education of steps that you can take but I’m just trying to put across that it’s very important to define different personas when you’re trying to do that because not everyone is in the same situation.

JOHN: So if you can get on the electoral roll, great. If you can’t register, you can add a note to say, ‘Please ask me, and I can confirm my identity’, usually official documents, ID documents, things like that. So if you can register, and it also can give your credit score a bump as well. So Experian it’s up to 50 points. It’ll be slightly different in the other agencies, but it can help. It’s definitely worth doing if you can do it.

How is a credit score calculated?

PHILIPPA: This whole business of building a credit score, it’s more complicated than you might imagine, isn’t it? I’m wondering what else goes into the calculation. What about things like personal circumstances, having dependents and where you live? I mean, does any of that play into it?

JOHN: There are lots of things that go into calculating the score, but I’ll start with the things that don’t because you mentioned them. Anything to do with your personal circumstances, your salary, dependents, some other expenses and so on, race, ethnicity, sexuality, those kinds of things, they’re not included on your credit report. But they’re factored in when you apply for credit, not race and ethnicity, for example. But when you apply for credit, you’ll tell them in your application form what your salary is, certain expenses, like childcare expenses and so on and that forms part of your affordability check.

PHILIPPA: It’s a lot, isn’t it, Clare?

CLARE: Well, and I think in a similar vein, if you’re talking about, kind of, relationship status, one of the things that loads of people don’t know about is that if you’re financially linked to someone, so if you’re married, if you have a joint account with them, then their financial behaviour impacts decisions made about your applications as well. I’ve spoken to a lot of people where there has been financial infidelity in their relationship or you know hidden debt, etc. And loads of people don’t understand that if you’re married or if you have a joint account, your financial behaviour impacts the other person and vice versa.

PHILIPPA: What about if you divorce that person or you separate from that person? How do you sever that in your credit record?

JOHN: Yeah, so it’s a really good point. Actually, it’s not, it’s not being married that does it. So actually, it’s kind of, it’s slightly a myth, but it’s not being married, it’s not living with someone, it’s not someone in your family or just that you’re in a relationship with someone. As Clare said, it’s just - the process actually is applying for joint credit together, and it creates what’s called a ‘financial association’ and links you two together. It means when you go and apply for credit, the lender can check that person’s information as well. So if they’ve not been good at managing their credit, it means you could be refused or you could pay more. If you shouldn’t be connected, so you have no open joint accounts together, you could do what’s called a ‘financial disassociation’. You break that link, you have to do it with all three credit reference agencies to do it. It’s a fairly simple process online. But you do that, you break the link, and that way your report is then stand-alone or that person is at least not connected to you anymore.

PHILIPPA: OK. So thinking about other ways of being associated with people, what about people who are all renting a place together. They’re not involved with each other, they’re just flatmates, but they’re all on the lease or they’re all on the rental agreement.

JOHN: That won’t financially connect you. No. The only way it happens is if, like I said, you open a joint account. So something like a joint bank account, a joint loan, obviously a mortgage, joint mortgage as well. Credit cards aren’t a linking account because you add someone as an additional card holder. You’re still the main card holder.

PHILIPPA: Oh OK, that’s an important point.

JOHN: You have to be careful if you add someone as an additional card holder because the onus is on you, and that’s your account, to be in charge of that.

PHILIPPA: Is there any issue about where you live?

JOHN: It can slightly, based on how a lender will interpret that information.

PHILIPPA: OK. Clare, it does seem to me this is all so personal, isn’t it? And most of the time, we just wander through life not thinking about it. But given that almost everything is online now for many of us, our spending habits, the stuff we don’t really think about, the sandwich we buy, the train ticket we buy, that must all play into this.

CLARE: Yeah, I mean, I think so. There are so many more opportunities to spend money. Obviously, with the sort of dawn of the Buy Now, Pay Later era…

PHILIPPA: Klarna and other providers, yeah.

CLARE: You have to be really, really careful with what a slippery slope that is.

PHILIPPA: Yeah, because they’re so heavily promoted, these things, aren’t they? It’s so easy to do, isn’t it?

JOHN: They’re included, at least some of them. They’ve started reporting to credit reference agencies. Klarna reports to Experian, and others report to other credit reference agencies as well. They don’t factor into credit scores as we’d give them to someone yet and that’s because we’re early days.

PHILIPPA: Because that’s the direction of travel, presumably for the industry, as you say. It doesn’t factor in now, but in the future, who knows?

JOHN: It’s moving that way, and at some point, it’ll factor into credit scores because lenders will feed back to the credit reference agencies how they’re taking that information. So if you had 30 loans, for example, that would have a serious significant effect on your credit report. If you had 30 Buy Now, Pay Later accounts, which technically they fall into that same bracket, then that would seriously impact any other application you make. So they’ll be viewed slightly differently. Lenders are feeding back to us to say, actually, “this is how we’re viewing them”. Not quite in the same way, but the more new accounts you have, usually the more it’ll impact your credit score negatively.

How do I know if my credit score is good or bad?

PHILIPPA: OK, so we’ve done quite a lot of digging, haven’t we? Into how all this works. I’m going to get to the crucial question, which is obviously really, how do you check? And what is a good score? What is a bad score?

Now, it’s the three organisations you mentioned earlier, isn’t it? It’s Equifax, and then Experian, your own, then TransUnion. You can just go on their websites, open a free account and find out?

JOHN: Yes, exactly. So of course, you can come to Experian and check your free credit score. You can do the same with the other credit reference agencies as well. Importantly, like I said at the beginning, check your credit report. You can check that for free. Statutory Credit Report, it’s called. Ideally, annually. So do it once a year.

PHILIPPA: Unlike Clare, who does it every month?

JOHN: Well it’s great, it’s great to check it, this is perfect, but it’s great to check in on your score but check your report once a year and before an application, but really once a year is great.

CLARE: It’s a really good idea to check your report if you notice a sudden change in your score. And this is why I check it every month. So I’ve got a 15-month-old daughter, and when she was born last year, fell over when a repayment was due on a small loan that I took out when we moved house a couple of years ago. And on the day that my daughter was born, I hadn’t done that.

PHILIPPA: You had your hands full though, didn’t you?

CLARE: I did, and my loan payment bounced.

PHILIPPA: OK.

CLARE: The next day, I phoned up and made it manually, but…

PHILIPPA: The next day, after you’d had your daughter?

CLARE: I did, yeah.

PHILIPPA: It’s impressive, isn’t it?

JOHN: That’s keeping control of your finances.

CLARE: She was… Well, this is, this is because I have everything set up to notify me on my phone, you see?

PHILIPPA: Understood.

CLARE: Also, she’s my third. So it was very much… It was par for the course.

PHILIPPA: No problem.

CLARE: But in the window between when the payment bounced and when it was made, the monthly submission of information to the credit reference agencies had happened.

PHILIPPA: OK.

CLARE: And it’d been recorded as a missed payment. And so I noticed then, a couple of months down the line, that my credit score had tanked, even though -

PHILIPPA: Really tanked? Just over that?

CLARE: Really tanked. But because I noticed that, I called my loan provider. They said, “Oh, this is what’s happened. I’ll put a note on your file. If you contact all the credit reference agencies with a query, we can let them know“. And so I did that. I submitted a form on each of the three. It took -

PHILIPPA: Fiddly?

CLARE: It was fiddly but it took 45 minutes, and it meant that that information was wiped from my files.

LUIS: That’s a specific case where you were aware of the payment, fortunately you could solve it, but nowadays with this era of awareness for scams and identity fraud but just by simply checking your report and understanding what’s been impacted you can identify whether a loan was taken under your name or a credit card’s been taken out in your name or someone has been spending money under your name.

Spotting and correcting errors in your credit report

PHILIPPA: Talking about correcting errors, and obviously, is a properly good idea to check it because clearly stuff happens. Is there a point at which it’s too late to correct something? If you go and check your credit report, maybe for the first time tomorrow, and you see a thing on there and you think, ‘Well, that’s not right’, but it was three years ago. Is there anything you can do about that?

JOHN: Absolutely. We keep data, generally, for six years. That’s usually someone’s credit history. It can be slightly longer sometimes if you’ve had a bankruptcy and you’ve had some restrictions, goes on for a bit longer, for example. But generally, six years. If you check your credit report and you see anything during that time that’s incorrect, and I should say they’re quite rare to have errors on there. But if it happens, you get in touch with us, and it’s all a free service, so you get in touch with us, you say, “right, this was the error”, and we’ll go off and we’ll query it with the company directly, just like Clare said.

PHILIPPA: I understand you’re saying it’s rare to find mistakes, but I suppose the question in my mind is, how do you know that? Because if people don’t check, they don’t know if they’re there, do they?

JOHN: Well, that’s always why I say, check it.

Understanding your credit score

PHILIPPA: OK. Good scores, bad scores. If you look at the score, you look at the number, and think “what does this mean?”. Tell us, talk us through that.

JOHN: So, firstly, I think really important to set the scene is you’ll check the credit score from one of the credit or all three credit reference agencies. We’ll all have slightly different bandings. Now, they typically work in the same way. A missed payment will negatively impact your credit score. Low outstanding debt will positively impact your credit score. If you check it, don’t compare the agency’s score. So don’t look at Experian and say, “Right, I’m 900 with Experian, but I’ve checked my TransUnion score and I’m only 600 with TransUnion.” So don’t compare them.

PHILIPPA: Yeah, that was my question. I mean, that happens, right, so?

JOHN: Yeah, absolutely.

PHILIPPA: So, how do we actually understand where we are then?

JOHN: View them as stand-alone scores. Just look at each agency individually and say, “Right, I’m Experian. I’m sitting in the good banding, and this is where I stand. I’ve checked the other credit reference agencies, and I’m in this banding for this.” And also, just worth highlighting, you can have some differences in credit reports as well. It’s not all identical information. You might have a couple of accounts with one credit reference agency that aren’t showing with the other two.

PHILIPPA: OK.

JOHN: So your score can be slightly different anyway.

PHILIPPA: Do you find that, Clare, when you check?

CLARE: Yeah, for sure.

PHILIPPA: Are they very different?

CLARE: Not wildly, but in actual fact, there have been points where there have been big discrepancies. And I think the important thing is, yeah, to just treat them as all pieces of your bigger, financial puzzle.

How to improve your credit score

PHILIPPA: So if you’ve got a good score, if you’re happily in that place, how do you look after it? How do you make sure it stays good?

CLARE: From my perspective, keeping on top of those monthly payments and correcting anything immediately. Your utilisation, so if you’ve got credit cards, this is something that was never explained to me when I was younger, but really, you don’t ever want to be going over 30% of your total limit.

PHILIPPA: Why is that?

CLARE: Because the higher your utilisation, the more it’s going to impact your score.

PHILIPPA: That’s interesting. So if your credit card company is saying, you can spend £5,000 if you want to, you shouldn’t be doing that, even though they say you can, and you think you can pay it.

CLARE: Not long term. I’d say, ideally, you do want to stick within that 30%. And lots of people use credit cards on a rolling basis, right? So they use them to pay for a certain thing. Maybe they put all their petrol on there and they pay it off in full every month. The crucial thing there is to wait until your statement so that the fact that you’ve used it has registered.

JOHN: Exactly the point I was going to make. Keeping the balance as low as possible is really good for your score. The closer you get to what we’d say is maxing out your credit card is not particularly good for your credit score. It will reduce it. And if you’re, like Clare said, in this scenario where you’re using it on a regular basis, you put all your spending on there and we pay, you might get benefits on your credit card, for example, for doing that.

PHILIPPA: Yeah, yeah, yeah.

JOHN: That’s fine. Absolutely a great way to use your credit card. However, if you’re applying for something really important, like a mortgage, what you might want to do is maybe avoid doing that a couple of months before you apply for it so that actually what you’re doing then is creating that available credit and you’re not maxing out your credit card because we’ll get the statement amount. If you’ve got a £5,000 limit and you spend £4,500 that month, your statement’s produced, although you’ll pay it off a few days later, we’ll know that you’ve spent £4,500 on there, and that’s on there till next month.

PHILIPPA: That is really useful to know. So, other end of the situation, if you’re looking at your credit scores, they’re not so great, what do you do to try and boost them up? If you’re thinking, ‘yeah, well, in a couple of years, I wonder if I might be wanting to try and get a mortgage’. How do you polish it up?

JOHN: There’s loads of ways to do it. But actually, the first thing I’ll say is be patient. These things don’t happen immediately. If you’re renting, you can share your rent payments with Experian, so you can add that information to your credit report as well. That will help if you’re making your rent payments on time regularly. We also have something called Experian Boost, where if you’re paying for certain things like digital subscriptions, Amazon, Netflix, Spotify, if you’re paying for your Council Tax regularly, if you’re paying into any savings regularly, you can get that information included in your credit score.

PHILIPPA: How do you do that?

JOHN: So it’s open banking. So you connect your bank account securely. We only scan for those transactions, so things like Amazon Prime, for example.

PHILIPPA: OK.

JOHN: And then you can boost your score by up to 101 points. That’s really great. If you’re looking for credit, your score is not particularly great, and it can unlock other lenders and other deals that are there. But the process of, you know kind of, building it up over time, making it look a bit better, is fundamentally, make your payments on time and try not to get into too much debt. So your outstanding borrowing will have a big impact on that. And if that’s why your score is low, work on a plan to bring it down over time.

PHILIPPA: One thought, I don’t know whether we’ve covered it, overdrafts, bank overdrafts. Does this play into it as well?

JOHN: It does.

PHILIPPA: It does? OK.

JOHN: Yes. So actually an overdraft will show, and it’s just how you use that overdraft as well. As long as you’re not going over your arranged overdraft limit, which isn’t good, then if you use it and you’re kind of repaying it, that’s ok.

PHILIPPA: But is it like a credit card? If you max out your overdraft, that’s a red flag, too.

JOHN: It’s not quite the same, but they do factor in, obviously, to credit scores because it’s an amount of debt that you owe.

PHILIPPA: So try not to max it out.

JOHN: Also, when you apply for credit, albeit not included in credit scores, what lenders often like to see is that you’re not stuck in the overdraft. They want to see you in a positive balance. At some point, during in the month, so that’s important as well.

PHILIPPA: OK. We’re running out of time. I had no idea there was going to be so much to talk about.

JOHN: Sorry, I’ll just talking. Keep going.

Busting credit score myths

PHILIPPA: I think it’s really interesting I really do. I just want to kind of bust a few kind of misconceptions around credit scores though. Actually, I wanted to ask you about this, Luis, which is about age, because I can see how you might think this stuff only really matters when you’re younger, because that is the time when you’re thinking more about mortgages, car loans, all that kind of stuff. I mean do retired people have to bother themselves about this? Does it matter?

LUIS: Yeah, of course, because like your financial life doesn’t stop when you retire. You’re still there, you’re still spending, you’re still reliable on financial products, you still might have like insurance policies you know or other products that support your retirement itself. So it does matter.

PHILIPPA: So this keeps on mattering. Actually, another slightly later life thing, student loans, Clare. If you get to the point where you don’t pay it off and it gets written off, does that impact your credit score?

CLARE: Not to my knowledge.

JOHN: No, makes no difference.

PHILIPPA: OK, final question, and I have to ask you this because when I said I was doing this podcast, two people asked me this, which was, if you keep checking it, and I think the answer to this must be no, because you check yours a lot.

JOHN: I know what you’re going to say.

PHILIPPA: If you keep checking your score, does it impact the score?

JOHN: It does not impact your credit score.

PHILIPPA: So you can check it every day. That’s not a problem.

JOHN: I would encourage anyone to check it every day. No, of course not.

CLARE: I think that’s the biggest myth around credit scores. It endures somehow the myth that if you check it, it will go down. I personally believed that for much of my 20s, and obviously, you can tell I don’t believe it anymore because I’m constantly on there.

PHILIPPA: Well, I’m glad we cleared that one up. This is obviously a huge misconception. People should go and check, and they should go and check right now. Yeah?

CLARE: Yeah.

LUIS: Yes.

CLARE: And don’t panic if your score is low. Even if your score is very poor, like the credit police not coming to take you away.

PHILIPPA: It’s worth remembering that.

JOHN: We’re not anyway.

PHILIPPA: I don’t think anyone is coming to take you away. I just want to be clear about this. This is between you and your credit score.

CLARE: Yeah, because I think there are, with loads of stuff to do with finances, it’s really hard not to sort of… When you see a number there it’s hard not to see that as like an assessment of you as a person. Just see it as something, see it as some information that you can use to improve.

PHILIPPA: It’s just where you’re at right now, isn’t it? It doesn’t mean you’re there forever if it’s not great.

JOHN: Exactly. To that point, they’re temporary. The data only lasts, stays on your report for six years, so if you’re not in a great place right now, that’s not the place where you might be in a year’s time or two year’s time or six year’s time. Even if you’ve been you know, bankrupt, for example, there’s always, you know, a light at the end of the tunnel.

PHILIPPA: Yeah, just better to know.

LUIS: Yeah. For me, we live in an era of data, fortunately or unfortunately. Don’t be afraid of things being done with your data itself, as sometimes you might panic about, like “Oh, my data has been sold here or there.” Most of the time, there’s a lot of companies that are trying to do the best for you. Most of the financial applications are there to help you.

PHILIPPA: That’s great. Thank you, everyone. Really really useful.

CLARE: Thank you for having us.

JOHN: Yeah, great.

LUIS: Thanks for having us here.

PHILIPPA: All good to know, right? Why not take a look at your credit report today and make sure it’s accurate? That way, you’ll know exactly where you stand when you make your next financial decision. Just before we go, our usual last reminder that anything discussed on the podcast shouldn’t be regarded as financial or legal advice. When investing your capital is at risk, thanks for being with us. If you’re enjoying the podcast, we would love it if you’d rate and review us. You know we always want to hear what you think. See you next time when we’ll be delving into how you can better understand your pension balance.

Risk warning

How can I improve my credit score?

In this blog, we'll cover where you can find your credit report, how to understand your score and crucially, how to improve it.

Whether you’re looking to get a loan, buy a house, or even just set up a mobile phone contract, your credit score will play a part. The world of credit scores and reports can feel a bit confusing. In this blog, we’ll cover where you can find your credit report, how to understand your score and crucially, how to improve it.

What is a credit score?

Your credit score is a number that represents how reliable you are with money, specifically when it comes to borrowing.

It’s the information about your borrowing habits that matters, rather than the number. In general the higher your score, the more likely you are to have applications accepted for things like loans, credit cards, or a mortgage.

In the UK, your credit score is calculated by credit reference agencies like Experian, Equifax, and TransUnion. They collect information like:

your history of paying bills - whether you pay on time;
your credit history - if you have outstanding loans, credit cards, or other types of borrowing; and
how much of your available credit you use - whether you ‘max out’ your credit card or bank overdraft every month.

The credit reference agencies then use this information to give you a single number which is your credit score. Agencies collect different bits of information and weigh them against criteria in their own way. This is why the number can differ from one agency to the next. The important thing is that your scores all point in the same general direction.

What is a good credit score?

Here’s a rough breakdown of the three main credit score agencies:

Experian - scores range from 0 to 999. A ‘good’ score is anything from 881 to 960, and an ‘excellent’ score is 961 or higher.
Equifax - their scores range from 0 to 1000. A ‘good’ score is between 531 and ^{_pension_age_from_2028}0, and an ‘excellent’ score is 811 or above.
TransUnion - this one ranges from 0 to 710. A ‘good’ score sits between 604 and 627, and ‘excellent’ is 628 or above.

The general rule of thumb is the higher the score, the better. Individuals with ‘good’ or ‘excellent’ scores are more likely to get approved for credit. Plus, they may be offered better interest rates. If your score is low, don’t worry. It’s not permanent, and there are plenty of ways to improve it.

How do you improve your credit score?

1. Be patient - building or improving your credit score doesn’t happen overnight. Chipping away in the right direction consistently means you’ll eventually notice positive changes.

2. Pay bills on time - lenders want to know you can be trusted to pay back what you owe. Missed payments or late payments can hurt your score more than you might realise. Setting up direct debits can help you pay on time.

3. Keep your credit utilisation low - credit utilisation is how much of your available credit you’re using. For example, if you have a ^{_basic_rate_personal_savings_allowance} limit on your credit card and you regularly spend £900 of it, that’s 9^{_personal_allowance_rate} utilisation. A general rule of thumb is to use less than 3^{_personal_allowance_rate} of your available credit. This can show lenders you’re not too reliant on borrowing.

4. Register to vote - lenders use the electoral roll to confirm your identity so make sure you’re on it. If you can’t register to vote for any reason you can add a note to your file asking lenders to contact you for other official documents.

5. Avoid applying for lots of credit at once - every time you apply for credit, it leaves a ‘footprint’ on your credit file. Too many applications in a short space of time can impact your score. Space them out if you can.

6. Check for and fix any errors - mistakes can happen. Maybe a payment is listed on your credit file as ‘missed’ when it wasn’t. It’s worth checking your file once a year and contacting the agencies to put things right if you notice an error.

7. Track regular payments - through open banking, some credit reference agencies can now track regular payments to services like Netflix, Amazon etc. You can also ask them to record your rent payments too - it’s all evidence.

8. Consider a credit-building credit card - this is the one to be careful with. It’s not a ‘fix all’ option and needs to be properly managed. If your score is low or you’ve got little credit history, a credit-builder card can help. The trick here is to spend small amounts and pay off the balance in full every month. Over time, this can show lenders you’re reliable with credit but beware of overspending.

A low score isn’t the end of the world, it’s just about showing lenders that you’re responsible with money. Your credit score doesn’t have to be a worry, and improving it doesn’t have to be a mystery.

Find out more about credit scores on Episode 31 of The Pension Confident Podcast. You’ll hear from Consumer Affairs Manager at credit reporting company Experian, John Webb; Clare Seal, an Author and a Columnist and a Content Creator; and Luis Mejia VP Data from PensionBee. You can listen to the episode, watch on YouTube or read the transcript.

Risk warning

How does inflation affect pensions?

Find out how inflation impacts pensions, what this means for you and how best you can protect your finances.

This article was last updated on 20/08/2025

A rise in inflation happens when the price of goods such as food, transport and living costs, like electricity, rise. Changes to inflation not only impact what you can afford today but also what you can afford in the future.

Imagine you have ^{_basic_rate_personal_savings_allowance} saved under your mattress for five years. If inflation is 2% each year, after five years, the cost of living would be over 1^{_personal_allowance_rate} higher. This means your ^{_basic_rate_personal_savings_allowance} won’t buy as much as it would’ve five years ago. In simple terms, its value decreases over time because of inflation.

Savings like your pension aren’t immune to these changes and if your pension value remains the same, this decreases your purchasing power in the future. Over time, this could mean that your pension savings might not get you as far as you’d hoped.

What is inflation?

Inflation is the rate at which the cost of everyday things like food, transport and electricity increases over time. The rise in prices, often presented as a percentage, means that a unit of money essentially buys less than it did previously.

For example, if you buy a pint of milk for £1 today and inflation jumps to 1^{_personal_allowance_rate}, next year the same pint will cost you £1.10. If inflation sticks at 1^{_personal_allowance_rate}, it’ll cost you £1.21 the year after. In the real world, the inflation rate changes constantly.

While it’s common for the value of goods to rise over time due to inflation, prices can also decrease. This is known as deflation.

What’s the relationship between inflation and interest rates?

High inflation is an economic ‘fever’ where symptoms include:

a loss of appetite to spend money (due to rising prices); and
a weakness in currencies.

This antidote of raised interest rates doesn’t correct inflation overnight and may have side effects of its own, such as:

it being more costly for you to borrow money for loans or mortgages; and
more attractive interest rates for cash savers.

What causes inflation to rise?

Here are three common reasons why a rise in inflation happens.

1. Built-in inflation

Built-in inflation refers to when wages go up because of rising costs. If workers in the UK demand higher wages to cope with increasing prices, businesses may raise their prices to afford these higher wages. This creates a cycle where higher wages lead to higher prices, which then leads to demands for even higher wages.

2. Cost-push effect

The cost-push effect occurs when it costs more to make products. For instance, if the price of fuel rises, it can become more expensive for manufacturers to transport their goods. To cover these higher costs, companies might raise the prices of everyday items, like groceries or electronics.

3. Demand-pull effect

The demand-pull effect happens when people have more money to spend, which increases the demand for items. For example, if the UK economy is doing well and people feel secure in their jobs, they might spend more on things like dining out or holidays. This higher demand can push up prices to match the increased spending.

How inflation affects the value of goods over time

The Office for National Statistics (ONS) recently released data showing that inflation rose to 3.4% in the 12 months to December 2025. In practice, this means that £100 of goods and services last year would now cost £103.80.

The government has tasked the Bank of England to keep inflation at around 2% a year. This target is important because it helps keep price increases manageable, allowing consumers and businesses to plan their finances more effectively.

How the Bank of England keeps inflation under control

To keep track of inflation, the Bank of England uses the Consumer Price Index (CPI). This is like an imaginary basket containing hundreds of goods and services, which have their prices tracked over time.

When inflation goes up, the Bank of England might raise interest rates. This makes loans more expensive, which can lead to less spending and help slow down price increases. On the other hand, if inflation is too low, the Bank of England may lower interest rates to encourage more spending and investment.

In rare situations, the Bank of England could consider a negative interest rate, which means banks would pay to keep their money with the Bank of England. This would encourage banks to lend even more money to their customers.

What to do when inflation rises?

Inflation impacts what you can buy now and in the future. To help keep your money from losing value, you could:

find a savings account with an interest rate above inflation; and
invest money into the stock market (through a product like a pension).

Savers

To counter the effects of inflation, you could choose a savings account with an interest rate higher than inflation - if there’s one available. This helps ensure that your money retains more of its value over time.

If you’re worried about being stuck with low rates for a long time, consider short-term products (such as an instant access saving account). This gives you the flexibility to benefit from rising interest rates without tying up your money for too long.

Investors

Historically, the stock market has offered higher returns compared to traditional bank savings accounts. Over the last ten years, global stock markets have grown by an average of 1^{_personal_allowance_rate} each year; which is much higher than the UK’s average inflation rate of roughly 3% a year.

Keep in mind that there’s no guarantee the stock market will keep growing at the same rate - it could also go down in value. Plus, remember to consider any fees you might have to pay when investing, as they can affect how much money you make.

How does inflation affect pensions?

If you’re currently receiving the State Pension, the inflation rate can determine the annual increase in your payments. Under the ‘triple lock’ policy, the State Pension should increase each April by the highest of the following three measurements:

inflation, as measured by the Consumer Price Index (CPI) in the September before;
average earnings growth, as measured by the ONS in the September before; or
2.5%, as the minimum annual increase.

This annual increase applies to both the basic State Pension (pre-April 2016 retirees) and the new State Pension (post-April 2016 retirees). Back in April 2023, the State Pension increased by 10.1% due to the significant rise in inflation.

Personal and workplace pensions are usually invested in the stock market. While changes in the inflation rate don’t directly change the amount in your personal pension pot, they can affect its value and how much you can buy with it.

Before retirement

As prices rise, the money saved in your pension may not stretch as far when you come to retire. If your pension investments don’t grow at a rate that outpaces inflation, you might find that your purchasing power decreases over time.

If you’re Auto-Enrolled into your employer’s workplace pension, a percentage of your salary will be invested into your pension. This means that as your pay increases over time, so will your pension contributions from you and your employer.

If you make regular contributions to your personal pension, it’s a good idea to consider raising your contributions each year to keep up with inflation. This helps ensure your pension grows enough to match rising costs.

After retirement

When you start taking an income from your pension, inflation can erode the value of your withdrawals. But this could be offset if the investment growth of your pension outpaces the rate inflation.

If you choose to buy an annuity with your pension, inflation may have different effects. An ‘escalating annuity’ increases over time to keep up with inflation, while a ‘fixed annuity’ doesn’t - which means its real value can shrink due to inflation.

Summary

Now’s a great time to start looking at your pension contributions and ensure you’re on track to retire with enough money. If you’re concerned about the impact of inflation on your pension pot, you can use our Inflation Calculator. Alternatively, to see how much your pension could be worth at retirement and how long it could last you, try our Pension Calculator.

Have a question? Get in touch!

Risk warning

Your Fossil Fuel Free Plan switch questions, answered

Find out why we’re closing the Fossil Fuel Free Plan.

Why are you closing the Fossil Fuel Free Plan?

We’re closing the Fossil Fuel Free Plan for a number of reasons.

We introduced our innovative Fossil Fuel Free Plan in 2020 in direct response to our customers’ feedback. Customers told us they wanted to send a stronger message to big polluters by excluding fossil fuel producers and other sectors while investing in companies better prepared for the low carbon shift.

Over the past few years, sustainable investing has evolved and new types of climate funds have developed.

At PensionBee we use surveying to reaffirm that our pension plans continue to meet our customers’ investment expectations. From our February 2024 survey to our Fossil Fuel Free Plan customers we learnt that:

98% of respondents want to expand the plan’s exclusionary screens with one or more new screens;
62% of respondents want their pension to decrease exposure to carbon intensive industries over time, by investing more in green revenues; and
66% of respondents were happy to pay small one-off transition costs to move to an improved plan, provided the overall cost of the plan didn’t increase.

Read the full survey results.

Why did you select the Climate Plan as an alternative?

At PensionBee, we’re committed to listening to our customers, therefore, we’ve been closely working with one of the world’s largest money managers, State Street Global Advisors, to create a new upgraded plan that reflects our customers’ views. The Climate Plan is our newest responsible plan and will bring with it many positive benefits to customers.

In recent years a new type of climate investing has evolved, which aims to incorporate a decarbonisation pathway. Paris-Aligned benchmarks (PABs) minimum standards include a set of baseline exclusions and a decarbonisation pathway, among other criteria, as defined by the EU Climate Benchmark regulation. This decarbonisation pathway aims to take the requirement of the world to meet net zero, and apply these to the Climate Plan.

This means that even if the global economy carbonises, the Climate Plan will move in the opposite direction by proactively investing in less carbon intensive companies, to ensure it’s meeting a 10% year-on-year carbon reduction.

The Climate Plan also has objectives to allocate more to companies with green business models, by proactively investing more in climate solution providers.

By investing in this plan, your pension would increasingly be investing in companies that are at the forefront of the transition to a low carbon economy, and those positioned to mitigate risk and capture the financial opportunities that it brings.

The Fossil Fuel Free Plan and the Climate Plan are both 100% equity based investments and therefore both considered higher-risk plans.

How does the new Climate Plan differ from the Fossil Fuel Free Plan?

The two key points of differentiation are:

Expanded fossil fuel free definition, moving beyond reserves to exclude companies with ties to fossil fuels based on revenues, power generation and reserves. This is because companies without fossil fuel reserves can still have significant exposure to fossil fuels, for example many utility companies use fossil fuel-based power generation, but they do not own the reserves themselves.
Net zero pathway, to incorporate a forward-looking decarbonisation pathway compatible with the EU’s Paris-Aligned Benchmark label.

As you can see from the table below, the company holdings look very similar at the present time.

Top 20 companies and their weights in each plan as of 22 July 2024.

Climate Plan		Fossil Fuel Free Plan
	Company	Weight	Company	Weight
1	Apple	4.73%	Apple	7.37%
2	Microsoft	4.50%	Microsoft	6.69%
3	NVIDIA	4.10%	NVIDIA	3.72%
4	Amazon	2.30%	Amazon	3.72%
5	Alphabet C	1.62%	Alphabet A	2.37%
6	Meta	1.44%	Alphabet C	2.05%
7	Eli Lilly & Co	1.17%	Tesla	1.70%
8	Alphabet A	1.11%	Eli Lilly & Co	1.29%
9	Broadcom	1.10%	Meta	1.27%
10	Tesla	1.06%	JP Morgan Chase	1.03%
11	JP Morgan Chase	1.02%	Visa A	1.01%
12	Schneider Electric	0.98%	Broadcom	0.98%
13	Taiwan Semiconductor	0.92%	United Health	0.93%
14	United Health	0.78%	Novo Nordisk	0.84%
15	Merck & Co	0.76%	Costco	0.72%
16	Novo Nordisk	0.72%	Home Depot	0.70%
17	Visa A	0.69%	Cisco Systems	0.64%
18	ABB Ltd	0.67%	ASML Holding	0.64%
19	Mastercard	0.62%	Nestle	0.62%
20	Johnson & Johnson	0.62%	Merck & Co	0.61%

However, over time the holdings may start to change as the plan gradually decarbonises to meet the goals of the Paris Agreement. This will ensure that the Climate Plan meets customer expectations that their investments align with international climate agreements.

How do the fees compare for the Fossil Fuel Free Plan?

Your one simple annual management fee won’t change. The Fossil Fuel Free Plan costs 0.75% annually and the Climate Plan will also have an annual management fee of 0.75% 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.

How will performance compare to the Fossil Fuel Free Plan?

As shown above, the starting position for holdings in the Fossil Fuel Free Plan and your new Climate Plan is very similar, although the new plan takes a stricter exclusionary approach. This means that in the short term, we would expect returns to be broadly comparable.

However, over time there may be increasing divergence in the companies that the new Climate Plan invests in. Whilst the old Fossil Fuel Free Plan continues to invest in non-fossil fuel companies that may be heavy carbon emitters or polluters, the new Climate Plan seeks to transition away from them. This type of proactive approach goes beyond the objectives of the old plan.

This means that if the rest of the market carbonises in the future, then you may see a more meaningful divergence in the underlying assets of the old Fossil Fuel Free Plan and your new Climate Plan.

One feature of the new Climate Plan is that it can take advantage of the growing opportunities in the shift towards a low-carbon economy, such as by increasing investments in environmentally friendly businesses. This approach also helps protect against risks by steering clear of industries and assets that might lose value if the transition to a low-carbon future doesn’t go smoothly. These “stranded assets” are investments that could become almost worthless due to new government regulations, changing public opinions, or shifting consumer preferences.

What are the costs of switching?

Legal & General Investment Management, manager of your old Fossil Fuel Free Plan, and State Street Global Advisors, who will manage the new Climate Plan, will conduct an in-specie transfer for the bulk of the funds. 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 cannot make withdrawals or contributions.

State Street Global Advisors estimates the cost of this in-specie transfer to be 0.09%, 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 £18. The annual management fee will remain unchanged at 0.75% of your pension balance.

What are the risks of switching?

Your old and new asset managers, Legal & General Investment Management and State Street Global Advisors respectively, will seek to minimise the risks of this switch by conducting the bulk of this switch in-specie.

In-specie switches are a business-as-usual activity for managers with dedicated transition teams on both sides handling the switch.

We will share more details on the dates that the switch will take place, and the associated “blackout” period. Currently we expect this to be from mid November to early December and we will confirm the exact dates in the coming weeks. 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 Climate Plan will perform better than the Fossil Fuel Free Plan in the short, medium or long term. However, based on the feedback we have obtained from customers, we are confident that the Climate Plan better aligns with our customers’ needs and expectations of this product.

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. If you want to switch plans, please log into your BeeHive.

With PensionBee you can switch to any new plan of your choice at any time. This switch will take around 12 working days to complete.

Can I continue to make contributions?

All your regular and ad hoc contributions will continue to be paid into your Fossil Fuel Free Plan until your switch begins. Once the switch begins, your BeeHive balance will be frozen until it completes. We estimate this will take 20 working days.

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

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 will contact you separately to discuss this.

If you were planning to make an ad hoc withdrawal in November or December this year, we’ll give you 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.

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

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

Risk warning

August product spotlight

This month, we put our State Pension Age Calculator in the spotlight. It'll tell you when you'll likely be eligible to start receiving the State Pension and how you can combine it with our Pre-State Pension Gap Calculator.

The State Pension is a regular payment you can get from the government once you reach the State Pension age if you’re eligible. It’s designed to help support you in retirement, however, to qualify you must have paid National Insurance contributions during your working life. When you’re entitled to receive it depends on when you were born.

If you were born before 5 April 1960 the State Pension age is 66 for both men and women. However, for those born after this date, it’s a bit more complicated. Our State Pension Age Calculator will tell you when you’ll likely be eligible to receive the State Pension.

How the State Pension Age Calculator works

To see your State Pension age and when you’ll reach it, you only need to enter your date of birth into the calculator.

Pre-State Pension gap

Many people want to retire before they’re eligible to claim the State Pension. However, doing so means you’ll need to ensure you’ve saved enough to cover the years between when you stop working and when you can start claiming the State Pension. So, if your State Pension age is 68 but you hope to retire at 60 you’ll need enough income for that eight-year gap. This is where a personal pension might come into play or other savings such as an ISA.

The ‘Pre-State Pension Gap’ Calculator can help you see how much income you may need depending on how early you want to retire. You’ll find it underneath the State Pension Age Calculator and you’ll be able to calculate your pre-State Pension gap once you’ve used the State Pension Age Calculator.

How to calculate your ‘Pre-State Pension Gap’

You’ll just need to enter a few details like your ideal retirement age and the amount you’re currently contributing each year to your pension. The calculator will then show you how much extra income you’ll need to fund your Pre-State Pension Gap.

The amounts shown are based on the Pensions and Lifetime Savings Association’s (PSLA) Retirement Living Standards. This provides a guide to what retirement may look like at three different living standards - ‘minimum’, ‘moderate’ and ‘comfortable’.

At the bottom of the page, you’ll find 10 of the most frequently asked questions about the State Pension, such as ‘how you can claim it once you’re eligible’ and ‘how much it’s currently worth’.

Future product news

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

Risk warning

Thank you! Your submission has been received!

Oops! Something went wrong while submitting the form.

E3: The gender pension gap - with Emilie Bellet, Romi Savova, and Sam Brodbeck

The Pension Confident Podcast

PensionBee Content

24 Feb 2022

minute read

Feb 2022

Inside the BeeHive

Women and Finance

The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to Episode 3, or watch on YouTube. Scroll on to read the conversation.

PHILIPPA: Welcome to episode three of the Pension Confident Podcast! My name is Philippa Lamb, stepping in for Peter Komolafe, and hold onto your hats this time because we’re diving into the gender pension gap.

Music kicks in

PHILIPPA: Thanks for listening in - we’ve had a great response to the first two episodes - keep those five-star ratings coming if you’re enjoying it and if you have any feedback we would love to hear it. Drop us a line: podcast@pensionbee.com or on Twitter it’s @pensionbee.

Now, as we say every time, we’re here to help everyone get the best out of their pension and we do mean everyone because when it comes to pensions there are some major inequalities and this time we’re going to tackle the gender pension gap. So, what is that? Well, research from PensionBee tells us that women face real obstacles when it comes to creating a comfortable retirement. In fact, the disparity between men and women’s pensions has grown to almost 60% in some parts of the UK. So, how did we get here? What is standing in the way of women saving enough for their retirement? And what can we do about this problem?

The usual quick disclaimer before we start, anything discussed on this podcast should not be regarded as financial advice and, as always with any investments, your capital is at risk. Now I’ve got three expert guests with me today: Romi Savova, CEO of PensionBee, Sam Brodbeck, Personal Finance Editor at The Telegraph and Emilie Bellet, founder of the financial education company Vestpod which is all about empowering women to save and invest.

Hello everyone!

Hellos from everyone

PHILIPPA: We are here, as you know, to talk about pensions so before we get going, it would be great to hear what a fabulous retirement actually looks like to all of you. I have to say, for me, a dream retirement is all about freedom and comfort - I want to be able to live somewhere lovely. I’ve always travelled a lot so I definitely want to do lots of that when I’m winding down work and retired. How about you?

ROMI: Well, for me, I haven’t visualised it perfectly yet, but it definitely involves my three children. I recently had a baby, only very recently. And so retirement is a little bit further away in terms of my thought pattern, but it involves them and of course, some sunshine.

EMILIE: Same for me around freedom and I feel I’m still going to be working in some capacity, helping maybe founders maybe - hopefully investing some money helping some businesses grow and spend time with my family. I see my in-laws coming to London, babysitting my kids and I think that’s brilliant.

SAM: We’ll I’m on paternity leave, so it’s kind of like being retired.

PHILIPPA: That’s not retirement, is it?

SAM: Maybe you’re right. I think I just want to do a lot of walking on my own. No one talking to me. I do like them, but also I’d like them not always to be there.

PHILIPPA: Alone time. Important for all parents, I think.

What is the gender pension gap and why it happening?

PHILIPPA: Okay, I think we all know what we’re hoping for, but how do we get there? And particularly - I’m sorry, sir - but particularly how do women get there? Let’s some kick off by defining what we mean, when we talk about the gender pension gap. Romi. I know that PensionBee has been looking into this. What exactly is it?

ROMI: Well, the gender pension gap is simply the difference between men’s and women’s pension pots, and it can be measured at any point in time but it’s particularly large when women get to retirement, because it takes many, many years to accumulate and build up a pension and the disparity between men and women actually increases with age. So when we look at the statistics and the numbers across the country, on average, women’s pension pots are about 38% smaller than men’s and that inequality is present in pretty much every region of the UK, and it’s pretty appalling.

PHILIPPA: So at some we all know about the gender pay gap, don’t we? I mean, is that the root cause of the pension gap that Romi has been talking about?

SAM: I think so. If you get paid less, you save less, and then that’s extrapolated over time.

PHILIPPA: But there’s more to it.

SAM: Yeah, it’s career breaks that women have typically more of, which affects both those things, I suppose. So you don’t save for the years or booking through a baby probably, unless you’re very organised. And then potentially you’re missing out on promotions and other things that enhance your pay.

PHILIPPA: Emilie, what do you see as the key issues driving this gap?

EMILIE: So I mean, if I just take my personal example, I thought starting working I would actually never stop working but when you look at women’s career we have some - we may have children. We are still the primary carers for families. So, what happens during these times is that we don’t earn, we don’t save money and this money is not compounding over a longer period of time.

PHILIPPA: I mean, Romi, there’s good data on this, isn’t there? I was looking 2021 last year, Office for National Statistics, they said women with dependent children are seven times more likely to work part-time than men. It’s a big difference, isn’t it?

ROMI: It is a big difference and it’s often socially imposed onto the women. We’ve done a lot of research into this topic and even when the woman is the higher earner. So let’s say that the gender pay gap doesn’t apply in your family, even then women are more likely to take time off to look after children.

PHILIPPA: Yeah, 15% of mums say they are totally economically inactive because of caring responsibilities.

ROMI: Yes. And it’s not only mums, again, when we’ve looked into the research, it’s mums, its relatives, its ageing parents, the caregiving aspect of our economy is simply unmeasured and uncompensated.

PHILIPPA: Yeah, that’s an interesting point isn’t it? Because we think about kids, don’t we? But it’s the other end of women’s careers as well, isn’t it? When they start looking after elderly relatives, that sort of thing. It’s usually women.

ROMI: Absolutely, and what tends to happen over time is that women participate less in the workforce, and that itself tends to promote the gender pay gap and it becomes a bit of a self-fulfilling prophecy, a negative self-fulfilling prophecy. And it will take quite a lot of action from everyone to get us out of this.

PHILIPPA: I mean, Emilie, do you think other psychological factors are at play here to do with pensions and gender, do you think?

EMILIE: There’s something around financial literacy and financial confidence, and I think women definitely need a boost. We don’t, I mean, we didn’t receive any financial education. It is the same for men and women, but we see a slight financial literacy gap between men and women. And I think it also comes from confidence.

PHILIPPA: Yeah, where do you think that comes from? That’s a societal thing, isn’t it? Women just don’t read about that stuff.

EMILIE: It’s maybe that we don’t, first of all, we don’t talk about money as a society. There’s a lot of shame and fear around tackling personal finances. We don’t learn at school, and then we are confronted with all these big financial decisions, you know, taking a mortgage contributing to a pension, even doing a budget, looking at your numbers, this can be super overwhelming. So we don’t really start this conversation.

And I think for women also, it’s the jargon. And it’s, it’s maybe for everyone, but I think people feel they’ve been a bit patronised also, by the financial services industry. So they can shy away from actually taking this decision, calling a financial advisor, talking about money with their partner. So I think these are a lot of like psychological barriers for everyone to overcome. I think education, better communication, this is helping women get started and have these important conversations.

PHILIPPA: And what do you think Romi, Sam? We do not want to be stereotyping here along the lines of gender attitudes to personal finance. But I mean, would it be fair to say that across the piece, across the board, I think a lot of women are still - it’s hard to understand, as Emilie was saying, they’re kind of walking away from it. It’s easy to not deal with it, isn’t it? Stuff like this?

ROMI: It is. And I think the systems and the way the systems are set up, make it harder for women to be on top of it, frankly, because first of all, if you’re having children, as a woman, you are doing most of the caregiving, and therefore you’re exceptionally busy. And so actually, women have less time to research their finances and get familiar with the jargon. And that’s maybe why Emilie will have seen some of a confidence gap.

Also, the part-time working, I think, tends to split the way that men and women save. So, in our research, we’ve seen that women will save for short-term things such as holidays, or a slightly bigger shop, whereas the man, potentially because of tax incentives as well, will end up putting more money into the pension, into the long-term savings. And then the system and the way that it compounds, what happens is that small differences tend to get compounded over time, because compound interest is what makes your pension grow. So by the time we look at this again in our 50s, those small changes in the beginning, are actually really, really big changes when it comes time to take your money out.

PHILIPPA: Yeah. And that mean, as you all said, it’s hard to look down the road and see what your life is going to look like. And often, you’re imagining you’re in a safe scenario with your pension planning, because you’ve got this thing going on. The guy is paying more, you’re dealing with the short-term holiday budgeting. But what if you get divorced? Or what if you have more children than you imagined? So, all these things can play out very differently from what you expect, can they?

ROMI: Absolutely, and when we see the approach to divorce and asset splitting, oftentimes, the pension is completely ignored. Again, because it’s perceived as a financial product that’s really, really difficult to understand. It has a lot of barriers, and the pension can get completely forgotten about and left behind, even if it’s a huge financial asset.

PHILIPPA: Well, yeah, because it can be bigger than the house, can’t it?

ROMI: Absolutely.

How can we tackle the gender pension gap?

PHILIPPA: So okay, I think we set the scene and we’ve looked at how we got to where we are now with the pension gap. Shall we move on to solutions and how to actually tackle this gap. Now, Romi, would it be fair to say that this is often framed as a problem women should be solving for themselves?

ROMI: I think it is almost always exclusively framed as a problem women should be solving for themselves. And the message I consistently hear from the financial services industry is that women need to do more and frankly, women are already doing so much.

PHILIPPA: Like we’re not already doing the other stuff.

ROMI: Yeah, absolutely and I just don’t think that that’s effective or fair, because placing the burden on the recipient of the system is just not going to work in terms of getting us out of the gender pension mess.

PHILIPPA: And it’s fundamentally wrong, isn’t it? This is a society wide issue that we all need to get involved in in solving.

ROMI: Yes, absolutely. If we could imagine a world where pay was equal, that would be a happier world for all and surely that should be impetus for everyone to play their part, whether it’s government, whether it’s pension providers, whether it’s women, but also importantly, it has to be men.

PHILIPPA: Yeah, Sam.

SAM: What can I do?

PHILIPPA: Well, as we’ve said, we’ll you’re doing some of it already, by taking some paternity leave, but as we said, it is - mostly care falls to women. We know this is a big cause of the pension gap. The government, they did try to tackle this a bit, didn’t they? This thing about women working less time than men, they introduced a thing called Shared Parental Leave. Can you just remind us how that works?

SAM: Yes. So, I used Shared Parental Leave with my first child, where effectively, I nicked a little bit of my wife’s maternity leave. I wasn’t paid for it. I took three months on top of would have been - normally just two weeks.

PHILIPPA: As a sole carer?

SAM: No. So I mean, I think that the idea is that I would have stepped in and she would have gone back to work and that would help her career, and that’s the sort of theory behind it. We actually decided to take it at the same time, because we thought maybe the early stages would actually be harder. But it was a bit of a headache, I mean, even to get it set up, speaking to the HR department, I don’t know. Maybe I was the first man to ever use it in the company.

PHILIPPA: When was this?

SAM: This is in 2018. So, I’ve been around, but I think 3% of men have used it.

PHILIPPA: Numbers are tiny.

SAM: I can’t think of I’ve ever seen an advert anywhere that tells you about it. People don’t talk about it, I don’t think. Even when I had done it, I spoke to people in the company, and they just didn’t know it existed.

PHILIPPA: Yeah, it’s a problem. I think government had high hopes. They were hoping for, I think, 20% take up in the first year. Well, that didn’t happen. I mean, even now. I mean, it’s hard to get a handle on the actual numbers, but it’s somewhere around 3 to 7%, something like that. It’s really, really low.

SAM: Yeah, that’s right. And it’s obviously a financial problem, because in general, women will get paid more while they’re off and men won’t. So, I wasn’t - I was unpaid for the bit above two weeks.

PHILIPPA: And that’s a huge problem, isn’t it? For men taking it up. I mean, most families just can’t afford to do that. And the Statutory Pay is really low isn’t it, that you actually get?

SAM: Yeah, it’s 100 quid a week or something.

PHILIPPA: I mean, that’s not going to pay the rent, is it?

SAM: But that’s the reason most people don’t take it, I think, probably. Apart from not knowing that it exists.

EMILIE: I think it’s very courageous to actually take your paternity leave, because it’s sending a very strong message. You know, you’re going to be out of work, you’re going to come back in a few months’ time, your job is still going to be here and you do the same as women. So well done you.

ROMI: I just don’t think it should fall to Sam to sort of self-sacrifice, because that is what leads to the 2% take up rate, like not many people are going to be as open minded about reducing their income for prolonged period of time. I think what is more effective is probably company policy. So you know at PensionBee, we have equal parental leave, and it’s for six months, because we know that this is a 1, 2, 3, maybe 4-time opportunity in your life. And surely you should have a long-term view on how your team is going to prosper from being able to take that time off, and then come back, hopefully refreshed when your baby is sleeping again.

SAM: I mean, that’s a great point. I mean, that’s what The Telegraph did. So, for my second child, they did introduce a new policy, which was equal parental leave, also six months, on full pay. So, I mean, I don’t know if that’s -

PHILIPPA: Full pay being the key point.

SAM: Full pay being - yeah, exactly. So, you know, if you’re a father now, why wouldn’t you take the full amount? There’s not really - I mean, I think if I hadn’t taken the full amount, my wife would be saying, what’s going on?

PHILIPPA: I think the other thing I’m wondering about, about why dads aren’t taking this up and that’s, I mean, all women know there is a motherhood career penalty to taking time out to be with your kids, whether you have to or you choose to you want to. Whatever the reason, you take big chunks of time out. It doesn’t do a lot for your career advancement with most employers. Guys know this, I think there has been some quite good research on the fact that it’s a big reason why they don’t want to take it. They don’t want to suffer that penalty. What do you reckon?

SAM: I think that’s - yeah, that is definitely the case. I mean, so I work for a newspaper and it’s a very fast pace. People coming and going all the time. There’s lots of change. And some men haven’t taken the full amount and I’m sure that’s because they think “I’m out of the game too long”. You know, what if a job comes up if I’m not seen in the office...

PHILIPPA: I didn’t look committed. All that.

SAM: Yeah, I don’t look committed, exactly.

PHILIPPA: What’s your take on this Romi?

ROMI: I think that in many companies, there is a culture of - if you are seen, you will be promoted. And so of course, men and women will respond to those types of incentives. I think businesses need to demonstrably be showing that that’s not the case. And we’ve certainly had many instances where we have promoted women while they’ve been on maternity leave. And I think that doing those types of things, because they are well deserved, and women should be recognised, regardless of whether they’re having children or not, is the type of way that you set an example and that you change the culture. And hopefully it influences other companies as well.

EMILIE: Maybe I can talk about more the conversation you can have with your partner. So I think when you’re planning for a family, it’s really important to have this conversation around, “Okay, who’s going to take time off and when? Plan a bit for your finances, what’s going to happen? Because very often women do this on their own, and they’re going to look at, “Okay, how much time am I going to be off work? How much will childcare cost?” and they will compare this to their own salary, and they will take a decision and say, “Okay, I’m not going to go back”. So, I think it’s trying to look at joint incomes, and how much you can pay for childcare, and see childcare more as an investment rather than a cost. But I think it’s really important to have these difficult conversations beforehand.

PHILIPPA: Planning. Would everyone agree? Did you do any Sam? You should have done.

SAM: So I’ve got a boy and a girl and I set them both up with - they both got Junior Pensions, Junior ISAs and premium bonds from birth. I mean, this is a strange way of addressing the gap but it does mean they’ll have the same amount of money, if nothing else happens.

PHILIPPA: So at least they start on a level playing field.

SAM: I’m addressing the gap in a very small way, but there is definitely much more you can do. I think you’re right about comparing. Women often will compare their salary to childcare, and say, “Actually, it makes no financial sense for me. I also want to be with my child. So why wouldn’t I just do that?”

PHILIPPA: Well, yeah, I mean, that is a key point, isn’t it? Because obviously women, they need to work. But a lot of women, they want to take time out to be with their children. It’s not that they’re forced into it, because no one else can do it. They want to, but quite reasonably, they want a decent pension, too. So how do we reconcile those two objectives?

ROMI: How do we reconcile that? I think that everyone should be free to live as they want, and to look after their children as they want to. And so of course, they’re going to be, you know, mothers and fathers who want to do the lion’s share. I think for women in particular, the most important thing, while you are off is to keep the pension contributions going. And because again, those small differences, they seem insignificant at the time, they become big problems later on, because of the way that compound interest works. I think that once women return to work, having been out of the workforce, there is often a temptation to go back part-time, which can then impact your pension contribution. Again, during that period of time, the pension contributions in the family should be shared.

EMILIE: Also on the pension, so when I left finance, studied building businesses, I didn’t have any income. And actually, I had this conversation with my partner, and I had my first son, and he actually paid into my pension. So, this actually works. It’s amazing, but in practice, it’s a very hard conversation to have sometimes for women, because if you never talk about money, if you don’t do your budgeting together, I mean, in some couples, you don’t even know how much the other is actually earning. You see that very often. It’s how do you actually start these conversations?

SAM: I wonder if there’s a role here for the government or the state really, because when you’re having a baby, there’s lots of - you have lots of contact points, and you’re given quite a lot of information. So, when you get the bounty packs, you’re in a hospital bed and the babies just been born. They’d give you all these documents that tell you “Here’s a free nappy, here’s some nappy cream”. I mean, they could have a thing that says, “What’s going on with your pension while you’re off?” And that would even just make you think a bit more targeted.

ROMI: Well, the anti-natal class seems a perfect opportunity to do that. I feel like right after childbirth. I’m not going to be as receptive to conversations about my pension.

PHILIPPA: I’m thinking earlier. A little bit before! But even GP surgeries, do you not think? Because when you actually discover you’re pregnant, isn’t that the moment because I mean, we’re all quite sane at the outset and able to take on new information. And you have time then, you’ve got nine months, whatever it is six, nine months to put some stuff in tray, maybe have those conversations you’ve been talking about Emilie, and think, what do we need to set up here? Because one way or another, we’re gonna take an income hit.

SAM: Doesn’t necessarily have to be the government. A pension company sends you an annual statement, normally, your pension is worth £20,000. It might well be worth a million by the time you retire. It could also say, are you off at the moment, caring for someone? Do you know this could affect the size of your pension?

ROMI: I think that’s another excellent idea. But it has to come from many, many places. But I think we want impact quickly, so I do think there has to be more done by government, especially around childcare and childcare costs. It’s one of the few areas and one of the few benefits, if you will, that have to be paid on a post-tax basis. So, when you pay into your pension, for example, you pay an on a pre-tax basis. You can have it deducted directly from your salary and then it’s something that’s not taxed by HMRC. But if you’re paying for childcare, you have to pay after you’ve paid tax, and therefore the calculation for women, as Emilie was saying, ultimately becomes, “Well, why would I pay another person to do this and reduce my salary effectively to zero - for many women - when I could do it myself?” And that, of course, comes with the long-term consequences.

PHILIPPA: Since we’re getting into numbers Romi, shall we? I know you’ve been doing some gender pension gap modelling, haven’t you? Do you want to talk us through some of the numbers because they are startling?

ROMI: Yeah, absolutely. So last summer, we modelled various policy interventions, and found that if men and women were to work the same hours at equal pay, with both working fewer hours in the beginning to share childcare, and both returning to full time work after a period of time, then the gender pension gap would effectively be eliminated. And that would enable women to increase their pots by more than £100,000. And men’s pots would only decrease by about £33,000. But overall, what that means is that the couple together will be about £70,000 pounds better off. And we tried looking at this in various different ways. We tried to see well, what if women were just paid equally? Right? Would that close things off? But no, it wouldn’t, because they’d still be working less. And so the only way to make things completely equal is if we do the paid and the unpaid work at equal rates.

PHILIPPA: I mean, the numbers are compelling, aren’t they? And this fairer approach to sharing care responsibilities. Clearly, it can make a huge difference to women’s pensions. We touched on this, but employers pay a big part here, don’t they? So, I’m wondering Romi, what would you like to see businesses, CEO’s like you, doing to close the pension gap?

ROMI: I think every business should be offering equal paid parental leave to anyone who has a child. That’s the single biggest intervention that you can make at the child’s bearing moment. Over time, I would like to see business, together with government, provide better childcare opportunities for all parents, because this is a problem that affects virtually everybody. The gender pension gap numbers show that in regions that have lower economic prosperity, overall, the gender pension gap is worse. Up to 60% in some areas, and so levelling up essentially, must also incorporate action on the gender pension gap.

PHILIPPA: Emilie?

EMILIE: So, I think for me, there’s maybe some efforts around communication also. Like, people are putting a lot of money into their pensions, but a lot of them aren’t necessarily aware of how much money they’re actually contributing into their pensions, how it’s invested, how much money they expect in retirement. So very simple tools like retirement calculators are already a good way to start, because most people are not going to have a financial advisor. A lot of women are telling me, you know, “I’m opting out of my pension because I don’t have enough disposable income”. So, I think, a bit more education.

PHILIPPA: This is knowledge again, isn’t it? It’s just that idea. It’s very, very easy not to get involved in what’s going on with your pension when you’re working, when you’re busy and there’s stuff going on and it all seems complicated.

EMILIE: Yeah, it’s very easy to actually not think about it. But I think it’s this moment where you’re like, “Okay, I’m going to take one hour, I’m going to set it up, I understand how it works and then I’m done. I know how much money I’m going to have when I retire”.

SAM: I actually think, kind of relying on employers is sort of missing the point a little bit. Lots of people will - one, lots of people are self-employed. Millions of people. So, there is no employer. Two, there are lots of tiny little companies who just don’t have them. They might not have an HR person; they might not have anyone who thinks about this stuff. So, I think like the rules of enrolment, the government probably needs to step in.

One actionable tip to take today

PHILIPPA: Before I let you go, we’d like to wrap up the podcast with tips from everyone. Things listeners can do for themselves right now. So specifically thinking about this gender pension gap, Emilie, how about you go first?

EMILIE: So, I would also think about, “Okay, do I have previous pensions sitting somewhere?” And maybe start with this, are they invested? Where are they? Who are my providers? Where are my login details? And that’s already a really good starting point.

SAM: So, mine would be to dads, and it would be not to think of yourself just as someone who earns some money that gets spent on various things for your kids. That you, your time is much more valuable. So, take the time, because the time is the most important thing. Most people don’t have too many kids.

PHILIPPA: Yeah, Romi?

ROMI: I think it’s important to bear in mind what the government does do, as well as what the government doesn’t yet do. And what they do do is provide the state pension, so you should do everything you can to make sure you get the full one. It’s currently about £10,000 pounds. So it will add a meaningful chunk to your income in any given year , and the way to make sure you get the full amount is to have 35 years of National Insurance credits and so that means about 35 years of working, but if you are not working, if you are a stay at home parent, then you should register for Child Benefit, because that will help you protect your record, even if you are not in work for a prolonged period of time.

PHILIPPA: OK, we’re done. Thanks everyone! And if you’ve been listening to this and you want to take a closer look at some of the research we’ve mentioned, you’ll find links in the episode show notes. A final reminder that anything discussed on the podcast should not be regarded as financial advice and, as always with investments, your capital is at risk. Thanks for listening. You know we love hearing your feedback so don’t hold back - good or bad. And if you have any questions about your own pension, get in touch with the PensionBee team. You can email: podcast@pensionbee.com or use the Twitter handle @pensionbee. We’ll be back next month. In the meantime, keep saving and stay pension confident!

Catch up on episode 2 and listen or read the transcript.

Risk warning

Period	Market Event	FTSE World TR GBP (%)	4Plus Plan (%)
4Plus Plan’s inception – 6 Sept 2013	QE Tapering, China Interbank Crisis and its aftermath	-5.44	-2.41
3 Oct 2014 – 15 May 2015	Oil price drop, Eurozone deflation fears & Greek election outcome	-5.87	-1.77
7 Jan 2016 – 14 Mar 2016	China’s currency policy turmoil, collapse in oil prices and weak US activity	-7.26	-1.54
15 June 2016 – 30 June 2016	BREXIT referendum	-2.05	-1.07

Period	Market Event	FTSE World TR GBP (%)	4Plus Plan (%)
4Plus Plan’s inception – 6 Sept 2013	QE Tapering, China Interbank Crisis and its aftermath	-5.44	-2.41
3 Oct 2014 – 15 May 2015	Oil price drop, Eurozone deflation fears & Greek election outcome	-5.87	-1.77
7 Jan 2016 – 14 Mar 2016	China’s currency policy turmoil, collapse in oil prices and weak US activity	-7.26	-1.54
15 June 2016 – 30 June 2016	BREXIT referendum	-2.05	-1.07

Elizabeth Anderson

April 13, 2023

Sole trader vs limited company: how do the tax savings stack up?

Faith Archer

August 16, 2024

3 reasons a sustainable pension can make financial sense

Lori Campbell

February 28, 2025

How can future-proofing your pension support your relationship?

Uneesa Zaman

July 23, 2025

4 steps to finding a missing pension

Charles Kelton

November 13, 2024

Ready to boost your retirement savings?

Every contribution counts towards a more comfortable retirement. When your pension is in a good place, you’re in a good place.

Combine your old pensions into one simple plan

Invest with one of the world’s largest money managers

Make paper-free online withdrawals from the age of 55

Pay just one simple annual fee

Sign up in minutes
Transfer your old pensions into one new online plan
Invest with one of the world’s largest money managers
Pay just one simple annual fee

Get started now

Capital at risk

How does your pension grow?

Does your age impact how you should invest?

PensionBee’s default plans

Global Leaders Plan

4Plus Plan

PensionBee’s sustainable plans

Climate Plan

Shariah Plan

PensionBee’s other plans

Tracker Plan

Preserve Plan

Pre-Annuity Plan

Will my top 10 holdings change?

Have a question? Get in touch!

What happened to stock markets?

Market reactions and global impact

How US politics is affecting UK pensions

Have a question? Get in touch!

1. Review your budget

2. Give your savings a boost

3. Consolidate your pensions

4. Cancel unused subscriptions

5. Check your credit score

6. Switch and save

7. Set new financial goals

The challenge for self-employed workers

Self-employed pensions

How often should you pay into your self-employed pension?

How can you access the money in a self-employed pension?

Getting the State Pension when you’re self-employed

The impact of Trump’s tariffs

So what does this mean for your pension?

Why hasn’t my pension balance recovered yet?

Where to find pension information and support

1. What’s a Lifetime ISA?

2. How do LISAs compare to pensions?

3. What tax relief do I get?

4. Will I pay tax on withdrawals?

5. So when can I withdraw money?

6. What if I need to access my money?

7. What about my workplace contributions?

8. Does Inheritance Tax apply to LISAs and pensions?

Should I open a LISA or a pension?

How does NVIDIA’s performance affect my pension?

What is NVIDIA?

How much of a typical UK pension is invested in NVIDIA?

How is NVIDIA affected by President Trump’s tariffs in 2025?

What could make the NVIDIA share price go up and positively impact your pension balance?

What could make the NVIDIA share price go down and negatively impact your pension balance?

Conclusion

Have a question? Get in touch!

How does Microsoft’s performance affect my pension?

What is Microsoft?

How much of a typical UK pension is invested in Microsoft?

How is Microsoft affected by President Trump’s tariffs in 2025?

What could make the Microsoft share price go up and positively impact your pension balance?

What could make the Microsoft share price go down and negatively impact your pension balance?

Conclusion

Have a question? Get in touch!

How does Meta’s performance affect my pension?

What is Meta?

How much of a typical UK pension is invested in Meta?

How is Meta affected by President Trump’s tariffs in 2025?

What could make the Meta share price go up and positively impact your pension balance?

What could make the Meta share price go down and negatively impact your pension balance?

Conclusion

Have a question? Get in touch!

How does Apple’s performance affect my pension?

What is Apple?

How much of a typical UK pension is invested in Apple?

How is Apple affected by President Trump’s tariffs in 2025?

What could make the Apple share price go up and positively impact your pension balance?

What could make the Apple share price go down and negatively impact your pension balance?

Conclusion

Have a question? Get in touch!

How does Amazon’s performance affect my pension?

What is Amazon?

How much of a typical UK pension is invested in Amazon?

How is Amazon affected by President Trump’s tariffs in 2025?

What could make the Amazon share price go up and positively impact your pension balance?