The beginning of a new year is a time when many of us take a step back and reflect on our lives - including our career. And it seems like many of us aren’t as happy as we could be.

Our recent survey showed that only three-quarters of people (74%) claim to be happy in their job. Indeed, 17% of respondents felt trapped in their current career, yet ^{_corporation_tax} felt that their job had equipped them with skills that they could transfer to other industries. Those figures are significant, particularly when we see that a ‘fear of the unknown’ was the most commonly quoted obstacle to people’s progression. So, for those of you who are interested in breaking free of your current role, we’ve created our Find Your New Career tool, to show you the different roles you might be interested in and how your current skill set might be utilised in a new job.

If you’re unhappy in your job and considering a change then you’re not alone. Here are some things to consider if you’re thinking about taking the leap.

Are you passionate about what you do?

Many people seem to have just grown tired of their current path or recognised that their true passion lies elsewhere. Our survey shows that (with the exception of the over 55s) the older people are, the less likely they are to be happy at work and doing something they’d call a ‘personal interest’. Added to which, irrespective of age, 34% of respondents claimed that they were in their job because they fell into it, while only 16% of people felt they were doing something they saw as their calling (with those working in ‘sales, media and marketing’ (39%), ‘arts and culture’ (32%) and ‘healthcare’ (^{_scot_intermediate_rate}) most likely to identify their work as their true passion).

Only 16% of people felt they were doing something they saw as their calling

There’s little doubt that times have changed. People no longer train in one discipline and stay in the same career for the majority of their working life, and people seem to be aware that there are more options and opportunities available to them, even as they get older. If that sounds like you, perhaps it’s time to have a look and see what’s out there?

Do you feel valued and on the right track?

Interestingly, it’s not all about the money. In our survey, factors like colleagues, support and company culture were considered more important than benefits or pay rises when it came to job satisfaction. Added to this, many seem to crave a new challenge or don’t feel like their current role is testing them enough. There is a strong link between happiness and position in the company hierarchy – those in senior manager roles are 85% more likely to be happy, compared to 7^{_personal_allowance_rate} in roles below management level.

When we asked people what was the biggest cause of their unhappiness, apart from ‘stress’ (33%), a ‘lack of progression’ (3^{_personal_allowance_rate}) and ‘not learning new skills’ (27%) were the biggest reasons for job dissatisfaction. So maybe it’s time to ask for that promotion or consider a move to somewhere with more opportunities to climb the ladder? And if you’re not yearning for more responsibility, maybe you just feel that you and your job aren’t a great fit and there’s no room to develop; only 33% of respondents felt that their job matched their skill set and only ^{_corporation_tax} felt that it was providing transferable skills.

You could use our Find Your New Career tool

If this is the case for you, consider speaking to your HR representative about training opportunities or the potential to occupy other roles within your company. If you don’t feel that’s an option, maybe it’s time for a more drastic change. You could use our Find Your New Career tool to find out about the roles and industries where your skill set might be valued to give you some ideas. You could also reach out to the government National Careers Service for some advice or potentially speak to a recruiter that operates in an industry that interests you.

What’s stopping you?

When we asked what stood in the way of people looking for a new job, the most common answer was ‘fear of the unknown’ (29%). A similar number of people were worried about their age, followed by people concerned about a lack of available or relevant positions (23%). The next two most common concerns were ‘not enough savings to quit the current job’ (^{_scot_intermediate_rate}) and a ‘difficult current financial situation’ (^_basic_rate). These responses suggest that a fear of financial instability and uncertainty about what happens next are major factors standing in the way of people’s happiness.

One way to reduce that uncertainty is to understand your financial situation and take control of your savings, and that’s something PensionBee can help with. You might have more money tucked away from than you realise, and our career finder might just show you a new opportunity you’d not thought of. Good luck!

Our survey was conducted by Censuswide, with 1,010 respondents in the UK between 25.11.2019 - 28.11.2019. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.

Money is a powerfully emotive subject.

We tend to think of money as a very abstract concept; it’s an enabler which allows us to do, be and have what we need and want in life. However, ask someone how they ‘feel’ about money, and it uncovers a whole raft of emotional responses ranging from guilt, shame and overwhelm through to security and freedom.

The strength of these feelings can be powerful drivers when it comes to how we make decisions around what we do with our money, and whether emotion dominates over logic.

Where it all begins...

Studies have concluded that our money story is defined by the time that we are 7 years old.

The messages that we hear, see, observe and are taught about money growing up comes from a variety of sources including our family, friends, teachers and the media.

As we go through life, all the experiences we encounter play a key part in the development of automatic habits (reactions) and attitudes (feelings and thoughts) towards money. As adults, the majority of the beliefs we have about money aren’t actually our own; they have been learnt or taught through conditioning.

Each life lesson and experience creates a template which is stored in our subconscious brain, and on which we draw for reference in the future.

If you pay attention to how your inner voice talks to you about money you’ll uncover some of those templates which you have stored. ‘That’s such a waste of money’. ‘Money doesn’t grow on trees’. ‘Living within your means is the only way to live; debt is evil’. ‘There’s plenty more where that came from, all it requires is some creative thinking’. ‘Life is for living, who knows what is round the corner’.

How our inner voice - our subconscious - talks to us about money determines the choices we make, our subsequent actions and the ultimate result of those actions.

Our two minds

We have one brain but two minds; the conscious and subconscious minds.

The conscious mind is our rational, thinking, educated mind (it can learn by reading a book for example). It is creative and open to new things, and is responsible for the voluntary thought, awareness, self-control and planning.

The subconscious mind likes familiar things; it is our habitual mind (it learns by repetition). This part of our brain has massive computing power; it operates constantly. The subconscious is our emotional mind; it encourages us to get emotionally attached to our thoughts.

between 85 and ^_rate of the decisions we make on a daily basis are made without any conscious thought.

Depending on which study you read, between 85 and ^_rate of the decisions we make on a daily basis are made without any conscious thought. We operate for the majority of our day from our subconscious. You know when you drive the route to work even though it’s a Saturday and you are going somewhere entirely different; well, that’s this showing up!

So, if we know that our subconscious is running the show a lot of the time, and this is where the templates from all of our past experiences sit, it makes sense that our past experiences can have a meaningful impact on our present day choices.

The battle between logic and emotion

Ever since my husband and I bought our home 7 years ago, he has wanted to chip away at the mortgage by overpaying each month.

Every month when we review our finances, I would make the case for putting some extra money in to our investments or pensions, while he would suggest using the money to overpay our mortgage.

We were fortunate to purchase our home at a time of rock bottom interest rates which have held low. My argument to him was that with interest rates so low, we would do better to invest our money and generate a return which significantly exceeds the interest rate we paid on the mortgage.

Looking at the numbers

Investing in our stocks and shares ISAs over the same 7 year period has resulted in annualised returns which are materially higher than the 1.89% we were paying for our home loan. Whilst past performance isn’t a guarantee of future performance, I am comfortable that we can ride out any downturn and really grow our money in the longer term with this option.

Should I say, my logical brain is comfortable with my analysis of the opportunity!

Even better, if we put the surplus money in to our pensions, we would get a generous kicker in the form of tax relief added by the government. (And this is an even more attractive option to a higher rate or additional rate taxpayer).

My rational, logical and considered argument seemed a no brainer. However, he was not to be convinced.

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Short term vs long term goals

I love a good spreadsheet, with a graph showing compound growth thrown in for good measure. But no amount of logical reasoning or analysis could distract him. My oft quoted ‘a house isn’t going to feed us when we are old, but our investments can’ raised a smile but he didn’t budge.

Having the stability of a home which we own outright was a strong emotional driver for him.

He argued he didn’t want money tied up for the longer term (which is advisable for stock market investing and a given for any money deposited in to a pension). He cited the certainty of interest rates versus the uncertainty of stock market gains/losses. Both valid points. He also pointed out that with interest rates at such low rates, this was exactly the right time to pay off the mortgage while it was cheap to do so. Another really valid argument.

So we’d compromise and do a bit of both. That is until recently...

Through my development and learning as a money coach, and specifically my recent training in neuro-linguistic programming, I have learnt so much more about this emotional relationship people have with money. It has enabled me to view my husband’s point of view in a different light.

He moved countries a lot when he was young with his father’s work, often packing up home after a couple of years and moving somewhere new. Hugely exciting and has given him a thirst for travel and adventure, but the experience has imprinted an emotional attachment to the meaning of a ‘family home’.

He just wants to own his own home for our family. Knowing that no-one is going to ask him to move away from it is hugely emotive.

With this insight, I knew that achieving this milestone would mean so much to him on a deeper level. And so it was that we changed up our short term goals and this summer we paid off our final mortgage payment.

Awareness

Now, with this emotional requirement met, he is so engaged with our monthly discussions around investing and pensions; it’s like talking with a different person.

I have to admit that I feel somewhat different too. I am surprised by the strength of my own feelings around security and the future now that we have no mortgage. The impact on your mental health of having such a big financial commitment paid off is absolutely huge.

everyone’s money story, and the emotional attachment it holds, is different.

What is important here is that everyone’s money story, and the emotional attachment it holds, is different. Awareness of the drivers behind your own story, and that of those around you, can help you connect in a more meaningful way to your decisions.

We always have a choice to engage our logical brain but it takes work; our subconscious is primed to keep us safe so it likes to keep us in our comfort zone doing things the way we have always done them. Take some time to become aware of some of the habits or beliefs around money which are driving your behaviour. Awareness is the first step towards change.

Emma Maslin is a certified Financial Coach and Mentor, Financial Wellness Speaker and Founder of multi award-winning personal finance education website The Money Whisperer. A former Chartered Accountant, Emma believes financial health and wellbeing isn’t a luxury just for the wealthy; it’s a basic need for all of us.

Pensions often aren’t given much thought until later life, which is understandable given that you can’t touch them until your 55th birthday, and your retirement may seem so far away. Despite this, it’s crucial to consider your pension provisions earlier, and to put those extra pennies away as often as you can. After all, it is suggested that a pension pot of £200,000+ is needed for a comfortable retirement.

Many people envisage going away on exotic holidays, finally getting around to renovating the kitchen or perhaps purchasing that golf membership to keep themselves busy in retirement. However, when you start to think about those luxuries, that £200,000 could quickly disappear. That’s why it’s so important to get into good habits early, and to put a solid saving plan in place.

Here are 6 easy ways to start saving for retirement early...

Ask yourself, is that takeaway really worth it?

Pensions are a very tax efficient way of saving. If you were to contribute £50 a month into your pension over a 30-year period, this adds up to £18,000. Under current legislation the government would also give you an extra £4,500 on top of this, without you having to do anything. This is a total of £22,500, which with the performance of the pension, should hopefully be even more!

So, does that extra takeaway a month really seem worth it now, when you could put this cash towards your retirement dreams?

Contribute more from your salary

Contributing an extra few percent from your salary in a workplace pension can also be a useful way of boosting your pension. These contributions will be deducted straight from your pay, so this can mean it won’t have a noticeable impact on your lifestyle (or bank account!). It is thought that people are most likely to save money on or as close to payday as possible.

Set short-term saving goals

Saving for your retirement is a marathon, not a sprint

It’s important to remember that saving for your retirement is a marathon, not a sprint. It can be quite daunting to work out how much money you want for retirement, and how much you currently have in your pension. So, it may be useful to set yourself some shorter-term saving goals rather than looking at the finish line so early on. For example, setting yourself a challenge to put an extra £10 into your pension than the previous month.

Carry on with old payments

With all the payment options available nowadays for our purchases, many of us are tied into contracts and finance plans to pay for these. So, when one of these regular payments finishes, why not continue to pay it, but put that money into your pension instead? This again will mean the contribution won’t have any additional bearing on your lifestyle but will allow you to save more into your pension.

Combine your pensions

It is estimated that the average worker will now have more than 11 jobs during their career. This could mean a lot of pension pots dotted about all over the place, which can make it difficult to manage and stay on top of your retirement savings. Combining your pension pots together can help you to plan for your retirement, and better understand your financial situation.

Stay on top of them

It is always useful to stay on top of your pensions. You should check to see that the fund is performing ok (although there will always be fluctuations in the performance in the short-term), ensure you aren’t facing any large fees, and finally, make sure you aren’t tied in with any benefits or clauses you weren’t necessarily aware of - as all of these factors can have a big impact on what you’ll receive at retirement.

Thinking about retirement and your pension whilst you’re younger can seem a strange decision, and even difficult to do at times. You may be facing more immediate issues and want to spend your extra cash on other things. But if you do want experience exotic trips, renovate your house and spend some time on the golf course in your retirement, then it’s important that you start saving for this sooner, rather than later.

Despite the above, trying to save for your retirement shouldn’t be the only thing you are doing throughout your career, and it’s important to find a balance that works for you. You will still want to have your guilty pleasures and treat yourself, but take a step back and consider the future you once in a while, too!

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Something I have learnt and re-iterate repeatedly to my readers and listeners is that cashflow is the most important thing in personal and business finances. Last year, I got my tax bill wrong and this almost wreaked havoc on my finances… which is rather embarrassing to admit given my background as an accountant!

An expensive mistake

Last April I thought, okay, I’m ahead of the game. I’ll pull my accounts for year three, using my new accounting software tool, and send over my income and expenses reports to my accountant, Christian, to pull together the official accounts.

You see I do most of it myself, but I like to have that sense check at the end of the process and someone to independently check my income, expenses and tax calculations. I had worked out a tax bill of ^{_basic_rate_personal_savings_allowance}. This had been saved up over a few months in my separate tax account… but I got it wrong! Rookie error for an accountant, all but qualified 17 years ago. I ‘forgot’ that dividends are taken after tax, not before.

Christian sent back my accounts and I saw £2,500 more than I was expecting. And I had to pay him his fee as well. Suddenly I had to find £4,000 rather than the anticipated ^{_basic_rate_personal_savings_allowance} that I had saved up.

Operation find three grand

Fortunately, I had some emergency business money set aside. I moved this money over to my tax liability account. I then made a few phone calls to my regular clients and explained the situation. I agreed some extra pieces of work, which earned an extra ^{_tax_free_childcare} during May. Work that I could do immediately, and payment would be received within 7 days.

However, most of my reserves were cleared out and now paid to the taxman. 4 weeks after I had just cleared my credit card debt as well. But I was not getting myself back into credit card debt again with this hiccup.

I went on a big work generation drive and spoke to everyone who I had worked with on my blog over the past year and lined up lots of new pieces of work. June was a tight month financially, but thankfully July and August saw a lot more stability.

So, what lessons did I take from my cash flow catastrophe?

1, Build up an emergency fund

Ideally you should have some business reserves set aside for emergencies as well as personal emergency money set aside. Things happen. Emergencies and unexpected events always happen. The best of us can save for the expected costs to hit but then what happens if the washing machine goes beyond repair, or the gearbox goes on the car?

I recommend at least three months business expenses set aside

I recommend at least three months business expenses set aside. For me this is fairly low being an online business, so I would have at least ^{_tax_free_childcare}-3,000 sat in my business emergency fund. I use the goals section of my Starling Business bank account where I can move money from my main balance and allocate it to separate ‘savings pots’.

For my personal emergency fund, again at least three months of monthly expenses should be covered. I mean essentials here, so mortgage, energy, council tax etc. And you only dip into this pot for emergencies, like if you lost your job, or had a big unexpected bill, a new boiler or an expensive dishwasher repair (that was also me in April).

2, Build up a tax fund

If you are self-employed it is so important to build up a tax fund. Every time you are paid an invoice, allocate at least ^_basic_rate of that to your tax savings. I must pay my tax at the end of January for my personal tax and end of May for my corporation tax. And soon every quarter for VAT. And I must have resources there to cover my tax liabilities to avoid fines and a huge amount of trouble.

You do not want to get on the wrong side of HMRC.

3, Get a good accountant

The above tax rules for payment are complicated enough without knowing what you can put through as income and expenses. I am an accountant myself, but not practicing, so I miss out on rules changes and updates. Make sure you find someone you can speak to quickly with any concerns, and who’ll correct your errors when you get things wrong.

Bear in mind that you don’t need an accountant near to where you live, as it can all be done on the phone and Skype. I am sent my accounts each year that I print off, sign and return to my accountant by post.

A great accountant is worth their weight in gold and is so worth the fee.

4, Get clear on your cashflow

Understand your cashflow and plot it on a graph. I have four years of books now and know that October through to March are great months income wise for me. Equally, I can see that June through to September are quieter months. Ideally, I try to bank extra money until March to help cover the summer months.

My income can vary by thousands each month, and I have seen swings of £3,000 from one month to the next. It can be difficult to manage but some month-by-month analysis does help.

5, Focus on stabilising your income

A fabulous piece of advice given to me in the early days was to focus on building passive income and regular income. Totally a huge challenge in the online world, but it is a model that gives you stability.

Focus on building passive income and regular income

I have some affiliate money that rolls in every month without me having to do too much, as it’s linked to older good search engine performing content. Maybe around ^{_higher_rate_personal_savings_allowance} to £1000. I also have advertising on my site that is totally passive. I have also networked and negotiated hard, to set up regular retainer contracts with clients whom I work with every month and pay me every month. These are not all monthly, some are quarterly or even six-monthly. But I know those clients will come back again and again.

This then means that any one-off jobs for a specific campaign are bonus extras, and just add to the funds, as opposed to paying my salary and business expenses.

I just hope being honest about my tax mistake gives you the inspiration you need to sort out your finances and make sure you put money aside for tax. Otherwise, you might be in for an expensive lesson yourself!

Lynn Beattie is a PensionBee customer and CEO/Founder of Mrs Mummypenny, a personal finance website. She is also an ACMA management Accountant, previously working in commercial finance for Tesco, EE & HSBC. Lynn is a single mum to three boys, living in Hertfordshire, and is the author of ‘The Money Guide to Transform Your Life‘ published in September 2020.

As a freelancer, your finances can be daunting but they’re also a vital part of your life. Freelancers often face inconsistent income and then there’s that annual tax assessment to complete! You need to be on top of your money at all times, so we’ve pulled together a few ideas to simplify your freelance money management.

Start with an app for freelancers

Your first step should be to make it easier to track and manage your finances. There are a bunch of helpful apps out there, designed specifically for freelancers and self-employed people.

Coconut is a banking app that helps you to track your income and expenses. You can set up an account in minutes just using your phone, plus Coconut will automatically calculate your annual tax bill so you know exactly how much you’ll be spending when you complete your assessment. Not only that, but Coconut will help you send payment reminders to any forgetful clients!

1Tap Receipts is your digital book-keeper

Or try 1Tap Receipts to make your self assessment a doddle. 1Tap Receipts makes it easy to record receipts from any business expenses, which could save you money on your tax assessment. You can store photos of physical receipts (so you don’t have to file those receipts for a year - or lose them!) and keep any electronic invoices on file too. 1Tap Receipts will then act as a book-keeper, automatically categorising according to HMRC requirements, converting foreign currencies, and calculating your tax.

In our digital age, it makes sense to modernise your finances, too - and apps like these could help you spend less time on your finances and more time working on what you love.

Prep for the future

As a freelancer, you’ll know how important it is to plan ahead. You probably know which times of year are quieter for your business so you need to make sure you’ve always got enough saved in advance.

To avoid any freak outs when that contract unexpectedly ends or when business is slow, make sure to engage mindfully with your money. Check in with your money management apps on a regular basis so you know exactly what’s in your account, what’s due for tax assessment, and what you’re owed.

It’s also a smart move to make savings a priority. Alongside an emergency fund, you should be saving regularly into an account that works for you. This way, you know you’re covered at any time.

Look after your retirement too

Saving for the immediate future is only part of a healthy savings plan. You should also be thinking about your retirement. When you’re freelancing or self-employed, pensions can seem confusing but they’re actually much simpler than you think.

You might also have had workplace pensions in the past. Freelancers often end up with many old pots so you might want to consider consolidating all your old pensions into one new personal pension plan.

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If you don’t receive a consistent monthly income, be sure to pick a plan that allows you to make one-off contributions. This means you can top up your retirement fund when it suits you (and your wallet!)

Put together a budget

Cutting costs is an important aspect of freelance finances. Working in cafes and coffee shops can rack up a bill, especially if you’re doing it every day! By putting together a budget, you can see where you’re spending and where you can save.

Put together a budget to see where you can save

Try saving money on your morning coffee by making it at home in a travel flask. If you like co-working spaces, do some shopping around to see what options are available, and which ones suit your budget best.

Or cut costs entirely by working from home! Homemade meals and your favourite beverages will save you a small fortune, plus you don’t need to spend as much on travel costs or desk space. Create an inspiring work area at home to motivate you to do your best every day.

File your tax return in advance

We know - tax assessments are the dullest part of the freelance lifestyle. Most people put them off until the last minute but this can result in a nasty shock in your bank account.

By getting your tax assessment done early, you don’t need to worry about any sudden bills. Even better, your assessment will give you an idea of your spending and income last year. You’ll be able to pick up on any patterns in your incomings and outgoings, which could help you plan better for the financial year ahead.

Freelancing can be a dream come true for many people, and your finances don’t have to be scary! By taking control of your money and implementing some solid plans, you can find both stability and freedom as a freelancer.

Have we missed any top tips for making better decisions with your money? Let us know in the comments below!

If you feel a bit iffy, you go to your doctor. They ask about your diet, exercise, aches and pains. Any medication you’re on and if you do anything ruinous like drink too much or smoke. This checklist helps them keep an eye on your health. So why are we so reluctant to do this to our finances?

What is financial wellbeing?

Financial wellbeing is a probably a phrase you’ve have heard a lot. It’s about having a good, healthy relationship with your money. It’s a sense of security that you have enough, and can manage both your short and long term needs, from paying the gas bill to saving for a pension.

Like the chat with your doctor, this kind of nourishing approach to money matters needs honesty, openness and, sometimes, admitting we’ve got a bit off track.

Why is a financial wellbeing plan needed?

We’re quite bad at talking about money. More than a quarter of women would rather tell their partner they were sexually unsatisfied, according to research, than discuss their financial situation.

So to kickstart a national conversation, the government-backed Money and Pension Service (MaPS) has launched a 10 year plan to improve the UK’s financial wellbeing.

What are the financial wellbeing goals?

The Money and Pensions Service has five goals to achieve by 2030; financially educate seven million children to instil good habits early; help two million poorer people save; lower by 2 million the number of people using credit to pay bills; provide debt advice for two million more; and encourage another five million to plan for their retirement.

Maps’ plan is interconnected and ambitious. The hope is that by catching children young, they can be guided away from joining growing numbers trapped by debt. Personal insolvencies in England and Wales are at their highest level since 2010, and among 18-25 year olds the increase since 2016 is estimated at a worrying 403%.

Financial wellbeing can be radical, but is also about small everyday changes.

Too many of us deep down know we are not saving enough towards our pension. Or end up buying more of what we don’t really need.

But a few virtually painless tweaks here and there can create a huge sense of financial ease, now and in the future.

3 small steps towards financial wellbeing

1) Direct debits are your friend

None of us are big fans of paying bills. The best way to keep on top of them is to set up a direct debit for each, to be paid two days after you receive your salary. You’ll be able to spend or save what’s left, safe in the knowledge you have covered the essentials.

Direct debits may seem rigid - you do have to make sure there is cash in the bank on the day they come out. But they reduce your life admin, and let you see exactly how much money you have left to play with, which can be extremely liberating.

2) The joy of less

One of Netflix’s biggest hits in 2019 was ‘Tidying Up with Marie Kondo’, a surprise hit about decluttering our lives of anything that doesn’t “spark joy”. We’re all guilty of buying stuff we don’t need, often with money we don’t have, eroding our financial wellbeing. Reducing mindless consumption will spread our money further, keep our credit card bills low, and create a satisfying sense of control.

3) Investing in yourself

Why do we love lists? Because they show us clearly and quickly our plan for a day. Ticking things off gives a sense of achievement. Planning for our longer-term future is harder, (it’s tough trying to guess what will happen 30 years from now), but just as mentally rewarding.

Money in a pension grows bigger the earlier you put it in, because of the power of compound interest. Got a pay rise? If you can, add it to your monthly pension contributions - you won’t miss what you didn’t have, and you can sleep soundly knowing you are laying solid foundations for your future self.

How can PensionBee help with financial wellbeing?

With PensionBee you can combine your old pensions and transfer them into a brand new plan, within a few easy steps. You get one simple pension and one clear balance that you can check any time - everything is designed to give you pension peace of mind. Sign up today.

Risk warning

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

Have you had a financial revelation? Is now the time to assess your finances and save some money? It is totally possible to save £5,000 in six months if you are starting from the beginning of sorting out your finances.

I was there, back in 2015 after switching from the ‘safe’ employed world to the self-employed world. My income went from a safe monthly salary to nothing. I had to closely conserve redundancy money, making it last as long as possible. Every single outgoing had to be rationalised, stripped back to basics and the best deal found.

How many of these can you change to make a huge saving, maybe even £5,000 in six months!

1) Switch Your Supermarket

Most of us are loyal to the same supermarket, doing the same weekly shop at the same supermarket brand. Why not try a different supermarket for a few weeks to see what you could save. The German discount retailers are so worth a visit and really will save you a fortune.

When I switched from Tesco to Aldi, I managed to save a huge £40 a week shopping for a family of five. The big savings can be made by switching from well known branded goods to Aldi brands. Give it a try and see what you think. The savings you can make really are huge.

Switch your shopping to a cheaper supermarket £40 x 26 weeks = £1,040

2) Voucher codes or savings apps

With a bit of internet searching you can easily find voucher codes for most forms of entertainment and eating out. Most chain restaurants will offer you freebies for signing up to their app, I have used offers for Prezzo, Toby Carvery and McDonalds recently.

Another favourite which saves me lots at the cinema is the KidsPass App, which saves me 40% on ticket prices for the whole family. Plus, half price tickets for family days out.

Assuming 1 trip to the cinema per month saving £20 and 2 meals out saving £40 = £360 in six months

3) Replace a takeaway dinner with a Fakeaway

How many takeaways do you eat every month, maybe it’s a Saturday night treat? You could replace say two of them per month with a home cooked ‘fakeaway’ instead. Making pizza at home is fun especially with children, or a homemade curry can be just as good as the curry house.

This could save around £30 per month or £180 in six months

4) Switch Your Energy Provider

It is estimated that 70% of the UK population could save money if they switched to a different energy provider, or to a better deal. It really is incredibly simple and takes just five minutes to check if you can save, comparison sites such as uSwitch make the process so simple.

Uswitch estimate that there could be annual savings on average of £479 so it’s worth investigating!

Potential savings in six months: £240

5) Switch Your Broadband provider

New rules which came into play on 15th February 2020 means your broadband provider must now tell you about better deals if you are out of contract. It’s about time! If only every monthly bill provider did this.

Again, you can use comparison sites such as Uswitch to check for a better switching deal. Recent data from Ofcom states that average annual savings of £228 are available.

Potential savings in six months: £115

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6) Use cashback websites

I love to use cashback websites to help save on any online transactions I make.Top Cash Back and Quidco are popular cashback websites. Whenever I buy insurance, book a holiday, switch broadband provider, buy football boots, or even when ordering pizza I get some cashback.

I simply search for the retailer/service provider in Top Cash Back and then click through to purchase. The cashback registers in my account and I transfer the savings into my bank account a few weeks later once it has become payable.

Potential savings in six months: £500

7) Move to a SIM only mobile phone plan

Do you really need a brand-new phone every two years at the end of your contract? Keep your handset and switch to a SIM only contract and make some big savings. Your regular handset mobile phone contract pays for the cost of the device and the data/calls every month so once the normal 24-month contract has ended you can switch to data/calls only.

There are big monthly savings here of potentially £30 per month or £180 in six months

8) Compare your car/home insurance

This is another regular bill to compare every year. When that auto-renew comes through for your car and home insurance don’t just accept it and auto-renew. There are likely to be savings by doing a comparison and switching. I like to use the switching tool on Top Cash Back to also benefit from an additional cashback discount too.

Also, you will save a lot by paying in one annual chunk rather than paying monthly. In the past I have saved several hundred pounds on insurance for my home and car compared to the auto-renewal.

Potential savings in six months: £400

9) Give ‘budget’ make-up a try

Are you a make-up lover? Do those expensive brands draw you in to make you buy something every month? Apparently, lipstick sales remain buoyant in difficult financial times, as we see it as a small treat purchase. But those brands, the likes of Bobbi Brown, Dior or Benefit are expensive. If you bought an item every month you could easily spend £200, especially including skincare.

Check out the budget beauty ranges from places like Aldi- Lacura, Elf cosmetics and even Poundland. I was a beauty snob and bought everything from the expensive brands, but I have since tried lots of the bargain brands and have found some brilliant products from moisturiser to mascara, and under eye concealer to toner.

Potential savings in six months: £160

10) Keep a spending diary or track your spending using an app.

Being mindful and understanding your spending in detail will help you to see patterns. You may have daily spending rituals or spending behaviours that are a reaction to something that you can cut out. The spending diary in old fashioned paper format can help you to understand and stop with those behaviours.

Or for the more tech savvy folks’, apps can also do a great job of showing your spend already categorised into areas, some even tell you off when you are overspending! You just connect your bank or cards used for spending and everything is automatically assessed. Apps such as Yolt and Emma are great for this.

Use this information wisely and reduce your day to day spending, and you could save up to £100 per month or £600 in six months!

11) Set up an auto-save tool

Auto-save tools are a brilliant way of stashing away money without even realising. Apps such as Chip connect to your regular spending bank account and autosave a chunk of money each week depending on your good spending habits and balance. The money is saved into an account with Barclays. The money is then easily accessible within a day if and when needed.

6 months saving without realising: £1,200

There you have it, eleven great ways to save £5,000. We can all take action with a few of these to save money, and maybe even all of them to save lots of money!

Lynn Beattie is a PensionBee customer and CEO/Founder of Mrs Mummypenny, a personal finance website. She is also an ACMA management Accountant, previously working in commercial finance for Tesco, EE & HSBC. Lynn is a single mum to three boys, living in Hertfordshire, and is the author of ‘The Money Guide to Transform Your Life‘ published in September 2020.

If you’ve checked your pension in recent days you may have noticed some fluctuations to your balance. That’s because markets are currently experiencing volatility, caused by the coronavirus outbreak.

More than 20 countries have banned travel to China, which has had an immediate effect on the Chinese economy. Now other markets are beginning to experience uncertainty as the world waits to see how the outbreak unfolds.

Markets have been impacted similarly during past outbreaks of serious illness (such as SARS and bird flu), and after short periods of uncertainty, markets recovered. We would therefore expect the same to happen in the case of coronavirus, however, at this stage, it’s unclear how long the current period of uncertainty could last.

Remember, pensions are a long-term investment

If your balance dips, we know that it could be unnerving, as you may not have seen your pension go down before. It’s important to remember that most downturns don’t last longer than a few months and short-term fluctuations are unlikely to cause any lasting damage – especially if you’re several years away from retiring.

It’s also good to know that most of the PensionBee plans are diversified which means they’re invested in a range of different assets such as shares, cash, property and bonds. Your money’s also invested across several different markets, from North America to Japan. This helps to shield your savings from the full impact of turbulence in any one market and gives them more opportunities to grow. You can find a detailed breakdown of each of our plans, including investment breakdowns, and past performance on the plans page. Please note, past performance should not be used as an indicator of future performance.

As long-term savers we have to take the rough with the smooth, and be patient during the dips. However, as with any investment you make, there’s always a risk that you could get back less than you started with.

The best thing to do in periods of uncertainty is keep an eye on the business headlines and log into your BeeHive where we’ll post any updates. If you have any questions don’t hesitate to get in touch with your personal BeeKeeper or give us a call on 020 3457 8444.

Retirement can be a shock to the system. It marks a significant change in lifestyle and will, at first, feel unfamiliar. Of course it will; gone is the dependable workplace routine, gone is the daily contact with colleagues, and gone is the financial security of a workplace salary. Suddenly, you’ve got new challenges to worry about, like living off a smaller income, having less human contact, and wondering what on earth to do with all the extra time.

Feelings such as loneliness, boredom and worthlessness may work their way into a new retiree’s thoughts. And the first thing to note is that it’s totally normal - you’re going through a significant and potentially unsettling change. The second thing to note is that it’s well within your means to live a happy and fulfilled retirement without letting those feelings overwhelm you. You simply need to prepare for retirement emotionally. This is what this article sets out to help you achieve.

Acknowledge that things will change

Change can be unsettling, particularly when you’re so used to living a certain way for so long - like spending the whole of your adult life working 9-5. The first step towards dealing with change is to acknowledge it and to accept that it will happen. Your life will change.

Acknowledging change is important because it grounds you in reality. Change isn’t good or bad in and of itself. It just is. If you’re a naturally anxious person, you may find that spending time actively acknowledging and accepting that your life will change after retirement prevents you from unrealistically idealising how great retirement will be, or fearing how terrible it will be.

Here are a few things to think about ahead of time:

You might feel a sense of loneliness

Most of us spend the majority of our adult waking hours at work. And we often end up knowing more about the lives of our colleagues than we do our friends! So suddenly finding ourselves without them is likely to be a lonely experience.

It’s unlikely that you’ll avoid this feeling altogether - recreating an office environment in your home isn’t particularly practical - but you can do a few things to help fill the void:

• Ask for their numbers or connect on social media before you leave so you can stay in touch.
• Arrange coffee dates with old colleagues every now and again so you can laugh and catch up on office gossip.
• Arrange outings or phone calls with friends or family who are available during weekdays.
• Join new communities with other retired people so you can make new friends who are available during the hours you are.

You might experience moments of boredom

Whether you had an office job or a vocational job, you probably spent your days focused on a particular task (or two). Things had to be done well, and they had to be done now. That pressure causes you to focus, and when you’re focused, time flies! Unless you really hated your job, chances are you were almost never bored.

But back at home, with no pressure to do much at all unless you want to, time tends not to move quite as fast. If you haven’t much going on to distract your mind, time can feel very slow indeed. And it’s in those moments that boredom can set in.

Feeling bored is totally normal - it’s hard to be busy all the time. Thankfully, this feeling is likely to dissipate as you become used to a less busy lifestyle. Remember, it will take time to adjust from working to retirement.

As always, there are some things you can do to make sure you’re not bored too often:

• Stay social
• Take up a hobby
• Learn a new skill
• Get into a routine
• Do the things you love at a slower pace
• Don’t fear down-time (it’s perfectly acceptable to just ‘be’)

You could feel a sense of worthlessness

Jobs give us a purpose. There’s a reason we’re there, and without us the organisation wouldn’t be quite as effective. Often, people rely on us - whether they’re colleagues or customers - and if we do a good job, we might often receive praise.

Being a valued member of an organisation can elevate our mood and self-esteem. So it shouldn’t come as a surprise that stepping away from that responsibility and the praise that comes with doing a good job could cause us to feel less valued. That’s natural.

So how do we regain a sense of self worth? There are a many ways:

• Start a journal. Regularly write down three reasons the world is better for having you on it.
• Play an active role in your family - whether that’s looking after the grandkids or spending more time with your extended family.
• Take up charity work and give back to a community or cause you care about.
• Create something, whether it’s a painting, music, writing, or a new flower arrangement.

Plan ahead to calm the mind

When it comes to your mental health, planning ahead can significantly reduce stress and anxiety. It also makes you more likely to succeed at the task in hand! The earlier you consider the following points, the better you’ll be prepared for retirement and the less worried you’ll be about it.

Prepare your finances

One of the biggest shifts when reaching retirement is the change of income. Instead of working for a salary, you’ll receive income from your workplace or personal pension. And unless you’ve decided to retire early, you’ll likely be able to receive the State Pension too.

Ask yourself the following questions:

• How much income will I earn from my pension/s?
• Will I be eligible for the State Pension, and how much will I receive?
• Will I have any other sources of income?
• How much will my monthly outgoings be?
• Will I have enough income to cover my outgoings?

Once you understand how your finances will be affected, you can decide how best to manage your money. For example, you might want to increase your pension contributions while you’re still working, or adjust your expectations about the retirement lifestyle you’re realistically able to afford.

If you’re planning on retiring early, read How much pension do I need to retire at 55?

Consider your pension options

Closely related to the previous point, you’ll want to think about how to use your pension when you retire. You’ll have a few options:

• Drawdown up to ^{_corporation_tax} of your pot as a lump sum without paying tax and leave the rest invested.
• Drawdown a small amount from your pension each month, and leave the rest invested so it lasts longer.
• Use your pension pot to buy an annuity which provides a guaranteed income for the rest of your life.
• A mix of the above.

Your circumstances and desired retirement lifestyle will influence your decision. If you find it difficult to decide, you may want to speak with an independent financial adviser ahead of time.

If you have more than one pension, read Should I consolidate my pensions?

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Think about your personal goals

There’s only one thing you shouldn’t do in retirement, and that’s nothing. Everything else is up for grabs! So write down all the things you’d love to do using the following method to find out which are most attainable (we’ve included some examples):

Example one

• Goal: Learn spanish
• Method: Sign up to weekly online classes
• Cost: £20 a session
• Timeframe: Once a week for 2 years
• Reward: A trip to Barcelona!

Example two

• Goal: Redecorate the house
• Method: DIY
• Cost: ~£3,000
• Timeframe: Daily for 3 months
• Reward: A dinner party with friends!

Join communities

Interaction with other people is an important and rewarding part of life. And if you’re used to speaking with people at work everyday, you’ll really notice when they’re not around. So consider joining some communities well before you retire, so that by the time you do, you have a strong network of friends you can continue to talk to and do things with.

Communities might include:

• Local community groups
• Special interest groups
• Religious communities
• Book/film clubs
• Sports clubs

Ease yourself into retirement

Retirement doesn’t have to happen suddenly. You don’t have to leave your 9-5 job on a Friday and begin your retired life on the Monday. Instead, you can ease yourself into it!

Flexible retirement is when you gradually reduce your hours or days before permanently retiring from work. For example, you might go from a full-time role to spending a couple of years working part-time. Or you could spend a year working 9-2.

This method can reduce the shock of suddenly finding yourself without a job, and it also allows you to enjoy the final years of your working career with slightly less pressure.

You’ll want to consider how your finances will be affected by this method, but if you’re over 55, you could even supplement your income with your pension.

For more information, read Flexible retirement tips.

Combine your pensions

Finally, after all these years, your pension gets its chance to shine! But wait, how many pensions do you have again?

The average person works at 11 jobs by the time they retire, which means they could have picked up almost a dozen pensions along the way.

Combining all your old pensions into one new plan could help you:

• More easily manage your money
• Save on excess fees
• Make smarter financial decisions

PensionBee exists to help you combine your old pensions easily. And with over 300,000 people having used our service, and thousands rating their experience Excellent on Trustpilot, why not see whether see we could help you too, today?

Interest rates have been at a record lows since the start of the coronavirus pandemic. However, there are murmurs of interest rates moving even further south, and potentially into negative territory. In this article, I’ll explore how interest rates work and why we could be headed for a negative interest rate environment, and what it could mean for us as consumers.

The role of the Bank of England

The Bank of England’s Monetary Policy Committee (MPC) is responsible for setting what’s known as the “base interest rate”. This is the rate of interest the Bank of England pays on deposits held by commercial banks, being the banks that everyday customers like you and I use.

Since March 2020, the base rate has been 0.1%. This is the benchmark that commercial banks use for setting their own saving and lending rates, and explains why we have seen such low rates of interest on offer for the past few months.

Meeting roughly every six weeks, the members of the MPC review the latest news on the UK and global economy, unemployment rates and Gross Domestic Product (GDP) growth or decline. Their task is to keep the UK economy on track to meet the inflation target of 2% set by the government.

The impact of the coronavirus pandemic on the economy has been deeply felt. Unemployment continues to rise, uncertainty around further regional and national lockdown is impacting business recovery and the economy as a whole has shrunk considerably compared with 2019, in spite of the government’s unprecedented economic bailouts. Our economy is in a recession.

In mid-October, against a backdrop of inflation at 0.7% (remember the target is 2%), the MPC asked banks and building societies how ready they would be if the base rate moved into negative territory. This was seen as a clear sign that they’re contemplating lowering rates to stimulate the economy.

How negative interest rates can stimulate the economy

If the base rate was set at negative, then commercial banks would have to pay to hold cash deposits with the central bank. Having to pay interest on deposits with the Bank of England provides a significant disincentive for banks to hold cash at the central bank, and instead encourages them to lend it out to businesses and consumers. As a result, we’d expect to see banks further lowering both their lending and savings rates.

Negative interest rates create an environment where savings are unattractive and spending’s easier - especially if banks pass through cheap rates to their loans and mortgages. If money is cheap to borrow, businesses and consumers take out loans and spend more, thereby boosting the economy.

This is the economic rationale for lowering rates into negative territory. But whilst the European Central Bank and others have already taken rates negative, this has never been tested in this country before. Whether the theory will hold during times of significant borrower risk, no one can say with any certainty.

What this could mean for those with mortgages

Average mortgage deals are now cheaper than before the pandemic, albeit the number of mortgage deals on the market have reduced substantially since March 2020.

Could mortgage rates go lower? History suggests that rate decreases tend only to be passed through to savers, while mortgage borrowers see no benefit. Whether UK lenders would follow the Danish banks in launching negative mortgage rates remains to be seen.

Regardless, for those who want to get on the mortgage ladder or re-mortgage to get a better deal, rates are some of the cheapest seen in recent times.

Importantly, for those with ‘variable rate’ or ‘tracker’ mortgages linked to the base rate who might be getting excited about getting paid to borrow money, unfortunately most of these mortgages will have a mechanism in place which stops the rate dropping below zero.

What this could this mean for savers

Banks pay you interest when the base rate is positive, but would a negative interest rate mean you have to pay your bank to hold your cash?

It’s uncertain exactly how negative interest rates charged by the Bank of England would be passed on to savers by commercial banks. Whilst those with cash savings may not be charged interest directly to keep their money in the bank, they may find charges passed through in other ways.

One possible scenario is that savers may have to pay to have a bank account, that is, pay their bank to keep their money safe for them. Earlier this month Starling Bank became the first British bank to introduce negative interest rates for personal account customers with Euro accounts. HSBC also made a statement last month that they might have to start charging for ‘basic banking services’. So whilst we might not see interest being charged directly on our savings, we could possibly see the end of ‘free banking’ as we’ve typically known it.

What’s almost certain though is that if the base rate was sub-zero, historically low bank rates would hit zero and savers would earn nothing on their deposits. With no incentive to save, they in turn are more likely to spend money on consumer goods and services.

Already rock-bottom rates over the last few months have hit savers hard, especially as many people still in employment or on furlough have been able to stash away more money whilst the lockdown restrictions have been in place. Changes brought about by negative interest rates could be the last straw; it may encourage savers to look at alternatives homes for their money rather than keeping it in the bank.

When money in the bank isn’t growing, it’s at the mercy of inflation, meaning we can buy less with the same money in the future. To hold the value of our hard-earned money, we need to at least match inflation, but ideally beat it if we want our money to grow. It’s possible that we’ll see an uptick in money flowing into the stock market as risk-aware savers seek out inflation-beating returns.

What this could mean for your pension

The impact negative interest rates could have on pensions is still relatively unknown, as it’s not been seen before. Defined benefit (also called ‘final salary’) pensions are likely to avoid any damage as they provide a guaranteed income in retirement, however, savers with defined contribution pensions could see their potential income drop.

Any drop in value is unlikely to have a lasting impact for the savers furthest from retirement, as they’ll have time to ride out the bumps and benefit from the long-term growth of their investments. But for those closer to retirement, any significant drop in value could have an impact on their retirement plans as they’ll have less time to recover any losses.

Although many pension plans adopt a lower-risk strategy for those approaching retirement, investing in assets such as bonds, if interest rates drop, or turn negative, the value of bonds would decrease. Therefore this could mean a drop in pension value for those closer to retirement.

But all of this depends on what happens next. The next meeting of the MPC is on 17 December 2020.

Emma Maslin is a certified Financial Coach and Mentor, Financial Wellness Speaker and Founder of multi award-winning personal finance education website The Money Whisperer. A former Chartered Accountant, Emma believes financial health and wellbeing isn’t a luxury just for the wealthy; it’s a basic need for all of us.

This article was last updated on 12/02/2024

In recent years British pensioners have been getting an increasingly good deal out of the State Pension - but is it enough to rely on completely in later life?

For most British retirees the State Pension makes up the bedrock of their retirement income, and for the last 10 years it has been guaranteed to increase every year by either inflation, wages or 2.5% thanks to the triple lock. In a decade that has seen wages stagnant and inflation remain at historic lows, this has been a great deal for pensioners - and next year they will get another increase of 2.5%.

In April 2021 the new flat-rate State Pension (for those who reached State Pension age after April 2016) will go up by £4.40 to £179.60 a week, or £9,339.20 a year. The old basic State Pension (for those who reached State Pension age before April 2016) should go up by £3.35 to £137.60 a week, or £7,155.20 a year.

And, because of a coronavirus-related quirk this year, forecasters have it that those in receipt of the State Pension could be in line for an even bigger income boost in 2022, gaining an extra 4.1%.

Inflation is creeping along at less than 1% (and has been for a decade), meaning those receiving the State Pension are seeing their income rise by more than the amount goods and services are going up. So does all this mean British savers can stop paying into their private nest eggs and rely solely on the State Pension? Probably not.

The Pensions and Lifetime Savings Association (PLSA) has worked out that for a basic retirement a single person needs at least £13,400 a year (£21,600 for a couple). This should provide a minimum to cover all their needs, plus enough for some fun. For example, a holiday in the UK, to eat out about once a month and do some affordable leisure activities twice a week. But that’s almost ^{_basic_rate_personal_savings_allowance} a year more than the new full State Pension will provide a single person. For those receiving the old basic State Pension the shortfall is an even bigger £3,000 a year.

The good news is that through a combination of the State Pension and some private or workplace pensions (which is now more likely for everyone thanks to Auto-Enrolment), the PLSA’s basic retirement income should be very achievable for most people.

Of course, what we all really hope for in our golden years is to retire in some style. For that, you really will need more than the State Pension! For a moderate lifestyle in retirement - maybe a two-week holiday in Europe and to eat out a few times a month – you’ll need about £31,700 a year (£43,900 for couples).

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At the more comfortable level - regular beauty treatments, theatre trips and three weeks in Europe a year - a single retiree would need £43,900 a year (£60,600 for couples). These figures will vary. When consumer champion Which? surveyed its members recently, it found retired households spent on average £2,110 a month, or £25,000 a year, with the basics costing £17,200.

Luxuries like long-haul trips and a new car every five years bumped the overall retired household figure in the Which? survey up to an annual £40,000 income - a long way from the £9,300 a year the State Pension will provide next year. You may think you’re quite frugal now and won’t mind a retirement lacking the luxuries. But remember, we’re all living much longer. A 30 year retirement is a very real possibility, and three decades is a very long time to be constantly counting the pennies.

The State Pension is a great foundation for retirement savings, but you’ll need to top it up with your own private nest egg to enjoy a really comfortable later life.

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

This article was last updated on 12/03/2025

We’re pleased to introduce four new Pathways designed to help savers make the best of their money in retirement.

What are Investment Pathways?

Most pensions can be accessed from the age of 55 (rising to 57 from 2028). And while some may use this opportunity to withdraw a large lump-sum or begin drawing down a regular income, others might prefer to delay touching their pension until they’re older. In either case, it’s important for there to be a pension plan to manage their money in a way that supports their goals. These options are called Investment Pathways.

With Investment Pathways, savers can choose from four distinct options depending on their retirement objectives, and how they plan to use their pension in the next five years.

Why launch these Investment Pathways now?

In 2015, the Financial Conduct Authority (the UK financial regulator) made a range of pension reforms to give people greater freedoms around how they managed their pension. This included being able to withdraw anything up to the entire pension pot from the age of 55 (rising to 57 from 2028) without seeking independent financial advice. A recent PensionBee survey showed that the majority (56%) of people don’t seek out advice before accessing their pension, which in many cases resulted in limiting their pension’s opportunity for growth.

To address this, the Financial Conduct Authority introduced the Investment Pathways initiative. Due to launch in February 2021, it requires all pension providers to offer four pension plans, one for each of the four key retirement goals it identified after extensive consultation.

We’ve been preparing for this for some time and PensionBee is among the first pension companies to launch its Investment Pathways, following the launch of our Pre-Annuity Plan with State Street Global Advisors in November 2020.

How will I choose between Investment Pathways?

We’ll ask you about your retirement objectives when you make your first withdrawal. Once you choose the Investment Pathway that meets your objectives, you’ll be switched to the associated plan. You can find out more on the Investment Pathways options on our Drawdown page.

We won’t ask you about your retirement goals if you’ve already made your first withdrawal. But you can still pick one of our Investment Pathways plans from our Plans page.

At PensionBee, we believe that everyone deserves the right to feel pension confident. Launching these Investment Pathways today takes us one step closer to achieving that goal.

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.

Retirement can be a time of considerable change; you’ll no longer be working, you’ll have far more free time, and you’re likely to see some decline in your health. Effective retirement planning like having a pension in place can help you not just survive, but thrive during this later period of your life.

Why is retirement planning important?

It might be impossible to predict how the future might turn out, but we can at least stack the odds in our favour. We can do this by preparing accordingly, which is why planning for our retirement is a very smart idea.

You can’t work forever

At some point you’ll reach an age where you either won’t want to work anymore, or just can’t work anymore (due to health reasons, for example). And at that point you’ll need to rely on other means of income.

The State Pension won’t get you far

If you pay National Insurance for at least 10 years of your working life, you’ll qualify to receive the State Pension. As of August 2020, the most you can get from a State Pension is £175 per week (£9,110 per year). This isn’t very much to live on. In fact, if two partners combined their maximum State Pensions they’d still fall far short of the £27,000 per year retired households spend on average in the UK, according to a Which? survey.

Pensions benefit from compounding returns

In a nutshell, compounding returns is the term used to describe how investments appear to grow more over time. This is because pensions are invested in things that tend to grow year after year.

For example, if £100 today grew 4% over the next year it would increase by £4. But if that £104 grew 4% again the next year, it would increase by £4.16 to £108.16. This is the power of compounding returns. If you start investing young enough, you could benefit from compounding returns for up to 50 years.

We’re living longer than ever

With the average life expectancy continuing to rise, more of us will be spending more time in retirement than ever before.

On the one hand, this is great - there’s more time to spend doing the things we’ve always wanted! On the other, it means you’ll need to stretch out your finances so that you’ve the income to support you for longer.

You’ll want to enjoy your retirement

Retirement is the perfect time to travel to those unvisited places you always wanted to visit, start a new hobby you’ve been delaying, or spend more time with your grandchildren. Unfortunately, most of these things don’t come for free.

Income from a pension could help you achieve all this. And if you’re still reliant on working for money when you’re older, you’ll have less time available to spend doing what you love.

You might see your health decline

Sadly, growing old doesn’t come without its downsides. As we get older our risk of developing a serious health condition increases. This is why it’s important to have money available to support you if you need it. This might include paying for health insurance, emergency treatment, or assisted living.

You won’t become a financial burden on your family

Having income retirement in place will help you pay for any unexpected personal expenses without needing to rely on the help of others. Of course, there are many circumstances where this is unavoidable, but having your own retirement income in place could go a long way to relieving the burden on others.

It’s one less thing to worry about

Perhaps an often overlooked aspect of retirement planning is that once everything’s in place, you no longer have to worry about not being prepared for retirement. This can be a massive boost for your mental health, particularly for those who are naturally anxious.

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How to plan for retirement

Now that we know why retirement planning is important, let’s look at how to go about it.

1. Start early

If you’re young, retirement might feel like a very long way away - but starting to put money away early on can really pay off in the long run.

We used the PensionBee pension calculator to see how much more a pension could be worth if a saver started paying in at 20 rather than 30 years old. The difference is stark.

Investing £200 per month from 20 years old would result in a pension worth £10,279 per year if retiring at 65.

Investing £200 per month from 30 years old would result in a pension paying out £7,098 per year if retiring at 65.

2. Start a pension

Pensions are specifically designed to help you save for retirement, and there are many benefits to getting one.

• Your employer will match at least 3% of your own contributions
• The government will boost your contributions with up to ^_higher_rate tax relief
• You’ll benefit from compounding returns (see above)

3. Keep track of your pensions

The average UK employee works at 11 companies during their lifetime, and are likely to accumulate different pensions as they go. Keeping track of your pension is essential and could prevent you from losing out on thousands of pounds as a result of paying unnecessary fees.

One of the best ways to avoid losing track is to combine your pensions into one.

4. Check your State Pension retirement age

The age at which you can start claiming a pension depends on when you were born. You can find out your State Pension retirement age on the official Gov.uk website.

You can choose to delay receiving the State Pension if you like, and doing so will increase the amount you get per year.

You can use this information to help decide when you want to retire.

5. Consider your options a few years before retirement

When you retire, you can choose what to do with your pension. This might include taking out a lump sum when you turn 55 or using it to buy an annuity. You could just decide to leave it where it is and make regular drawdowns.

Before deciding which option’s right for you, you’ll want to give it plenty of thought. You might even want to speak with a financial adviser. So give yourself plenty of time to consider your options - at least a year, ideally.

Consolidate your pensions with PensionBee

If you’ve accumulated multiple pensions over the years, you might want to consider consolidating them into one simple online plan.

• Sign up in minutes
• Pay one simple annual fee
• Manage your pension from anywhere with the PensionBee app

Sign up to PensionBee here.

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.

You’ve finally reached retirement. The busy 9-5 job and all the routine that comes with it is behind you, and now you’ve got more time on your hands than you know what to do with. If you’re wondering what to do in retirement, don’t worry. This article’s for you!

Take up a new hobby

Many people use retirement as a chance to try new things. Finding a new activity can help keep a positive mindset and bring a sense of wellbeing to your life. And with more time on your hands, it’s important to find something to do that helps keep yourself busy.

Sport

Keeping active in retirement helps keep a positive mind and body. Regular exercise helps to improve your mood, reduce stress and boost energy levels. Playing sport can provide structure to your day, on top of the health benefits, and if you play as part of a team, it also means you’ll be able to socialise and make new friends.

Some less-demanding sports you might want to consider include:

• Bowls
• Dancing
• Golf
• Swimming
• Tennis
• Yoga

Baking

Baking or cooking at home is something else you can learn when you retire, if you haven’t already. Making something with your own hands can bring a sense of fulfilment and satisfaction, and baking is just one way of doing that. Not only can baking be relaxing, it means you’re in control of your diet and is a cheap alternative to eating out too.

You may already have lots of recipes at home, but there are endless others available online. Some recipe sites you might like to look at include:

• Allrecipes.co.uk
• BBC Food
• The Happy Foodie

Education

Over the course of your career, you’ll have picked up a vast amount of knowledge. Just because you’ve retired, it doesn’t mean it’s no longer valuable.

You could take the time to educate the next generation and pass on your skills. Whether you write a blog, or speak at local schools and community centres, your time will be appreciated and it can be rewarding knowing you’re passing on your knowledge to the next generation.

You could also educate yourself further in a topic, or learn about something completely different.

Retirement activities

Travel the world

After a long career, many people want to travel the world, experience different cultures and visit places they haven’t been to before.

Whilst traveling can be expensive, you don’t need to travel far to have a great experience. Mini breaks offer a great alternative if longer trips aren’t possible. Spending time in a city you’ve always wanted to visit for a few days, or just having a day out to places closer to home can be just as satisfying, and a cheaper option.

Spend time with family

Having more time on your hands will allow you to spend time with loved ones, which you may not have been able to do during a busy working life.

Spending more time with friends and family is always fun, and it creates special memories for your loved ones too - particularly your grandchildren.

If you aren’t able to visit family, phone calls or video calls can be just as important and allow you to spend time together.

Read books

It’s important to keep your mind active during retirement, and reading is just one way to do this.

The brain is like a muscle, and by exercising it, it stays active and healthy. Reading stimulates the brain, improves our cognitive ability and can bring back memories from your childhood too.

Not only is it a very affordable hobby, there is a huge choice in reading material. You could also join a local book club to share opinions and recommendations, and to help make new friends too.

Volunteer

Without a job, some retirees feel that they’ve lost their sense of contributing to a goal or mission. Volunteering in retirement can be a great way to counter this, allowing you to contribute to a cause close to your heart.

Giving back to your local community gives a sense of accomplishment and can increase your self-confidence. Alongside the sense of achievement, volunteering can help you to stay active and get involved in a friendly community and make new friends.

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Retirement tips

Decide what you want to achieve each day and get into a routine

After working long hours and not having a lot of time to put your feet up during your career, it’s easy to sit around and become unproductive. It can be helpful to have a routine to follow; eating and going to bed at similar times every day, for example.

Having a list of things you want to achieve and do every day, can also give your day a sense of purpose and an opportunity to reflect at the end of the day.

See it as new chapter in your life and a fresh start

Retirement presents an opportunity to start a clean slate. After stepping away from your working life, you now have more freedom and time to pursue new activities and ideas.

Your retirement is what you make of it, so see the positives of the opportunity it offers and live it to its full potential.

Pursue a new hobby or learn a new skill

Use the freedom that comes with retirement to learn something new. Having some extra time can allow you to pursue a hobby you’ve always wanted to, or to even learn a new skill.

Retirement doesn’t have to be static and your age is just a number, so shouldn’t define what you do. Why not learn a new language or learn to play the guitar for example.

Do what makes you happy

Retiring should be one of the most enjoyable and rewarding chapters of life. Everyone will envision their retirement differently, so it’s important to do what makes you happy. Whether you want to fill it with thrills, or take a more relaxed approach, it should be what you want it to be.

If you’re thinking about taking out a pension, you’ll want to find one that’s right for you. Most pension providers offer a range of pension funds (also called plans or schemes) to cater for people’s varying needs. It can make choosing the right one feel more complicated than you might expect.

But don’t worry. We’ve outlined a few simple steps to help you find the best pension fund to invest in. We’ll start with the basics.

What is a pension fund?

A pension fund is a pot of money that’s invested in the stock market and other assets. Its goal is to grow as much as possible so that savers can use this money to live off when they retire. You may see it referred to as a pension plan or pension scheme, but it’s all the same thing.

Different funds invest their money in different ways to cater for the varying needs of savers. They might focus on:

• Higher- or lower-risk investments (eg. stock market or bonds)
• Specific geographic markets (eg. China or UK only)
• Specific market sectors (eg. technology or commodities like gold)
• A mix of the above

For example, a saver in their 20s might prefer to choose a fund that invests in higher-risk companies as they tend to have the highest growth potential. But a saver close to retirement might choose a lower-risk fund so there’s less chance their pension pot will lose value (even if that sacrifices growth opportunity).

The most common type of pension offered by companies to their employees is known as a defined contribution pension. The employee and the company pays into it, the government provides a tax-free bonus, and a pension provider invests that money on behalf of the saver.

Less common (though highly regarded) is the defined benefit pension, which pays a retirement income based on your salary and the number of years you worked for the employer. These days, it’s rare to find a company that offers this type of pension.

It’s also possible to manage your own pension, where you choose how the money gets invested. This is known as a self-Invested personal pension (SIPP). It’s suitable for those who feel confident enough to make their own investment decisions, however fees can be more expensive than a regular pension.

How do I pick the right fund?

In the UK, there are hundreds of funds to choose from. This is intentional; pension providers want to cater for a wide range of savers and offer different types of funds to suit their needs.

To choose the best pension plan for you, you’ll want to consider the following.

Pension provider reputation

A pension provider can manage your pension savings for many decades, so you might feel more confident trusting a provider with a successful track record and responsible investing strategy.

You can usually view the past performance of a provider’s funds by visiting their website. You may also be able to find fund comparisons on comparison sites or in the news. But bear in mind that there’s no guarantee that a good run will continue.

Equally, while some newer providers may not have the same track record as some of their peers, they may offer funds that you might be more comfortable with. For example, some newer funds only invest in socially or environmentally responsible companies.

Fees and charges

If you choose a provider to manage your pension for you, you’ll need to pay a management fee. This can vary significantly depending on the fund. You may also be charged a range of other fees too.

It’s best to be equally wary of funds that have particularly low or high fees. Low fee funds may include extra restrictions or charges for making changes to your pension, such as transferring it to a new provider. The best pension fund might not have the lowest fee.

Equally, high fee funds could significantly impact the growth of your pension - a 2016 Which? study showed that a 2% fee could result in a pension’s value being almost ^_basic_rate less at retirement than a 1% fee.

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Flexible contributions

Each payment you make into your pension is known as a contribution. Usually, contributions are made monthly but some funds allow you to choose other types of payment schedules. Others may allow you to make ad-hoc payments, which could be particularly useful if your income is seasonal or irregular.

Some providers make it easier to change your contributions than others, so check the provider’s terms before making a decision.

Accessibility

We live in the age of apps and instant information, and while some pension providers have gone to great lengths to update their service there are still many that haven’t caught up.

If you’re keen to keep tabs on the performance of your pension, you might want to choose good pension funds that offer an app or modern website. As well as being much more convenient than waiting for your annual pension statement, it saves paper too.

In addition, some providers offer varying levels of personal support. For example, at PensionBee we provide our customers with personal account managers (our BeeKeepers!) who can be contacted via live chat, email or phone.

Attitude to risk

Like other types of investments, pensions are not risk-free. While pensions do tend to increase in value over time, there’s no guarantee they won’t grow at a slower pace than you’d like or even fall in value.

When it comes to choosing funds, some are considered higher risk than others. For example, a fund that invests mostly in the stock market may be subject to daily fluctuations in value. Meanwhile, a fund that invests in government or corporate bonds will be much more stable. The higher the risk, the bigger the growth potential (and loss potential). But the best pension scheme for you might not be a lowest-risk one either.

It’s conventional wisdom to invest in higher-risk things earlier in life, and lower-risk things later in life. This allows your money the chance to grow as much as possible while reducing the chance of a sudden fall in value as you approach retirement. As a result, many pension providers offer a default fund which automatically adjusts its investments in this manner.

Funds available through PensionBee

PensionBee offers a range of pension plans to suit a variety of needs. This includes specialist funds for those underserved by the wider pension market, such as the Future World fund which invests your money into companies that pledge to move to an environmentally-friendly economy.

These funds are managed by some of the world’s biggest money managers, including BlackRock, HSBC, Legal & General, and State Street Global Advisors. For extra peace of mind, there’s just one fair and transparent annual fee to pay.

You can view your balance, see if you’re on track to meet your retirement goals, and adjust contributions on the fly using the PensionBee app. And if you have a question, you can speak with a personal account manager (we call them BeeKeepers) by live chat, email or phone.

There are plenty of pension funds to choose from. The best pension fund to invest in is the one that best suits your needs.

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.

With any investment you make there will always be fluctuations in its value, and this is no different with a pension. Whenever there are periods of political or economic uncertainty, it can be unsettling to see your pension balance decrease. After all, these are your hard-earned savings that you’re relying on to be able to live comfortably in retirement. Read on to learn why short-term fluctuations occur, and find out why they are in fact quite normal and no cause for alarm.

How the stock market affects your pension

Defined contribution pensions are the most popular type of pension. When you contribute to these, your contributions will be paid into a fund that invests in the stock market. This will usually achieve growth over the long-term, but there are never any guarantees. In the short-to-mid-term its value is likely to swing both up and down.

Stock market trends

Since 2010, the average annual pension fund returns have been around 8.5%. This is often referred to as a bull market, when there’s been extended periods of growth in the markets. However the 2020 decline caused by the coronavirus pandemic has seen the second-biggest stock market crash of all time. These impacts have been felt around the world, in the UK and have been reflected in the FTSE share prices too.

Other stock market slumps, known as bear markets, have often led to considerable returns in the following years. It’s these trends, no matter how dramatic, that are part and parcel of investing. After the global financial crisis in 2008, the S&P 500 (a US stock market index that measures the stocks of 500 large-cap US companies), finished up over ^_basic_rate the following year. This example from the S&P 500 goes to show how much the market can recover.

While no one can predict how long market declines will last, or say with certainty what the future will bring, history shows us that any turmoil is usually a short-term blip, and brighter news isn’t far away. That said, past performance is not indicative of future performance and shouldn’t be the basis of future investment decisions.

There’s no reason to panic

When looking at a pension’s value, it’s important to evaluate what you’ve earned or lost over its lifetime, rather than over a shorter period. If you look at your pension balance during a downturn, for example, and only focus on recent performance, declines will appear more pronounced than if you were to look at them in the context of a longer time period.

It’s possible to turn a decline to your advantage: when markets aren’t doing so well, some investors argue it’s a good opportunity to save more into your pension. Contributing during a downturn will mean you’re buying pension units (your investments) at a cheaper price. So when markets rebound, you could reap the rewards as their value increases.

Diversified portfolios

Most pensions will be diversified across a range of locations and different asset classes. This means your retirement savings could be invested in shares, bonds, cash and other assets, across the globe, depending on the plan you’ve chosen. Choosing a diversified fund means that any declines in your pension will be less pronounced as you still have the opportunity to profit in markets that are doing well over the long-term.

Appetite for risk dependent on age

As a pension is a long-term investment, it’s important to consider your approach to risk and return as you get older. If you’re opting for a plan with higher potential for growth, this will come with a greater level of risk. Higher-risk investments will see sharper increases and decreases in their value. Choosing a lower-risk investment will see smaller fluctuations, but they’re likely to provide a slower rate of growth. So whilst in your 20s, 30s and 40s, you may choose to invest in a higher-risk plan, and then adopt a lower-risk strategy in the run-up to your retirement. It’s important to remember that any investment carries the risk that you may get less back than you started with.

As you approach retirement, your pension may automatically be moved to a lower-risk plan and invested into assets considered to carry lower risk, such as bonds. For example, the PensionBee Tailored Plan, derisks investments as a saver grows older, helping to protect against market tremors.

How to protect your pension

With pensions, intermittent ups and downs don’t usually have a lasting impact as most savers will have plenty of time to ride out these bumps, and benefit from the long-term growth of their investment. But for those closer to retirement, stock market crashes mean your pension has less time to recover from these losses. This is why it’s important to take a balanced approach to protect your savings.

Government bonds

Investing in government bonds is one way you can help protect your pension savings. Government bonds are considered to be one of the lowest-risk types of investment, however this means the opportunity for high returns is also lower. Investing in government bonds means you’re effectively lending money to different companies when they’re looking to raise funds. You’ll receive a regular fixed sum until the bond reaches its maturity date, at which point you’ll get your original investment back.

The PensionBee 4Plus Plan invests in bonds, and aims to achieve an annualised 4% return over a five-year period, making it a suitable option for those nearing retirement.

Investing in property

Investing in property is another alternative as part of a balanced investment strategy. Although some pension funds will invest in property as part of their diversified portfolio, investing directly into property offers a tangible asset that tends to increase in value over time. However, property will require more investment up front, so it won’t be possible for everyone.

Planning ahead and having a balanced investment strategy can help to reduce the impact market declines will have on your retirement savings.

What this means for your PensionBee pension

If you’re a new customer you may not be used to seeing any fluctuations to your pension balance – highs or lows. It’s important to remember that you’ll only see these dips during a downturn because PensionBee gives you full transparency over your investments and your old pensions would have experienced falls too, you just never saw them. At PensionBee, we believe it’s better to be honest about what’s happening with your money all the time and not just once a year on an annual statement.

Whilst there’s no perfect antidote to totally protect your savings from market tremors, it’s essential to keep a level head. Many of the PensionBee plans are diversified across different asset classes and locations, as we believe this is the most-balanced approach. Check out our plans page for a more detailed breakdown of how our customer’s money is invested, or if you’re already a customer, head to the account section of the BeeHive.

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.

In the past few weeks the spread of coronavirus has caused ripple effects around the world, with financial markets experiencing some of their most challenging periods since the 2008 recession. Despite the government being swift to introduce a range of measures to protect people’s livelihoods and safeguard the economy, the impact has been far-reaching. As investors, it’s likely you will have experienced some degree of market volatility first hand, no matter how your pension savings are invested.

In addition to the quarterly performance update you’ll receive from your money manager later this month, I wanted to give you a snapshot of how all of the PensionBee plans performed, when compared to the UK and US stock markets. I’m pleased to report that all seven of our plans performed better than the UK and US stock markets during the first quarter of the year, and provided all investors with a degree of protection against the downturn.

It is also important to compare the quarter’s performance to the long-term returns of the market, where most pensions are invested. Indeed, pension savers who have been investing for the last 30 years, as many pension savers ultimately will be, enjoyed cumulative returns of over 30^{_personal_allowance_rate} for the period (comparison of the UK stock market from 1989-2019). Long-term savers create healthy retirement nest eggs and that is what pensions are all about.

Nevertheless, our customers will want to monitor and understand the performance of their pensions throughout time. Read on to learn how our plans performed for savers under 50, who are a long way off retirement, and for those aged over 50, who may be considering drawing down in the near-term. PensionBee has been proud to offer sound financial products in partnership with the world’s largest money managers, BlackRock, State Street Global Advisors and Legal & General.

Remember that past performance is not a guide to future performance and this blog has solely been prepared for informational purposes and not with the intent to influence future investment decisions. As with all investments capital is at risk.

Savers under 50

Sources: Bloomberg and money managers directly. ^Price taken on the last day of the quarter. Past performance is not an indicator of future performance. Capital at risk. These tables do not take account of any fees that may be levied for a particular investment. Full factsheets are available here: www.pensionbee.com/uk/plans. ^^Equity content refers to the amount of exposure each plan has to global stock markets and other listed risk-on assets, such as property.

All of our plans designed for customers under 50 years old outperformed global markets during the quarter as a result of their emphasis on diversification. Most plans are invested in a range of assets such as shares, cash, property and bonds, usually across several different regions. This means that when one type of investment or market dipped, others rose. In addition, a more responsible or ethical investment stance, such as that evident in the Future World and Shariah Plans resulted in better performance.

The majority of our customers are invested in the Tailored Plan, which invests your money differently as you get older, moving it to safer assets as you near retirement. While the plan experienced varying volatility over the quarter, depending on your age and the corresponding weighting of investment in company shares, most customers will see a gross return of around -10 to -^{_corporation_tax_small_profits}. The combination of investments in the plan, including fixed income assets such as government bonds, helped to limit the impact of the turbulence seen in global markets.

While it’s been difficult for savers under 50 to see their pension balances falling over the past few weeks, it’s important to remember that short-term fluctuations, including severe ones, are entirely to be expected and in fact contribute to the ability to generate healthy longer-term returns. Indeed, younger savers are unlikely to be negatively impacted by this downturn when they come to retire as the greater the decline in your plan’s value, the more likely you are to benefit from the future recovery of the stock market.

Savers over 50

Sources: Bloomberg and money managers directly. ^Price taken on last day of quarter. Past performance is not an indicator of future performance. Capital at risk. These tables do not take account of any fees that may be levied for a particular investment. Full factsheets are available here: www.pensionbee.com/uk/plans. ^^Equity content refers to the amount of exposure each plan has to global stock markets.

Early last year we introduced two new pension plans specially designed for those nearing retirement, offering our over 50 customers more options to safeguard their savings ahead of drawdown. The 4Plus Plan targets an annualised return of 4% over a 5-year period, which is consistent with commonly recommended annual drawdown rates of around 4%.

When compared to global markets, the 4Plus Plan had one of the strongest performances of the quarter, delivering a gross return of -9% over the period. The plan is actively managed by State Street Global Advisors who began reducing its investment in more exposed assets, such as company shares, when markets began to fall in February. This quick action helped to safeguard savers from the full impact of volatility, and State Street Global Advisors will continue to keep a close eye on markets and react accordingly in the coming months.

Savers in the Preserve Plan were the most insulated from market volatility, as the principal aim of the plan is to reduce risk, and shelter savings from the impact of short-term market fluctuations for customers intending to make substantial withdrawals in the near future. By making short-term investments into creditworthy companies and safer assets such as fixed income, the Preserve Plan remained stable over Q1, resulting in neither gains nor losses for investors.

Those customers over 50 who are in our default plan, Tailored, also saw a reduced level of losses, when compared to global markets. That’s because the plan automatically derisks investments as an investor ages, moving their savings to safer assets and taking a more conservative approach to investing as they near retirement. For those expecting to retire within the next few years, the Tailored Plan (Vintage 2019 - 2021) has a relatively modest level of investment in company shares and therefore limited stock market exposure, resulting in losses of just -7%.

For our customers who are already in retirement and are perhaps thinking about withdrawing all of their pension as a result of the downturn, I hope that you will take comfort in the range of plans we have on offer, and balance your short-term desire to safeguard your savings with risks of not keeping your savings invested in the longer-term. With that in mind, you may want to consider only drawing down what you need and keeping a close eye on the markets.

Over the coming months we intend to keep you regularly updated on what’s happening with your savings and if you have questions about your plan’s performance, or anything else, you’re welcome to get in touch with your BeeKeeper.

An important note of caution: It’s always impossible to forecast what will happen from quarter to quarter, and past performance should never be used to predict future performance. However, it is reasonable to prepare ourselves for further falls as coronavirus has continued to have an impact on the global economy in the first weeks of April. When markets fall, it’s tempting to consider withdrawing your money to protect it or moving it to lower risk investments, however, there’s a risk that investments could be sold at a loss and you may miss out on any increases in value in the future when markets recover.

On the contrary, when markets are not doing well, there are more opportunities for investors. If you make regular contributions to your pension, you may wish to consider continuing to make those contributions as you’ll be able to invest at lower prices than before the market downturn.

At the end of last year PensionBee set out to do something radical: to bring together brilliant minds from the UK’s most ambitious digital pension platforms in order to tackle the online problem of pension scams. We organised the first ever Pension Scams Hackathon, which challenged PensionBee, AgeWage, Smart Pension and Nutmeg to combine our skills and develop an online concept that raises awareness of pension scams in both an engaging and educational way.

Not only was the Hackathon a huge success, but over the past four months representatives from the four “pentechs” have continued to work together alongside our technology partner, JMAN Group, to turn the winning concept, Scam Man & Robbin’, into a reality…

Scam Man & Robbin’ is a five-minute online game that educates consumers about pension scams by casting the player in the role of ‘Scam Man’, a vigilante whose main objective is to protect people’s pensions from scams! Scam Man must correctly identify six of the most common pension scams by shining his torch on them to destroy them, as well as collecting six corresponding bonuses that can help protect savers’ pensions. The game challenges some common misconceptions which may initially seem positive about a pension scheme, such as guaranteed high returns or an offer of free advice, but may in fact be the hallmarks of a scam.

Inspired by one of the world’s most-loved superheroes, Scam Man & Robbin’, is designed for consumers of all ages and gamers and non-gamers alike, balancing educational scams content with a narrative that’s entertaining from start to finish.

Why scam awareness is more important now than ever

Since we set out to create Scam Man & Robbin’, scams have been on the increase. In March, Action Fraud, the UK’s national reporting centre for fraud and cybercrime, announced that coronavirus-related fraud reports had increased by 40^{_personal_allowance_rate}. And earlier this month the National Cyber Security Centre revealed it had already taken down 2,000 online scams, including 200 phishing sites seeking personal information such as passwords or credit card details, and over 800 advance-fee frauds, where a large sum of money is promised in return for a set-up payment.

The number of pension scams has also soared since the beginning of the coronavirus pandemic, as opportunistic scammers attempt to exploit savers experiencing serious financial strain and looking to access their savings. Research from the All-Party Parliamentary Group on Pension Scams shows that with more people staying at home, in line with social distancing and lockdown restrictions, it’s much more likely that pension savers will be contacted by scammers via phone or online.

To help highlight the new risks that face pension savers, a coronavirus-specific scam has been included within Scam Man & Robbin’, warning consumers against moving a pension to a fund that guarantees coronavirus protection and high returns during periods of economic uncertainty. Other scams featured in the game include cold calls, early pension release and pressure to make an immediate decision.

The game serves to highlight scam warning signs and raise awareness that anyone can fall victim to a pension scam, regardless of age or level of savings. Scammers are increasingly sophisticated criminals and prey on savers who are simply seeking to make the most of their money in a confusing pensions world. In 2019 The Financial Conduct Authority and The Pensions Regulator released research showing that ^{_scot_higher_rate} of pension savers, (the equivalent of over 5 million Brits), could be at risk of falling for a scam. It estimated the average loss to be £82,000 per victim, which equates to around 22 years of pension savings. Pension scams are believed to have cost British savers £4 billion in 2018 alone.

Collaboration will be key to tackling pension scams

Scam Man & Robbin’ is proof that when the pensions industry joins forces and collaborates for the good of consumers, great things can happen. We’re proud to have successfully united some of the biggest innovators in pensions and are confident progress can be made if the sector can continue to come together to find innovative ways to raise awareness of the types of scams in operation today. The pensions industry is taking a stand, and playing the scammers at their own game!

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

Due to the Covid-19 pandemic across the globe, in the past few weeks over 95% of our team have had to start, and adapt, to working from home. We do, however, have a critical team operating in the office as some things still have to be done manually like processing post and scanning policy documents. But we’re slowly adjusting to this new way of working, thanks to our wonderful Talent team.

We do, however, have a critical team operating in the office

They surveyed our 100-strong staff to find out how we can work better from home and stay connected, looking at which aspects should be improved and the consensus of how we’re coping throughout this challenging time. This has resulted in us becoming much closer, as colleagues have been driving across London delivering screen monitors and Wi-Fi boosters, while others have been sharing tips of how to cope with working from home (from going for regular exercise and stretching to making sure we get fresh air!). That really is the value of Love!

At PensionBee we have three Mental Health First Aiders whose job is to help, look after and care for the wellbeing of our team. They’re trained in helping deal with mental health situations and this has been emphasised and communicated to everyone during the pandemic. The aiders are well known throughout PensionBee, are approachable and always happy to help. Team leaders and senior management have also been arranging regular feedback sessions with their teams, our infamous Happiness! meetings, and one-to one catch-ups to make sure everyone’s healthy, well equipped and happy with their new home offices. These regular check-ins are also crucial to ensure we remain focussed on our goal of delivering a leading pension product.

We’re doing everything we can to make sure we’re still giving our customers the best service

From home we’re still able to do the vast majority of our office work which ranges from replying to emails and answering calls from providers and customers and, ultimately, doing all we can to consolidate our customers’ pensions as quickly and simply as possible. We strive to answer customer emails the same day and are maintaining a phone call answer rate of above 90%. The team is, however, looking forward to getting back into the office and for things in the world around us to go back to normal. For the time being we’re doing everything we can to make sure we’re still giving our customers the best service, even while performing “business as usual” from our homes!

Life is a complex journey, packed with events that can have a significant impact on your finances. If you’re a woman, these events are very likely to impact your pension balance. If you choose to follow the marriage and children route it’s normally the woman who takes maternity leave and who often returns to work part-time, or sometimes chooses not to return. The husband is the one who continues to work full-time, continuing with his pension contributions.

And then you have divorce, according to fascinating government data analysis, ^{_scot_higher_rate} of marriages now end up in divorce. The mean age of divorce for a man is 46 and 44 for a woman. (Nice to see that I am bang on for the average statistic, divorced at 43). These stats are shockingly high, making it even more important for men and women to protect themselves financially.

The stark difference in pension pot sizes

Data analysis from PensionBee highlights the differences in pension pots by age and by sex. And clearly shows the impact of life events on pension pot sizes. On average, men have saved £23,423 towards their retirement compared to just £15,0^{_state_pension_age} saved by women, accounting for a 36% gap in the size of their respective pension pots.

A gender pension gap is evident across all age groups, and only widens with age

A gender pension gap is evident across all age groups, and only widens with age. The data shows that there’s a staggering 51% gap amongst savers in their fifties and over (£56,710 compared to £27,594), more than double the gap of savers under thirty (23%: £4,129 compared to £3,192) and those in their thirties (22%: £14,305 compared to £11,170). It’s interesting to note that the gap is at its smallest before women typically start having children.

Why are there gaps between the sexes?

Women take time off for maternity leave and pension contributions are often stopped (I certainly stopped mine as I couldn’t afford to live once statutory maternity pay kicked in). After babies, women might choose to return to work part-time or take a career break. Pension contributions will drop or even stop compared to their full-time male equivalents.

Many women, particularly in current times are leaving the corporate world to set up their own businesses for increased freedom around childcare responsibilities. This again will cause a drop in pension contributions until the business is established and producing regular income.

Then later in life women often take on the caring role for elderly relatives, with many having to drop their hours again at a time when maybe their children have grown older. The caring responsibility switches from children to their parents!

And for so many of us divorce happens. Divorce is very complex when it comes to financial matters. And the area of pensions in divorce is still a very grey area. Absolutely it should be taken into consideration, but often it’s not. Women should ensure that money when you’re together is held in joint names or shared between both partners. Protect yourself from the possibility of the worst happening.

Divorce is very complex when it comes to financial matters.

I’m a real-life example of pensions in divorce. The financial settlement was based on the property equity only. I kept my pension, my ex-husband kept his, despite mine being five times higher. It was still deemed too small to take into consideration based on its future annual value.

This whole pattern of life is hugely generalised, and I recognise that life often follows a different route, but you can’t argue with the statistics based on real-life customer pension pots at PensionBee. Women have smaller pension pots than men. This isn’t right or fair.

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I have a clear solution that could protect women’s pots

Maternity leave

I would always recommend that women keep their pension contributions going whilst on maternity leave, but in reality, this is difficult, particularly when the maternity cover at full pay doesn’t last for long. Statutory maternity pay is low.

Whilst women are on maternity leave, the full-time working partner should make some pension contributions for their partner who may have had to stop or reduce their pension contributions. Rather than giving a birth present of a thing, gift a pension contribution instead. Rather than an expensive birthday or Christmas present, gift a pension contribution.

Part-time work

If one partner chooses to reduce their hours to part-time to spend time with the children, then the other partner should step up and cover the loss in pension contributions. Or maybe if there’s an annual bonus, some of this can be transferred into the part-time person’s pot. Women in this position, ask your partner and get that money transferred into your own personal pot!

Self-employment

Pensions are tricky for self-employed folk, particularly when building a business if profits and turnover is lower. I managed to start sporadic transfers into my pension pot after I had been trading for three years. In normal non-covid circumstances I transfer money into my pension pot via my company to save on corporation tax, depending on monthly turnover. I.e. a good month for turnover would mean a decent pension contribution. Not at the moment though, all my money just goes into my emergency funds pot to protect myself for the uncertainty of this year.

But remember if your partner runs a business where you might be set up on the payroll, they can absolutely make pension contributions for you. And bonus, this will save them some tax!

I’m incredibly passionate about women having financial freedom and to protect their financial futures. We never know what may lie in the future so this solution of transferring pension monies over to partners who’ve stepped out of work for a time is fair. And if divorce does occur, there might be less discussions over pensions as you’ll have already ensured that both parties have pension pots in their own names.

I’d love to know your thoughts. Have you done this before, either given or been given pension contributions? Do you even know your pension size compared to your partners? Maybe it’s time to take a look and address the balance.

Lynn Beattie is a PensionBee customer and CEO/Founder of Mrs Mummypenny, a personal finance website. She is also an ACMA management Accountant, previously working in commercial finance for Tesco, EE & HSBC. Lynn is a single mum to three boys, living in Hertfordshire, and is the author of ‘The Money Guide to Transform Your Life‘ published in September 2020.