PensionBee review
Our verdict
Find out how you can combine your pension pots into one easy to manage plan.
If you have several pension pots dotted around and want to simplify your life by having them all in one place, PensionBee could be a great option.
With straightforward fees and an easy-to-use app, it can take the headache out of pension management.
However, sophisticated investors who want nuanced control over their pension investment assets may find it a bit too simple. And, unless you’re self-employed, you have to transfer an existing pension to start a PensionBee account. But if you’re happy to transfer, or self-employed and on the lookout for a hassle-free pension, then PensionBee could be right up your street.
You can visit the PensionBee website to check exactly how much its service will cost you using the annual management fee calculator, so there are no surprises.
Pros
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No minimum contributions
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Simple fee structure
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Refer-a-friend bonus
Cons
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Mandatory pension transfers for employed people
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May be too simple for sophisticated investors
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Risk of drawdown fee if you take out your full pension pot within a year of account opening
Private pension holders are buzzing about PensionBee. It makes investing in your future simple and easy, even if you tend to swap jobs often and have accounts with lots of different pension providers. Discover Pension Bee’s pension investment options, what PensionBee’s customers think and what charges you can expect.
What is PensionBee?
PensionBee is a personal pension provider with a key selling point of simplification. If you’ve previously contributed to a number of workplace and personal pensions, it helps you to consolidate them by transferring them into a new online plan. Alternatively, if you’re self-employed, you can start a new PensionBee plan from scratch.
PensionBee’s website and app give you an overview of your plan with a balance and your projected retirement income, depending on when you plan to retire. You can also easily increase contributions should you wish to sweeten your retirement pot a little. As a nice little sweetener, if you refer a friend who opens an account, PensionBee will put £100 into your pension pot.
How does the PensionBee pension work?
If you have any existing pension plans, PensionBee tracks them down and transfers them into one easy-to-use pot. If you’re self-employed and haven’t paid into a pension before, you can open an account without transferring in any other pensions.
If any of your old pension plans have guaranteed benefits that you’d lose by switching, or require an exit fee of £10 or more to transfer to PensionBee, your own pension expert – fittingly named a ‘BeeKeeper’ – will let you know and get your permission before completing the transfer.
You can pay into your pension plan with either one-off or regular contributions. There’s no minimum contribution so you can drip feed small amounts in as and when you can afford to. You can set up payments into your plan via a standing order, or make one-off bank transfers.
As with all UK pensions, you get tax relief from the money you pay in, based on the amount of income tax you usually pay. There are 8 different plans on offer that you can choose between. You’re not locked into a beehive and free to switch plans whenever you want.
Once you reach pension access age, PensionBee also offers the option to set up a pension drawdown, or to buy an annuity through its partner, Legal & General.
Fees and costs for the PensionBee pension
PensionBee has a simple annual management fee, which can vary depending on the plan you choose. Unlike some other pension providers, it will not charge you an exit fee should you decide to move your retirement pot elsewhere.
If your pension pot size is larger than £100,000, PensionBee will cut its standard fee in half for the portion of your savings over this amount.
- Tracker and Preserve plans. 0.50% annual fee on balances of £100,000 or less, and 0.25% on any amount over £100,000.
- Tailored and Pre-Annuity plans. 0.70% annual fee on balances of £100,000 or less, and 0.35% on any amount over £100,000.
- Fossil Fuel Free plan. 0.75% annual fee on balances of £100,000 or less, and 0.375% on any amount over £100,000.
- 4Plus, Future World and Shariah plans. 0.95% annual fee on balances of £100,000 or less, and 0.475% on any amount over £100,000.
Your annual fee is calculated daily and automatically deducted from your account each month. There’s a handy calculator on the PensionBee site to show you how much each plan will cost you, depending on the amount you have in your pension pot.
Separately from PensionBee’s charges, you may also incur transaction costs from the fund managers that look after your plan. These range from 0.00% to 0.14%, depending on the plan you choose (but can vary regularly).
Investment options with the PensionBee pension
You can choose between 8 investment plans, which are managed by some of the world’s biggest investment firms, such as BlackRock and HSBC. The plans are all given a risk/reward rating of lower, medium or higher to help you decide which one to go for. Plans in the “lower” category are less likely to result in big losses, but the potential rewards are lower. Meanwhile plans in the “higher” category have higher growth potential, but stand a higher chance of falling in value if the market (or specific companies) perform poorly.
Below are the 8 investment plans in a bit more detail:
PensionBee’s plans
| Fund Name | Fund Manager | Description | Risk/Reward Rating |
|---|---|---|---|
| Preserve | State Street Global Advisors | A plan that invests your money into lower-risk assets that typically experience smaller fluctuations in value, such as bonds. | Lower |
| 4Plus | State Street Global Advisors | A plan with a balanced approach to growth for the short or medium term where money is invested in a mix of assets and assets are actively adjusted on a weekly basis. | Medium |
| Tailored | BlackRock | A plan that starts out investing for growth, and moves your money into safer assets as you near retirement. | Medium |
| Tracker | State Street Global Advisors | A cost-effective “set and forget” plan that follows the world’s leading market indices. | Medium |
| Fossil Fuel Free | Legal & General | A sustainability-focused fund that tracks the FTSE All-World Transition Pathway Initiative. It excludes fossil fuels, tobacco and other controversial sectors. | Higher |
| Impact | BlackRock | An ethical plan that actively invests only in companies that address the world’s great social and environmental needs. | Higher |
| Pre-Annuity | State Street Global Advisors | Invests your money in bonds to provide you with returns that broadly correspond to the cost of purchasing an annuity. | Higher |
| Shariah | HSBC Global Asset Management and State Street Global Advisors | A plan meant for people who only want to invest in Shariah-compliant companies. | Higher |
How can you manage the PensionBee pension?
Once you’ve opened an account, selected a pension plan, and transferred in any existing pensions that you want to, PensionBee’s pension requires very little management.
You can view your live balance online in your PensionBee account (your “BeeHive”) and check the performance of your pension. You can also check your retirement planner, which forecasts your predicted savings by the time you retire.
You can also use your BeeHive to make or amend contributions, switch pension plans if you want to, select pension beneficiaries, transfer in more pensions, and update your personal details.
Withdrawing your pension
Once you reach the point of wanting to access your pension (age 55, rising to 57 from 2028), PensionBee offers two options.
Firstly, you can leave your money invested in any of PensionBee’s plans, and use PensionBee’s drawdown service. This lets you take money out of your pension as and when you like. You can take 25% of your pension pot as a tax-free lump sum (or in instalments). The rest will be subject to income tax at your individual rate. PensionBee doesn’t charge any fees for using its drawdown service.
Secondly, if you’d prefer to buy an annuity that provides a regular fixed income for life, you could consider buying one through PensionBee’s annuity partner – Legal & General.
A couple of things to note here. If you withdraw your full pension pot within a year of transferring it to PensionBee, you’ll incur a fixed withdrawal fee of £150.
Also, you’re under no obligation to use PensionBee’s drawdown or annuity options. Your pension will have to last you for several decades, with luck. So even if you’ve been contributing to a PensionBee pension for years and are very happy with its services, it’s always worth shopping around and comparing your options for taking money out.
Transferring a pension to PensionBee
When you join PensionBee, you’re asked to give as many details as you can about all the pension plans you currently hold, and the team at PensionBee will see if they can find them for you. It takes 12 weeks on average to transfer in a pension.
If you’ve forgotten who your current providers are (easily done), you can give PensionBee information about your previous employers. Then its experts will check its database to find your pension providers.
If your other pension schemes have exit fees of more than £10, or come with special benefits that you could lose in a transfer, PensionBee will inform you before going ahead. Benefits may include things like a guaranteed annuity rate or a fixed income from a final salary scheme. If pensions with such benefits have a total value of more than £30,000, you’ll be required to seek professional advice before transferring them.
You don’t have to transfer all of your previous pensions to PensionBee to get started. If you’re employed, you only need to transfer one previous pension over. If you’re self-employed, you can start a brand new pension from scratch, without transferring over any other pensions.
The only pensions that you can’t transfer into PensionBee are most public service pensions, which the government doesn’t allow to be transferred (and international pensions).
Is PensionBee safe?
In its relatively short lifespan (since 2014), PensionBee has attracted more than 200,000 customers.
PensionBee is regulated by the Financial Conduct Authority (FCA), and is bound by the FCA’s rules and regulations in the conduct of its investment business.
It is also covered by the Financial Services Compensation Scheme (FSCS) protection, which means your pension is covered up to £85,000 if PensionBee were to go bust.
Bear in mind that no investments, including pensions, are completely risk-free. The value of investments can go down as well as up. That said, pensions are usually the longest-term investments you’ll ever make. Over many years (or decades) your investments have a good chance of riding out any market volatility.
PensionBee customer service and reviews
Once your PensionBee plan is set up, you can access it at any time on the website or the app to see how it’s performing. If you have further questions and need to speak to one of the BeeKeepers, the company offers a dedicated customer service phone line or live chat.
As part of its vision “to make pensions simple, so that everyone can look forward to a happy retirement”, PensionBee promotes financial freedom, good health, and social inclusion.
While this might sound unusual coming from the traditionally staid and serious financial services industry, it’s an ethos that its customers seem to appreciate.
On consumer review platform Trustpilot PensionBee scores 4.6 out of 5 and an “excellent” rating, based on more than 10,000 reviews (as of June 2024). Not too shabby.
Recent positive reviews highlight PensionBee’s simple, user-friendly setup and pension transfer process, excellent communication and helpful support staff. As with any company, there are a few customers who had a less positive experience with customer service. To its credit, PensionBee takes the time to respond to 100% of negative reviews.
Who is the PensionBee pension suited to?
If you’ve got lots of old pension pots knocking about and want to consolidate them into a simple pension scheme with reasonable costs, PensionBee is well worth considering as it takes a lot of the hassle out of tracking down and transferring your existing pension pots.
It’s also a decent option for self-employed people looking to set up a new pension that requires minimal effort to manage.
It’s probably not suitable for you if you’re:
- Employed by a company and don’t have, or want to transfer, any existing pensions.
- An experienced investor that wants the flexibility to pick and choose the specific assets that your pension is invested into. In this case you’d be better off opting for a full SIPP.
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