PensionBee vs the FTSE 100: How our plans measure up

Martin Parzonka

by , Product Manager

08 Jan 2019 /  

08
Jan 2019

PensionBee vs the FTSE 100: How our plans measure up

The stock market affects all areas of financial life, and even if you don’t consider yourself to be an investor, you’ll undoubtedly have skin in the game through your pension. Even so, it’s not easy to understand the relationship between recent stock market fluctuations and the short and long-term impact they can have on our investments.

That’s why we’ve looked at the historical performance of our PensionBee plans, benchmarking them against the performance of the FTSE 100, which measures the performance of the shares of the 100 largest companies listed on the London Stock Exchange.

The stock market and your pension

The money managers of PensionBee invest your retirement savings in a mixture of assets such as stocks, shares, cash and property – spread across the world’s financial markets, not just the FTSE 100. This diversification is what helps to soften any major short-term declines, while also giving your investments an opportunity to generate profit in the long-term.

For better or worse, it’s normal to see the small fluctuations that occur in the stock market reflected in your balance. But it’s important to remember that, either way, these fluctuations are unlikely to have a lasting impact on your retirement income.

If you’re due to retire in the middle of a downturn (or upturn), and plan to withdraw some or all of your pension balance at that time, you could consider a plan that invests in a way that is very low risk and low return such as the Preserve plan.

How PensionBee’s plans measure up

Here’s a breakdown of how each of our longest running pension plans has performed against the FTSE 100 in recent months and years.

Tracker

tracker plan performance Source: PensionBee unit price data and LSE FTSE 100 data. Past performance is not indicative of future performance. The result displayed does not include PensionBee’s fees of up to 0.50% per annum, which will reduce returns. Note that fees are 0.25% for amounts over £100,000.

Our ‘Tracker’ is a simple and cost-effective plan that’s managed by State Street Global Advisors. The Tracker plan invests the majority of your money in global shares, bonds and cash and the plan investments are globally diversified.

Tailored

tailored plan performance Source: PensionBee unit price data and LSE FTSE 100 data. As our Tailored plan is designed to invest your money differently as you get older, the relevant Key Fact Sheet will depend on your date of birth. Please follow this link to select the appropriate one to your circumstances. The performance chart above is indicative of the specific investment for those born between 1978-1983. Past performance is not indicative of future performance. The result displayed does not include PensionBee’s fees of up to 0.7% per annum, which will reduce returns. Note that fees are 0.35% for amounts over £100,000.

Our Tailored plan is managed by BlackRock and is our most popular plan. It’s designed to invest your money differently as you get older, moving your money to safer assets as you approach retirement.

Future World

future world plan performance Source: PensionBee unit price data and LSE FTSE 100 data. Performance data only exists from our launch of the plan in October 2017. Past performance is not indicative of future performance. The result displayed does not include PensionBee’s fees of up to 0.95% per annum, which will reduce returns. Note that fees are 0.48% for amounts over £100,000.

We introduced our environmentally-friendly Future World plan at the end of 2017. Managed by Legal & General, our low carbon plan is invested solely in shares, which is why it mirrors the fluctuations of the FTSE 100 more closely than other plans.

Match

match plan performance Source: PensionBee unit price data and LSE FTSE 100 data. Past performance is not indicative of future performance. The result displayed does not include PensionBee’s fees of up to 0.6% per annum, which will reduce returns. Note that fees are 0.3% for amounts over £100,000.

Our Match plan invests your pension in a wide range of assets worldwide and is managed by BlackRock. It’s designed to invest in line with strategies of the wider pension industry.

Benefits of diversification

As you can see from the charts, there are benefits if your pension investment is diversified globally and also diversified over different asset classes (like bonds, shares and other financial investments).

If a particular stock market - say the Japanese Nikkei or one of the main European ones - doesn’t perform well over a long period of time, your money still has the opportunity to grow by being in other places, say government bonds or US stocks. By not putting all your eggs in one basket, any declines in your pension will be less pronounced because you still have the opportunity to profit in markets that are doing well over the long term.

Of course past performance is not indicative of future performance.

To find out more about how each of our pensions is invested, visit our plans page and download the relevant factsheet for more information.

Risk warning

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

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Capital at risk

PensionBee product shot PensionBee product shot

Manage your pension from the palm of your hand

Sign up to PensionBee and we’ll combine your old pensions into a new plan that you can manage online.

Sign up now

Capital at risk

PensionBee product shot PensionBee product shot

Have a question? Call our UK team 020 3457 8444

Have a question?

Call our UK team

020 3457 8444

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