What a whirlwind! It’s been five years this week since PensionBee was born. It’s fair to say that this milestone has crept up on us rather quickly. We’ve enjoyed taking a look back through the PensionBee archives to see what’s been going on.
First and foremost, we have to thank our fabulous customers - who’ve been signing up in their thousands - and who trust us to make pensions simple and engaging. We’ve frequently chosen to feature our customers in our adverts, and it’s been great to bring their stories to a wider audience in the TV ads we launched this year. For those of you who haven’t seen our TV ads yet, you can hear from Tony and Lucille in these YouTube videos.
First and foremost, we have to thank our fabulous customers
Another huge thank you has to go to the equally wonderful PensionBee team. Helping our customers look forward to a happy retirement is the motivation to get up every day and do what they do, and we think they’ve been doing a damn fine job of it. We’re so proud of the team (there’s over 100 of us now!), and the incredible diversity they bring to PensionBee. Our team have a raft of secret lives, from Glastonbury rockstar (Matt, our Head of Design), to seafood entrepreneur (Nasrin, from our A-team), to political activist (Bat, in our tech team) and many more. We’ve built a lovely supportive culture based around our values that binds us together. Our Head of Operations, Tess, has been writing a blog series this year diving into each of the values and what it means to us.
2019 has been a big year in itself - we’ve launched three new pension plans, broke through £500 million of assets under administration, and earned our 1,000th Trustpilot review, not to mention picking up a bevvy of awards. We’ve also made a whole raft of product improvements, including a new retirement planner, speeding up your tax top ups and withdrawals, and we became the first pension provider to adopt the new Simpler Annual Statement.
It’s great to see the Simpler Annual Statement being launched by PensionBee including Simpler Costs and Charges. Looking forward to others in the industry adopting it for our customers. @DWP @pensionbee adopts simple pension statement - FTAdviser https://t.co/6m1v2tOfrt— Ruston Smith (@RustonSmith1) May 2, 2019
A great moment was when Romi put her headset on and became a BeeKeeper for a week in January.
This not only helped out the team during a busy time, but was a great experience talking to customers about their issues and learning how the PensionBee front line has changed.
We’ve also been absolutely delighted to welcome Michelle Cracknell onto our board of directors. Michelle joins us from The Pensions Advisory Service, and brings a wealth of experience understanding the problems savers face when it comes to their pensions.
An industry in transition
Looking back to when we started in 2014, it feels almost like a different time in the pensions industry. For one thing, the Pension Freedoms that allowed you to take money out of a pension from the age of 55 were not due to become active until the following April. Auto-Enrolment into workplace pensions had started, but had not reached past the larger employers. 2015 was arguably when UK savers had several reasons for taking an interest in their pensions for the first time in a long time.
The transfer process was often long, arduous and paper-based
This is when the problems in exerting consumer choice in pensions came to the fore: complex, expensive products, with high (and often hidden) management fees; and when you did find a product you liked, the transfer process was often long, arduous and paper-based. It’s no surprise that PensionBee’s first service - finding and combining your old pensions into a new, online plan - remains our most popular.
So what’s changed in that picture in five years? The pensions industry is changing, partly driven by the regulators mandating changes that help consumers, and partly by consumers moving to better products. The Pensions Dashboard is one of the major headlines, promising to centralise information about all your pension savings. We think that will make a huge difference, but it’s still a few years away (Romi’s recent appointment to the Steering Group will surely help…).
In the meantime, 2018’s Open Banking has welcomed pensions under its wider Open Finance umbrella, and the introduction of GDPR in the same year is a further push towards digitisation and a consumer-centred business. Fees have come down a lot - the regulator introducing a 0.75% fee cap on the default funds of Auto-Enrolment pensions in 2015 has had a big impact on people’s expectations, and many other schemes have brought costs down in an effort to win over newly engaged savers.
There’s still a long way to go to make the industry digital by default
We’ve seen increased adoption of digital pension transfers, and an improvement in the average transfer time (remember it used to take longer to transfer a pension than to travel to Mars?). But in a world where PensionBee needs four robots to sign letters with a fountain pen in order to save our customers the hassle, there’s still a long way to go to make the industry digital by default.
Any story of the last five years in the pension industry would not be complete without mentioning the rise in interest in the Environmental, Social and Governance (ESG) sector of investment. ESG has grown from nowhere in the mid 2000s to be a major investment category, and the increasing global awareness of climate change is fueling further growth. PensionBee introduced the Future World Plan in 2017 in response to rising demand for a greener pension. We continue to hear demands for greater transparency and social impact, and we’re excited about the direction this is going and how we can help our customers use their savings to make an impact.
So, what’s next?
It seems appropriate to close by thinking about the next five years - what will pensions feel like by 2024? We know there are some significant challenges here - the average pension is still a world away from the slick, modern financial services we’ve all become accustomed to on our phone apps and online. There is a long way to go to deliver real transparency in fees and investments. But we’re really excited by the prospect of being able to lead the charge here, and we’re grateful to all our customers for giving us the honest feedback we need to understand what you need.
On that note, we’ve had a lot of those customers tell us that when it comes to taking money out of a pension, it still feels clunky and old-fashioned. So we asked them to tell us what a pension would be like if it were as easy to use as a bank account, we listened, and then we got building. Stay tuned in 2020…
To all our customers, the wonderful PensionBee team and the investors and supporters who have got us through the ups and downs of the last five years - a huge thank you and here’s to the next!
Thank you, from Jonathan and Romi.