Fossil fuel free pension saving is almost here!

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Important: With investments, your capital is at risk. Pensions can go down in value as well as up, so you could get back less than you invest.

Exclude the planet’s biggest polluters

Exclude the planet’s biggest polluters

Your money won't be invested in companies that own proven or probable reserves in coal, oil or gas.

Make more socially responsible investments

Make socially responsible investments

Persistent violators of the UN Global Compact - as well as tobacco and arms companies - are excluded from the fund.

Pay one fair annual management fee

Pay one fair annual management fee

You’ll pay an annual fee of 0.75%, and that's it. We'll take this from your pension automatically.

Exclude the planet’s biggest polluters

Exclude the planet’s biggest polluters

Your money won't be invested in companies that own proven or probable reserves in coal, oil or gas.

Make more socially responsible investments

Make socially responsible investments

Persistent violators of the UN Global Compact - as well as tobacco and arms companies - are excluded from the fund.

Pay one fair annual management fee

Pay one fair annual management fee

You’ll pay an annual fee of 0.75%, and that's it. We'll take this from your pension automatically.

With your support we can launch one of the UK’s first mainstream fossil fuel free pensions!

£40m

of £100 million target reached

PensionBee customers said they wanted fossil fuel free investments, so now we’re working hard to launch a new Fossil Fuel Free plan.

In order to deliver the plan at 0.75% annually, we need a collective £100 million in commitments from customers seeking to go fossil fuel free.

If you’re an existing PensionBee customer, you can commit to switch your plan (just scroll down the My Plan page once logged in).

If you haven't finished signing up to PensionBee yet, continue your sign up here and switch plans in your BeeHive.

If you're new to PensionBee, you just need to sign up and commit to transfer into one of our current plans, and you can then switch into the Fossil Fuel Free plan.



Sign up today

What is Fossil Fuel Free?

What is Fossil Fuel Free investing?

The Fossil Fuel Free plan is one of the UK’s first mainstream private pensions to completely exclude companies with proven or probable reserves in oil, gas or coal, tobacco companies, manufacturers of controversial weapons, nuclear weapons and persistent violators of the UN Global Compact, whilst also investing more of your money in companies that are aligned with the Paris agreement. It does this by passively tracking the FTSE All-World TPI Transition ex FF ex Tobacco ex Controversies index.

In plain English, what this means is that your investments will passively follow the market performance of a group of fossil fuel and tobacco free companies within the index, instead of your money manager actively buying and selling stocks in these companies. Find out more about passive and active investing.

This is a completely new index created specifically for PensionBee’s Fossil Fuel Free plan. The index is part of a new Paris-aligned index series designed in collaboration with the Transition Pathway Initiative, FTSE Russell and the Church of England.

This is a completely new index created specifically for PensionBee’s Fossil Fuel Free plan. The index is part of a new Paris-aligned index series designed in collaboration with the Transition Pathway Initiative, FTSE Russell and the Church of England.

How does a Paris-aligned index work?

A Paris-aligned index is a way of investing more of your money in companies who have adjusted their businesses in preparation for climate transition, and moving your money away from those companies that still have high carbon emissions or display poor management when it comes to climate governance.

The index uses data on how well prepared a business is to capture the benefits from the transition to a low carbon economy, such as increased exposure to the global green economy, and invests more in those companies.

What is Fossil Fuel Free investing?

FAQs

About Fossil Fuel Free investing


When is this plan available?

To meet the fund requirements for launch we need a collective commitment of £100 million from existing PensionBee customers. £100 million is the fund ‘seed’ amount; the minimum amount needed to launch a new product like this. To reach this amount, we’re asking PensionBee customers to commit to switching to the new plan. Once £100 million has been committed, the fund will launch and everyone will be switched into the new plan.

The Fossil Fuel Free plan is the first mainstream product of its type because the investment management world didn’t believe there was enough demand for it. We hope our customers can prove them wrong!

How is this a new way to invest?

This is the first mainstream personal pension of its type that enables you to passively invest but exclude whole sectors, such as fossil fuels and tobacco. As a private pension saver you would normally have to find a specialist ESG fund from an active manager to offer you this level of discretion over where your money is invested. That can often be very expensive, complex to understand and come with additional risks.

The Fossil Fuel Free plan is a hybrid of traditional passive investing; it tracks an index, but with the type of stock-picking you can only usually get from a niche ESG provider. The mainstream passive investing world has historically shied away from offering a product of this type because they didn’t believe there was big enough demand for it.

How is it different from the Future World Fund?

The Future World Fund seeks to engage with fossil fuel companies to get them to change their business practices and carbon footprint over time, whereas the Fossil Fuel Free Plan excludes them completely from the outset.

However, by excluding these companies you no longer have a chance to engage with their management teams. For many of our customers that’s the right approach. Decades of fruitless engagement with oil companies has only resulted in a steady increase in fossil fuel extraction and carbon emissions.

In early 2020 when we surveyed our customers, many told us the time for engagement is over. As a result, we decided to offer two different approaches to tackle climate change. This plan is a way to divest your money completely, and instead support companies who have proven evidence of their climate transition activities.

It’s a new plan and a new approach. What are the risks?

All investing carries risk. This plan has 100% allocation to shares (equities) and global stock markets, which brings both risk and reward. Pensions are a long-term investment and so many savers take an approach that carbon-focused businesses will become ‘stranded assets’ as we climate transition. This means they believe that investing in oil or fossil fuels is a risk, since the business models of these companies have no future in the green economy.

The plan tracks an index that’s part of the FTSE Climate Transition series. The first index of this type was launched in early 2020 as part of a collaboration between the Transition Pathway Initiative (TPI) and The Church of England. Learn more about the index.

What does the plan invest in instead of fossil fuels companies?

The fund aims to invest in major international companies with a proven track record of adjusting their business model and operations to prepare for climate transition. Currently the fund invests in approximately 1,295 companies. A snapshot of the top 10 holdings for the last quarter are below.

Name Country / Industry Weight
Microsoft US / Tech 5.59%
Apple Inc US / Tech 5.13%
Alphabet (Google) US / Tech 3.00%
Amazon.com US / Consumer 2.89%
Mastercard US / Financials 1.12%
Home Depot US / Consumer 1.08%
JP Morgan Chase US / Financials 1.07%
UnitedHealth Group US / Health 0.84%
Samsung Electronics Korea / Tech 0.84%
Procter & Gamble US / Consumer 0.82%

What are the specific exclusions?

FTSE Russell and TPI, who worked together on the index, set the index screening criteria for the exclusions. Read more about those criteria.

Fossil fuels

International companies that own proven or probable reserves in oil, gas or coal are excluded from the fund. These are major international companies such as Shell, BP, Total, Chevron, ExxonMobil, Rio Tinto, Glencore, BHP Billiton, and ConocoPhillips, alongside many others. In fact, around 235 fossil fuel companies are excluded. Companies that provide services to the fossil fuel industry, use fossil fuels, or finance exploration are not excluded from the index.

Tobacco companies

International companies involved in the manufacture of tobacco products are excluded, such as British American Tobacco, Philip Morris, Imperial Brands. Around 40 tobacco companies are excluded.

Others

Manufacturers of anti-personnel mines, cluster munitions, chemical and biological weapons, nuclear weapons, firearms, and military weapons are all excluded.

Perennial violators of the UN Global Compact are excluded. Read more about the UN Global Compact.

How does the cost compare to similar funds?

If you look at the work of ethical investing, usually these types of pension products are actively managed. Active management means that your money managers are picking stocks on a weekly or monthly basis, and this can be very expensive. The Fossil Fuel Free plan benefits from a more passive approach, by tracking the market performance of a select group of fossil fuel free companies within the index. In general, passive strategies are more cost-effective than actively managed fund strategies.

To offer this plan for 0.75%, at launch we need a collective commitment of £100 million from existing PensionBee customers.

What if I want to exclude more sectors than this?

This new fund, like all our new product developments, came about as a result of customer demand. We are very grateful to our customers for speaking up and telling us that they wanted something new.

If our customers speak up again, en masse, and tell us that they want to exclude another sector from their pensions then we’ll survey our customers again. If we see demand for a new type of product then we’ll work with our money managers to create it. The power is in your hands!

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