Pensions and Finance blog, news & resources

Governance and the Pensions Dashboards

In the final of our three blogs, Clare explains why the proposed governance structure will fall short on delivering government’s objectives.

In December, our CTO Jonathan Lister looked at the technical architecture for the pensions dashboard and concluded that an approach based on familiar design patterns and open APIs is preferable to the centralised model proposed in the feasibility study.

In the final of our three blogs, I explain why the proposed governance structure will fall short on delivering government’s objectives to ensure consumers are protected, industry pay all development and delivery costs, meet the 2019 deadline and, keep the UK at the forefront of the data revolution.

What does the DWP propose?

In the absence of a clear industry lead, the Department concludes that a new single delivery group will oversee and drive implementation. This will be led by a chair, steering group, implementation executive and working groups setup in time to launch the first dashboard in 2019.

The cost should be met by industry. Industry will also fund the development and delivery costs of the dashboard infrastructure, including the Pension Finder Service and identity verification, the non-commercial dashboard and all new regulatory functions related to dashboards.

Not only does this timeframe seem highly ambitious it also sounds extremely costly and potentially unnecessary. When considering the huge costs of setting up Open Banking, asking the pensions industry to pay to start again, on a voluntary basis, seems a tall order.

As Romi covered in her blog, with no commercial dashboards in sight for five years, the financial benefits for providers are unclear or at best distant. We know for some providers there may ultimately be no commercial benefit, so costs will be hard to justify.

Now I am not suggesting that government pay, but if industry are, we should reuse what already works to protect consumers and only set up new systems where nothing else exists.

What’s the justification for setting up another body?

Three reasons are given as to why the Open Banking Implementation Entity (OBIE) is unsuitable for this task and why a new body must be set up. These are:

OBIE already has a packed programme of work,
the pensions industry needs to build trust and clean data before they are ready to join up with other sectors of financial services and
finally, that it would require amendments to existing legislation to do so.

Firstly, the OBIE are both willing and able to expand to other financial products and in fact, have an extended remit to do so. The pensions industry does need to clean their data, but we’ve always known this would be phased over 2-3 years. In all scenarios those with good data go first.

Whilst it’s clear how the Department came to their conclusions, the unwritten reason appears to be that they don’t want to lose control by allowing the OBIE to run it.

The arguments as to why the OBIE cannot be used are weak in the face of evidence that the vast experience and skills accumulated by the 150 people already working there to deliver solutions are reusable and extendable to the challenges of pension dashboards. They also have an extensive framework supporting an existing liability model, fit for purpose regulatory permissions and a dispute resolution system to underpin governance.

The relative ease of extending OBIE’s remit and employing more people to deliver a Pensions Dashboard in contrast to the time and cost of recruiting and building an entire function from scratch deserves further examination.

Whilst it’s clear how the Department came to their conclusions, the unwritten reason appears to be that they don’t want to lose control by allowing the OBIE to run it.

Their arguments ignore the issue of set-up costs, which industry must bear, to build a parallel delivery body and governance structure, when one already exists.

The fact is we are going to need legislation for any new body to operate successfully anyway. Legislation is necessary in all scenarios.

So how much will it cost and who will ultimately pay?

Open Banking Ltd’s public financial accounts 2017 give us some indication of what the administrative expenses for running a similar body are, £28M.

Seeing as everyone knows where their bank account is (they don’t need to search), there are only nine stakeholders with up-to-date, clean data (CMA9) and there’s a legislative order to mandate them to pay for Open Banking Ltd’s activities, this is an arguably easier task than pensions, where none of the above applies..

In addition to the set-up and running costs of the duplicate body, pension providers will also need to pay to clean / digitise their data, overhaul IT infrastructure and build open APIs with no commercial incentive yet in sight.

Even in a scenario where we have legislation then who do we think is really going to pay for it? That’s right - consumers. Since many workplace schemes are already at the 0.75% charge cap, this can only mean cost cutting elsewhere. Across the board, the quality of products and services will be reduced. We can wave goodbye to future technological innovation or focus on engaging savers - the opportunity cost is huge.

Good governance is about protecting consumers

As we saw play out with the CMA9 and Open Banking, the only way to ensure consumers were given access to their data was to set up a completely independent entity led by a team from outside the banking industry. Prior to this the banks succeeded in controlling the initiative to suit their own interests.

Likewise, in pensions, the only way to ensure we protect consumers is to have a genuinely independent governance body and not one representing industry interests. The OBIE is that independent and neutral body proven to act in the interests of consumers, with a track record of challenging - and not bowing to - incumbents.

From a regulatory standpoint, to protect consumers from the outset we must reuse existing regulation and permissions. These already exist in the form of FCA’s Account Information Service Provider (AISP) permission, Payment Initiation Service Provider (PISP), the OBIE regulatory framework and Directory of organisations Financial Conduct Authority regulated to operate in the ecosystem. Not only are these fit for purpose, and exist, they already protect consumers and as yet haven’t seen one data breach.

Using these means that only regulated entities can operate in the ecosystem and unregulated screen scraping services, which breach FCA rules, can be shut down. Consumers can also use the Directory to check the list of regulated services available to them, as they can with Open Banking.

2019 is only achievable by using what we have

The only possible way to set up the governance body, deliver a dashboard, protect consumers, ensure industry voluntarily pay for it and meet the 2019 deadline is to use an existing body.

The study proposes the SFGB have until Spring 2019 to recruit a chair. The chair must then recruit the steering group, implementation executive and working groups in following months. They must all then agree design standards, set up a new governance framework and launch a dashboard almost immediately. It’s not realistic.

In contrast, the OBIE has structural framework and staff in place and can begin once government instructs them. And let’s not forget the scale of challenges faced by the OBIE when dealing with the banks. They have the proven track record of success in bringing together fragmented and fractious industries.

The OBIE might be busy, but they have the solid foundation to take on more. Pensions are a different beast to current accounts yes, but the principles are the same. OBIE will act if asked, with industry paying a levy (similar to banks) to expand and enhance their capability to include pensions.

The Open Finance revolution will not wait five years for pensions

The final, most worrying aspect to all of this is that the inevitable cost, complexity and long delays of starting from scratch will come at real price to both UK savers and UK plc. At a time when can neither can afford it.

The DWP’s governance approach risks relegating pensions to the shadows, missing being part of the Open Finance and, eventually, Open Life consumer revolution. The DWP say the pensions industry are not ready, but what about savers?

Consumers have already waited too many years for the ability to just see their own savings online and in one place.

The UK is a world leader in Open Banking and the entire world is emulating it’s approach. Work is currently underway in Australia to adapt UK Open Banking protocols to pensions and other savings vehicles. If the government doesn’t support extending OBIE standards into pensions then the UK will lose a strategic leadership opportunity and other countries, like Australia, will reap all the economic benefit that should belong to the UK.

“Open Banking is making sure you’re creating the best possible outcomes for customers… from small businesses to big companies. We’re looking forward to a bright future with #OpenBanking”. #TechnologyisGREAT #UKFintech 🇦🇺🇬🇧 pic.twitter.com/0Q7K4bIloV
_{— Dept. Int.Trade Aust (@tradegovukAUS)}

HM Government’s ‘Industrial Strategy - Building a Britain fit for the future’, clearly sets out an objective of putting the UK at the forefront of the data revolution while helping meet the needs of an aging society.

No country in the world has yet brought pensions into Open Finance to build successful commercial dashboards using Open Standards. It is in the national interest to promote the UK as a centre of excellence in fintech innovation and bring pensions into Open Finance now, rather than see our own Open Banking standards used to build international Pensions Dashboards we must copy in five years.

Conclusion

The only way to meet the 2019 deadline is to use using an existing governance and delivery body, the OBIE, to drive this forward. Anything else risks opening up consumers to unnecessary risk, delay and cost. It forces the industry to pay to duplicate something we already have, that already works and wants to expand its remit. This is on top of huge data cleansing and API building costs with no commercial incentive.

Consumers have already waited too many years for the ability to just see their own savings online and in one place. In every other area of their financial lives consumers are being empowered through Open Data. It’s imperative we allow pensions to be brought into this data revolution now, rather than once again allowing pensions to be labelled too different, too complex and ultimately too outdated, to engage with.

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Open Source Software - Are the sustainability problems getting better?

Business leaders are increasingly choosing to use open source software in their technology infrastructure. We explore whether open source software can improve the global sustainability problems.

Open source software (OSS) is the bedrock of the digital economy. It’s estimated to comprise 7^{_personal_allowance_rate}-9^{_personal_allowance_rate} of modern software solutions. The adoption of OSS into organisations is both deep and wide. Organisations that have already integrated OSS are increasingly deploying it into new areas of digital operations, often replacing functions served by proprietary software.

At the same time, OSS usage cuts across industries, from education to transport and not merely technology. Businesses of all sizes are choosing to deploy OSS not only because it’s a feasible option, but because OSS offers unique benefits to their business. The 2022 State of Open Source report found that 77% of organisations increased their usage of OSS in 2021, with 36% increasing usage significantly.

Unfortunately, the long-held concern over OSS sustainability continues. How can the development and maintenance of OSS receive the crucial ongoing support it needs to continue serving not just governments and businesses but indeed whole societies that benefit and even depend on it?

A fragile foundation

At its foundation OSS development is done almost entirely by volunteers, who freely give their personal time to work on OSS projects - think wikipedia, but for software. Many OSS projects serve the needs of organisations of all sizes, including among the very largest in the world, whilst being maintained by developers who lack almost any kind of financial or institutional support.

Businesses and governments across the world make extensive use of OSS yet many have little understanding of how the software they rely on is developed and maintained in the first place. For example, GitHub estimates that over one billion websites rely on OpenSSL for securing network connections, including the likes of Google and Facebook, yet the project has a core team of only 18 maintainers. The rapid digital consumerism of OSS adoption has not been met with the level of support it needs to sustain itself.

Commercial enterprises that rely on proprietary software can often put pressure on suppliers when features and fixes are needed. It’s hard to leverage that same kind of pressure on a community which has chosen to freely give their time and resources. But in such cases, any pressure may mean those developers are unable to keep up with requests, leading to burnout. They may even leave the project altogether, with the hope that other volunteers may step in to help.

Given a system which relies almost entirely on free labour and self-motivation it’s easy to see that this ‘way of working’ isn’t one that can be sustained indefinitely. The problems arising from a lack of sustainability may result in, at ‘best’, a slow down in digital innovation and at worst leaving gaping security vulnerabilities left exposed for longer. OSS has had its share of high-profile security issues such as the recent Log4j and Heartbleed vulnerabilities, which highlight the fragility of a system on which much of the modern world runs.

Where are we now?

Whilst OSS sustainability has been a concern for many years, the 2016 ‘Road and Bridges’ report written by Nadia Eghbal is seen as a crystallisation of the sustainability problems facing OSS as well as offering ways to remedy the situation. By this point, however, the report is several years old so it’s worth understanding how the sustainability issue has changed.

Financial support initiatives

A sustainable way to compensate developers has long been sought. Some fresh attempts to address the problem of financial support for OSS have been made in the last few years including the development of new funding models as well as adapting existing ones.

GitHub Sponsors, for instance, launched in 2019 to enable donations to open source projects and their maintainers and was later expanded to allow corporate sponsorship. Through this expansion, GitHub emphasises to organisations that they should recognise the importance of their ‘digital supply chain’, encouraging them to give back to the solutions that serve their business needs. Financial support in OSS has typically taken the form of one developer donating to another, yet incentivising and enabling commercial enterprises to support projects can enable much larger amounts of funding to flow into OSS.

Outside of the technology world, some financial support has started to filter through from other industries. In 2019, employment website Indeed, launched the FOSS Contributor Fund, whilst earlier this year, music streaming giant, Spotify launched its Free and Open Source Software (FOSS) Fund to support and pay developers of projects nominated by the Spotify R&D department.

Sponsorship and donations have been one of the most common ways to support OSS projects. OSS foundations also play an important role in financially stewarding the support of OSS but operate in a slightly different way than directly giving to projects. Instead, they seek to raise funding for the foundation itself, and in turn, distribute the funds among the projects it supports. Some of the largest foundations require ongoing funding to help support 100s of projects at the same time. The Apache Foundation, for example, supports more than 200 OSS projects, The Linux Foundation, over 400 and the Eclipse Foundation over 300 projects.

Leveraging the financial muscle of corporate organisations will hopefully help keep at least certain projects viable. Understandably, commercial businesses have a vested interest in supporting the OSS they use and it’s encouraging to see dedicated funding coming from such organisations. But given the dominance of certain projects, most financial support may end up going to the biggest projects or to a relatively narrow set of open source projects.

Emerging open source models

Of course, financial support is welcome and needed but it alone is unlikely to sustain OSS development in the long term. Some argue what’s needed are entirely new business models.

For instance, Tidelift has developed a type of managed services model for OSS enabling organisations that use OSS to receive direct support from a growing group of maintainers Tidelift has partnered with. Tidelift effectively provides organisations with dedicated support for their digital supply chain. Organisations subscribe to a paid management plan through which the maintainers who work on their products earn financial compensation. In this way, Tidelift helps to compensate maintainers whilst providing organisations with the assurance of reliable professional-grade software.

“Open source doesn’t just need ‘funding.’ It needs a better business model that works for creators and users alike, at massive scale,” - Donald Fischer, Co-Founder of Tidelift.

Open Collective, created in 2017, functions like a crowdfunding platform, except the support goes deeper. Open Collective connects OSS projects with those interested in financially supporting them by providing those projects with fundraising tools, helping them to pay their expenses and accepting sponsorship. By essentially taking care of financial administrative operations, they allow OSS projects to get on with the business of development whilst helping them raise and manage the funding they need.

Such new models are examples of the kinds of creative solutions OSS perhaps needs and so far appear promising yet they are still in their relatively early stages. Central to the idea of sustainability is something that is able to be supported continuously. More time, therefore, may be needed before a judgement can be made as to how effective such newer endeavours may be.

Other models, however, have been established for longer and proven to be relatively more successful than others but may only just be showing signs of fragility. The open core model in which a free ‘core’ version of the software is made available alongside paid-for add-ons which extend the functionality of the core offering, is one of the more successful models with companies such as Docker and Elastic both having grown hugely using an open core approach.

Yet concerns remain that open core brings with it some of the same constraints that already exist with proprietary software. For example, restricting or preventing community contributions from extending the core product to the point it ends up competing with the paid-for features or creating a type of ‘vendor lock-in’. Perhaps ironically, open core may to some extent work against the ethos of OSS offsetting its unique benefits such as the speed of developing new features by being constrained by more commercial goals. In recent years, Elastic is a company whose use of the open core model blurs the spirit of open source development, to the extent that it’s questionable whether the project can still be called open source.

Beyond financial support

Perhaps naturally, the conversation around sustainability tends to centre around funding. However, sustainable OSS requires a more holistic approach.

Open Source Program Offices (OSPOs) are one way that organisations can assess their wider relationship with OSS and understand its importance to their business. OSPOs can help to foster investment in OSS in important non-financial ways such as making OSS contributions and participating in the OSS community. Though not a new concept, the number of OSPOs in organisations has been increasing. A 2022 report backed by the Linux Foundation found that 63% of respondents view OSPOs as critical to engineering success. It also reported that OSPOs are continuing to be adopted across industries and not just in technology, reflecting that more businesses are taking the value of OSS seriously and no longer simply ‘free-riding‘. Whilst the number of OSPOs is growing they still represent a small percentage of all the businesses that use OSS.

Human capital, as well as financial capital, is crucial to sustainability goals. Ensuring the continued success of OSS also requires that maintainers and contributors feel they are able to retain the capacity to contribute to projects. There’s some evidence that corporate support of employee contributions has been increasing in recent years. The 2020 FOSS Contributor Survey found that an increasing number of companies are implementing policies allowing employees to freely contribute to OSS. Additionally, just over half of respondents said they were paid by their employer for some of the contributions they make.

Certainly, this is the kind of ‘corporate backing’ many hope to see; an appreciation for the value of OSS followed by concrete measures to support contributions. Yet there still remain several concerns which may impact OSS projects. These include whether employers will push their employees to work on projects which most benefit the business rather than everyone who uses them, the impact there might be on a project if an employee is redeployed to work on proprietary software projects, or what may happen to a project if an employee is simply no longer paid to work on it.

Even where contributors are paid, for most making money isn’t their primary motivator. If it was, we probably wouldn’t be enjoying the benefits it brings us today. There’s often a fundamental difference in values between those who produce OSS and those who consume it. Aaron Stannard suggests a misalignment in mindset between the two groups. For those who use OSS, it’s easy to adopt a “take, take, take” attitude to solutions which are freely available, whilst the producers of OSS are typically motivated by reasons which aren’t commercial, such as the satisfaction that comes from creating something useful

Overall, some worry that corporate involvement in OSS may just become self-interested. Organisations need to ensure they protect the ethos and culture of the open source movement as they strive to support it.

A community of reciprocity

Just as technology itself is ever-evolving, tackling OSS’s sustainability problems continues to yield new solutions and ideas. Yet the sustainability problem is far from solved or perhaps even alleviated. New ideas in recent years may prove to be successful avenues of sustainability worth replicating but at the moment it’s too early to tell. And where progress has been made, it should perhaps come as no surprise that the greatest efforts have come from the technology industry itself.

Tackling sustainability problems with OSS will likely take multiple approaches, where different solutions exist side by side. As OSS is fundamentally fueled by its community of producers, addressing sustainability issues will need to involve its community of consumers beyond the technology industry.

If the community of those that use OSS work with and for the benefit of those who produce it, a reciprocal exchange of development and support can exist in much the same way as a living ecosystem’s able to thrive through the interdependence, of all who participate in it, on each other.

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Open Finance - exploring the benefits beyond Open Banking

We believe Open Finance has the ability to revolutionise consumers’ financial wellbeing. But whilst many may just be getting to grips with Open Banking we explore what Open Finance is and how it can benefit everyone.

What I learned about mothers and their pensions from answering Mumsnet questions

What are the burning questions that mums want answered when it comes to their pensions?

I was recently asked to answer some questions from Mumsnetters about their pensions.

With much talk this International Women’s Day of the ‘motherhood penalty’ contributing to the gender pension gap, this exercise was particularly instructive. It taught me a lot about the circumstances of this particular demographic, primarily women in their late 40s and 50s, although some younger, and also their retirement provision.

First off, there were more than 170 questions. More than we expected. I didn’t get through them all, although I wanted to. Women in this age bracket are thirsty for more pension information, but by this, I don’t mean to imply lacking in knowledge, because that clearly wasn’t the case. Many might have said they don’t know enough or even anything, but actually many of those participating were switched on, engaged, well-informed and curious.

Some asked about the best ways to invest a pension - what’s to argue against a passive global tracker fund? Not much, I replied. What’s the best way to access an income when you have a number of pots to draw from? How can I increase my workplace contributions?

Small’s a key word when mothers talk about their pensions. Even ‘absolutely tiny’. They’ve taken pensions when they can get them throughout working life, perhaps in part-time jobs, perhaps built up through a little bit of self-employment at some point. The random mixture of provision through the years, around childcare and in many cases before Auto-Enrolment came in in 2012 and you were lucky if your employer a) offered you a pension and b) actually encouraged you to pay in, is evident.

Mothers’ pensions may be small, but they are numerous. Many referred to a few ‘old defined benefit pensions’ and ‘small DC pots’ - they know the difference between defined benefit (DB) and defined contribution (DC).

I’m not surprised that this group of mothers talk about their old DB pots - the demographic of mothers with older children is just old enough to have had a DB pension through work when they started in working life, before this kind of pension became a public sector rarity.

For some, the DB pot came later in life, after kids and on joining the public sector. Some of the mothers referred to their ‘small’ NHS or teacher’s pension that they have been paying into for the last few years.

While some had some broader questions on pensions in general, most wanted help with their individual circumstances, not generic information. Their circumstances were often relatively complex, even if the sums involved were typically low. The recurring question was: ‘What should I do?’ By far the next biggest question was: ‘Should I consolidate?’.

It’s no surprise that consolidation is high up on their list of queries, with so many small pots around. Mothers like - need - to be organised in every way and I completely understand this desire to Marie Kondo your pensions. But the presence of the odd DB pension in the mix does complicate this effort to get all their pensions in one place.

Unfortunately, even taken together, the total of these pots is unlikely to qualify women for bespoke independent financial advice. That’s why they’re on this Mumsnet board. They need individual advice because of the complicated nature of their career histories and pension schemes, but perhaps can’t afford it because of the smallness of their overall pot. I referred several times to the free Government guidance service, Pension Wise.

Despite the lack of mega bucks, what I found heartening is that mothers do prioritise their pensions, at moments when they can. There’s clear evidence from those asking questions on this board that they have always tried to pay in, even if it’s been a relatively small amount. Mothers do what they can for themselves, although the odds are stacked against them. This is borne out by our own data around the contributions of our female customers, which we also published this week.

I love the fact that pensions are becoming a hot topic of open discussion. Maybe one day, they’ll be discussed as frequently and with as much passion as UK house prices. What would be ideal is if we could all become as clued-up in our own right about pensions as we are property. Answering these questions showed me that mothers on Mumsnet would like to be and I hope I helped just a little bit.

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. Anything discussed on the podcast should not be regarded as financial advice.

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Match Plan investor update Q3 2020

Viraj Bhayani from the Match Plan fund manager, BlackRock, updates us on the plan's performance in Q3 and the latest news.

Hi, I’m Viraj Bhayani from BlackRock, and I’m here to give you an update about the Match Plan, which you are invested in.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

How did the plan perform compared to the market, over the last three months? Did we have a good quarter or a bad quarter?

On an absolute scale, the quarter started off strongly, as the continued re-opening of economies combined with monetary and fiscal stimulus, maintained investor sentiment. However, towards the close of the period, increased instability was attributable to worries around rising COVID-19 cases, a resurfacing of Brexit tensions and investor concerns regarding technology companies’ valuations.

On a relative scale, the Match Plan aligns to the consensus of its peers in the pension sector. This means that some of the funds would have outperformed it and others would have underperformed it. In other words, by investing into the Match Plan, investors choose to be in an average fund that should represent the returns of the average of the pension sector. The Match Plan has been designed to help investors access a broad range of markets, in a straightforward and cost-effective way. This provides a greater degree of diversification than investing in a single asset class. This follows one of BlackRock’s core beliefs – that diversification is the key to achieving a more consistent investment experience over time. The return for the Match Plan over the three months ending September 30th 2020 was +0.65%.¹

Risk: Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Risk: Diversification and asset allocation may not fully protect you from market risk.

^{1 source: BlackRock, as of 30 September 2020. Performance gross of fees in GBP.}

What can savers expect for the next quarter?

The initial phase of the economic restart has been quicker than expected, but the part that lies ahead will be the hardest. Governments are incentivised to respond to rising cases with new containment measures as health concerns generally still trump economic ones. We are seeing this play out in Europe, with the introduction of curfews in France and Germany, and the month-long lockdown in England. Measures are targeted and local, but in sum, they have the potential to weigh on mobility and economic activity in the near-term. The timeline for a vaccine has been a positive surprise following accelerated efforts worldwide. Yet immunisation is not a panacea for the economy and a recovery to pre-COVID levels will take time.

We do not expect a similarly large hit to economic activity as seen in the spring. But the restart now looks to be facing significant challenges in the near-term. The risk is a broadening of containment measures that leads to a stalling for a few months – or even temporary reversal – of momentum in the economic restart. Ongoing policy support is crucial to help bridge businesses through any shock and avoid any long-lasting economic effects. Well-designed COVID-19 testing regimes are a key differentiator across countries – and asset returns.

The pandemic has exposed vulnerabilities of global supply chains and added a catalyst to geopolitical fragmentation. It has led to a policy revolution that blurs the boundaries between fiscal and monetary action – which could address some of the rising inequalities. And it has put a premium on sustainability, corporate responsibility and resilience of companies, sectors and countries. Market sentiment has been driven by the pandemic’s near-term evolution and the policy response, but these structural limits are transforming the investment landscape and will be significant to investment outcomes.

At BlackRock we are focusing on building real resilience for the whole portfolio. This goes beyond building a better blend of returns - it’s about ensuring the portfolio is well positioned at a more granular level to underlying themes, including sustainability. The pandemic has accelerated a tectonic shift toward sustainability and a call for a focus on resilience: diversifying across companies, sectors and countries that are positioned well for these trends. Therefore, over the long-term we believe that owning a diversified portfolio of stocks and other assets that incorporates sustainable insights will be beneficial for savers.

How has BlackRock driven positive social change in the past quarter?

BlackRock has recently been analysing our investment stewardship activities over the past year. Investment stewardship for BlackRock goes beyond simply voting at companies’ shareholder meetings, we also emphasise engagement - the direct dialogue with companies on governance issues that have a material impact on sustainable long-term financial performance. We advocate for robust corporate governance and the sound and sustainable business practices core to long-term value creation for our clients and promotion of positive social impact.

To highlight some of our key achievements in 2020, firstly BlackRock Investment Stewardship team voted against more directors than in previous years, reflecting heightened investor and societal expectations. Over 5,000 votes against directors at 2,809 companies² were driven by concerns regarding director independence, insufficient progress on board diversity, and overcommitted directors. BIS also held directors to account for insufficient progress on climate disclosures and compensation policies inconsistent with sustainable long-term financial performance (5,130 vs nearly 4,800 (this year vs prior year)².

Secondly, engaging corporate leaders has been our top priority. The events of the past six months, have reinforced the need for strong leadership so in 2020 BlackRock Investment Stewardship team increased its engagement by almost half (+^{_scot_top_rate}) – total engagements: 3,043 vs. 2,050 (in 2020 vs. 2019 respectively)² – both in reaction to the pandemic and to enable us to hold management accountable, particularly given our commitment to intensify our focus and engagement with companies on sustainability-related risks.

Thirdly, we believe investor expectations continue to rise. In light of the external environment and developments, we are currently reviewing our voting and engagement guidelines to provide more detail on our expectations and how we intend to reflect them in our voting actions in the next proxy season. BlackRock Investment Stewardship team has already set out expectations for 244 carbon-intensive companies making insufficient progress integrating climate risk into their business models or disclosures.² Those that do not make significant progress risk voting action being taken against management in 2021.

^{2 source: BlackRock 2020 Investment Stewardship Report, as at September 2020}

Views expressed are of BlackRock. Match Plan represents the BlackRock Consensus 85 Fund.

Risks warnings

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.

Match Plan fund specific Risks

Credit Risk: The issuer of a financial asset held within the Fund may not pay income or repay capital to the Fund when due.

Equity Risk: The values of equities fluctuate daily and a Fund investing in equities could incur significant losses. The price of equities can be influenced by many factors at the individual company level, as well as by broader economic and political developments, including daily stock market movements, political factors, economic news changes in investment sentiment, trends in economic growth, inflation and interest rates, issuer-specific factors, corporate earnings reports, demographic trends and catastrophic events.

Derivative Risk: The Fund uses derivatives as part of its investment strategy. Compared to a fund which only invests in traditional instruments such as stocks and bonds, derivatives are potentially subject to a higher level of risk.

Liquidity Risk: The Fund’s investments may have low liquidity which often causes the value of these investments to be less predictable. In extreme cases, the Fund may not be able to realise the investment at the latest market price or at a price considered fair.

Counterparty Risk: The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.

Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

Important information

This material is for distribution to Professional Clients only and should not be relied upon by any other persons.

Issued by BlackRock Life Limited (“BLL”), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. The Fund described in this document is available only to trustees and members of pension schemes registered under Part IV of the Finance Act 2004 via an insurance policy which would be issued either by BLL, or by another insurer of such business. BLL’s registered office is 12 Throgmorton Avenue, London, EC2N 2DL, England, Tel +44 (0)20 7743 3000. Registered in England and Wales number 02223202. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

Rates of exchange may cause the value of investments to go up or down. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Any objective or target will be treated as a target only and should not be considered as an assurance or guarantee of performance of the Fund or any part of it. The Fund objectives and policies include a guide to the main investments to which the Fund is likely to be exposed. The Fund is not necessarily restricted to holding these investments only. Subject to the Fund’s objectives, the Fund may hold any investments and utilise any investment techniques, including the use of derivatives, permitted under the Financial Conduct Authority’s New Conduct of Business Sourcebook which contain the rules by which investment of the Fund is governed. The BlackRock Life Limited’s notional fund units have a single unit price. The unit prices are normally calculated on each business day. For performance reporting, notional units are valued at special closing prices on the last working day of each quarter to enable comparison with the relevant benchmark index.

Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.

This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.

© 2020 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, BUILD ON BLACKROCK and SO WHAT DO I DO WITH MY MONEY are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

Your updated fact sheet will soon be available to download in the BeeHive. If you’d like to ask a question in the next update or share your thoughts, you can get in touch with PensionBee via email or Twitter.

As with all investments, past performance is not indicative of future performance and you may get back less than you start with.

‍

Match Plan investor update Q2 2020

Viraj Bhayani from the Match Plan fund manager, BlackRock, updates us on the plan's performance in Q2 and the latest news.

Hi, I’m Viraj Bhayani from BlackRock, and I’m here to give you an update about the Match Plan, which you are invested in.

How did the plan perform compared to the market, over the last three months? Did we have a good quarter or a bad quarter?

TheMatch Plan is a diversified portfolio that follows the average of its peers in the Pension Sector at an accessible cost. The fund’s investments are guided by the strategies of similar funds, implementing the average across the pensions sector. As a result, the Match Plan aims to perform at the average when compared to its peers. The fund invests in a mix of bonds, shares and cash which allows it to minimise losses during market downturns and pick up the positive performance during market recoveries.

Following a challenging first quarter of the year, where the COVID-19 pandemic drove a sharp fall across markets, the second quarter reflected the improving global situation. The stimuli to the economy provided by governments and central banks have shown positive results in supporting the economies, and businesses have started reopening while the pandemic statistics look calmer in many areas of the world. While the uncertainty remains around the future of the COVID-19 virus and the recovery of the economies after the shock, investors started to regain confidence which was reflected in the rise in stocks and bonds prices.

The return for the Match Plan over the three months ending June 30th 2020 was 12.28% (GBP), which on an absolute scale, reflects the general market rally.

What can savers expect for the next quarter?

The initial COVID-19 contraction is larger than the great financial crisis in 2008, but we believe its cumulative impact on the economy will likely be less as long as the policy response remains strong enough to cushion the blow. Normal economic crisis and recovery cycle does not apply, so we are tracking three signposts: how successful economies are at restarting activity while controlling the virus spread; whether stimulus is still sufficient and reaching households and businesses; and whether any signs of financial vulnerabilities or permanent scarring of productive capacity are emerging. Markets are laser-focused on changes in any of these three “known unknowns,” and a possible second wave of infections and policy fatigue are major risks in the second half of 2020.

The shock will have long-term consequences that are starting to play out. Policymakers are funnelling money directly to the (non-financial) private sector, with debt monetisation, which is a way for the central banks to finance the government spending, being a possibility down the road. The pandemic is reinforcing structural trends such as ecommerce and sustainability; amplifying deglobalisation and geopolitical fragmentation; and may deliver a generational shock to the emerging world.

We expect volatility to remain elevated over the near-term and, whilst we appreciate this is challenging given the uncertainty in markets, we believe savers should take a long-term perspective. This is particularly relevant for those savers with a long time to retirement. This is because, simply put, we still expect shares to outperform other assets such as cash and fixed income over the long-term and therefore believe stocks and other risky assets have the potential to help our savings grow over time.

How has BlackRock driven positive social change in the past quarter?

Sustainability considerations are at the core of our approach to how BlackRock invests, manages risk and executes its stewardship responsibilities. This commitment is based on our conviction that climate risk is investment risk and that sustainability-integrated portfolios can produce better risk-adjusted returns to investors in the long-term.

While BlackRock Investment Stewardship team (BIS) has been engaging with the companies on sustainability issues for years, this year we are focusing more on engaging with firms in carbon-intensive sectors. These include for example ExxonMobil, where BlackRock voted against directors due to significant concerns about climate risk management and supported a shareholder proposal on governance; or TransDigm, a U.S. aviation manufacturer, where BlackRock voted against a director for lack of progress on climate risk reporting and supported shareholder proposal to adopt emissions goals. These companies face material financial risks during the transition to a low-carbon economy. Together, they represent a significant proportion of market capitalisation and CO2 emissions in their respective regions. BIS is determined to maximise the impact of its climate-related engagements.

In 2020, we have identified 244 companies that are making insufficient progress integrating climate risk into their business models or disclosures. Of these companies, we took voting action against 53, or 22%. We have put the remaining 191 companies “on watch.” Those that do not make significant progress risk voting action against management in 2021.

Through this report, we hope to provide a deeper look at our engagement process and methods; how we are working to promote transparency in investment stewardship, both in our own activities and through the adoption of disclosure standards; our involvement with Climate Action 100+; and our view on the importance of social factors to the long-term health of companies and society as a whole.

The opinions expressed are as of June 30th 2020 from BlackRock and are subject to change at any time due to changes in market or economic conditions.

Risks warnings

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.

BlackRock DC LifePath UK Risks

Credit Risk: The issuer of a financial asset held within the Fund may not pay income or repay capital to the Fund when due.

Equity Risk: The values of equities fluctuate daily and a Fund investing in equities could incur significant losses. The price of equities can be influenced by many factors at the individual company level, as well as by broader economic and political developments, including daily stock market movements, political factors, economic news changes in investment sentiment, trends in economic growth, inflation and interest rates, issuer-specific factors, corporate earnings reports, demographic trends and catastrophic events.

Derivative Risk: The Fund uses derivatives as part of its investment strategy. Compared to a fund which only invests in traditional instruments such as stocks and bonds, derivatives are potentially subject to a higher level of risk.

Liquidity Risk: The Fund’s investments may have low liquidity which often causes the value of these investments to be less predictable. In extreme cases, the Fund may not be able to realise the investment at the latest market price or at a price considered fair.

Counterparty Risk: The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.

Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

Important information

Issued by BlackRock Life Limited (“BLL”), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. The Fund described in this document is available only to trustees and members of pension schemes registered under Part IV of the Finance Act 2004 via an insurance policy which would be issued either by BLL, or by another insurer of such business. BLL’s registered office is 12 Throgmorton Avenue, London, EC2N 2DL, England, Tel +44 (0)20 7743 3000. Registered in England and Wales number 02223202. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

Rates of exchange may cause the value of investments to go up or down. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Any objective or target will be treated as a target only and should not be considered as an assurance or guarantee of performance of the Fund or any part of it. The Fund objectives and policies include a guide to the main investments to which the Fund is likely to be exposed. The Fund is not necessarily restricted to holding these investments only. Subject to the Fund’s objectives, the Fund may hold any investments and utilise any investment techniques, including the use of derivatives, permitted under the Financial Conduct Authority’s New Conduct of Business Sourcebook which contain the rules by which investment of the Fund is governed. The BlackRock Life Limited’s notional fund units have a single unit price. The unit prices are normally calculated on each business day. For performance reporting, notional units are valued at special closing prices on the last working day of each quarter to enable comparison with the relevant benchmark index.

Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.

This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.

© 2020 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, BUILD ON BLACKROCK and SO WHAT DO I DO WITH MY MONEY are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

Your updated fact sheet will soon be available to download in the BeeHive. If you’d like to ask a question in the next update or share your thoughts, you can get in touch with PensionBee via email or Twitter.

As with all investments, past performance is not indicative of future performance and you may get back less than you start with.

‍

Match Plan investor update Q1 2020

Viraj Bhayani from the Match Plan fund manager, BlackRock, updates us on the plan's performance in Q1 and the latest news.

Hi, I’m Viraj Bhayani from BlackRock, and I’m here to give you an update about the Match Plan, which you are invested in.

How did the plan perform compared to the market, over the last three months? Did we have a good quarter or a bad quarter?

The strategy of the Match Plan is to align to the Pension Sector average. By this I mean that the fund’s investments are guided by the strategies of similar funds, implementing the average across the pensions sector. As a result, the Match Plan aims to perform at the average when compared to its peers.

In the light of the recent market volatility driven by the COVID-19 global pandemic, the plan has performed negatively this quarter at -6.58% (as at 31 March 2020). The negative performance is driven by the fall in stock markets worldwide, whereby global stocks have fallen by over ^_basic_rate (as measured by the MSCI World Index) and UK stocks have decreased by over ^{_corporation_tax} (as measured by the FTSE All Share-TR Index) (source: BlackRock, as of 31 March 2020). In the past three months, the fund allocated 63.8% of the assets to stocks, in accordance with the fund objective and strategy, hence bearing the losses due to market fall.

The Match Plan is intended as a long-term investment that should be changed only when investor’s needs or requirements change over time. Despite the recent market volatility, the approach remains the same, which is why the fund has not been making short-term asset allocations in response to temporary market movements. During times of heightened volatility, BlackRock’s approach is to carefully review the risk in our portfolios to ensure they remain appropriate.

It is worth reiterating that the fund is aimed at a long-term investment horizon, where the market moves on to recover after shocks, such as the one we’re currently experiencing. The Match Plan is a diversified portfolio that follows the average of its peers at an accessible cost. Hence, the portfolio is well positioned to benefit from the market picking up following the stress.

Risk: Diversification and asset allocation may not fully protect you from market risk.

What can savers expect for the next quarter?

The coronavirus pandemic is set to deliver a sharp and deep economic shock. Stringent containment and social distancing policies will bring economic activity to a near standstill, and lead to a sharp contraction in growth for the second quarter. However, provided government intervention aimed at supporting households and businesses through the shock is swift, we would expect markets to recover with limited permanent economic damage over the long-term. This includes drastic public health measures to stem the spread of the infection, as well as coordinated monetary and fiscal policies to prevent disruptions that could cause lasting economic damage.

We see encouraging signs from major central banks and governments that such a monetary and fiscal response is starting to take shape. The governments and central banks responses have been swift – and we expect the total government intervention to be similar in size to that of the global financial crisis in 2008, but compressed into a shorter time frame. While the shock is of unknown depth and duration, we see the shock as akin to a large-scale natural disaster that severely disrupts activity for one or two quarters, but eventually results in a sharp economic recovery.

Markets, in our view, may ultimately settle down if three conditions are met: 1) visibility on the ultimate scale of the coronavirus outbreak and evidence the infection rate has peaked over the long-term; 2) quick and coordinated government and central bank response; and 3) confidence that financial markets are functioning properly.

At the time of writing (14 April 2020) we have seen a short-term recovery in the portfolios but it is too early to call an end to the volatility. We cannot with any certainty pinpoint a specific date or level in markets that will give us the confidence to say, “it’s over”. However, over the long-term we still believe that owning a diversified portfolio of stocks and other assets with the potential to outperform cash will be beneficial and that, through adding assets such as UK government bonds we can help manage risk for customers as they approach retirement.

No crisis is ever the same but historically, after every period of market fall, a rebound follows and so whilst it is uncomfortable living and working (and saving) through this crisis, we believe savers should take a long-term perspective.

One positive has been the strength and depth of our investment team, our investment process and our continual engagement with PensionBee throughout the crisis. Despite rather unusual working conditions, the Investment Committee who are responsible for overseeing the strategy (and the portfolio managers who ensure contributions are invested in line with our long-term plans), have been able to function as normal. I am proud of how my colleagues have all come together in this challenging time and proud that the team have been well equipped to look after the savings of PensionBee customers.

How has BlackRock driven positive social change in the past quarter?

The past quarter has presented multiple challenges to people in every corner of the planet from health, social and economic perspectives. While we are facing unprecedented events such as the coronavirus outbreak and witnessing the global markets struggle, we believe it is important to be reactive to the immediate challenges, while also staying focused on our longer-term commitments.

At BlackRock we are committed to supporting people affected by the coronavirus outbreak. As a part of our coronavirus response, BlackRock has committed USD $50 million to pandemic relief efforts globally to aid the healthcare workers and provide medical supplies, as well as support the foodbank networks for citizens. Here in the UK we are working with organisations such as the National Emergencies Trust to support the urgent needs of those most affected by the outbreak.

Keeping our long-term aspirations in mind, BlackRock has also announced the launch of the BlackRock Foundation earlier than planned, with the aim to broaden the firm’s philanthropic investments in economic mobility, financial resiliency and sustainability. “The contribution we’re making – in line with our purpose as a firm – will support our commitment to creating greater financial well-being and advancing sustainability,” said Larry Fink, Chairman and CEO of BlackRock. “These funds will be strategically deployed to partners and programs aligned with this mission, helping catalyse new and innovative ideas that support social and economic progress for more people around the world. The BlackRock Foundation will support our conviction that the transition to a more sustainable economy must be inclusive, fair and just.”

Recognising our social responsibility as a large asset manager, we constantly look to enhance our approaches to stewardship as Larry Fink has stated in his latest letter to the CEOs. This past quarter we have worked on intensifying our focus and engagement with companies on sustainability-related issues and proactively promoting effective disclosures of climate-related risks.

During our engagements, we advocate for disclosures aligned with the reporting frameworks developed by the Task Force on Climate related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB) and are already seeing results. These frameworks consider the physical, liability, and transition risks associated with climate change and provide guidance to companies for disclosing material, decision-useful information that is comparable within each industry.

Our Q1 2020 Stewardship report provides multiple case studies and insights into our stewardship activities in this quarter, which you can access at the following link. To pick one example, we recently engaged with the heads of ESG and sustainability of an Irish construction company to discuss its approach to managing and reporting on its sustainability practices suggesting aligning its climate risk reporting with the TCFD framework. Cement production represents ^_ni_rate of the company’s revenues, however accounts for 8^{_personal_allowance_rate} of the company’s total carbon footprint. To manage these greenhouse gas (GHG) emissions challenges, the company is focusing on its emissions intensity (520kgCO2/t by 2030) rather than setting an absolute GHG target that would constrain cement production volumes.

Nonetheless, the company met its 2020 target and is seeking to further reduce its GHG emissions intensity by an additional 8% by 2030. We are encouraged that the company has set an ambition to achieve carbon neutrality along the cement and concrete value chain by 2050. This science-based target (SBT) at a 2-degree scenario has been independently verified to be in line with the Paris Agreement. From a reporting standpoint, we were also encouraged to learn from the engagement that the company is in the process of enhancing disclosures and is reviewing both the TCFD and SASB reporting frameworks. The company indicated that it welcomed the TCFD recommendations and is actively participating in TCFD’s preparers forum. While it is early days in the company’s reporting journey, we are encouraged with the tone of our engagement. We will be looking to the company to align its climate risk reporting more explicitly with those recommendations going forward

Risk: Case studies are for illustrative purposes only; they are not meant as a guarantee of any future results or experience, and should not be interpreted as advice or a recommendation.

Views expressed are of BlackRock.

Risks warnings

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.

BlackRock DC LifePath UK Risks

Credit Risk: The issuer of a financial asset held within the Fund may not pay income or repay capital to the Fund when due.

Equity Risk: The values of equities fluctuate daily and a Fund investing in equities could incur significant losses. The price of equities can be influenced by many factors at the individual company level, as well as by broader economic and political developments, including daily stock market movements, political factors, economic news changes in investment sentiment, trends in economic growth, inflation and interest rates, issuer-specific factors, corporate earnings reports, demographic trends and catastrophic events.

Derivative Risk: The Fund uses derivatives as part of its investment strategy. Compared to a fund which only invests in traditional instruments such as stocks and bonds, derivatives are potentially subject to a higher level of risk.

Liquidity Risk: The Fund’s investments may have low liquidity which often causes the value of these investments to be less predictable. In extreme cases, the Fund may not be able to realise the investment at the latest market price or at a price considered fair.

Counterparty Risk: The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.

Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

Important information

Rates of exchange may cause the value of investments to go up or down. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Any objective or target will be treated as a target only and should not be considered as an assurance or guarantee of performance of the Fund or any part of it. The Fund objectives and policies include a guide to the main investments to which the Fund is likely to be exposed. The Fund is not necessarily restricted to holding these investments only. Subject to the Fund’s objectives, the Fund may hold any investments and utilise any investment techniques, including the use of derivatives, permitted under the Financial Conduct Authority’s New Conduct of Business Sourcebook which contain the rules by which investment of the Fund is governed. The BlackRock Life Limited’s notional fund units have a single unit price. The unit prices are normally calculated on each business day. For performance reporting, notional units are valued at special closing prices on the last working day of each quarter to enable comparison with the relevant benchmark index.

Issued by BlackRock Life Limited (“BLL”), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. The Fund described in this document is available only to trustees and members of pension schemes registered under Part IV of the Finance Act 2004 via an insurance policy which would be issued either by BLL, or by another insurer of such business. BLL’s registered office is 12 Throgmorton Avenue, London, EC2N 2DL, England, Tel +44 (0)20 7743 3000. Registered in England and Wales number 02223202. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.

This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.

© 2020 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, BUILD ON BLACKROCK and SO WHAT DO I DO WITH MY MONEY are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

Your updated fact sheet will soon be available to download in the BeeHive. If you’d like to ask a question in the next update or share your thoughts, you can get in touch with PensionBee via email or Twitter.

As with all investments, past performance is not indicative of future performance and you may get back less than you start with.

‍

March product spotlight

In our product update series we highlight some of our recent new product features and updates. This month's edition focuses on a new checklist feature in the BeeHive and a provider search feature when adding a pension in the app.

Legal & General respond to our open letter regarding Shell

Find out how Legal & General have responded to our concerns around their investment in Shell.

*Read the initial letter to Legal & General from our CEO, Romi.*

Legal & General’s response

1. Statistics should come before company names

As climate change becomes ever more important, and more people want to understand why certain companies are included in a fund, we think it is important to make sure that statistics are not lost.

Perhaps it is not clear, but the index tracked by the fund actually reduces fossil fuel intensity by 57%, and emissions intensity by 22% (as at 30/09/19).

This fossil fuel reduction estimate is commensurate with analysis by reputable independent bodies (such as the International Energy Agency) around the amount of total fossil fuels that must still be left in the ground, if the world is to meet the targets of the Paris Agreement.

2. Companies are not included because they are ‘sufficiently contributing to our future’

That is a personal judgment upon which people can disagree and is not something considered for every one of the thousands of companies in the fund.

Companies are included (or more precisely not excluded) because they conform to certain transparent rules for index construction – not all of which are climate-related.

The fund has already significantly reduced exposure to hundreds of carbon-intensive stocks. Further exclusions might have unintended financial impacts.

For example, Shell is one of the largest payers of dividends in the UK. The Future World fund aims to balance these concerns between environmental sustainability and financial sustainability, by including three environmental factors as well as four investment factors.

3. Is Shell ‘doing enough’?

As you suggest, it is widely agreed that the oil and gas industry as a whole cannot continue to grow oil & gas expansion unabated if the world is to meet climate targets. However, there is no widespread agreement on what individual companies need to do. For example, you reference a study by Carbon Tracker that suggests Shell be required to cut emissions by 35%. However, this suggested cut depends on a number of assumptions about the behaviour of government-owned companies and competitors, the speed at which clean technologies scale up, the strength of future government policies, as well as the behaviour of consumers. Even under stringent measures to reach net zero emissions in 2050 – compatible with 1.5°C of global warming, the more ambitious interpretation of the Paris Agreement – this will take decades.

There are many potential pathways for the evolution of the energy system and still many uncertainties about which technologies (green hydrogen, carbon capture and storage) will get us there faster. (Incidentally, the ‘green revenues’ tilt gives investors positive upside on this).

Most pathways will still have a role (if gradually shrinking) for oil and gas companies. But there is the possibility that a few oil and gas companies end up with a consolidated share in the market ( producing more, even if everyone else is producing less), while still meeting climate change targets. This is not to downplay the seriousness of the challenge ahead – in some of our more ambitious modelling, climate policies could see demand for oil peaking globally in the next decade. Companies absolutely need to start planning now. And through our engagements we are demanding that they do this. Without this being an endorsement of Shell’s business model, we have seen some positive signs:

Shell has gone further than the majority of oil & gas companies by setting a carbon reduction target that also includes emissions from its customers (when they burn Shell’s fuel in cars and power plants). They are showing more responsibility – including by linking targets to pay - at a time when other oil majors refuse to even disclose total emissions.
Shell has also gone further than many of its peers by substantially investing in low-carbon technologies (including renewable energy). We do not, as a rule, expect oil and gas companies to turn into renewable companies – preferring that they gradually ‘wind down’ their business in line with climate goals, returning more money to shareholders. However, there may be individual companies that are successful at this, and Shell has outlined a serious ambition to become the world’s largest electricity company.
They have taken positive steps in quitting some trade bodies over differences in climate policy. Also, many people might not appreciate that ‘integrated’ companies like Shell don’t just provide oil and gas to burn. They also provide key components to make the plastics in our phones, along with other gadgets, latex gloves and MRIs in hospitals, chemicals, detergents and many others.

4. We agree that the company can do more

In our meetings with them are pushing for further transparency on how their upcoming production plans are aligned with the Paris Agreement. We will be monitoring how the company meets its emissions targets (as well as the profitability of its low-carbon, New Energies division).

We are also ramping up our data and analytics capacities, working in partnership with a leading energy consultancy, to be able to assess individual company or portfolio alignment to the targets of the Paris Agreement. Were the modelling or our engagement with the company to result in us having significant concerns around Shell’s strategy, we will take action either by voting against the chair of the board across all our assets, or by removing Shell from the Future World range.

If you have any more questions or concerns you would like us to raise with Legal & General directly, please reach out to us at [email protected].

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June product spotlight

This month, we’ve made significant updates to our plan information to help you better understand your pension.

This article was last updated on 16/10/2024

It’s our mission to build pension confidence and create a world where everyone can enjoy a happy retirement. This month, we’ve made significant updates to our plan information to help you better understand your pension.

Your Annual Statement is ready!

Have you seen your annual statement for the 2023/24 tax year? You can find it by logging into your account otherwise known as your “BeeHive”, clicking on ‘Account’ and then clicking on the ‘Resources’ tab. Your Annual Statement includes your current pension savings, projected retirement income and your annual management fee. You can read, download and save your statement straight from your BeeHive.

If you have any questions, please reach out to your BeeKeeper.

Keep reading to find out about this month’s product updates.

Fund performance chart and table

We’ve introduced two new plan performance graphs in our customers’ BeeHives’. These changes are designed to give you a better understanding of how our plans work. This way you can have greater confidence the plan you’re invested in works best for you. You can check them out today by logging into your BeeHive online, selecting ‘Account’ and then ‘My Plan’ or in the app by tapping ‘Account’ then ‘Plan information’

How pension investments work

Both the performance chart and table show how the fund your pension is invested in has grown over time. However, each provides a different way to understand that performance. Before explaining what the chart shows, let’s take a moment to look at how investing your money works.

Like all pensions, when you invest in one of our plans your money’s used to buy units in it. If you own 100 units in your plan and each unit is worth £1.25, then your pension balance is ^{_lower_earnings_limit}. However, the unit price changes daily and reflects your plan’s performance and value on that day.

The unit price itself is made up of the value of the underlying company shares in your plan. For example, if your plan invests in an index which includes Apple and the value of Apple falls, this impacts the unit price of the plan. So, if the unit price drops to £1.10 and you have 100 units, your pension balance becomes £110. Unit prices go up and down, and reflect how the market is doing on any given day. Essentially, if the value of the companies in your plan goes up or down, the units your money’s invested in also go up or down and as a result, the value of your pension balance will reflect this.

The fund performance chart

The chart shows what would have happened to ^{_money_purchase_annual_allowance} if you invested that money in one of our plans five years ago. As you interact with the performance chart, you’re seeing how much the initial ^{_money_purchase_annual_allowance} worth of units was worth at that point in time.

The time frame covers five consecutive 12-month periods. These run to the end of the most recent quarter of the year. As time goes on, the chart will update to show performance information to the end of the recent quarter when that data becomes available.

What’s included in the fund performance?

It’s important to note that the fund value shown may include embedded fund fees that are part of the plan’s annual management fee. These are costs paid to the fund manager to invest your money and manage the fund. The fund value excludes any personal contributions or government top ups made to your pension.

How does the chart work?

You can hover your cursor over the chart to see the value of a fund at different points in time over the past five years. As you move across it, the date, fund value and percentage will automatically update.

The fund performance table

This table gives a simple percentage of how much the fund made or lost in a given calendar year. The figures shown are after any fund charges and taxes have already been deducted. This enables you to compare the fund’s performance to any years before or after.

Please note, there’s limited historical data for our Impact Plan or our Fossil Fuel Free Plan due to when these plans launched and the available data.

Benefits of performance information

Increased confidence

We’ve made important information about our funds’ performance more accessible to help you understand the impact on your pension balance.

Past performance isn’t an indicator of future performance. However, seeing how a fund’s performed historically may offer insight into how it could perform in future. Showing performance over a five-year period should be long enough to see how the fund performed throughout different market conditions.

Performance and your plan’s objective

Different pension plans have different investment objectives. It’s important to remember that a plan’s performance shouldn’t simply be compared to other plans but also to its own objectives. For example, the objective of our Preserve Plan is to preserve the value of your pension balance rather than grow it. It may be most suitable for anyone approaching retirement and planning to make substantial withdrawals from their pension in the near future. It aims to preserve your money by investing in assets like bonds which are lower-risk but are also expected to return less compared to assets like equities. This means this plan’s growth at one point in time may have been less than a plan that invests with a different objective. Whilst the Preserve Plan may still see growth, that’s not its main objective.

Where to find the plan performance information

You can find the performance chart in our app or by logging into your account through our website. When logging in online click on ‘Account’ then ‘My Plan’ or through the app by tapping ‘Account’ then ‘Plan information’. To see the performance chart for our other plans, scroll to the bottom of your plan page and select ‘View plans’ then ‘Plan info’.

Let us know what you think

We want to continue improving our plan information where possible to empower our customers to invest in a pension that’s right for them. This year, we’ll be tackling other aspects of our plans information to make it easier to find key details and understand what they mean. If you have any thoughts about our latest changes or ways we can improve the rest of our plan pages, we’d love to hear from you. Let us know what you think by emailing [email protected].

Future product news

Keep your eye out for our next product blog or catch up on previous posts. We’re looking forward to spotlighting more of our handy features and free financial tools plus we’ve got lots of great new updates in the works we’re looking forward to bringing you this year. We’ll let you know what they are, how they can help you save for a happy retirement and how to get started.

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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Is the Shariah Plan right for you? Here's what you need to know

What are Shariah-compliant pensions and how can Muslims invest to help them secure their financial future?

Is the rising cost of living impacting pension saving?

What's the real impact of the cost of living crisis on our pension savings?

How to top up your State Pension

Find out how making extra National Insurance contributions could increase your State Pension.

This article was last updated on 21/02/2025

Did you know you could increase the amount of the State Pension you receive by making extra National Insurance (NI) contributions? When the ‘new’ State Pension was introduced in 2016, the government announced that you could plug gaps all the way back to 2006. The deadline has been extended three times since the announcement, and you now have until 5 April 2025 to top up.

How does this top up work and would it help you?

The current full State Pension is £221.20 a week (2024/25) and to receive the full amount, you’ll need 35 qualifying years of NI contributions. However, if you’ve taken time out of the workplace, for example to raise a family or care for older relatives, you might have gaps in your NI contribution history. If you have missing contributions from 2006-2016 you can plug the gaps by making extra NI payments.

Bear in mind that if you’re over the age of 73, you’ll be receiving or eligible for the ‘old’ State Pension so you won’t need to top up.

How much does it cost?

Making up for one year of missed NI contributions will cost you up to £907.40 (2024/25), which will add about £302.64 per year (£5.82 per week) to your pre-tax State Pension. There might be occasions where you don’t need to pay the full amount. For example, if you only have two months of missing contributions, you’ll only pay £151.20 (2024/25) to make up the full year.

However, the rate you pay depends on which year you’re topping up:

Tax year	Rate
2006/07 - 2019/20 (inclusive)	£824.20 (£15.85/week)
2020/21	£795.60 (£15.30/week)
2021/22	£800.80 (£15.40/week)
^{_tax_year_minus_three}	£824.20 (£15.85/week)
2023/24	£907.40 (£17.45/week)
2024/25	£907.40 (£17.45/week)

If you don’t top up your State Pension you’ll get an amount proportionate to the number of years you have full NI contributions for. For example, if you have 30 years of NI contributions, then you’d get an amount worth 86% of the full State Pension. This works out at £190.23 per week (2024/25).

How do I top-up my National Insurance?

You can top up your NI in two ways via the gov.uk website:

It’s worth noting that you can’t pay to increase your State Pension beyond the maximum of £221.20 per week (2024/25).

Do I need to top up my State Pension?

Find out if you have any NI contribution gaps by checking your National Insurance record on the DWP website. Even if you have missing years, you may still qualify for a full State Pension. You can check this by using the government’s State Pension forecast calculator.

When not to top up your State Pension

Certain benefits automatically come with NI credits, so you may find that there are no gaps in your NI contribution record, even though you weren’t working. If you were in receipt of these benefits you may not need to top up your State Pension. Examples include:

if you were on Child Benefit;
if you were a grandparent looking after children;
if you were on maternity, paternity or adoption pay;
if you were on statutory sick pay; or
if you were unemployed and actively looking for work.

If you were ‘contracted out’ of the Additional State Pension, before the changes came into effect in 2016, then you’ll need to check whether topping up can help. You can find out more information on the gov.uk website.

Samantha Downes is a financial journalist and has written for most national newspapers and women’s magazines. She is also the author of two finance guides and has set up the Substack PumpkinPensions to help guide people looking to save more towards their future.

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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How to save for the future on an unpredictable income

Saving for the future with an unpredictable income might seem tricky, but with flexible pensions, smart tech tools, and a solid plan, it’s easier than you think – and your future self will thank you!

How to deal with a gap in your pension savings

Learn about the implications of not saving enough for retirement and find out how you can plug the gap.

This article was last updated on 01/10/2024

Saving for retirement is a long-term goal, so plenty can happen during your lifetime that might cause you to fall behind on your pension savings.

If you find yourself with a pension shortfall - when the amount you’re currently saving isn’t enough to reach your retirement goal - you’ll want to get back on track as soon as possible.

Do you have a pension income shortfall?

First, you’ll want to check if you’re on track to reach your retirement goal. The easiest way to do this is to use our pension calculator.

You’ll need to provide:

retirement income goal;
current age;
expected retirement age;
current pension pot value; and
current level of contributions.

If the projected income figure is less than your goal, then you’ve got a pension income shortfall.

How much do you need to save to catch up?

If you’ve used our pension calculator, learning how much you need to increase your contributions to meet your retirement income goal is simple.

Simply adjust the ‘personal monthly contribution’ slider until the projected figure meets your goal figure.

Here are some possible scenarios.

Your age	20	30	40	50
Retirement goal	£17,000/yr	£17,000/yr	£17,000/yr	£17,000/yr
Current pension pot	^{_tax_free_childcare}	^{_isa_allowance}	£40,000	£80,000
Current contributions	£150/mo	£200/mo	£250/mo	£300/mo
Shortfall	£2,8^{_pension_age_from_2028}/yr	£3,598/yr	£5,349/yr	£6,623/yr
Needed contributions	£210/mo	£300/mo	£490/mo	£850/mo

‍The above scenarios assume a retirement age of 65 and an employer contribution of £150 per month. We haven’t included additional state pension income.

Bear in mind that you’re likely to earn a higher salary as you get older, so you should be able to increase your contributions over time. Your employer should also be able to pay in more as your salary increases.

Options to boost pension savings

If you need to make up for a shortfall, there are plenty of ways to go about it.

Join a workplace pension

It’s now a legal requirement for employers in the UK to offer a workplace pension to their employees. New employees should be auto-enrolled into this scheme, but it’s possible for the employee to opt out of it. You can’t join your company pension until you’re 22 and earn at least ^{_money_purchase_annual_allowance} per year. If you’re 21 or under and earn ^{_lower_earnings} or more in a tax year (2024/25), you have the right to opt into your workplace pension scheme. If you choose to opt in, you’ll be entitled to the minimum level of employer contributions. If you earn less than ^{_lower_earnings} you can still ask your employer to give you access to a pension to save into. They have to do this, they just don’t have to make any employer contributions

If you’re working but haven’t joined your employer’s workplace pension scheme, doing so will help you get back on track. Not only will you receive tax relief on contributions from the government, but your employer will also contribute at least 3% of your qualifying earnings.

If you’re working but haven’t joined your employer’s workplace pension scheme, doing so will help you get back on track. Not only will you receive tax relief on contributions from the government, but your employer will also contribute at least 3% of your salary.

Start a personal pension

If you’re self-employed or unable to join a workplace pension for another reason, you can always start your own self employed pension.

You can choose between a defined contribution pension or a Self Invested Personal Pension (SIPP). Even though you won’t receive employer contributions (unless you own a Limited business), you’ll still receive tax relief from the government.

If you’re unsure which is right for you, you might want to speak with a financial adviser first.

Combine your old pensions into one

If you’ve changed employers, you’ll likely have multiple pension pots dotted around the place. It’s easy to lose track of these pensions or forget about them altogether. For example, you might move home and forget to tell your pension provider. This isn’t uncommon. It’s estimated more than 4.8 million pension pots are missing in the UK with this figure expected to grow by 13^{_personal_allowance_rate} by 2050.

Keeping track of multiple pensions can be time consuming, if you even know where to look. And given that different providers charge a different range of fees, you might find yourself paying more than you need.

Combining your pensions into one easy-to-manage plan that has a single fee structure could save you money in the short-term, as well as reducing the amount of ‘fee erosion’ over the long term.

Before moving your old pensions, check if there are any exit fees or other penalties that could make it worth keeping them where they are.
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Delay retirement

The longer you pay into your pension, the more chance it has to grow. And thanks to the miracle of compounding returns, the amount that it grows increases over time.

So delaying retirement by even a couple of years can significantly increase your retirement income. Here’s an example.

Let’s take a 55-year old with a pension pot of £150,000, and see how their retirement age could affect their income.

Retirement age	Annual retirement income
65	£8,824
^{_state_pension_age}	£9,307
^{_pension_age_from_2028}	£9,828
68	£10,390
69	£10,999
70	£11,^{_state_pension_age}1

And this assumes they never pay into their pension again after the age of 55, which is unlikely.

Delaying retirement can have lots of benefits. For more, read 6 reasons why you should delay taking your pension.

Plan for a more modest retirement

Increasing pension contributions isn’t always possible, and it can become costly if you leave it until later in life (as we’ve seen). Depending on your retirement goal, you might find that you can actually live off less without seeing much impact on your standard of living.

A recent Which? survey suggested that couples enjoying a moderate retirement living standard spend £43,100 a year. That’s £21,550 each. So, depending on how much you planned on saving for each year of your retirement you may decide you don’t need to increase your contributions as much as you thought or at all.

However, if you can increase your contributions - even just a little - you might find it worth doing. Because no one knows what the future brings, and saving more now could pay off just when you need it.

Consider other ways of earning retirement income

While it’s sensible to have a good pension in place, you don’t necessarily have to rely on it exclusively to earn your retirement income.

Other ways of earning income in retirement include:

Cashing out of other investments
Selling collectable items
Renting out property
Downsizing your home
Selling a second home
Releasing equity in your home (comes with risks)
Taking on part-time work

Planning ahead for retirement

Retirement is one of those things that seem a long way away until you get there, by which time your options to address any shortfalls will be limited.

If you do find yourself with a gap in your pension savings, don’t worry. The above tips should help you get back on track, even if you need to adjust your retirement expectations a little.

When it comes to pensions, the best time to act is when you’re young. The next best time is 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.

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How PensionBee is representing the diversity of their customers

Take a look at our new customer campaign and learn how we’re representing our customers across our marketing communications.

Love is one of our five PensionBee values, driving everything we do from the way we communicate to the way we design our product. As we’re on a mission to make as many people as possible pension confident so that everyone can enjoy a happy retirement. We’ve long been dedicated to celebrating the diversity of our customers and showcasing the different experiences within our community.

After reading a report from Anything But Grey about the marketing industry’s age-related blind spot, I wanted to ensure we continue representing a core demographic of our customer base, the over 50s, in our next marketing campaign. To date, we’ve featured customers in their 50s enjoying a campervan as well as walking along the beach, and this time set out to showcase customers at home enjoying their everyday lives. It was important to us that we were visualising and reflecting back what people belonging to that age group actually look like and not just a stereotype.

In January, we sent a call out in our newsletter looking for enthusiastic customers to be a part of our marketing campaigns. We were inundated with responses and a team of us spent time speaking to customers and getting to know their stories. We selected six people to join our existing bank of testimonials, which seeks to amplify our customers’ voices in the media and share their experiences of the pensions industry. Of our new additions, half are over 50. Whilst this shouldn’t be a surprising statistic given the industry we’re in, we’re really proud to be representing this age group across our website, digital assets and offline in an authentic way.

Moira, Fiesal and Ed, who are all over 50, are three of our 240k Invested Customers. This genuine representation helps add authenticity and honesty to our marketing. They were used in the campaign alongside Suzette, Alex, Kezia and Jackson, her French Bulldog! We wanted to showcase how our customers are both preparing for and enjoying retirement.

We’re committed to highlighting the real people that are combining, contributing and withdrawing from their pensions with PensionBee. Take a look at our website and digital ads to see them there.

We’d love to hear from you! If you’re interested in sharing your PensionBee experience with the press or appearing in future campaigns send an email to [email protected].

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How PensionBee is making pensions affordable for every saver

We’re introducing a new fee structure, designed to reward the most dedicated savers.

How pension contributions could stop you from losing 30 hours of free childcare

Find out how pension contributions could help you keep 30 hours of free childcare.

How our BeeKeepers continued working through lockdown

Our BeeKeeper, Ollie, reflects on the experience of helping customers be pension confident during a pandemic.

March 2020 was a daunting time for everyone, including at PensionBee. Lockdown number one was in full effect, working from home was a new experience for many of us, and no one knew when we were going to see our loved ones next.

Adjusting to working from home

When the initial whispers of a lockdown were happening, we began quickly looking at a company-wide work from home arrangement. One of the key challenges we faced was to make sure we could continue to take care of our customers’ pensions while keeping their information secure. And we needed to continue to do our jobs at the level that our customers have come to expect.

Working from home isn’t a new concept at PensionBee. Many of us have been working from home infrequently for many years. But we’d never had our whole team work from home, and no one had done it for such a long period of time.

Working from home isn’t a new concept at PensionBee

It was challenging at first. In the office, it’s so easy to share information and ideas, help each other with specific challenges, or just relax over a coffee break together. Collaborating over Highfive, our video conferencing software, wasn’t new but it took some getting used to as our only option.

Our technical team pulled out all the stops when it came to making life easier for everyone. Within a day or two, the whole team was up and running from their dining tables, home offices and - in a few cases - their coffee tables. We were able to stay in touch with our customers without missing a beat, reassuring everyone involved that this storm will pass, and that we’d be there to look after their pensions so they could focus on what’s important – their health and wellbeing.

Staying safe and reassuring customers

We maintained a ‘business as usual‘ approach while making sure that everyone was safe and adhering to the lockdown rules. We created a Critical Task Unit (CTU), allowing a few select members of the team to remain safely socially distanced while working in the office to process the post and paperwork we often receive from providers. Fortunately, we were able to contact dozens of providers that normally have a paper-based pension transfer system, and convince them to process hundreds of transfers paper-free. This helped cut down on the amount of unnecessary paper used, along with the number of people needed in the office to get through it all.

The rest of our BeeKeepers and Nectar Collectors adapted to working from home well. They made full use of virtual meetings, using secure networks to take care of customers’ accounts, and answering customer emails, calls, and live chats without missing a beat.

From day one, they were managing to answer over 9^{_personal_allowance_rate} of customer calls and were available on email and live chat

We had a huge influx of customer communication at first. Understandably, many customers were concerned about the volatility of the stock markets and how their pensions might be affected. The BeeKeepers took working from home in their stride. From day one, they were managing to answer over 9^{_personal_allowance_rate} of customer calls and were available on email and live chat for any customers that just needed some reassurance that their future retirement was being carefully managed.

Looking to the future

By the time the pandemic started to settle down, the whole PensionBee team had adapted well to our new way of working. Some people have chosen to work from home permanently, moving closer to their families or accelerating planned moves out of the capital. Despite the challenges we faced, PensionBee hit several significant milestones, including reaching £2 billion of AUA in July of this year and listing on the High Growth Segment of the Main Market of the London Stock Exchange back in April. We were even able to celebrate this huge achievement remotely with each other over video calls (thanks to bottles of bubbly we received in the post!).

We’re a family at PensionBee. And after the year that everyone’s had, not seeing your family for a long time has been tough - especially when you’re so used to seeing them every day. We’ve done our utmost to keep the hive buzzing over the last 18 months, and we’ll continue to look after our customer’s pensions, and each other, as the last of the lockdown restrictions lifts and we can finally get back to a bit of normality.

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How open source software can enable digital transformation

Business leaders are increasingly choosing to use open source software in their technology infrastructure. We explore some of the key ways open source software can be a driver of digital transformation.

Adapting and innovating are essential for any company to remain competitive. A business’s digital transformation strategy is a key part of enabling it to be nimble in responding to changes in its industry and building compelling products and services.

Open source software (OSS) now lies at the heart of many companies’ technology infrastructure. Its transition to a pervasive foundation for software development over the last 30 years has been remarkable. The time has long passed when only proprietary software solutions would factor into a business’ thinking about what software should comprise their tech stack. A report by Red Hat, a provider of OSS to large companies, surveying over 1,000 businesses across the world, revealed that ^_rate of companies agree that OSS is important to their infrastructure.

Business leaders are showing confidence that utilising OSS in their business operations isn’t just a viable option but in fact, the preferred way to drive their business forward, with the same report finding that open source will make up more of the software solutions these businesses use in two years’ time than proprietary software.

As OSS becomes increasingly critical to the operations of businesses of all sizes we take a look at a few of the essential ways it can enable and drive forward digital transformation.

Speed of innovation

OSS enables businesses to innovate quickly by giving them a starting point for their software solutions that they can build on. This could be particularly beneficial to start-ups and small businesses who could start with community-developed OSS to see whether a solution is right for them without the long-time lock-ins and potentially prohibitive costs often seen with proprietary solutions.

Businesses can also develop prototypes more rapidly, as OSS often provides generic solutions that a team can easily customise for their needs. With access to the source code, businesses are able to build, test and modify different versions of a software product, to understand whether one provides the benefits and efficiencies they’re looking for and more swiftly iterate a new version if it doesn’t.

Greater control

An inherent property of OSS is that it can be freely modified. Businesses, therefore, can have more precise control over the features and capabilities of their end product. As a business’s needs change they’re free to develop a solution that best serves their end goal rather than relying on proprietary vendors to develop features they’re looking for (if they ever will) first. This puts the power and timing to deploy features and fixes further into the hands of businesses.

Additionally, a business may find an open source solution which provides 8^{_personal_allowance_rate} of the capabilities they require meaning they simply need to modify the remaining ^_basic_rate to suit their particular needs. In this way, businesses will find that many open source solutions have already done much of the heavy lifting in terms of development and helpfully provide a suitable foundation to build on top of.

Agility

Deploying OSS enables businesses to be flexible and react more quickly to changes within their industry. Its customisability enables unique solutions to be developed that could give businesses a competitive edge in the marketplace and allow them to more easily modify the software infrastructure that supports their business model and processes.

Further, businesses don’t need to make long-term commitments to proprietary solutions and can therefore change up their approach and pivot towards new priorities with greater ease when implementing new or adapting existing digital technologies.

Security

The security and stability of a piece of software is, of course, a paramount concern when designing a digital transformation strategy. As OSS is publicly accessible, it’s open to anyone to view the source code, increasing the chances of identifying security and reliability issues and consequently, the speed with which fixes can be deployed. This can help to better ensure the integrity and security of the software solutions that are powering a business’ transformation.

Community development and engagement

The open source community is hugely engaged with the projects it develops. Its community’s a big driver of the tremendous value OSS provides and one which champions transparency and collaboration. Businesses can draw on not only the expertise offered by their own employees, but the expertise of the large open source community. Some businesses make a point of “giving back” to the communities that build the software they use, either by making code contributions or helping with writing documentation, answering questions or related activities.

Can open source alone bring successful digital transformation?

Whilst open source’s already driving the digital transformation goals of businesses effectively, simply making the choice to use OSS alone may not allow businesses to immediately reap the potential benefits it can bring. Red Hat advocates for what it calls an open transformation approach. They suggest that, in addition to open technologies, open processes and open culture are key to ensuring successful digital transformation. Open processes concern identifying and removing barriers and developing better ways of working within the business and an open culture seeks to ensure teams effectively communicate and work together as they navigate changing circumstances.

As development in each of these areas progresses together, they can maximise the impact that implementing new or adapted technologies can have on business goals.

Open source - a digital driver for progress and success

The choice to use open source-based solutions in digital transformation strategies is becoming ever more attractive to businesses. The adoption of open source continues to be a strongly positive one. Business leaders are indicating that the decision to deploy open source as part of their infrastructure isn’t just one of the cost savings but rather because they see that it offers legitimate advantages over proprietary solutions and can enable a faster time to market for products and services.

Open source can allow businesses to scale up, adapt to changing market needs and create innovative, unique solutions, without having to sacrifice the high levels of security and stability necessary to underpin digital operations.

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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The Buzz.

What does the DWP propose?

What’s the justification for setting up another body?

So how much will it cost and who will ultimately pay?

Good governance is about protecting consumers

2019 is only achievable by using what we have

The Open Finance revolution will not wait five years for pensions

Conclusion

A fragile foundation

Where are we now?

Financial support initiatives

Emerging open source models

Beyond financial support

A community of reciprocity

What is Open Banking?

What is Open Finance and what benefits does it bring?

1. Greater financial transparency for consumers and lenders

2. Access to more financial products

3. Empowered to make better financial decisions

What are the challenges for Open Finance?

1. Consumer awareness

2. Regulation

What comes next for Open Finance?

How did the plan perform compared to the market, over the last three months? Did we have a good quarter or a bad quarter?

What can savers expect for the next quarter?

How has BlackRock driven positive social change in the past quarter?

Risks warnings

Match Plan fund specific Risks

Important information

How did the plan perform compared to the market, over the last three months? Did we have a good quarter or a bad quarter?

What can savers expect for the next quarter?

How has BlackRock driven positive social change in the past quarter?

Risks warnings

BlackRock DC LifePath UK Risks

Important information

How did the plan perform compared to the market, over the last three months? Did we have a good quarter or a bad quarter?

What can savers expect for the next quarter?

How has BlackRock driven positive social change in the past quarter?

Risks warnings

BlackRock DC LifePath UK Risks

Important information

Make the most of your PensionBee account with our checklist

Check your transfers

View or switch your plan

Transfer more pensions

Add a pension

Make a contribution

Where will I find the checklist?

Easily search for your old providers

Future product news

Legal & General’s response

1. Statistics should come before company names

2. Companies are not included because they are ‘sufficiently contributing to our future’

3. Is Shell ‘doing enough’?

4. We agree that the company can do more

Your Annual Statement is ready!

Fund performance chart and table

How pension investments work

The fund performance chart

What’s included in the fund performance?

How does the chart work?

The fund performance table

Benefits of performance information

Increased confidence

Performance and your plan’s objective

Where to find the plan performance information

Let us know what you think

Future product news

What is a Shariah-compliant pension?

Ethical vs. Shariah-compliant investments - are they the same?

PensionBee’s Shariah Plan

How the plan ensures halal compliance

Fees and benefits of the Shariah Plan

Learn more about Shariah Investing

Is the Shariah Plan right for you?

The impact of the cost of living crisis on pensions

Four ways you can protect your pension during the cost of living crisis

How does this top up work and would it help you?

How much does it cost?

How do I top-up my National Insurance?

Why is the ^{_high_income_child_benefit} ‘childcare cliff’ so dangerous?

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