[ PENSION APPS ]
for making things unnecessarily
complicated.
“Lots of people feel intimidated
about getting on top of their pensions
and combining them,” she says.
“Languishing”
“The primary experience people have
with their pensions is a big envelope
that arrives maybe once a year – if your
pension provider still has your current
address. It tends to be a bit of an offputting
administrative experience for
the vast majority of people.
“We often find that people’s money
is sitting around and languishing
in funds that have had poor
performance, poor diversification,
high charges, and the money
hasn’t done very well. And in some
instances, we even find that the fees
have completely eroded the pension.”
PensionBee has about 80,000 active
customers and administers more than
“The primary experience
people have with their
pensions is a big envelope
that arrives maybe once
a year – if your pension
provider still has your
current address”
£850m of pension assets through its
platform. After tracking down old
pots, it can put these into off-the-shelf
portfolios from the likes of BlackRock,
Legal & General and State Street
(which offers several passive options
to keep charges down). It also now
offers a drawdown product.
Unlike many pension providers,
there are no entry or exit fees on
funds. Management charges for most
plans vary between 0.95 and 0.5 per
cent per annum. For larger pots, this
falls to as low as 0.28 per cent.
Surprises
Moneybox, launched in 2016, is
another fintech app that can help
digitise the pension process. It offers a
tracing service and passive portfolios
with fees ranging from 0.57 to 0.75 per
cent for pots below £100,000. Charges
fall to between 0.27 and 0.45 per cent
for anything larger.
Moving out of expensive funds can
make a huge difference, particularly
for younger investors, owing to the
impact of compounding charges over
20 or 30 years.
Savova says people are often
pleasantly surprised to find a lost
pot, but it can just as often turn out
to be an unwelcome shock owing
to poor returns and/or high fees. To
plan for your future, however, you
need to begin by finding out where
you stand today.
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