[ 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 . trustnet . com
In the back
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[ PLATFORMS & PENSIONS ]
The range of potential outcomes
differs to such an extent between
online pension planners that
John Blowers wonders if they
can be trusted at all
Open plan
R
ecently, I heard something
about financial services
that amazed me more than
everything else I already
knew about this crazy industry.
I was told that when an adviser is
recommending a strategy – and this
also applies to online planners and
tools for direct investors – the primary
consideration is protecting themselves
from the potential wrath of the
regulator, not a positive outcome for
the end consumer.
If I understand this correctly, it
means that there may be a practical
way for advisers to make their clients’
money work harder, or to use more
realistic cash-flow modelling or
growth-rate assumptions. But by
taking such a course of action, it may
come back to haunt them.
TRUSTNET
trustnet.com