The Buzz.

With any investment you make there will always be fluctuations in its value, and this is no different with a pension. Whenever there are periods of political or economic uncertainty, it can be unsettling to see your pension balance decrease. After all, these are your hard-earned savings that you’re relying on to be able to live comfortably in retirement. Read on to learn why short-term fluctuations occur, and find out why they are in fact quite normal and no cause for alarm.

How the stock market affects your pension

Defined contribution pensions are the most popular type of pension. When you contribute to these, your contributions will be paid into a fund that invests in the stock market. This will usually achieve growth over the long-term, but there are never any guarantees. In the short-to-mid-term its value is likely to swing both up and down.

Stock market trends

Since 2010, the average annual pension fund returns have been around 8.5%. This is often referred to as a bull market, when there’s been extended periods of growth in the markets. However the 2020 decline caused by the coronavirus pandemic has seen the second-biggest stock market crash of all time. These impacts have been felt around the world, in the UK and have been reflected in the FTSE share prices too.

Other stock market slumps, known as bear markets, have often led to considerable returns in the following years. It’s these trends, no matter how dramatic, that are part and parcel of investing. After the global financial crisis in 2008, the S&P 500 (a US stock market index that measures the stocks of 500 large-cap US companies), finished up over ^_basic_rate the following year. This example from the S&P 500 goes to show how much the market can recover.

While no one can predict how long market declines will last, or say with certainty what the future will bring, history shows us that any turmoil is usually a short-term blip, and brighter news isn’t far away. That said, past performance is not indicative of future performance and shouldn’t be the basis of future investment decisions.

There’s no reason to panic

When looking at a pension’s value, it’s important to evaluate what you’ve earned or lost over its lifetime, rather than over a shorter period. If you look at your pension balance during a downturn, for example, and only focus on recent performance, declines will appear more pronounced than if you were to look at them in the context of a longer time period.

It’s possible to turn a decline to your advantage: when markets aren’t doing so well, some investors argue it’s a good opportunity to save more into your pension. Contributing during a downturn will mean you’re buying pension units (your investments) at a cheaper price. So when markets rebound, you could reap the rewards as their value increases.

Diversified portfolios

Most pensions will be diversified across a range of locations and different asset classes. This means your retirement savings could be invested in shares, bonds, cash and other assets, across the globe, depending on the plan you’ve chosen. Choosing a diversified fund means that any declines in your pension will be less pronounced as you still have the opportunity to profit in markets that are doing well over the long-term.

Appetite for risk dependent on age

As a pension is a long-term investment, it’s important to consider your approach to risk and return as you get older. If you’re opting for a plan with higher potential for growth, this will come with a greater level of risk. Higher-risk investments will see sharper increases and decreases in their value. Choosing a lower-risk investment will see smaller fluctuations, but they’re likely to provide a slower rate of growth. So whilst in your 20s, 30s and 40s, you may choose to invest in a higher-risk plan, and then adopt a lower-risk strategy in the run-up to your retirement. It’s important to remember that any investment carries the risk that you may get less back than you started with.

As you approach retirement, your pension may automatically be moved to a lower-risk plan and invested into assets considered to carry lower risk, such as bonds. For example, the PensionBee Tailored Plan, derisks investments as a saver grows older, helping to protect against market tremors.

How to protect your pension

With pensions, intermittent ups and downs don’t usually have a lasting impact as most savers will have plenty of time to ride out these bumps, and benefit from the long-term growth of their investment. But for those closer to retirement, stock market crashes mean your pension has less time to recover from these losses. This is why it’s important to take a balanced approach to protect your savings.

Government bonds

Investing in government bonds is one way you can help protect your pension savings. Government bonds are considered to be one of the lowest-risk types of investment, however this means the opportunity for high returns is also lower. Investing in government bonds means you’re effectively lending money to different companies when they’re looking to raise funds. You’ll receive a regular fixed sum until the bond reaches its maturity date, at which point you’ll get your original investment back.

The PensionBee 4Plus Plan invests in bonds, and aims to achieve an annualised 4% return over a five-year period, making it a suitable option for those nearing retirement.

Investing in property

Investing in property is another alternative as part of a balanced investment strategy. Although some pension funds will invest in property as part of their diversified portfolio, investing directly into property offers a tangible asset that tends to increase in value over time. However, property will require more investment up front, so it won’t be possible for everyone.

Planning ahead and having a balanced investment strategy can help to reduce the impact market declines will have on your retirement savings.

What this means for your PensionBee pension

If you’re a new customer you may not be used to seeing any fluctuations to your pension balance – highs or lows. It’s important to remember that you’ll only see these dips during a downturn because PensionBee gives you full transparency over your investments and your old pensions would have experienced falls too, you just never saw them. At PensionBee, we believe it’s better to be honest about what’s happening with your money all the time and not just once a year on an annual statement.

Whilst there’s no perfect antidote to totally protect your savings from market tremors, it’s essential to keep a level head. Many of the PensionBee plans are diversified across different asset classes and locations, as we believe this is the most-balanced approach. Check out our plans page for a more detailed breakdown of how our customer’s money is invested, or if you’re already a customer, head to the account section of the BeeHive.

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.

In the past few weeks the spread of coronavirus has caused ripple effects around the world, with financial markets experiencing some of their most challenging periods since the 2008 recession. Despite the government being swift to introduce a range of measures to protect people’s livelihoods and safeguard the economy, the impact has been far-reaching. As investors, it’s likely you will have experienced some degree of market volatility first hand, no matter how your pension savings are invested.

In addition to the quarterly performance update you’ll receive from your money manager later this month, I wanted to give you a snapshot of how all of the PensionBee plans performed, when compared to the UK and US stock markets. I’m pleased to report that all seven of our plans performed better than the UK and US stock markets during the first quarter of the year, and provided all investors with a degree of protection against the downturn.

It is also important to compare the quarter’s performance to the long-term returns of the market, where most pensions are invested. Indeed, pension savers who have been investing for the last 30 years, as many pension savers ultimately will be, enjoyed cumulative returns of over 30^{_personal_allowance_rate} for the period (comparison of the UK stock market from 1989-2019). Long-term savers create healthy retirement nest eggs and that is what pensions are all about.

Nevertheless, our customers will want to monitor and understand the performance of their pensions throughout time. Read on to learn how our plans performed for savers under 50, who are a long way off retirement, and for those aged over 50, who may be considering drawing down in the near-term. PensionBee has been proud to offer sound financial products in partnership with the world’s largest money managers, BlackRock, State Street Global Advisors and Legal & General.

Remember that past performance is not a guide to future performance and this blog has solely been prepared for informational purposes and not with the intent to influence future investment decisions. As with all investments capital is at risk.

Savers under 50

Sources: Bloomberg and money managers directly. ^Price taken on the last day of the quarter. Past performance is not an indicator of future performance. Capital at risk. These tables do not take account of any fees that may be levied for a particular investment. Full factsheets are available here: www.pensionbee.com/uk/plans. ^^Equity content refers to the amount of exposure each plan has to global stock markets and other listed risk-on assets, such as property.

All of our plans designed for customers under 50 years old outperformed global markets during the quarter as a result of their emphasis on diversification. Most plans are invested in a range of assets such as shares, cash, property and bonds, usually across several different regions. This means that when one type of investment or market dipped, others rose. In addition, a more responsible or ethical investment stance, such as that evident in the Future World and Shariah Plans resulted in better performance.

The majority of our customers are invested in the Tailored Plan, which invests your money differently as you get older, moving it to safer assets as you near retirement. While the plan experienced varying volatility over the quarter, depending on your age and the corresponding weighting of investment in company shares, most customers will see a gross return of around -10 to -^{_corporation_tax_small_profits}. The combination of investments in the plan, including fixed income assets such as government bonds, helped to limit the impact of the turbulence seen in global markets.

While it’s been difficult for savers under 50 to see their pension balances falling over the past few weeks, it’s important to remember that short-term fluctuations, including severe ones, are entirely to be expected and in fact contribute to the ability to generate healthy longer-term returns. Indeed, younger savers are unlikely to be negatively impacted by this downturn when they come to retire as the greater the decline in your plan’s value, the more likely you are to benefit from the future recovery of the stock market.

Savers over 50

Sources: Bloomberg and money managers directly. ^Price taken on last day of quarter. Past performance is not an indicator of future performance. Capital at risk. These tables do not take account of any fees that may be levied for a particular investment. Full factsheets are available here: www.pensionbee.com/uk/plans. ^^Equity content refers to the amount of exposure each plan has to global stock markets.

Early last year we introduced two new pension plans specially designed for those nearing retirement, offering our over 50 customers more options to safeguard their savings ahead of drawdown. The 4Plus Plan targets an annualised return of 4% over a 5-year period, which is consistent with commonly recommended annual drawdown rates of around 4%.

When compared to global markets, the 4Plus Plan had one of the strongest performances of the quarter, delivering a gross return of -9% over the period. The plan is actively managed by State Street Global Advisors who began reducing its investment in more exposed assets, such as company shares, when markets began to fall in February. This quick action helped to safeguard savers from the full impact of volatility, and State Street Global Advisors will continue to keep a close eye on markets and react accordingly in the coming months.

Savers in the Preserve Plan were the most insulated from market volatility, as the principal aim of the plan is to reduce risk, and shelter savings from the impact of short-term market fluctuations for customers intending to make substantial withdrawals in the near future. By making short-term investments into creditworthy companies and safer assets such as fixed income, the Preserve Plan remained stable over Q1, resulting in neither gains nor losses for investors.

Those customers over 50 who are in our default plan, Tailored, also saw a reduced level of losses, when compared to global markets. That’s because the plan automatically derisks investments as an investor ages, moving their savings to safer assets and taking a more conservative approach to investing as they near retirement. For those expecting to retire within the next few years, the Tailored Plan (Vintage 2019 - 2021) has a relatively modest level of investment in company shares and therefore limited stock market exposure, resulting in losses of just -7%.

For our customers who are already in retirement and are perhaps thinking about withdrawing all of their pension as a result of the downturn, I hope that you will take comfort in the range of plans we have on offer, and balance your short-term desire to safeguard your savings with risks of not keeping your savings invested in the longer-term. With that in mind, you may want to consider only drawing down what you need and keeping a close eye on the markets.

Over the coming months we intend to keep you regularly updated on what’s happening with your savings and if you have questions about your plan’s performance, or anything else, you’re welcome to get in touch with your BeeKeeper.

An important note of caution: It’s always impossible to forecast what will happen from quarter to quarter, and past performance should never be used to predict future performance. However, it is reasonable to prepare ourselves for further falls as coronavirus has continued to have an impact on the global economy in the first weeks of April. When markets fall, it’s tempting to consider withdrawing your money to protect it or moving it to lower risk investments, however, there’s a risk that investments could be sold at a loss and you may miss out on any increases in value in the future when markets recover.

On the contrary, when markets are not doing well, there are more opportunities for investors. If you make regular contributions to your pension, you may wish to consider continuing to make those contributions as you’ll be able to invest at lower prices than before the market downturn.

At the end of last year PensionBee set out to do something radical: to bring together brilliant minds from the UK’s most ambitious digital pension platforms in order to tackle the online problem of pension scams. We organised the first ever Pension Scams Hackathon, which challenged PensionBee, AgeWage, Smart Pension and Nutmeg to combine our skills and develop an online concept that raises awareness of pension scams in both an engaging and educational way.

Not only was the Hackathon a huge success, but over the past four months representatives from the four “pentechs” have continued to work together alongside our technology partner, JMAN Group, to turn the winning concept, Scam Man & Robbin’, into a reality…

Scam Man & Robbin’ is a five-minute online game that educates consumers about pension scams by casting the player in the role of ‘Scam Man’, a vigilante whose main objective is to protect people’s pensions from scams! Scam Man must correctly identify six of the most common pension scams by shining his torch on them to destroy them, as well as collecting six corresponding bonuses that can help protect savers’ pensions. The game challenges some common misconceptions which may initially seem positive about a pension scheme, such as guaranteed high returns or an offer of free advice, but may in fact be the hallmarks of a scam.

Inspired by one of the world’s most-loved superheroes, Scam Man & Robbin’, is designed for consumers of all ages and gamers and non-gamers alike, balancing educational scams content with a narrative that’s entertaining from start to finish.

Why scam awareness is more important now than ever

Since we set out to create Scam Man & Robbin’, scams have been on the increase. In March, Action Fraud, the UK’s national reporting centre for fraud and cybercrime, announced that coronavirus-related fraud reports had increased by 40^{_personal_allowance_rate}. And earlier this month the National Cyber Security Centre revealed it had already taken down 2,000 online scams, including 200 phishing sites seeking personal information such as passwords or credit card details, and over 800 advance-fee frauds, where a large sum of money is promised in return for a set-up payment.

The number of pension scams has also soared since the beginning of the coronavirus pandemic, as opportunistic scammers attempt to exploit savers experiencing serious financial strain and looking to access their savings. Research from the All-Party Parliamentary Group on Pension Scams shows that with more people staying at home, in line with social distancing and lockdown restrictions, it’s much more likely that pension savers will be contacted by scammers via phone or online.

To help highlight the new risks that face pension savers, a coronavirus-specific scam has been included within Scam Man & Robbin’, warning consumers against moving a pension to a fund that guarantees coronavirus protection and high returns during periods of economic uncertainty. Other scams featured in the game include cold calls, early pension release and pressure to make an immediate decision.

The game serves to highlight scam warning signs and raise awareness that anyone can fall victim to a pension scam, regardless of age or level of savings. Scammers are increasingly sophisticated criminals and prey on savers who are simply seeking to make the most of their money in a confusing pensions world. In 2019 The Financial Conduct Authority and The Pensions Regulator released research showing that ^{_scot_higher_rate} of pension savers, (the equivalent of over 5 million Brits), could be at risk of falling for a scam. It estimated the average loss to be £82,000 per victim, which equates to around 22 years of pension savings. Pension scams are believed to have cost British savers £4 billion in 2018 alone.

Collaboration will be key to tackling pension scams

Scam Man & Robbin’ is proof that when the pensions industry joins forces and collaborates for the good of consumers, great things can happen. We’re proud to have successfully united some of the biggest innovators in pensions and are confident progress can be made if the sector can continue to come together to find innovative ways to raise awareness of the types of scams in operation today. The pensions industry is taking a stand, and playing the scammers at their own game!

As always, we’d love to hear your feedback, so leave your comments below or get in touch with the team on X!

Due to the Covid-19 pandemic across the globe, in the past few weeks over 95% of our team have had to start, and adapt, to working from home. We do, however, have a critical team operating in the office as some things still have to be done manually like processing post and scanning policy documents. But we’re slowly adjusting to this new way of working, thanks to our wonderful Talent team.

We do, however, have a critical team operating in the office

They surveyed our 100-strong staff to find out how we can work better from home and stay connected, looking at which aspects should be improved and the consensus of how we’re coping throughout this challenging time. This has resulted in us becoming much closer, as colleagues have been driving across London delivering screen monitors and Wi-Fi boosters, while others have been sharing tips of how to cope with working from home (from going for regular exercise and stretching to making sure we get fresh air!). That really is the value of Love!

At PensionBee we have three Mental Health First Aiders whose job is to help, look after and care for the wellbeing of our team. They’re trained in helping deal with mental health situations and this has been emphasised and communicated to everyone during the pandemic. The aiders are well known throughout PensionBee, are approachable and always happy to help. Team leaders and senior management have also been arranging regular feedback sessions with their teams, our infamous Happiness! meetings, and one-to one catch-ups to make sure everyone’s healthy, well equipped and happy with their new home offices. These regular check-ins are also crucial to ensure we remain focussed on our goal of delivering a leading pension product.

We’re doing everything we can to make sure we’re still giving our customers the best service

From home we’re still able to do the vast majority of our office work which ranges from replying to emails and answering calls from providers and customers and, ultimately, doing all we can to consolidate our customers’ pensions as quickly and simply as possible. We strive to answer customer emails the same day and are maintaining a phone call answer rate of above 90%. The team is, however, looking forward to getting back into the office and for things in the world around us to go back to normal. For the time being we’re doing everything we can to make sure we’re still giving our customers the best service, even while performing “business as usual” from our homes!

Life is a complex journey, packed with events that can have a significant impact on your finances. If you’re a woman, these events are very likely to impact your pension balance. If you choose to follow the marriage and children route it’s normally the woman who takes maternity leave and who often returns to work part-time, or sometimes chooses not to return. The husband is the one who continues to work full-time, continuing with his pension contributions.

And then you have divorce, according to fascinating government data analysis, ^{_scot_higher_rate} of marriages now end up in divorce. The mean age of divorce for a man is 46 and 44 for a woman. (Nice to see that I am bang on for the average statistic, divorced at 43). These stats are shockingly high, making it even more important for men and women to protect themselves financially.

The stark difference in pension pot sizes

Data analysis from PensionBee highlights the differences in pension pots by age and by sex. And clearly shows the impact of life events on pension pot sizes. On average, men have saved £23,423 towards their retirement compared to just £15,0^{_state_pension_age} saved by women, accounting for a 36% gap in the size of their respective pension pots.

A gender pension gap is evident across all age groups, and only widens with age

A gender pension gap is evident across all age groups, and only widens with age. The data shows that there’s a staggering 51% gap amongst savers in their fifties and over (£56,710 compared to £27,594), more than double the gap of savers under thirty (23%: £4,129 compared to £3,192) and those in their thirties (22%: £14,305 compared to £11,170). It’s interesting to note that the gap is at its smallest before women typically start having children.

Why are there gaps between the sexes?

Women take time off for maternity leave and pension contributions are often stopped (I certainly stopped mine as I couldn’t afford to live once statutory maternity pay kicked in). After babies, women might choose to return to work part-time or take a career break. Pension contributions will drop or even stop compared to their full-time male equivalents.

Many women, particularly in current times are leaving the corporate world to set up their own businesses for increased freedom around childcare responsibilities. This again will cause a drop in pension contributions until the business is established and producing regular income.

Then later in life women often take on the caring role for elderly relatives, with many having to drop their hours again at a time when maybe their children have grown older. The caring responsibility switches from children to their parents!

And for so many of us divorce happens. Divorce is very complex when it comes to financial matters. And the area of pensions in divorce is still a very grey area. Absolutely it should be taken into consideration, but often it’s not. Women should ensure that money when you’re together is held in joint names or shared between both partners. Protect yourself from the possibility of the worst happening.

Divorce is very complex when it comes to financial matters.

I’m a real-life example of pensions in divorce. The financial settlement was based on the property equity only. I kept my pension, my ex-husband kept his, despite mine being five times higher. It was still deemed too small to take into consideration based on its future annual value.

This whole pattern of life is hugely generalised, and I recognise that life often follows a different route, but you can’t argue with the statistics based on real-life customer pension pots at PensionBee. Women have smaller pension pots than men. This isn’t right or fair.

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I have a clear solution that could protect women’s pots

Maternity leave

I would always recommend that women keep their pension contributions going whilst on maternity leave, but in reality, this is difficult, particularly when the maternity cover at full pay doesn’t last for long. Statutory maternity pay is low.

Whilst women are on maternity leave, the full-time working partner should make some pension contributions for their partner who may have had to stop or reduce their pension contributions. Rather than giving a birth present of a thing, gift a pension contribution instead. Rather than an expensive birthday or Christmas present, gift a pension contribution.

Part-time work

If one partner chooses to reduce their hours to part-time to spend time with the children, then the other partner should step up and cover the loss in pension contributions. Or maybe if there’s an annual bonus, some of this can be transferred into the part-time person’s pot. Women in this position, ask your partner and get that money transferred into your own personal pot!

Self-employment

Pensions are tricky for self-employed folk, particularly when building a business if profits and turnover is lower. I managed to start sporadic transfers into my pension pot after I had been trading for three years. In normal non-covid circumstances I transfer money into my pension pot via my company to save on corporation tax, depending on monthly turnover. I.e. a good month for turnover would mean a decent pension contribution. Not at the moment though, all my money just goes into my emergency funds pot to protect myself for the uncertainty of this year.

But remember if your partner runs a business where you might be set up on the payroll, they can absolutely make pension contributions for you. And bonus, this will save them some tax!

I’m incredibly passionate about women having financial freedom and to protect their financial futures. We never know what may lie in the future so this solution of transferring pension monies over to partners who’ve stepped out of work for a time is fair. And if divorce does occur, there might be less discussions over pensions as you’ll have already ensured that both parties have pension pots in their own names.

I’d love to know your thoughts. Have you done this before, either given or been given pension contributions? Do you even know your pension size compared to your partners? Maybe it’s time to take a look and address the balance.

Lynn Beattie is a PensionBee customer and CEO/Founder of Mrs Mummypenny, a personal finance website. She is also an ACMA management Accountant, previously working in commercial finance for Tesco, EE & HSBC. Lynn is a single mum to three boys, living in Hertfordshire, and is the author of ‘The Money Guide to Transform Your Life‘ published in September 2020.

What is a ‘BeeKeeper’? What do they do? Are they human? Do they actually look after bees? These are just a few of the questions we regularly receive at PensionBee! A BeeKeeper is a customer’s personal support, who’ll be on hand to help them with any questions throughout their pension journey. BeeKeepers can be easily reached via live chat, email and phone. And yes, we are indeed humans! Here’s what an average day looks like for a BeeKeeper at PensionBee.

A-Team Stand-Up

At 9:05am every morning (we allow an extra five minutes as commuters are sometimes delayed), the entire A-Team meets for our morning meeting. The A-Team is formed of the customer-facing team which consists of the BeeKeepers, Nectar Collectors and their Team Leaders. In this meeting we discuss any problems or challenges any of us have and share what we’ll be working on through the day and week.

A Nectar Collector will liaise directly with external agencies and pensions providers, handling the paperwork and administrative decisions involved in a successful pension transfer. They work extremely closely with BeeKeepers, who in turn keep the customer updated on any matters concerning their pension.

Team Leaders manage the BeeKeepers and Nectar Collectors, closely supporting them with their daily tasks and queries. They work closely with the VP Operations and help to develop structures and processes which will improve the A-Team’s overall efficiency.

General Stand-Up

At 9:15am we have our company wide Stand-Up which is made up of the A-Team, and our colleagues across the business, from Marketing and Product to Finance and Operations. Similarly to our A-Team stand up, each team briefly discusses the projects they’re working on, and what they’re planning to action in the day ahead. After each department has spoken, we do “shoutouts” where anyone can announce news such as promotions and new hires, any awards we’ve picked up the night before and whether there’s any birthdays in the company. (Yes, all 100+ people regularly sing Happy Birthday!)

Each team briefly discusses the projects they’re working on, and what they’re planning to action in the day ahead.

Live chats

Live chats take up a good proportion of a BeeKeeper’s day and are always different! Answering them in a prompt manner is essential at PensionBee as we aim to give our customers the best experience, and we understand your time is very important to you! We try to make our team of BeeKeeper’s as knowledgeable as possible to help our customers get the information they need, fast. We have a “Fingers-on-Buzzers” Slack channel to help us with any difficult questions we may come across. Our CEO, Romi, is in the channel and is always happy to answer any questions there may be, along with other colleagues who know pensions inside out.

Emails and calls

As each customer receives their very own BeeKeeper upon sign up, on an individual level we need to make sure we’re available as quickly and easily as possible. The main way customers contact their BeeKeeper is by email or over the phone. We strive to answer all inbound calls, and aim to hit our 100% call answer rate every day. With emails, we try our best to respond within 24 hours of receiving them. Calls and emails from customers can range from questions regarding plans and transfer updates to what we offer and so much more!

Happiness! meetings

A Happiness! meetings are between a BeeKeeper and their Team Leader. Happiness! meetings occur every four weeks and offer an opportunity for a catch-up where the manager can see how the BeeKeeper is doing. Each meeting is centred on the BeeKeeper’s happiness and can cover any challenges they’re facing in or out of the workplace, ambitions for the future and sometimes just a chit chat! We tend to hold these meetings outside of the office to feel more relaxed; local coffee shops are usually a popular location!

Donut

At PensionBee we have another Slack channel called “Donut”. Everyone in the channel gets to meet up with someone random within the company, and you get to go out for a donut! This is an excellent chance to get to know other members of the company and find out what they do! Donuts are especially fun if you want to understand different departments within PensionBee and how they work, including the A-Team!

Everyone in the channel gets to meet up with someone random within the company, and you get to go out for a donut!

Bee-Storm

A “Bee-Storm” happens every other Thursday and it’s where the BeeKeepers, Nectar Collectors and Team Leaders will meet to discuss any ideas they believe would improve the processes at PensionBee. This is important as we’re the ones who are constantly engaging with our customer and really want to make their experience as good as possible. This can involve adding automation somewhere to save time, suggestions for our app and any niggles which can be easily fixed by our brilliant team of developers. All the ideas get discussed and are prioritised, then a couple of days or weeks later you’ll see the fixes live!

Lunch & Learn

Lunch & Learn is exactly what it sounds like! It’s a session held once a month and consists of a member from the Senior Management Team talking about a particular topic within their job role. Previous Lunch & Learn discussions have been on mental health, diversity, the systems we use, communication and our value of quality! We have a Lunch & Learn coming up soon with our chairman Mark Wood, which will be very popular no doubt! Having company-wide transparency is essential to our value of honesty and is a brilliant way to engage everyone!

Last week we released our annual Pension Landscape survey which examined the pension pots of over 13,500 consumers. It found that savers across all age groups are undersaving, and may not be able to achieve the comfortable retirement they’re hoping for if they don’t find a way to save more.

Our findings coincide with a new campaign from the Department for Work and Pensions (DWP), which highlights the importance of building on the State Pension in order to end up with the income you want in retirement. They pose the question, “will the retirement you get be the retirement you want?”, and encourage us to get to know our pensions better.

For example, do you want a retirement income that affords you the bare minimum when it comes to creature comforts? Or do you want to enjoy the little extras, such as a holiday abroad, or two, a year and a comfortable lifestyle? The reality is we’d all like the latter, but the majority of us aren’t quite saving enough to achieve it.

Here are five ways to ensure you’re on track for a comfortable retirement.

1. Check your State Pension entitlement

While it’s front of mind, check your State Pension entitlement. By entering just a few details online you can find out how much State Pension you could get, when you can start claiming it, and what steps you can take to increase it if needed.

Remember to qualify for the full State Pension amount of £8,7^{_pension_age_from_2028}.20 a year in 2019/20, you’ll need at least 35 years of National Insurance Contributions or relevant credits. For most, £8,7^{_pension_age_from_2028}.20 won’t be enough to live comfortably in retirement which is why it’s so important to view this as the foundation of your pension which can be built upon with other savings.

2. Plan for retirement with a pension calculator

A pension calculator can help you calculate how much your pension could be worth in retirement, based on how much you’re currently saving and when you’d like to retire. Most calculators will give you the option of adding the State Pension into the equation so you can see a realistic estimate of what your income is likely to be. That way you’ll know quite quickly if you’re on track for a comfortable retirement or if you could face a shortfall.

3. Pay more into your workplace pension

Once you’ve calculated how much you can expect to receive in retirement it’s likely you’ll want to grow your pot. If you’re aged 22 or over, work in the UK and earn more than ^{_money_purchase_annual_allowance} you’ll probably be enrolled in your workplace pension scheme through Auto-Enrolment. This scheme compels your employer to save 3% of your qualifying earnings into your pension, while you save 5% (4% in reality, plus 1% in a HMRC tax top up).

While Auto-Enrolment is a good start, it only accounts for 8% of your earnings, when a common rule of thumb is to save ^_ni_rate of your annual salary. Therefore, most will need to make additional contributions to their pensions if they’re to reach their target income in retirement.

If you have the option to pay more than the current 5% into your workplace pension, it might be worth exploring – particularly if your employer will match your contributions.

4. Consider starting a personal pension

If it’s not possible to pay more into your workplace pension, you may wish to open a personal pension instead. Unlike the pension you have through work, a personal pension will be yours to keep, which gives you a lot more choice and control over where your money’s invested.

It also means that when you change jobs you can move your old workplace pension to your personal pension so you don’t lose track and will only ever have one or two pensions to manage.

When analysing the data for the Pension Landscape we discovered that savers of all ages could make a significant difference to their expected pension pots in retirement simply by making an additional contribution of just £100 per month, on top of their 5% workplace contributions.

5. Supplement your retirement income

Nowadays retirement doesn’t have to be a hard stop and and many choose not to give up work completely. Reducing your working hours or going part-time can be a great way to supplement your pension income and maintain an active lifestyle well into retirement.

There are lots of other ways to earn a small income in retirement, such as renting out a room in your home, tutoring or even cat sitting and dog walking. Whatever you choose to do, a few hours’ work a week can add up over a year and could help you afford the little extras that make your retirement much more comfortable.

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.

Women born in the 1950s who are campaigning about increases in their State Pension age suffered a setback last week, when they lost a High Court case against the government.

The Government must be breathing a sigh of relief, as compensation for the 3.8 million women affected would have run into billions of pounds.

The case against the government

Two claimants, Julie Delve and Karen Glynn, took the Department for Work and Pensions to court, seeking judicial review of the decision to hike up their pension age as it “unlawfully discriminated against them on the ground of age, sex, and age and sex combined”.

State Pension age for women was hiked up further and faster than expected between 2010 and 2020, up from 60 to ^{_state_pension_age} and beyond. The State Pension age for both men and women is now ^{_state_pension_age}, but is set to rise to ^{_pension_age_from_2028} by 2028, and potentially to 68 by 2039.

The court case, supported by campaign group Backto60, also argued that the women affected were given inadequate notice. Some women have experienced severe financial hardship, when they received less than a year’s personal notice about significant delays to their State Pension and did not have time to make alternative plans.

Women affected were given inadequate notice

Meanwhile, lawyers for the Department of Work and Pensions argued that the changes equalising State Pension age for men and women were necessary due to increasing life expectancy and that the cost of reversing the changes would be hideously expensive. The Government denied there was any duty to notify the women individually about changes to their State Pension age.

The judgement in the Backto60 case

Lord Justice Irwin and Mrs Justice Whipple dismissed the claim on all grounds. Far from finding that the 1950s women had suffered discrimination based on age or sex, the court found that moves to equalise State Pension age actually corrected direct discrimination against men. The judges also insisted that they were not in a position to conclude steps taken to inform the women were reasonable.

The judgement finished by saying that while the court was “saddened by the stories contained in the claimants’ evidence”, the court’s role was limited: “There was no basis for concluding that the policy choices reflected in the legislation were not open to government. In any event they were approved by Parliament. “The wider issues raised by the Claimants about whether the choices were right or wrong or good or bad were not for the Court. They were for members of the public and their elected representatives.”

Read the full judgement here: https://www.judiciary.uk/judgments/r-on-the-application-of-julie-delve-and-karen-glynn-v-the-secretary-of-state-for-work-and-pensions/

Disappointment for 1950s women

The decision is disappointing for a generation of women who were already massively disadvantaged by the pension system and gender pay gaps. The pension system was based on the underlying principle that women would get married and could therefore rely on their husband’s earning power and pensions. This has been particularly damaging for the single, separated and divorced.

After the ruling, Dave Prentis, the Unison general secretary, said: “This is a terrible blow for the millions of women who will have been hoping for a very different outcome today.

This is a terrible blow for millions of women

“The decision to hike the State Pension age with next to no notice didn’t just throw their retirement plans up in the air, it also left many women on lower incomes really struggling to make ends meet.

“Now, almost a quarter of a century later, justice and the State Pension that was so cruelly snatched away from them remain disappointingly out of reach.

“It seems perverse that the Department for Work and Pensions had no obligation to inform these women of this significant change.

“But despite today’s decision women born in the 1950s will not give up their campaign to get back what they are rightly owed.”

What next after the Backto60 court case?

The Backto60 and Women Against State Pension Inequality (WASPI) groups have both vowed to continue campaigning. WASPI complaints of maladministration to the Department for Work and Pensions and the Parliamentary and Health Service Ombudsman were put on hold during the judicial review process, but can now be reviewed.

Looking ahead, women born in the 1950s are not the only people who may experience hardship in retirement. Pension experts warned that millions of people in their 40s and 50s are still heading towards a nasty shock, when they find out what retirement has in store. Younger savers may face further increases in State Pension age, if we do continue living longer. The combination of longer life expectancy, static wages and low interest rates mean we all need to save longer and harder before being able to leave work.

Automatic enrolment will go some way to bridging the gap, but at current contribution levels will not provide adequate income in retirement. Individuals will need to plan many years ahead to take care of their own pension provision.

Find out more about the issues and how to get involved.

Faith Archer is a Personal Finance Journalist and Money Blogger at Much More With Less.

Saving for retirement can seem daunting. No one has a crystal ball for the future, and everyone’s idea of “enough” is different. But what if with a small change, you could double your pension pot?

We are living longer; in September the Office for National Statistics revealed boy babies born today will live to age 79.3 on average and girls to 82.9, an increase of 3.7 and 4.2 weeks respectively.

This is great news! But if they stop work at 65 that’s at least 15 years and maybe closer to two decades they need to pay for with their pension.

How much you will need for retirement will depend on the lifestyle you want to lead – fast cars and cruises on the Med, or a caravan for holidays in the Lake District. Both are fine, but come with different price tags.

You should aim for an income in retirement of two-thirds what you had while working, according to the Department for Work and Pensions (DWP). However data by online pension provider PensionBee found all savers are undersaving.

PensionBee analysed the habits of over 13,500 consumers, looking at how much people were putting away, but also the difference saving just a bit more could have on their final pot. And it was dramatic.

It found on average savers in their forties are the most prepared for retirement, and are on their way to building a pension pot expected to be worth £87,203 by the age of 65, an amount significantly higher than savers of all other ages. But spread over roughly 20 years in retirement that would give them just £4,360 a year to live on in cash terms.

The good news is that between a quarter and a third of PensionBee savers by age group are already making extra contributions into their retirement pots. But what if this desire to save more could be pushed just a little bit further?

PensionBee calculated the difference paying in an extra £100 a month could make to the average UK saver’s pension in the long-term. It discovered that average savers across all age groups would be considerably better off, with those in their forties building an expected pot at retirement of £118,640 – over £30,000 more.

Those aged under thirty, who benefit from having the longest time to save before retirement, would make the greatest improvement – it would almost double their expected pots to £124,287.

By contributing just an extra £100 per month, those in their thirties could add around £44,000 to their pots, totalling £124,853, while those aged fifty and over could add around £15,000, bringing their expected pots up to £94,256.

Almost everyone who is in work is already saving into a pension set up by their employer, who must pay in at least 3% of your salary and you add 5%. But studies have shown this minimum is not enough – many experts say at least ^_ni_rate in total is needed.

Adding just £3.20 a day, every month, into your pension, can open up a whole new set of possibilities for fun in retirement and make the most of the amazing gift of living longer.

Laura Miller is a freelance financial journalist.

We believe pension providers have a key role to play in the transition from the carbon economy to one based on 10^{_personal_allowance_rate} renewable energy sources. The investment system offers a few different approaches on how we get there, so we’d like to explain more about our take on things.

Engagement with consequences

The UK Government has made a legally binding commitment to achieving net zero greenhouse gas emissions by 2050. At PensionBee we believe it’s only going to be possible to meet those targets if we directly pressure oil companies to stop polluting. The willingness of these huge fossil fuel companies to adapt is critical in whether we, as a society, succeed in the shift to a zero-carbon future quickly enough to meet the needs of the planet.

Whilst there are many arguments for the disinvestment (divestment) approach, or selling all the shares held in oil companies and other big polluters, we believe more impact can be made through meaningful engagement with these carbon giants.

We believe more impact can be made through meaningful engagement

We can do this by using our power as shareholders to vote on climate change motions at their annual general meetings and vote out directors who are not taking real action on carbon emissions. We think it’s essential to use our power to vote against unsustainable corporate practices and the incentives that drive bad behaviours across the industry.

If, instead, we just sell the shares or exclude fossil fuel companies completely, then other investors who only care about profit and not the environment, are going to buy those shares and allow polluting at the current, dangerous, rates. That’s why it’s so important that we take a stake.

So, why did we pick the Future World Plan?

When we were looking to introduce a responsible plan back in 2017, we reviewed all of the options available and picked one with a strong and measurable commitment of supporting climate-related shareholder motions and challenging the management teams of fossil fuel companies who are not transitioning quickly enough. Like Legal & General, the money manager of the Future World Fund, we believe being responsible for the environment means engaging with these companies first, before resorting to disinvestment.

We also engaged with some of the key independent thought leaders in this area, who support the Future World Plan as a best in class responsible offering, including Share Action and Good With Money.

But why does the plan invest in fossil fuel companies, such as Shell?

We’ve had lots of questions from our customers about why our responsible plan, the Legal & General Future World Fund, invests in oil companies, like Shell.

We believe that the major polluters of the world must change if we’re to meet the ambitious global carbon emissions targets and our voice can help drive that change, through shareholder motions and public pressure. As a result of this strategy, Shell have linked executive pay to industry-leading carbon emissions targets.

However, not all companies will change for the better and when they refuse to engage, they should be divested from the Future World Plan. Indeed, the Plan recently divested from ExxonMobil and Legal & General, the money manager, is planning to vote against the reappointment of its CEO for not being transparent on emissions reporting.

We want to see more of this type of engagement from all money managers, as they have the collective power to make the huge changes our planet urgently needs.

What’s next?

We’re currently working on a campaign to engage the companies we are invested in on the issues that matter. We also don’t believe it’s enough to just focus on the Future World Plan and therefore we are preparing to put an increasing amount of pressure on all of the managers of our customers’ money, to demand that they play their part.

That’s why we want to hear more from our customers on the climate change debate, and how we can use the collective power of our pensions to transition to a zero-carbon economy more quickly.

Please reach out to engagement@pensionbee.com as we’d love to hear from you!

As the Brexit deadline of 31st October 2019 looms, you may be wondering how Brexit could impact your pension savings. While the final outcome is still unclear, there are some frequently asked questions that we can answer right now. Read on to find out our view on Brexit and pensions.

1. What does Brexit mean for PensionBee?

PensionBee is a UK-based company and as such we’re not directly impacted by Brexit. We do however recognise that you could see some effects on your pension balance, depending on what happens in the coming weeks.

Regardless of a ‘deal’ or ‘no deal’ scenario, it’s safe to say that we would expect to see some volatility in the markets in the short-term.

2. Will my pension balance go down?

While you might see some fluctuations in your balance in the coming weeks, this could be positive or it could be negative. It’s impossible to predict exactly how markets will react.

Our customers can take comfort in knowing that most of our plans are diversified. This means they’re usually invested in a mixture of assets such as shares, property, bonds and cash – spread across global markets, from North America to Asia. This diversification is designed to protect against the risk of any single type of asset or location.

In practice this could mean that while some assets may decrease in value in Europe, values of other assets located in Japan, Asia and North America could increase.

It’s important to also remember that pensions are a long-term investment and although it can be uncomfortable, short-term fluctuations are normal and to be expected from time to time. They are unlikely to cause any lasting damage, especially if you have no plans to retire in the next few years. As long-term savers we have to take the rough with the smooth, and be patient during the dips and periods of economic uncertainty.

3. Will my pension be managed differently after Brexit?

As your pension provider, we don’t actively manage your investments. Your pension is managed by some of the biggest money managers in the world such as BlackRock, Legal & General, State Street Global Advisors and HSBC.

Although planning for Brexit is a challenge, all large financial institutions will have been considering the potential effects of Brexit for some time. In the short-term it is unlikely your money manager will change the strategic asset allocation of your plan, and will instead approach Brexit as they would any other period of uncertainty, such as the ongoing US-China trade dispute.

4. Will Brexit affect how I access my money from 55?

Our drawdown option becomes available as soon as you reach your 55th birthday. We don’t anticipate Brexit having any impact on how you access your pension, whether you’re living here in the UK, Europe or further afield.

5. Can I switch pension plans?

It’s impossible to know which plan or type of investment may perform better following the different Brexit outcomes. If you’re concerned about the effect of Brexit on your pension, now could be a good time to review your plan choice. We have seven plans in total, with three offering defensive strategies – Preserve, 4Plus and Tailored.

Remember, it’s free to switch plans anytime and there is no limit to the number of times you can change.

If you have any questions or concerns about your pension, get in touch with the team by emailing: feedback@pensionbee.com

PensionBee was founded on the realisation that it is possible to achieve so much good in finance by using technology. Technology can solve some of the most pressing problems in the pensions industry, from measuring value for money, to investing democratically, to enrolling people into workplace pensions, to consolidating their pensions. As I look around the pensions technology industry today, I am delighted to see like-minded companies such as PensionBee, AgeWage, Nutmeg and Smart Pension working hard to make pensions better for people. But one concern that continues to worry me is whether we’re doing enough to confront scammers.

Scams within the pension industry

When Michelle Cracknell CBE, formerly Chief Executive of The Pensions Advisory Service, told me about a “Scams and Ladders” board game developed by Professor Keith Brown of the University of Bournemouth and trialled at Glastonbury in 2017, I was intrigued. Scams are a scourge on the pensions industry, causing untold sorrow to consumers and reputational damage to all providers. Recent analysis from The Financial Conduct Authority and The Pensions Regulator found that over five million people across the UK (^{_scot_higher_rate}), could be at risk of getting scammed and the average loss is £82,000 per victim. Most of these people are normal consumers, simply seeking to make the most of their money in a confusing pensions world. They are therefore susceptible to tactics that - to an industry insider - generally sound too good to be true.

Scammers are known to be helpful, accessible and relatable

At the same time, most preventative action in the industry, while generally well-intentioned, has focused on extensive paper communications, images of desolate pensioners and generally the types of things that most consumers would discard in the category of “that doesn’t apply to me” and “it all seems confusing”. Meanwhile, scammers are known to be helpful, accessible and relatable. It is no wonder that confirmation bias leads people to make financial decisions that can cost them dearly. Timing is also key. Warning people about scams at the point of transfer is often too late. It is important to raise the level of awareness of pension scams before a consumer is even approached.

An innovative way to increase awareness

One way to raise awareness of pension scams is to devise a simple, interactive, shareable online game that can alert consumers to suspicious tactics before they are happening. If we can use technology to solve some of the biggest pension challenges we face as a society, we should also be able to come together as a sector to try and solve a problem that impacts us all: pension scams.

It is with great hope and anticipation that we announce a Pension Scams Hackathon

So it is with great hope and anticipation that we announce a Pension Scams Hackathon on 29 November 2019, where some of the most well-known companies in the PenTech space will team up to create the winning concept for a pension scams game, inspired by the “Scams and Ladders” board game. Barclays has kindly agreed to host us at Plexal, the innovation centre in the Olympic Park, and we have invited a broad representation from the pensions industry to judge our efforts, including Michelle Cracknell CBE, Margaret Snowdon OBE (President of the Pensions Administration Standards Association), Dominic Lindley (Member of the Financial Services Consumer Panel and Member of the Pensions Dashboard Industry Delivery Group) and Stephanie Baxter (Deputy Personal Finance Editor at The Telegraph), each of whom brings a unique perspective to the challenge at hand.

Want to be involved?

While the concept for the game will be developed on the day, the technology powering it and its full user experience will be built by our friends at JMAN Group, to be launched to the public in early 2020. If you would like to be involved, if you would like to participate in the hackathon or if you would simply like to support our initiative, please get in touch. This event is all about uniting behind that which makes us strong: our focus on consumers, our belief in technology and our spirit for change.

I look forward to seeing what we can achieve!

Register here: https://www.eventbrite.co.uk/e/pension-scams-hackathon-tickets-79164480091

Over the past few months, something rather wonderful has started to happen. We’ve received lots of calls, emails, live-chats and reviews from customers asking where their pension money is invested.

Whilst we’ve always had very engaged customers, recently there’s been a real change in the type of questions and comments we see - and they’re more focused on investments, and climate change.

Some of the brilliant questions our customers are asking are:

• ‘Why should I save into a pension if there’s no world left when I retire?’
• ‘Am I funding my own oppression?’
• ‘I feel uncomfortable with the voting record of the people managing my pension. What are you doing about this?’

We’ve engaged with each of these customers individually, but it’s now time to open up the wider debate and publicly share some of the conversations we’re having behind the scenes as well.

How customers’ money is invested

At PensionBee our customers’ money is invested in thousands of companies listed on global stock markets. In theory that means each customer indirectly owns shares in those companies. But in order to get economies of scale, all that money is pooled together by a money manager to passively track an index, such as the FTSE100.

These index funds aim to match the performance of all of the stocks in the index and get a return in line with the market. It’s low cost, diversified and the most common way to invest pension funds.

When a plan passively tracks an index of stocks the money manager doesn’t have the ability to add or remove certain companies. This is because the plan automatically buys all the stocks in the index, including ones that people might have strong views on, such as oil companies or tobacco firms.

One PensionBee plan that’s a bit different is our Future World Plan. Here the money manager, Legal & General, does have the ability to remove certain companies that don’t meet their environmental criteria, as they did with Exxon Mobil, who refused to engage in carbon reduction discussions.

In the case of Exxon Mobil, Legal & General sold all their shares from the Future World Plan and will use their shares from the rest of the business to vote against the reelection of the current CEO.

We agree with Legal & General ’s ‘engagement with consequences’ approach, and how they vote for change in poorly performing companies. That’s why we picked the Future World Plan.

The role of money managers

It’s clear that all money managers have a crucial role to play in tackling the climate crisis, using the collective power from all the shares they own in index funds to positively influence companies they are invested in.

They can do this through engagement or by using their voting rights as shareholders at Annual General Meetings to demand change. They can vote for climate change motions or against the reappointment of management teams who don’t commit to transition their businesses away from fossil fuels.

As a result we’ve begun to talk to our money managers (State Street Global Advisors, Legal & General, BlackRock and HSBC) about their specific engagement policies and voting records with the companies where our customers’ money is invested.

An important part of being transparent as a pension provider is holding our money managers to account. It’s also about doing the right thing by our customers.

As they manage our customers’ money, we need to be sure their views and actions are aligned with those of our customers. When it comes to the climate crisis we need to understand what they are doing to best represent the interests of both our customers and the planet.

Let’s be clear, this is a planetary issue - and not just a PensionBee one. A comfortable happy retirement also means having a sustainable planet to live on.

We’ve had a mixed response from our money managers so far, but we are using this as a starting point for discussion.

Our customers are the driving force behind this change; sharing the questions they want answered and refusing to accept weak responses. We’re proud to represent our customers.

Whilst change takes time, where a money manager will not meaningfully engage with us on these important topics and where their actions continue to be at odds with our customers’ views, after a period of consultation we will fully review the relationship.

We’ll be publishing the outcomes of our ongoing discussions with money managers and keeping customers up-to-date with our other activities in our sustainability blogs. We’ve also started to pose our customer questions to money managers in our quarterly update videos.

Not only do we want customers to know that we’re working hard on this topic behind the scenes but we invite everyone to get in touch with their ideas, comments, views and questions at engagement@pensionbee.com

Nearly 3.8 million women born in the 1950s could be affected by the results of a court hearing on 5 and 6 June 2019.

Backto60, a group campaigning on their behalf, has been granted judicial review to determine whether increases to women’s State Pension age, and the impact of those changes, amounted to age and sex discrimination.

These women were hit hard when successive governments hiked up the age when they would get their State Pension. They expected payments to start at 60 – but then the government moved the goal posts. Changes were introduced further and faster than anticipated. Worse still, many women were only notified within a year of their expected retirement age, while others didn’t receive letters at all.

This left some women with less than a year’s notice to prepare for a six-year increase in their State Pension age, missing out on up to £45,000 as it rose from 60 to 65.

How did the State Pension age change?

Until 2010, women started receiving their State Pension earlier than men, at the age of 60 rather than 65.

However, concerns about increasing life expectancy and ballooning pension costs meant politicians decided to raise State Pension age and make it the same for both men and women.

The Pensions Act 1995 proposed gradually pushing up State Pension age for women from 60 to 65 over the 10 years from April 2010 to April 2020. But then the Pensions Act 2011 accelerated the changes, so State Pension age hit 65 by November 2018.

State Pension age will continue rising to ^{_state_pension_age} by October 2020, then ^{_pension_age_from_2028} by 2028, with plans to push it up to 68 between 2037 and 2039. You can check your own State Pension age at www.gov.uk/state-pension-age.

What went wrong?

Hundreds of thousands of women and their families have suffered financial hardship, because they weren’t given sufficient warning about the changes.

The government didn’t start writing to notify any of the women affected for nearly 14 years after the Pensions Act 1995. Many had less than a year’s notice that their State Pension age had increased by four, five or even six years. The abrupt changes left little time to make other plans, or save money to cover the gap.

All the signs of a growing scandal here. Having worked with @thisismoney on these cases, I’m increasingly convinced these are not isolated errors but rather a systematic problem with incorrect state pension forecasts https://t.co/t7b7wrYWRh

— Steve Webb (@stevewebb1) May 25, 2019

Many had already taken irrevocable decisions – such as accepting redundancy, taking early retirement or leaving jobs for caring responsibilities – based on expecting their State Pension to kick in when they reached 60.

Single, divorced and widowed women have been particularly hard hit, lacking any income from a husband or partner. The entire pension system was structured around married couples and male breadwinners, assuming that wives would benefit from their husband’s pension money.

Equalisation of the State Pension age is especially devasting for the generation of 1950s women who have already suffered from gender pay gaps, lower workplace pensions than men and the financially disastrous ‘married women’s stamp’.

These women are less likely to have had well-paid jobs and more likely to have stopped work to look after children. With less chance to build up a workplace or private pension, any changes to the State Pension are far more damaging.

How can I get involved?

If you want to take action, consider joining one of the campaign groups below.

• Women Against State Pension Inequality (WASPI) is fighting for fairer treatment, a bridging pension and compensation for those who have suffered financial losses. WASPI is currently pursuing a complaint of maladministration with the Parliamentary Ombudsman. Visit www.waspi.co.uk for details.
• Meanwhile BackTo60 is campaigning for all women born during the 1950s to have their financial position put back to where it would have been, had their State Pension started at the age of 60. See www.backto60.com for more information.

Check back for a further post after the hearing with tips on how women affected can cope with their State Pension delays.

Faith Archer is a Personal Finance Journalist and Money Blogger at Much More With Less.

The first robo-advisors appeared towards at the end of the 2000s. Since then, the industry has grown at an impressive pace. In fact, Statista predicts that, by 2023, the robo-advice business may be worth more than US$2,552,265m (…about £1,959,000m in today’s money).

In this article, you’ll uncover a few myths around this technology, and explore some of the pros and cons of choosing robo-advice for your pension.

Here’s what you’ll learn:

• What’s a robo-advisor? How does it work?
• Myth 1: Your money is managed by robots
• Myth 2: Robo-advisors are only for people with small pension pots
• Myth 3: Robo-advice is only for millennials and ‘tech-savvy’ people
• Myth 4: Robo-advisors might replace human advisors one day
• Conclusion: Are robots right for you?

What’s a ‘robo-advisor’? How does it work?

Though the software behind it all is enormously complex, the concept of robo-advice isn’t.

Simply put, the term is used to describe a range of automatic investment tools that use software (instead of human judgement) to make investment decisions.

Now to dispell a few myths…

Myth 1: Your money is managed by robots

Reality: There’s an obvious issue with the name here - robo-advisors aren’t necessarily ‘robots’. They’re software, operating with a certain amount of human oversight (depending on the provider in question).

This means that, if you visit a robo-advisory firm, you’re unlikely to see any robots - just people working at computers.

Want to see an actual pension robot in action? Take a look at Armie.

Bear in mind that Armie only speeds up your paperwork for us - he doesn’t make any investment decisions! We leave that to our money managers - more on them later.

Myth 2: Robo-advisors are only for people with small pension pots

Reality: In the earlier days, people tended to use robo-advice services purely for smaller pots (sometimes referred to as ‘micro-accounts’).

This was typically due to the cost savings, and the obvious trepidation around putting such a large sum of your retirement money under the control of a piece of software.

As the technology has evolved and people have become more comfortable with the idea, robo-advisors are taking on larger and larger pot sizes.

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Myth 3: Robo-advice is only for millennials and ‘tech-savvy’ people

Reality: As the figures show, billions of pounds in assets under management would suggest otherwise.

Today, many modern robo-advice platforms are easy to use with modern interfaces and require no more tech knowledge than the ability to log onto a website or app and choose from a few selections.

And, whilst many financial products wouldn’t describe themselves as ‘robo-advisors’, to one extent or another, many of them use the same digital decision-making technology to inform their investing strategy.

Myth 4: Robo-advisors might replace human advisers one day

Reality: OK, we’re not sure that everyone believes this one, but we’re going to put it to rest here anyway.

Despite what Silicon Valley and the ‘techno-optimists’ may tell us, automation is not the way of the future for everything.

True, robo-advice is likely to take a larger share of the pension market over the next few years (…and decades) but replacing humans completely one day? We doubt it.

There will always be people who want to work with a living, breathing human. Someone they can speak to about their investments, someone with years of experience that they can trust, and someone whose decisions are not based entirely on the variables within a piece of software.

Simply put, the robots won’t replace us any time soon. Or ever.

Conclusion: is robo-advice right for me?

Robo-advisors certainly have their place, the growth of the industry illustrates that. They’ve simplified investing and made it more accessible for many savers, but can they match the expertise and insights of the world’s biggest money managers? We’re not so sure.

Our money managers have centuries of combined experience and trillions of pounds under management - and no robo-advisor can match that yet.

Back in January I wrote a piece about my favourite PensionBee value – love. But while that’s my favourite, it’s still only one fifth of the values that make up PensionBee, and they’re each as important as each other!

This time I’d like to talk about another of our values – innovation. In a nutshell, PensionBee wouldn’t exist without innovation. The company was borne out of our CEO Romi’s frustration at the problems she faced when trying to move her own pension, and it was that experience that inspired her to start PensionBee in order to give others the help she wished she’d had herself. She saw a system that wasn’t working for her, and she decided to create one that would.

One definition of the word innovate describes it as meaning to “make changes in something established”. When PensionBee was started, the “something established” that we were looking to make changes to was the pensions industry as a whole, and while I wouldn’t say that’s a finished job, I do believe that our innovation applies to more than just the wider industry now. In fact, in much of our innovation, we ourselves are the “something established”.

Over the three and a half years that I’ve been working at PensionBee, I’ve watched the company evolve in all areas; from our front-end product now used by thousands of customers, to the way we work internally. Importantly, we see each new change as a positive. It can be easy to rest on your laurels and remember that old saying that “if it ain’t broke, don’t fix it”. But just because something works, doesn’t mean it couldn’t work better.

One of my favourite things about the way that we innovate at PensionBee is that the desire to be better comes from all areas of the business. In our customer success team we have a monthly “BeeStorm” where the team shares the things that aren’t working for them and the improvements they think we can make. As a cycling fan, it always makes me think of Team Sky principal Dave Brailsford’s marginal gains philosophy. The smallest things, when they build up, can make the biggest difference. Whenever we introduce a new automation it makes me happy to know that every minute we save for the customer success team is another minute they can spend making sure our customers get the best service possible.

And because the entire company is encouraged to share new ideas and to highlight where we could be doing better, it helps create an environment where change isn’t seen as something to fear, but something to be excited about. Towards the end of last year we had a team discussion around the importance of feedback, and how we should always thank people – our customers and each other – for it. Even if it’s not always positive, honest feedback helps us to understand how we can improve.

Honesty also happens to be another of the PensionBee values, and will be the one I’ll be writing about next!

This article first appeared in the Spring 2019 edition of The Institute of Leadership & Management’s Edge Magazine.

It’s 1pm on a Monday and I’m stepping out for a regular one-to-one meeting with one of PensionBee’s software engineers. The opening question, “Are you happy?”, starts a conversation that is very different to the conversations I used to have with managers, revolved around performance, and opens a window onto my colleague’s thoughts and feelings and how their time working in the company fits into their life.

Our vision is to live in a world where everyone has a happy retirement, and to do this we need to make pensions simple and engaging. Pensions are not something that most people typically take an active interest in, despite the financial importance of pensions – they are often someone’s largest financial asset after their property. Pensions are typically dull, complex and provided by companies that are frustrating to deal with. The resulting disengagement means people are not actively choosing their pension provider, and when consumers don’t exercise choice there is less pressure on customer service, price and product, so they generally get a worse outcome – not exactly a recipe for a happy relationship with one of your most important financial products.

At PensionBee, I’m fortunate to be a part of a team who get out of bed every day motivated to solve this problem and help the workers of the UK take control of their long-term savings. One of our challenges is how to create an environment where everyone in the team is able and motivated to use their skills and work effectively together. To do this, we put happiness at the heart of team culture and use it as a lens for how we see our people. We believe that a happy team will lead to happy customers and happy customers will reflect back on the team in a virtuous cycle.

This means that happiness, or “Happiness!” as we call the programme, is a target that guides rather than follows more traditional people management techniques such as performance management. This seemingly unusual approach is something that we’ve come to see as a competitive advantage, leading to better workplace fit, better performance, and ultimately, more satisfied customers. In this article, I will share a few stories of what it means for PensionBee to build a culture around “Happiness!”, and how we create an environment for it to flourish.

Every new joiner to PensionBee is assigned a Happiness! Manager, who is tasked with meeting with them regularly and discussing their happiness levels. A Happiness! Manager can be different from the person taking responsibility for developing someone’s performance, as we want to make it clear that Happiness! Managers’ priority is happiness. The meetings take place every six-eight weeks and, although the conversation is deliberately open-ended, the meetings start with the simple question, “Are you happy?”. The aim is to focus on how someone is feeling, especially relative to the previous meeting, and what the company can do for them to better support their growth. Steering the conversation to look at someone’s performance is inconsistent with this, as that is instead asking what they are doing for the company.

Happiness! meetings cover a variety of topics – you might talk about adjusting someone’s working hours to give them more time with their children, how their aspirations are changing and what this means for their role, or an idea they have for improving the workplace environment. Sometimes the conversations are just a check-in that shows that someone cares and is there if they are needed. Happiness! meetings create a default of openness and honesty, which transfers well into people’s work and interactions with their teammates – if you feel comfortable to discuss any topic you are more likely to give honest feedback or collaborate across teams, all of which adds to overall productivity.

Culture in any workplace is just another word for behaviour - it’s inevitable that there will be a culture in your company, so it’s better to design it deliberately. We want the principle of Happiness! to drive group behaviour, alongside the company’s values of Simplicity, Honesty, Quality, Innovation, and Love. We use rituals to define and habitualise behaviours we believe are important. An effective method for communicating a message is to repeat it over and over again, and rituals are the behavioural equivalent.

To give an example, there is a daily “stand-up” each morning at 9:15am that the whole company participates in – we stand in a circle and set out our intention for the day, and flag if there’s anything we need help with. It’s a great way of keeping everyone connected to what others are doing and keep a spotlight on the whole team’s effect on customers. In a similar vein is the bi-weekly Show ‘n’ Tell, where anyone can present on something they have done in the last two weeks they are proud of. Questions and feedback are encouraged, and the sessions are often used to celebrate team performance or show upcoming product changes. We regularly receive feedback that these rituals show the team that we genuinely value transparency, and that we want them to feel like they can input across team boundaries, all of which increases job satisfaction.

Another contributor to happiness is the connection between your actions and your effect on customers. Customer feedback – both positive and negative – is highly visible in a channel on Slack, a messaging tool that everyone in the team uses. PensionBee customers are assigned a personal account manager from the Customer Success team when they sign up, who they know as their “BeeKeeper”, and feedback often mentions these individuals, which is fantastic for creating that feeling of a job well done.

What has been even more interesting to see is the response to negative feedback, usually triggered by a customer who feels like we have dropped the ball or failed to communicate regularly and clearly. As soon as negative feedback pops up in Slack, this lights a fire under the whole team to sort it out, and a multi-disciplinary group naturally forms to address the issue. This will usually include the customer’s BeeKeeper, someone from the product team who can help fix the problem, someone in the marketing team who will help if necessary on social media or respond to a review, and also involve compliance or technical pension experts if the issue calls for that.

Initial transparency is coupled with the delegation of responsibility for tackling customer issues to the people who have the information to deal with them best, and this allows for a rapid and effective response. It is not unusual for a customer who has left negative feedback to react positively to the group’s efforts and revise a negative review or become a strong advocate for PensionBee, further increasing the happiness felt by the people involved.

The above example is enabled by embedded use of technology – in that case, Slack being used by all team members, and integrations with external customer feedback tools. This approach is at odds with a more traditional structure of centralising feedback through specific channels, communicating issues out in regular meetings, and eventual resolution of customer problems by specifically trained staff. We believe that by encouraging a higher level of technical literacy, we can create better outcomes for team members and customers.

Technology is something that everyone is trained to work with and encouraged to think of as a mechanism for making them more productive. The media is currently hooked on the concept that AI and big data are coming to “eat all the jobs”, in the words of Marc Andreessen. For us, technology is something that is part of the reason PensionBee is able to exist at all, and we are constantly looking for ways to increase our team’s skills with technology and make sure everyone in the organisation can have high quality conversations about tech.

This approach presents a challenge to the role of the software developers at PensionBee. Part of their job is to look for ways to be tool-builders, helping people with less technical experience to get the most out of technology. If people can see that technology helps them become more effective, that will encourage them to seek more opportunities to use technology.

Moreover, we have supported members of the Customer Success team who want to move into software development to do so, as part of a general effort to transition and promote within the company. Having trained within the Customer Success function, people are highly experienced in customer needs and the company’s product, which makes them highly perceptive and valuable. An investment training them in technical skills means they are then able to bring this experience to a different area of the business, and the support they feel changing career path contributes directly to their happiness.

It’s impossible to talk about happiness without considering the role of mental health within the modern workplace, as mental health issues are on the corporate agenda more clearly than ever before. Happiness is at the heart of good mental health and a culture built around happiness ensures that the PensionBee team can adapt to changes in modern working practices and pressures. By encouraging happiness as a habit, team members are motivated, able to think freely and creatively and are a pleasure to work with – exactly the sort of foundation we need to tackle the big problems affecting the country’s long-term savers.

Women don’t just get hit by the gender pay gap – we also get walloped by the gender pension gap. After years of working for lower pay, we’re left with smaller pension pots. We’re not talking pennies either, but a great big yawning gap.

Research by PensionBee revealed a 31% difference between male and female pension pots. That’s nearly a third, and the inequality increases with age. PensionBee found that by the time women reached their 50s, men have a pension pot that’s almost twice the size, at just over £31,250 for women and nearly £53,450 for men. Yet women live longer than men, so if anything we actually need bigger pension pots to last for longer!

Writing about the gender pension gap made me cross. So for International Women’s Day, I’d encourage you to get angry about pension savings, then think about how to get even.

Women’s pension savings are hit while we’re working…

Fundamentally, if women earn less, they have less money available to pay into a pension. If you don’t have as many pounds in the first place, you can’t put as many into retirement savings.

Contributions to pensions at work are normally based on a percentage of salary. On lower pay? You’ll pay less into your pension and see smaller sums added by your employer and by tax relief. The good news about pensions is that for every £100 a basic rate taxpayer puts into a pension, the taxman will add an extra £25 on top. If you’ve been auto-enrolled into a workplace pension, then from April 2019 you’ll have to pay at least 4% of qualifying earnings into a pension, topped up by at least 3% from your employer and 1% from the tax man.

Tax relief on pensions is more attractive for higher-rate taxpayers, so women who don’t break into higher tax brackets may be less inclined to pay into a pension. Anyone lucky enough to pay higher rate tax can claim an extra ^_basic_rate tax relief via their tax return, or an extra ^{_corporation_tax} tax relief for additional rate taxpayers.

…and hit again if we stop

But women’s pensions don’t just get hit while we’re working. Our pension pots also get hammered when we stop. Women are more likely than men to take time off work to look after children or care for sick or ageing relatives. Our pension pots can then get slashed three ways by the ‘motherhood penalty’.

Many women stop contributions while on maternity leave, in an attempt to make ends meet. It can be hard to restart pension contributions if you don’t return to the workforce – because if you don’t have cash coming in, what can you pay into a pension? Long career gaps, with little or no pension saving for years, are a massive disadvantage for women.

Women who choose to return to work part-time get lower salaries in exchange – and so make lower pension contributions. Of the 8.4 million part-time employees in the UK, nearly 3/4 are women, according to labour market stats from the ONS, meaning women are disproportionately affected. Plus, anyone whose promotion prospects are limited by career breaks or part-time roles will then miss out on increased salaries and increased pension payments.

One spark of light is that the gender wealth gap is beginning to close at younger ages. Recent figures from the ONS showed that women aged 18-44 actually had larger estates than men of the same age. Average personal wealth was £175,200 for women compared to £152,000 for men, looking over 2014-2016. Men still had estates worth more than women for all other age groups.

Paying more into a pension early in your career, when you have any extra money, will help narrow the gender pension gap come retirement.

Fight back on the pensions front

Faced with financial inequality, it’s crucial for women to get more pounds into their pensions. Here’s my seven point action plan to narrow your own gender pension gap:

1. Grab free money

When you pay into a workplace pension, your employer has to add money on your behalf, plus you get tax relief on top. Don’t opt out of a workplace pension because retirement seems a lifetime away – it’s like turning down a pay rise.

2. Start saving early

Time is the magic weapon when it comes to pension saving, as those early payments have longer to benefit from compound interest.

3. Whack up your contributions

Stash extra cash into a pension while you can, especially if you’re ever thinking of having kids. Get a pay rise, inheritance or windfall? Bump up your pension payments.

4. Check out pension arrangements during maternity leave

Some employers will continue paying into your workplace pension while you’re on maternity leave, even after maternity pay stops. Make sure you don’t miss out!

5. Register for Child Benefit after having children

Even if you’re not entitled to payments because your partner earns over ^{_annual_allowance} a year, it’s worth doing. Otherwise, you could miss out on National Insurance credits towards a chunk of your State Pension.

6. Build pension saving into the family budget

If you’re part of a couple, and one person takes time out for caring responsibilities (man or woman!), plan how to fund their pension out of family income. Even non-taxpayers can save up to £2,880 a year into a pension and get £720 added by the tax man. Is there enough money for the earner to pay into the non-earner’s pension?

7. Make the most of your pension money

Track down pension pots from previous employers and any private pensions, then check where your money’s invested and how much it costs. If you have several years to retirement, you can afford to choose investments that take more risk in the hope of higher returns. Plus, switching to lower cost options will stop your retirement savings being eaten away by charges.

So, if you want to strike a blow for women’s equality, don’t burn your bra. Negotiate a pay rise, bump up your pension contributions and check your pension costs. Your future self will thank you, when you can afford to retire, rather than working till you drop.

Faith Archer is a Personal Finance Journalist and Money Blogger at Much More With Less.

Shariah compliant pensions invest savings in accordance with Islamic principles on finance, making them suitable for anyone who wishes to invest their money in line with their faith. They could also be suitable for any savers looking to invest more responsibly, regardless of faith.

Whilst Shariah compliant pensions can seem complicated at first, they’re actually pretty straightforward. Here are three key principles of Islamic finance to help you understand more about Shariah compliant pensions and how they could work for you.

Ethical investing

Islamic finance prioritises ethical investment, which means that Shariah compliant pensions will restrict or exclude investment in certain industries, which are deemed to be unethical. These industries include:

• alcohol
• tobacco
• gambling
• weapons
• finance sector

Alongside these restrictions, some Shariah compliant pensions will allow for a small percentage of non-compliant income from large, Shariah compliant companies with many operations. PensionBee’s Shariah Plan allows for 5% of non-compliant income, which is donated to community charities, supporting positive social change and assuring investors of the fund’s commitment to ethical investing.

No interest

Islamic finance sees interest as unfair and something that can create inequalities. This is why a key principle of Islamic finance is the requirement that no interest is earned or paid, and you’ll see this reflected in Shariah compliant pensions as well. With a Shariah compliant pension, wealth is generated by profits made through trade and investment instead of interest.

Whilst this requirement may seem unconventional at first, some Shariah compliant financial products consistently outperform their expected profit rates, which means that Shariah compliant financial services may be able to balance more responsible investing and saving with a healthy return.

Transparency

Another core principle of Islamic finance is transparency in financial contracts and agreements. This means that contracts and documents must use simple language, with terms and conditions that are easy to understand. There also shouldn’t be any discrepancies within the contract that could result in later disputes.

Shariah compliant pensions offer transparency in their terms in order to encourage fairness and equality. Here at PensionBee, transparency is one of our core values so we always provide easy-to-understand information about our plans and how they work. We think transparency should be an industry standard so it makes sense to us that Shariah compliant pensions, which aim to be more responsible, are committed to transparency.

Find more info about our Shariah Plan, where you’ll also find a factsheet and a helpful video. Our Shariah Plan is managed by HSBC and State Street Global Advisors, following a Shariah compliant benchmark, and is appropriately diversified.

To learn more about Shariah investments, listen to episode 6 of our podcast, watch on YouTube or read the transcript.

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.

Some 3.8 million women born in the 1950s must wait to find out the results of a court case about how the government delayed their State Pension for up to six years.

As described in my previous post, campaign group Back to 60 sought a judicial review of the way women’s State Pension age was increased to the same age as men.

The hearing against the Department for Work and Pensions (DWP) took place in the High Court on 5 and 6 June. The judgement is yet to be published, but here is a summary of the key arguments.

The case asks for compensation for women born between April 1950 and April 1960 on the basis of a combination of age and sex discrimination and the government’s failure to properly inform those affected.

Many of these women have suffered financial and emotional distress, after successive governments sped up the process of raising their State Pension age from 60 to as high as ^{_state_pension_age}.

Back to 60 and another campaign group, Women Against State Pension Inequality (WASPI), have long argued that many women received little or no personal notice of changes to their State Pension age, and therefore did not have time to make other plans.

In court, the DWP defended the changes as a measure designed to equalise the State Pension age between men and women, and to ensure intergenerational fairness between those receiving the State Pension, and younger taxpayers funding them.

The DWP insisted that the Government had taken “extensive” steps to notify women of the changes. The DWP also said that “personal notifications would have been difficult if not impossible prior to 2003”.

Yet the legal team for Back to 60 produced internal documents showing the DWP was aware on at least six occasions, in 1998, 2000, 2007, 2011, 2012 and 2015, that information about changes to State Pension age was not reaching the women affected.

As reported by David Hencke in the Byline Times, civil servants repeatedly warned ministers about problems ahead. The memos reveal that ministers rejected proposals to send out a mass mailing with tax paperwork in 1997. They also predicted criticism of the DWP’s failure to communicate with the women affected in 2007, and refer to ‘widespread ignorance” of the changes with only three years to go. Direct mailing only started in 2009 – just a year before the State Pension age started to go up, and 14 years after the initial legislation in 1995.

The DWP also argued that there was no duty of fairness to the women affected, no obligation to notify them, and no right to expect legal remedy for the lack of notice, as reported by The Guardian.

At heart, the case is all about money. The legal representative for the DWP said that raising pension age to ^{_state_pension_age} also aimed to “make pensions affordable…and to control government expenditure at a time of great pressure on public finances”.

The day after the judicial review hearing, the DWP released figures calculating that the net cost of reversing the changes, so State Pension age returns to 60 for women and 65 for men, adds up to a massive £215 billion.

In practice, the court case is not seeking such astronomical sums. The hearing did not ask to reverse the State Pension age changes for both men and women, but just for compensation for women born in the 1950s. But it could still cost many billions of pounds.

For now, the 1950s women, government and taxpayers must wait for the judgement to be published, to find out if any compensation will be awarded at all.

Faith Archer is a Personal Finance Journalist and Money Blogger at Much More With Less.