They run an efficient pension savings plan that offers everyone access to quality funds with a minimum of fuss (and cost).
They have the tools to help us bring our pensions together and best of all, you leave their website and app feeling brighter and more confident about your financial future, than when you landed there.
Pension Bee are also campaigners for better retirement savings. They run the Robin Hood index which benchmarks the pension villains against the pension heroes.
Published this morning. Here are headlines from this their third Robin Hood Index.
Research reveals the best and worst of the pensions industry
- Slowest provider takes almost two months to transfer a pension on average
- Quickest provider takes less than two weeks
- One provider charging customers an average annual charge of 62.1%, while another goes as low as 0.3%
- Savers still facing extortionate exit fees to move their pension from a handful of providers
PensionBee has analysed the transfer times, average annual charges, and exit fees imposed by 35 of Britain’s biggest pension providers.
Xafinity transfers taking an infinity
The online pension manager analysed a sample of 7,292 transfers to their platform, and discovered that the firm responsible for the slowest average transfer time is Xafinity at 52 days. This is seven days longer than the second slowest company, Now: Pensions, with Mercer, Towers Watson and Aon Hewitt also proving similarly sluggish.
| 5 slowest transfer times Position | Provider | Average transfer time |
| 1 | Xafinity | 52 days |
| 2 | Now: Pensions | 45 days |
| 3 | Mercer | 44 days |
| 4 | Towers Watson | 41 days |
| 5 | Aon Hewitt | 41 days |
Source: PensionBee.
Total sample size of 7,292 from January 01, 2018. Each individual provider has a sample of at least 5 transfers
However, while these providers are still putting up barriers to transfer there’s evidence others are taking a more positive approach, as reflected by the transfer times of Aviva, Scottish Widows, B&CE, Canada Life and Phoenix Life, who all manage to transfer a pension in under two weeks on average.
Now: Pensions are the most expensive annually
In addition to examining transfer times PensionBee also analysed a sample of 1,056 pensions. It found an average annual charge of 62.1% imposed by Now: Pensions – by far the biggest in the study.
PensionBee calculated the charge by adding up all fees, including fund fees, fixed £-based fees and any other policy fees that may apply. In the case of Now: Pensions, a £-based fee of £18 (in addition to a %-based fee of 0.3%) is applied to fairly small pension values (approximately 40% of the pensions in the sample of 91 were below £100).
The result is a high charge as a proportion of the pension pot. Currently these charges are permitted by the Department of Work and Pension’s charge cap legislation.
| 5 worst providers by average annual charge Position | Provider | Average annual charge |
| 1 | Now: Pensions | 62.1% |
| 2 | Zurich* | 5.9% |
| 3 | Aegon | 1.1% |
| 4 | Phoenix | 1.0% |
| 5 | Nest | 1.0% |
* predominantly personal pensions
Source: PensionBee. Based on a total 1,056 annual charges found between June 2017 and March 2018. Each individual provider has a sample of at least 20 observations.
No Robin here
Largely though, a number of providers appear to be operating a fairer fee structure. Legal & General charge the lowest average annual charge at 0.3%, with Fidelity and B&CE following closely with fees of 0.4% and 0.5% respectively.
| 5 best providers by average annual charge Position | Provider | Average annual charge |
| 1 | Legal & General | 0.3% |
| 2 | Fidelity | 0.4% |
| 3 | B&CE | 0.5% |
| 4 | Standard Life | 0.8% |
| 5 | Aviva | 0.8% |
Source: PensionBee.
Based on a total 1,056 annual charges found between June 2017 and March 2018. Each individual provider has a sample of at least 20 observations.
Phoenix Life enforcing the biggest exit fees
As part of their analysis PensionBee also examined exit fees across 5,431 pensions, with their research revealing that 305 had exit fees present. Staggeringly, the biggest was a £12,245 charge from Phoenix Life – who are entirely responsible for the top five exit fees in the study.
| 5 biggest exit fees Position | Provider | Exit fee (£) |
| 1 | Phoenix Life | 12,245 |
| 2 | Phoenix Life | 10,543 |
| 3 | Phoenix Life | 9,413 |
| 4 | Phoenix Life | 9,206 |
| 5 | Phoenix Life | 7,239 |
Source: PensionBee. 5,431 from June 2017 to April 2018, of which 305 had exit fees.
The research further indicated that the highest exit fees are on with-profits pensions termed ‘market value reductions’, meaning they escape the FCA’s focus and rules for now.
Staggeringly, one Phoenix Life exit fee would eat up 96% of one unlucky saver’s pension – the biggest percentage in the study – with Abbey Life and ReAssure imposing similarly excessive exit fees.
| 5 biggest exit fees as a proportion of a pension Position | Provider | Exit fee as a percentage |
| 1 | Phoenix Life | 96% |
| 2 | Abbey Life | 69% |
| 3 | ReAssure | 56% |
| 4 | Abbey Life | 47% |
| 5 | Phoenix Life | 45% |
Source: PensionBee. 5,431 from June 2017 to April 2018, of which 305 had exit fees.
What’s the big message for the Pension Plowman?
People have no way of knowing where they are incurring costs and how their costs compare.
Of course the Robin Hood Index is only comparing one side of the value for money equation and people need to understand what value they’ve been getting from their pension.
Unfortunately it’s even harder to work out “value” than “money”.
The numbers published in the Robin Hood Index are PensionBee’s and so are the comments. A more in depth analysis of what you are actually paying might include some hidden fees from transition costs. The value of a retirement savings scheme has to be found from a careful analysis of past performance – and its drivers. There need to be a separation of luck from judgement by looking at both the reward from the fund and the risk taken to get that reward.
The work started by Pension Bee, needs to be picked up by others. People need to be able to look at their pension pot and consider whether to keep it or transfer it to a better pot. People need to know when not to transfer too, which is why the analysis of exit penalties is important. A lot of the high exit penalties shown here, apply only to certain people. The over 55’s for instance, often get an exit-fee amnesty (as a result of Government intervention).
I stop short of saying we need an adviser to help us do this. 94% of us don’t use advisers and – as there aren’t enough IFAs to go round, a rush to advice could swamp them.
The long-term answer is for the kind of analysis started here, to continue across the whole pension genome so people can compare apples with pears without bothering advisers.
And finally!
After that little lecture, here is the PensionBee video, which is well worth watching!
You can find out more about the Robin Hood Index by reading the full report here
You can read the Beekeeper’s own thoughts here
Queen Bee – Romi Savova!