PensionBee: pensions, fees and how it works

PensionBee is an online pension provider that takes old workplace and personal pensions and combines them into one plan you manage yourself, through a website and an app. It is a personal pension rather than a workplace scheme, and it is execution-only: it does not give advice or individual recommendations, so the decision about whether it suits you is yours¹.

It charges a single annual management fee, taken directly from the pension pot, and the percentage depends on the plan you choose. PensionBee publishes the current figure for each plan on its fees page³.

PensionBee Limited has been authorised by the Financial Conduct Authority since 1 August 2016, and the firm is on the FCA Register under reference number 744931⁴. Its pension is a defined contribution scheme, so what you end up with depends on what you pay in and how the investments perform, and your capital is at risk⁵.

PensionBee's pension plans and how the default plan is chosen

PensionBee's plans are all personal pensions, open to employed and self-employed people, and all of them invest your money into diversified pension funds with a different mix of assets and a different approach to investment decisions⁷. The plans are managed by large investment firms including BlackRock, State Street Global Advisors and HSBC⁹.

If you sign up without choosing a plan, your pensions transfer into a default option chosen according to your age: the Global Leaders Plan if you are under 50, or the 4Plus Plan if you are 50 or over². PensionBee describes these as its two default pension funds for different age groups⁸. One of its pages also says that if you are not sure which plan to choose, you will be placed into its most popular plan, Tailored¹⁰. The two statements do not match, so it is worth confirming which plan applies to you before you transfer.

Any scheme used for automatic enrolment must have a default investment arrangement, which is the arrangement members are placed into when they do not make a choice¹¹. PensionBee's own default rule is set out in its terms: by signing up without choosing a plan, you agree to transfer your pensions into its default option according to your age¹.

You cannot hold more than one PensionBee plan at a time. The provider states that customers can only invest in one plan or fund at a time, and that its plans do not have multiple sections⁴. You can switch plans at any time, either by telling PensionBee which plan you would like to move to, or online under the Plans section of your account⁴. Switching between its own plans takes on average five working days, because of the settlement cycle when trading institutional funds².

How PensionBee's annual fee works

PensionBee charges one annual fee rather than a set of separate charges, and it is taken from the pension pot rather than billed to you⁷. The fee is a fixed percentage of your pot, set out for each plan on PensionBee's fees page, and it is deducted automatically¹.

The provider says there are no hidden provider fees or platform fees, no contribution charge, and no hidden transfer fees³. It also says it may charge fees for additional services if you make a special request³.

Because the fee is a percentage, the amount you pay rises and falls with the size of your pot, and it is charged whether or not the investments have gone up. PensionBee's key features document states that projected values in it have been calculated using standard assumptions and are not guaranteed¹⁴. For how charges compare across the wider market, see the pensions guide.

Who can join PensionBee and which pensions it can take

PensionBee's plans are personal pensions open to employed and self-employed people⁷. Usually you would need to transfer an old personal or workplace pension to join, though that is not necessary if you are receiving a split pension as part of a divorce settlement¹⁵. You do not have to move everything: you can transfer just one of your inactive pensions to get started¹⁶.

If you are self-employed, you can open a pension without transferring anything and contribute as much or as little as you like, with flexible contributions according to your income¹⁶. If you live or work overseas, you can keep paying in as long as you are still classified as a relevant UK individual⁴.

PensionBee does not offer a protected pension age on its scheme. It allows withdrawals from the normal minimum pension age of 55, rising to 57 from 2028⁴. Where a pension transferred in from another provider came with a protected pension age of 55 or 56, PensionBee says it will honour that where it has been correctly informed¹⁸.

Signing up is free, and PensionBee says you can begin combining pots online in a few minutes¹⁹. It cannot trace old pensions for you: if you are missing the details, you would need the government's free Pension Tracing Service⁴. Once you have them, PensionBee asks for a few simple details and then finds and transfers the old pensions²⁰. Its BeeKeepers, described as personal account managers, help set up the new pension and guide you through the transfer²¹.

Transferring old pensions to PensionBee: how the exit fee checks work

Before transferring, PensionBee checks whether the old pension carries exit fees or special benefits such as guarantees, using a risk-based approach with three categories²².

PensionBee states it cannot guarantee to find an exit fee or special benefits, because it relies on clear information from third parties, and it does not check certain policies considered very low risk, including where a customer asks it to waive the usual checks¹³. If you transfer without a policy number, PensionBee contacts the old provider for the paperwork and checks it for exit fees or special benefits before the transfer goes ahead²².

Exit fees themselves are charged by the old provider, not by PensionBee, and can be a flat fee or a percentage of the fund, deducted from the pension balance²³. PensionBee charges nothing to transfer in, however many pensions you move, and nothing to transfer away²². It says it does not impose exit fees on savers who withdraw or transfer before their retirement date¹³. Some old pensions charge high fees to transfer out, which is one of the drawbacks of combining¹⁹.

Paying in and how tax relief is added

The government gives tax relief on pension contributions, which either reduces your tax bill or increases your pension fund²⁴. You usually get tax relief on money you pay into a personal pension²⁵. At PensionBee, personal contributions get a 25% top-up added automatically: for every £100 you put in, the government adds £25, making £125⁴. PensionBee applies for basic rate tax relief on all personal contributions¹.

Your employer can also choose to pay into your PensionBee plan²⁰. PensionBee's plans are personal pensions rather than workplace schemes, so this is a choice for the employer rather than automatic enrolment into PensionBee as a scheme. If you are self-employed, you can set up regular contributions or add one-off payments from your account⁷.

Taking money out: drawdown, lump sums and annuities

PensionBee sets out four options at retirement: drawing a set amount each month, taking a lump sum of up to 25% tax free, buying an annuity, or a combination of these²⁷. Ad-hoc withdrawals can be made whenever you want, by choosing how much to take and telling PensionBee which bank account to pay it into¹⁰.

The wider rules are the same as for any personal pension. You can take the whole pot as a lump sum, take a number of lump sums, use flexible drawdown, or buy an annuity²⁸. You can also take a scheme pension, buy an annuity, or draw an income directly from the fund as drawdown²⁹. Later lump sums can include 25% tax free, as long as the total tax-free amount is not more than 25% of that pension and the lump sum allowance³⁰. Defined contribution savers can withdraw all or some of the money as a lump sum, or take payments as income over time instead of buying an annuity³¹.

PensionBee does not provide annuities itself. It has a partnership with Legal & General so that customers can use their PensionBee balance to buy an annuity through Legal & General⁴. Before withdrawing, PensionBee requires you to verify your identity using its Facial Similarity Check, and once bank details and identity are verified it usually takes around 10 working days to receive the money³². Taking money out can affect means-tested benefits, so it is worth checking how pension freedom affects them before withdrawing²⁸. Free, impartial guidance on the options is available from Pension Wise²⁸.

Managing your pension in the BeeHive app and online

Your PensionBee account is called your BeeHive, and you can log in through the website or the app at any time²¹. It works as a personal pension dashboard where you can check your balance whenever you like⁹. The app is currently only available in the UK App Store and Google Play Store⁴.

Plan switching is done in the BeeHive: log in, go to My Pension, select Switch plan and follow the steps². You can also switch plans under the Plans section⁴. Self-employed customers can manage the pension online, set up regular contributions or add one-off payments⁷.

PensionBee's BeeKeepers act as personal account managers and help with setting up the pension and the transfer process²¹. The provider says it serves more than 315,000 customers, managing £7.5 billion in assets under administration⁵. One of its product pages gives a figure of 327,000 or more people saving with PensionBee; the two figures are not reconciled in the documents, so treat the customer number as approximate¹².

Leaving PensionBee or transferring out

There is no exit fee for transferring away from PensionBee, and no charge for transferring in²². Transfers out can only go to UK-based, HMRC-registered pension schemes⁴.

If you have a share of an ex-partner's pension following a divorce, or a scheme with special features or guarantees such as a Guaranteed Minimum Pension, you might not be able to transfer your pension³³. That restriction comes from the rules around certain protected benefits rather than from PensionBee itself, and it is one reason a transfer can be blocked or delayed.

Switching between PensionBee's own plans takes on average five working days². Moving a pension out to another provider depends on the receiving scheme and the old provider's timescales. If you are thinking about leaving, the pension providers directory lists other providers, and the pensions guide explains how transfers work generally.

What happens to your pension when you die

PensionBee customers can add beneficiaries in the Account section of the BeeHive, with customisable percentages for each beneficiary³⁵. On notification of a death, PensionBee begins the death benefits procedure to review and agree the beneficiaries of the plan, taking nominations into account³⁵. Beneficiaries need to send a copy of the death certificate and complete the death benefits form³⁶.

PensionBee is a defined contribution scheme and only offers accepted beneficiaries the option of taking the inherited pot as a lump sum payment⁴. If benefits are not claimed within two years, currently, beneficiaries may lose the ability to take them as a lump sum³⁶. The identity of beneficiaries must be verified before payment; for a beneficiary under 18, identity is verified by contacting a parent or legal guardian, and payment is then made into a bank account in their name³⁵.

More widely, a personal pension provider will ask you to complete an expression of wish form naming who you would like to receive the pension, and it should be kept up to date²⁵. Beneficiaries might pay Income Tax to receive the money, depending on your age when you die³³. For defined benefit pensions, the scheme will usually pay a lump sum to a spouse or civil partner, typically two or three times salary, if you die before taking the pension³⁷. If the person who died had a State Pension, the Northern Ireland Pension Centre needs to be told so payments stop³⁸.

Complaints and how your pension is protected

If PensionBee makes a mistake administering your pension, you can complain directly to it using its complaints policy, and refer the complaint to the Financial Ombudsman Service if you are dissatisfied⁵. The Pensions Ombudsman can look at complaints about how personal and occupational pension schemes are run, and deals with some complaints about the administration of workplace pensions³⁹.

To take a complaint to the Pensions Ombudsman you need full details of the complaint, the final response from any party you believe to be at fault, any relevant correspondence, and copies of the policies and scheme rules under which the decision was made if you have them⁴⁰. For a workplace pension, you can complain to MoneyHelper or the Pensions Ombudsman about how it is managed, and report concerns about dishonesty, fraud or how the scheme is being run to The Pensions Regulator⁴¹.

PensionBee is a member of the Financial Services Compensation Scheme, and its pension is structured as a long-term insurance contract with up to 100% cover and no upper cap⁵. Money in its clearing account is held with Barclays Bank, separately from all other PensionBee assets and bank accounts, and is unlikely to be held there for more than a few working days⁵. PensionBee Limited is authorised by the FCA under reference 744931⁴. With pensions, your capital is at risk⁶.