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@GlenH - I'm astonished to hear that your pension is worth less than half of the total contributions after 20 years. I almost can't believe it. SJP are pretty rubbish and expensive, but they're not THAT rubbish. Are you absolutely sure you've got those figures correct?
When you say "I haven't had advice from SJP"... believe me, you have. You may not know it, or feel like it, but SJP have to give you advice in order to recommend the transfer to them. If the early exit penalty was not explained to you, then it sounds like pretty good grounds for a complaint to me. I'd rather not go into too much detail, because I don't know any of the details and we're just strangers on a forum. But I'm comfortable telling you that I've submitted a number of complaints to SJP on behalf of clients. Particularly with regards to their early exit penalties, which I think are a disgrace and something that should have been left behind in the 1900s. I've had every single one of those complaints upheld and SJP have "released" the pension without applying the charge. But I don't know your circumstances, so I can't comment on specifics. SJP are very precious about reputation though. They don't like people airing dirty laundry and seem quite happy to write a cheque to make people go away quietly.
As for the awful performance. I still just struggle to see how that's possible. Unless you are in an ultra defensive portfolio that has virtually no equities in it and high SJP charges. But even then... I'd expect it to be flat after 20 years, not halved! :/
@Bunky1981
Thank you for your advice, I do appreciate it.
My pension is a small one from 20 years ago and not a DB pension.
The encashment value and the transfer value are the same and about 6% less than the Unit Value. I confess I don't fully understand the transfer process from the St James's Place side and I've never had advice from them. The fact that after 20 years my pension is worth just 42% of the amount I paid in, 6% seems a small price to pay to get it out of there. If I do have to pay the 6% to transfer this is nothing to do with PensionBee but the unpleasant people at St James's Place. After a year with PensionBee I can transfer my pension elsewhere with no charges. If you think I have any grounds for a complaint with St James's place please let me know, it does seem wrong that a pension can go down 58% in 20 years.
@rossannan - I agree. They do seem to do about as much as can be asked to, to save us from ourselves. Certainly more than Hargreaves Lansdown and their ilk. I think the ethics of PBEE look solid. Hence why I'm pleased to be a shareholder.
ESG is, happily, a big factor now for the viability of a stock. Deliveroo tanking is a great example of wider forces at work. When a company's ethics are poor (how they treat their delivery drivers) it is no longer just about "woke" people not wanting to hold the stock. It means that major funds managers can't buy it either, as it jeopardises the credentials of the rest of their fund. ESG is so a la mode at the moment, that any stock with solid ESG credentials becomes very attractive to large fund managers and therefore puts the private investors in a great place. So I'm excited!
@DinkyDan - spot on. I'm also in the my 30s and our generation rarely have anything particularly interesting about modern pensions. Certainly if they're Defined Contribution anyway. The link that rossannan is useful. There are other benefits such as enhanced tax free cash (where your Pension Commencement Lump Sum is more than 25%) as well as other benefits.
I suppose the main thing is that Pension Bee just has a range of investment options that are really no different to the majority of your employer's pension scheme. However a company pension scheme is quite likely to cheaper since it's on a larger scale and often very difficult to beat on cost. So it's always worth checking your work scheme first. I'm constantly amazed by how many people don't even realise they can change or choose the funds within their work scheme and for a much lower cost than they could if they went to the same pension provider as a direct consumer. Bulk buying power!
However, pragmatically, the younger generations tend to change jobs every few years, as opposed to our forebearers who were typically more 'job for life' and also lived in a time of Defined Benefit (final salary) pensions where you didn't have to think about any of this. So for us, it's quite likely we've got 10 different pension pots by the time we're 40-50 and to realistically manage those properly, while having enough knowledge to know broadly which funds you should be looking at... just isn't that likely. That's where a service like Pension Bee comes in. Yes it has a premium to it. But for most people, being able to just pick a number on a risk scale and stick it all under one roof is highly attractive. So the vast vast majority of people could benefit from it.
One other thing to mention is that many employer pension schemes employ 'lifestyling'. This is a process where they lower the risk of your pension automatically as you approach 55-65. The idea being that you want to reduce volatility as you approach retirement as you'll being buying an annuity. Of course nobody has bought annuities really since the banking crisis as the rates are awful, and now taking your money as drawdown (leaving it invested in retirement while you skim the growth off the top for your income) is very much the norm. So I find it bizarre that Lifestyling is still endemic because why would you want to reduce your risk with 30 years of retirement ahead of you. But employer schemes have Trustees. And those Trustees are (quite rightly) more concerned with not getting it wrong, rather than getting it right. Another reason to consider 'taking control' of the investment strategy of your previous pensions.
Hope some of that helps :)
Dinkydan
This is a useful article on that topic:
https://www.investorschronicle.co.uk/2013/10/02/your-money/pensions-and-sipps/retirement-income/the-dusty-old-document-that-could-double-your-pension-8plmXnd33DBoUirpciiqFM/article.html
Bunky1981
The good thing is that the warnings/alerts are not just stuck away in the FAQs - my recollection is that they are an integral part of the online form filling that initiates the transfer process. PensionBee seem to do all they reasonably can to save us from ourselves without putting themselves on the hook.
But execution only in the world of pensions is a risk absolutely worth highlighting - folk will inevitably make mistakes with e.g. older policies and then seek to blame PBEE, or make fund selection mistakes around e.g. life-styling and then seek to blame PBEE. Your instinct to kick the tyres is a good one - don’t ever stop! Permabulls add no value.
I’m less concerned about charges as I suspect that most folk will be be doing much the same or even better on that front once they transfer.
The growth opportunity is clearly to get more and more folk to think about their pensions, do sensible consolidation and then, once they are comfortable with the platform, make further contributions. I am excited that the self-employed can now set up a scheme with PBEE from scratch without consolidating - how long before the employed will be able to do this too? That will be a major inflection point...
Bunky, I appreciate your opinion. I personally am a big fan of varied opinions on investments, being in my early 30s I could only see benefits to the service given by PBEE and given that the pensions I've personally encountered rarely have additional benefits other than paying out a monthly income after I have worked for atleast another 35 years... So would pensions issued in a certain time/ decade be more generous with additional benefits ( whatever that might be) that could discourage potential customers from PBEE?
@Rossannan - Oh I agree. I feel like I've come across as negative about PBEE. That really wasn't my intention. The fact you've even read the FAQ puts you ahead of the majority of consumers.
Anyway, we're all here to rejoice in the success of what (so far) looks like a shrewd investment on our part. So I'll stop sounding so miserable and just enjoy the ride. ;)
So it’s certainly buyer beware but they are commendably transparent about what that means.
(in particular click on the link in FAQ 3 to go to the “Special pension benefits glossary”)
Bunky1981
“There are many potential benefits that you can lose with an execution only transfer and you would never even know you lost them.”
Having gone through the process that wasn’t my experience. My pension, my ultimate responsibility, certainly, but fair warning was given - much along the lines of FAQ 3 here:
https://www.pensionbee.com/faq
@DinkyDan
I didn't mean to infer they were being frivolous. But of course they will take all and any pensions that they can to generate fees, within the regulatory framework. Nothing wrong with that either. They're a business.
I wasn't referring to DB pensions. I work in the sector and have a very good understanding of pensions. I don't mean that sound aloof, just simply to say that I do understand this stuff. There are many potential benefits that you can lose with an execution only transfer and you would never even know you lost them.
In addition, the Ombudsman has made it very clear to the entire advice sector that 'ease of administration' and 'consolidation' are absolutely NOT good enough grounds alone to combine your pension pots. Even less so unless there is a material benefit in charging. So moving a load of old work pensions that are typically 0.2-0.4% into PensionBee at double the cost... would be very unlikely to pass as compliant financial advice. That's all I'm saying. There's nothing nefarious about it. It's simply 'buyer beware'. No different to people who buy life insurance from a Meerkat and have absolutely no idea that unless it's placed in Trust it will form part of their estate and be liable to 40% inheritance tax on death. Of course they'll be dead before their kids find that out.
All I meant by my original comment was to highlight that comparing an execution only platform to a (admittedly awful) financial advice company is just not a correct comparison. Of course Pension Bee is "easy and straight forward" by comparison. There's only a fraction of the due diligence and consumer protection by using them. So it's bound to be. That was my only point.
@Rossanan - I'm a shareholder and a customer of theirs. I used them to try and find a few £k of old pensions for my early 20s that I couldn't be bothered to do that admin on. Mostly unsuccessful I might add. But I think their offering is great and I have no doubt that they'll be very successful and a broadly good thing for the pension space. Hence why I bought into the IPO :)
One of the reasons it would be interesting to hear from other customers was that my recollection was that you had a PDQ option which saw you doing your own DD, which I took, and a slower option which involved them doing the DD. None of my pots were DB though - that is a whole different kettle of worms.
Sorry, too many acronyms there, starting to sound like LoD...
The execution only point is worth making but I have transferred three pots in to date and the process ensures that you do not do anything that is against your own interests without having been well warned about the pitfalls.
Using PensionBee is certainly an interesting and somewhat unusual experience in this day and age, when so many other platforms/interfaces are designed to keep you away from real people at all costs (and that kind of thing is all about cost).
The key to the growth that we are looking for as PBEE shareholders is going to be driving folk to the site to have that experience in the first place. Once they’ve had it, I think we’ve got them. They’ve certainly got me. The current investment options are lower cost and reasonably varied, but that needs to be kept under review to satisfy demand (within reason - simplicity and transparency are clearly the USPs here).
I guess we are looking to see the money raised being well spent on initiatives that increase the funds under administration in short order and demonstrate not just the continued growth that is priced into the current valuation but the potential for even steeper growth.
Anyone else on here a customer as well as a shareholder?
Execution only yes but I think your post unduly implies that they PensionBee as a company are frivalous in taking peoples pension pots under management to generate fees. The type of pensions you are referring to are more likely Defined Benefit Pensions and such. PensionBee will not transfer defined benefit pensions over £30k unless you consult with a financial adviser
https://www.pensionbee.com/pensions-explained/pension-types/what-is-a-defined-benefit-pension#:~:text=A%20defined%20benefit%20pension%20(also,ve%20contributed%20to%20the%20pension.
As a service of gathering multiple small pensions pots together several people i know have used them and had excellent results. They are a service provider only but I'm confident they are doing their due diligence before taking people's money. This is espically useful since all employers are mandated to offer a pension scheme regardless of how long someone is employed for and with anyone moving jobs once or twice might want to combine these with ease. Lots of positives for the consumer, and investors.
@GlenH
Just someting to clarify about PensionBee. They are execution only. It's a very important distinction and I'm still amazed by how many people don't realise that. In plain language, that means that any benefits you may lose by transferring to them is your fault. Any flaws in the wisdom of the transfer, it's all on you.
I wouldn't recommend my worst enemy to Saint James Place... but you are least protected from poor advice as you can complain to them about it, and then ultimately the FOS if you so wish. You have no such option with PensionBee.
I think PBEE are a great company, and the reason they are doing so well is because they do not suffer the expensive barrier to entry that insured financial advice does. So they can just set up a simple and cheap website to hoover up assets without any real risk. Commerically, it's fantastic. Hence why I've happily taken part in the IPO. They're a great business and I wish them, their customers and their shareholders the best of luck. I'm excited for their future.
The reality is that you'd get a much cheaper similar service (about half the cost in fact) from Royal London, Scottish Widows, Vanguard and many more. PensionBee are expensive and they're not really asset managers. But they've marketed very well and their website is simple and easy to use. the process is very slick. So the punters love it. I think they offer a great service and are a positive for the industry.
ps. I'm surprised to hear your SJP assets were "losing money every year". they're rubbish funds... but not so rubbish that they lose ground every yeaer. I also assume you were outside their exit penalty of 6 years and that you did check whether that would apply in the event that you transferred to PBEE? I've seen plenty of cases of SJP pensions being transferred execution only to providers without the customer knowing that there's a painful penalty. May be worth checking that SJP didn't make any errors if your balance was going down every year. Just a friendly bystander :)
This is exactly why I registered for the IPO, good product well executed.
Thought I would give you an insight on this company from a customers point of view. I did a lot of research on pension providers. A lot of providers seem cheaper than PensionBee but have a lot of hidden fees and everything is complicated and their websites aren't simple to use. PensionBee was below average for fees, website very simple and easy to use and it had some great performing funds. I've been delaying sorting out my pension because everything seemed so complicated but PensionBee was a breath of fresh air ,so I decided to sign up with them. Took me about 5 mins to register to transfer my pension, everything was clearly explained and easy to follow and PensionBee will do everything else for me. The website was very easy to use and very clear and I was very happy with my experience. In fact I was delighted to have finally sorted out my pension which was losing money every year with St James Place ( I would not recommend them) and in the end it was painless.