The Moneybox Personal Pension puts you in control of your financial future. You’ll be able to bring together your old pension pots, see how much money you have and where it’s going to get you over time, all from the Moneybox app.
Why is Moneybox offering a pension?
Many people have thousands of pounds sitting in old pension pots they barely know anything about.
With every new job you get a new pension. With the average person now having 11 jobs over the course of their career, these old pensions can become really difficult to keep track of. Not to mention paying a staggering £38,000 in total fees to pension providers by the age of 65.
This lack of knowledge can be traced right back to the pensions industry. Pension companies barely engage with their customers and when they do, they send snail mail letters to old addresses, written in financial jargon that hardly anyone understands. Even the basics like checking your account balance and seeing where your money’s invested are made really hard.
How can Moneybox help?
We’re building a pension that lives on your phone and is designed for the way you live today.
You can easily bring together all your old, stranded pension pots into one place and check your account balance anytime, anywhere. Your Moneybox pension will sit alongside your other savings and investments in the app, putting you in control of your financial future.
Over the last few months, we’ve helped our early beta customers find and consolidate thousands of old pension pots, each worth an average of £10,000. We are excited to be rolling out this beta to the wider Moneybox community over the next few weeks. New users will be able to join our pensions waiting list.
How to consolidate your old pension pots
To transfer an old pension we just need two pieces of information:
- The name of your old pension provider
- Your old pension policy number
We know it can be tricky to keep track of old pensions and who they are held with, so if you don’t know these details, here are some ways to track them down.
The Government tracing service asks for the name of your old employer and searches to see who the provider of their workplace pension was/is.
If you’re struggling to find an old policy number, the best course of action would be to search for any old emails or letters from the provider. Failing that, you can usually give them a call to recover this. If you are still unable to find the details, just get in touch with our customer support team and we’ll be able to help.
Once the above details are confirmed, we can kick off the transfer. For most providers this can be an end to end electronic process taking on average 2-3 weeks. If we do need a signature from you, our team will send a form out to you the next day. Unfortunately, some providers only operate via manual systems, meaning all correspondence must be completed via paper-based mail. This can slow things down but our team is committed to doing everything they can to ensure a speedy transfer process from the Moneybox side.
You can track the progress of your transfer in the Moneybox app.
What can I invest in?
The Moneybox Personal Pension gives you the choice of three investment options:
- Fidelity Index World Fund (this is the same equities fund available in the app for a Moneybox ISA, GIA, or Lifetime ISA). This fund diversifies your investments into more than 1,600 companies across 23 countries and aims for long-term growth of your capital.
- Old Mutual MSCI World ESG Index Fund. This also invests in a range of global companies but considers environmental, social and governance factors – such as how companies respond to climate change, treat their workers and manage their supply chains.
- BlackRock LifePath Fund. A ‘Lifestyle’ fund unique to pensions, which changes the balance of investments as you get closer to your retirement date. When you select this fund you’ll be asked to select the one with a target date that matches when you think you will retire. If you’re unsure of this, we recommend that you speak with an independent advisor.
You will be able to change your investment fund at any time in the Moneybox app.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest.
What are the fees?
For the first £100,000 in your Moneybox Personal Pension, the account fee is 0.45% per year, billed monthly. On balances over £100,000 this comes down to just 0.15%. This fee is calculated daily and charged at the end of each month from the value of your investments.
You’ll also be charged the fund provider fee ranging from 0.12%-0.30%.
- Fidelity Index World Fund: 0.12%
- Old Mutual MSCI World ESG Index Fund: 0.23%
- Blackrock LifePath Fund: 0.21%
You should carefully compare the fees charged on any old pensions with other pensions available.
We pride ourselves on top notch customer service
Our dedicated pensions team are available 9am – 5.30pm Monday to Friday. We recommend getting in touch with our team via the in-app chat – they are super responsive! Alternatively, you can email firstname.lastname@example.org.
Top Pension FAQs
Can I move any type of pension to Moneybox?
We’re not able to accept every type of pension, unfortunately. We can’t accept a pension you are currently contributing to – we can only accept old pensions. If your old pension is a ‘defined benefit’ scheme or has any special benefits (for example a greater than 25% tax free drawdown amount), we wouldn’t be able to accept this.
If your pension is from another country, it’s likely this also can’t be transferred. However, we can check for you to be sure. Drop the team a message and they’ll do some investigating.
Can my employer pay into my Moneybox pension?
Unfortunately not. We’re only able to transfer old pensions that are no longer being contributed to by your employer.
How much money should I have in my pension?
Research by the pension provider Royal London estimates that, assuming lower living costs in retirement (e.g. hopefully you won’t still be paying for a mortgage), you need an income of £17,500 a year to live comfortably. To get an income of £17,500, you need a final pension pot of £260k to get a retirement income of £9,000 a year to combine with the full state pension of £8,500.
How much should I expect to pay in fees?
Fees are important because they reduce the performance of your pension, and over the long term even small differences in fees can have a big impact on money you end up with. The funds used for auto-enrolment can charge at most 0.75% annually.
You should carefully compare the fees charged on any old pensions with other pensions available – where cheaper options are available, you may want to switch.
How does drawdown work?
The Moneybox Personal Pension is only currently available as a service to consolidate your old workplace pensions into one new account, and so doesn’t offer a drawdown service. We are looking to introduce this feature in the future. If you become eligible to make drawdown payments on your pension whilst it is held with Moneybox, you will need to first transfer your pension to another provider. We’ll make sure this is as easy and smooth as possible!
Should I consider a personal pension or a Lifetime ISA?
Pensions and Lifetime ISAs can both be used to save for retirement but have important differences, including when you pay income tax.
Your contributions into a pension aren’t taxed, but you pay tax on the money you withdraw from it during retirement. A Lifetime ISA is the other way around: you contribute money you’ve already paid tax on, but eligible withdrawals are tax-free.
For most people, it makes sense to pay into a pension rather than a Lifetime ISA, but this depends on tax rates or the age when you want to access your investments. A Lifetime ISA could be relevant if you’re self-employed, earning less than £10,000 from a single employer, not working, or if you expect to pay a higher tax rate in retirement than you do in work – this will depend on your individual circumstances so you’ll need to assess the benefits of a pension or Lifetime ISA or seek independent financial advice.
For more information on Lifetime ISAs, see here.