It’s an exciting time for the pension world and for so many of us who have been waiting for a truly ethical way to invest our money for the future. The PensionBee Fossil Fuel Free (FFF) Plan is here, and my pension pot is one of the first to be transferred over to the new fund. This makes me feel so happy.
I have struggled for a while morally with the fact that my short-term consumer decisions had such a conflict with my longer-term investments. I make choices every day with the money I spend going to ethical businesses. My energy company supplies me with renewable energy, I drive a hybrid car, I shop locally for food and I recycle and reuse everything I possibly can. But yet my pension money was sat in the PensionBee Tracker Fund that included lots of companies that I wouldn’t chose to use as a consumer or that were environmentally aware.
I know I am not the only one with this view, my ethically minded friends feel the same, we all want to do something good with our money spent now and that we work hard to put aside and save for the future in our pension.
What is the PensionBee Fossil Fuel Free Plan?
It is one of the first mainstream plans of its kind to completely exclude fossil fuel producers, tobacco companies, manufacturers of controversial weapons and persistent violators of the UN Global Compact. The plan tracks a brand new index created specifically for the FFF plan, the FTSE All-World TPI Transition ex Fossil Fuel ex Tobacco ex Controversies Index. The plan is managed by Legal & General Investment Management.
PensionBee already have a Future World Fund which is different with its investment principles. It included companies who pledge to move to environmentally friendly operation.
This is great but its not enough to many people. In fact, in early 2020 PensionBee spoke to their Future World customers and 34% said that that they no longer wanted to invest in oil companies who had committed to make more environmental changes in the future. They wanted their money moved away from the oil companies in totality.
Could PensionBee Hit the £100m Target of Committed Transfers by Customers?
The FFF Plan is available to all existing and new customers from 18th December. It’s been a bit of a wait since first hearing about the new plan. In November, I along with many other customers committed to transfer our fund over to the new plan. PensionBee initially needed £100m of funds committed by customers to secure a 0.75% fee on balance under £100k and for the plan to launch.
I was keenly watching the total amount of money transferred grow and grow each week hoping that the launch could happen before Christmas. Within a week £31m has been committed by customers, (my £60k pension pot was my contribution to the total!) to move over to the new fund and then within a month £41m had been committed.
In December, another significant investor committed to the fund meaning that that £100m target had been hit and the new FFF plan could launch. My personal money will be moving over in the New Year. A great start to 2021 for my environmentally aligned personal finance and future.
The fees for the FFF Plan are 0.75% (this is slightly higher than I was paying in my Tracker Plan at 0.5%, but I am comfortable with that) and drop by 50% for the portion of your pension balance over £100k. I am not far from this milestone; I am aiming to get here within the next five years to benefit from a saving on the management fees.
What If I am not a PensionBee customer?
You can consolidate your pension pots and move them over to PensionBee with ease. Pensions can be complex and difficult to understand if they are sat in lots of different pension pots from your various employers. Just five years ago I had no idea how much money I had, what fees I was paying and how much my pension might be worth in the future.
I wanted simplicity, language that I could understand, great customer service and the ability to check my pension balance and contribute when I wanted. PensionBee gave me this control. I filled in some simple forms with my existing Pension details and my PensionBee BeeKeeper went to work to get those pensions transferred over. PensionBee do this for free. There may be exit fees from your existing pension provider to transfer your money. If this is the case your BeeKeeper will let you know before anything happens to process the transfer.
I have not looked back since I moved my pensions over to PensionBee. I have committed since the beginning of 2020 to adding £500 a month to my pension. This will be enough to provide with me with the income when I choose to eventually retire. The helpful retirement planner in the app and online has given me the confidence to know that this will be enough.
If I am a PensionBee customer and want to switch to the new FFF Plan
Just log into your account and choose the option to switch plans. It’s completely free to switch and your BeeKeeper will do all the work for you once you have given permission to transfer the money.
Please be aware that any form of investment can go up and down. You may want to consider advice from a qualified IFA. Just make sure they come recommended by a trusted friend and check their investment levels. Some will only work with clients with an investment level of at least £150k. This post was written in collaboration with PensionBee