Illustration by Neil Webb

About a year before he reached retirement, Frank Chapman started mapping out the travels he and his wife envisioned for their golden years. A career accountant for British telecom companies, he thought it best to put some numbers behind his dreams, so he contacted the major pension providers where his savings were stowed. It was hard to pry even basic information from them, he says. Instead they channeled his calls through financial advisors, who pitched costly services. The more he prodded for information, the more hidden fees he found, from 1.3 percent in annual fees to service and administrative charges and investment and withdrawal penalties.

Chapman is not alone in his struggle to make sense of a murky system, though his career probably gave him a leg up on the average pensioner—a growing population in the UK, which in 2012 became the first country to mandate that private sector employers auto-enroll their employees in a pension plan. In the span of six years, the number of people with pensions in the UK jumped by 10 million.

But just opening the accounts isn’t enough to ensure they will fund a person in retirement. Studies show that workers change jobs an average of 11 times in the course of their careers, and beyond the potential to misplace all that paperwork, any number of things can happen before a person reaches retirement age, says Romina Savova (MBA 2012). “The institution managing your money could wind up being bought, change its name, or cease to exist,” she says. Some people aren’t even aware that they’ve been auto-enrolled, according to the Association of British Insurers and the Pensions Policy Institute, which recently found 1.6 million unclaimed pension funds, worth nearly £20 billion, floating around the UK. “That probably underestimates the scale of the problem because those are only the ones we know about,” Savova says. The situation will be exacerbated by job losses associated with the COVID crisis this year, leading to more than 20 million abandoned pensions by the end of 2020, she estimates.

Savova founded PensionBee in 2014 to address this lack of continuity and introduce transparency to an industry that’s known to be convoluted and confusing. The company is able to track down a customer’s pension plans and consolidate them into one, which can be managed by a mobile app, and the investments are handled by some of the world’s biggest money managers, including BlackRock and State Street Global Advisors.

Frank Chapman signed on, as did his wife, who had a half-dozen different accounts of her own. Now the couple can set up contributions, monitor their investments, and use drawdown tools from their phones. When they’re ready to book a holiday—next up is a trip to the American Rockies, if the global health crisis permits it—they can withdraw the cost of the trip and leave the rest where it is to continue growing. They pay one flat annual fee (0.95 percent for the first £100k invested, then half that for amounts above £100k). And when the markets get jumpy, as they did in March, Chapman can unlock the app with his fingerprint to see, within seconds, the state of his investments. (He can also avoid the app for months and maintain a long-term view.) The contrast with his experience with legacy providers is as different as chalk and cheese, he says.

To increase transparency, the PensionBee website offers planning tools and primers to explain, in jargon-free detail, taxes and withdrawals and anything else you might be too embarrassed to ask about. The site has 300,000 registered users and around £1 billion in assets under administration—a figure that has doubled every year but still represents a small fraction of the £1 trillion under management across the UK.

Its customers range in age from 18 to 80, although the majority are in their mid-career years. Over-50s like Mr. Chapman make up about 15 percent of the company’s customer base and are its fastest-growing segment. People assume that it’s mostly millennials who have the desire and savvy to manage their finances by mobile app, Savova says, but “we’ve found that people of all ages want easy ways to contribute, to invest more responsibly, and to forecast what they’ll receive once they start accessing their pension.”

Looking farther into the future, Savova is excited to see how expanding the floodlights of transparency could transform pension investing—or even society at large. Pension savers are invested in all of the world’s largest companies, she says, and though people may have strong ideas about corporate behavior, they haven’t had the levers to deploy the collective power of their ownership. Perhaps, Savova suggests, a tech-enabled platform like PensionBee could help with that.

Also, the pandemic has made clear that a more sustainable form of capitalism—one that prioritizes social inclusion, health and well-being, and environmental protections—is going to be the more profitable approach in the long term, Savova says. That in turn would lead to happier retirements for its customers. “It is our responsibility to put that power into pension savers’ hands,” says Savova, “and we are just at the beginning of that journey.”

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