LFP090 – Pensions in the Gig Economy Age with Romi Savova CEO Pension Bee

The ONS has stated that the average UK worker will end up with eleven pension pots in their life. What a nightmare to track and manage for decades! What can Fintech bring to the party?

In this episode Romi Savova CEO and founder of online pensions provider Pension Bee joins us to discuss where pensions are now and where they are going.

Interestingly while we hear much about Open Banking there is no talk about Open Investment. Now isn’t that a curious thing,

Topics discussed on the show Include:

  • the historical background to the so-called “pensions crisis”
  • pensions as an acronym forest
  • Romi’s award as Entrepreneur of the Year at Women in IT Excellence awards
  • Romi’s career journey and personal experience of trying to move one of her pensions
  • the nightmare of trying to port pensions from one country to another
  • five aspects to the pensions situation:
  • Visibility
    • most folks don’t know how much is in their pension despite it being the major asset most people have alongside their house
    • ditto what this number implies in terms of their retirement income
    • the Pensions Dashboard project
    • Sweden has had one for 13yrs
    • the challenge comes in the data feeding the dashboard
  • Integration
    • companies like Pension Bee helping folks find and combine their pensions into one pot
    • challenges around dirty data
    • GDPR as a stimulus for providers cleaning their data
    • complications beyond data around terms and conditions
  • Portability
    • 2-3% of providers charge exit fees – the highest PBee has seen was 78%!!!
    • the rules are that a maximum exit fee for folks over 55 (!!)
    • renaming exit fees as something else
    • the time taken for providers to release assets (it can be up to 60 days just to move a pot of money!)
    • most folks don’t chose providers their employer does so the misincentives exist
  • Costs
    • 51% of people don’t even know there are costs involved in their pension (?!?)
    • auto-enrolment pensions have costs capped at 0.75%
    • however many pensions do not have capped costs
    • ways of disguising the total level of costs
  • Data
    • much is still kept in non-digital fashion and full of errors
    • GDPR data portability issues for pensions – but remains to be seen how this is interpreted
  • PBee outsources the money management to State Street, Blackrock and Legal & General
  • PBee’s online information portal on pensions you have with them
  • PBee have three products with total fees ranging from 0.5-0.95%, balances over £100k will be reduced to half these costs
  • partnerships – eg with Revolut and the Daily Telegraoh

And much much more 🙂

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