Customer pledges pave the way for PensionBee to launch one of the UK’s first mainstream fossil fuel free funds
London, 17 December 2020: Leading online pension provider, PensionBee, today launches a new fossil fuel free fund, created in partnership with Legal & General Investment Management (LGIM), in response to overwhelming consumer demand.
The PensionBee Fossil Fuel Free Plan is one of the first mainstream funds of its kind to completely exclude fossil fuel producers, tobacco companies, manufacturers of controversial weapons and persistent violators of the UN Global Compact.
It’s designed to invest more of savers’ money in companies that are aligned with the Paris agreement, by tracking an index called the FTSE All-World TPI Transition ex Fossil Fuel ex Tobacco ex Controversies Index. This is a completely new index created especially for the fund, and is part of a new Paris-aligned index series designed in collaboration with the Transition Pathway Initiative, FTSE Russell and the Church of England.
Today’s launch is the result of a year of campaigning by PensionBee, and follows a pledge of support from existing customers who committed to switch to the new Fossil Fuel Free Plan as soon as it became available . PensionBee needed to secure a 1 commitment of £100 million from its customers in order to launch the plan at the desired all-in fee of 0.75%, with a reduced fee of 0.38% on any savings over £100,000.
In less than a week PensionBee had reached a third of its target, securing £31 million in commitments, and was well on its way to reaching the target. PensionBee continued to build demand in the market following the campaign launch, and now another investor has emerged with sufficient investment to launch the fund.
As a result the fund launches today (17 December), and PensionBee’s Fossil Fuel Free Plan will be available to customers from 18 December. All of the pension providers’ existing customers who have already committed to invest in the plan will have their assets invested into the fund as soon as they can be processed.
The new plan is PensionBee’s third responsible investing option, from a total of nine plans currently on offer to consumers. It joins the Future World Plan, which invests money into companies that pledge to move to an environmentally-friendly economy, utilising an ‘engagement with consequences’ approach, and the Shariah Plan which only invests in Shariah-compliant companies.
In early 2020, PensionBee surveyed its Future World Plan customers and found that over a third (34%) thought that the time for engagement with oil companies was over . They asked to completely exclude oil from their pensions, even if that meant a 2 potential reduction in the profitability of their pension, with many convinced that oil production is a dying and long-term unprofitable business.
Clare Reilly, Chief Engagement Officer at PensionBee, commented: “We’re delighted to be launching our new Fossil Fuel Free Plan with the help and support of our customers. It’s our customers who have made this possible every step of the way, first by telling us they wanted a product that completely excludes companies with oil, gas and coal reserves from their investments, and secondly, by pledging to invest in the fund ahead of its launch.
We believe sustainable investing is the future of engagement with pensions and that everyone should have the option of using their investments for good. We hope this is just the start of all savers using their investment power to transform the world they live in – for the better of the planet, society and their retirement.”
Emma Douglas, Head of DC at LGIM commented: “We are excited to build on our existing partnership with PensionBee through the launch of this Fossil Fuel Free Fund. We believe that investing in companies who are positioned to capture the benefits from the transition to a low carbon economy will enhance investment returns for savers that will in turn help them reach their retirement goals. However, it’s not just investment returns that motivate savers but the opportunity to make a difference.
Our research has shown that savers want to understand how their investments can align with their own principles with climate change being a key theme that engages members. At LGIM, we continue to hold companies to account on ESG issues including their progress towards net zero, through our Climate Impact Pledge.”
To find out more visit: https://www.pensionbee.com/fossil-fuel-free-pension
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PensionBee is a leading online pension provider, enabling customers to interact with their savings through its unique combination of smart technology and dedicated customer service.
Since it was founded in 2014 by Romi Savova, PensionBee has been a challenger in an industry ripe for disruption. It has grown rapidly by helping consumers to solve the challenges they face when it comes to locating, combining and managing their pension savings. It now counts over 115,000 active customers from 18-80 years of age with over £1.2 billion in assets under administration, and has experienced over 85% growth in invested customers year on year.
Its range of plans are tailored to customers’ needs and are 100% FSCS protected. Plans are managed by some of the world’s largest money managers including: BlackRock, HSBC, Legal & General and State Street Global Advisors.
PensionBee uses its proprietary technology and Open APIs to allow customers to manage their pension, view their live balance, make contributions and withdrawals online and with the help of a smart calculator to plan their saving. It continuously engages with customers through its dedicated customer account managers and listens to feedback to develop new tools which help customers to easily plan for their retirement.
By focusing on ease of use, full transparency on fees, and jargon-free communication, PensionBee has become one of the UK’s most trusted pension providers with a 95% customer retention rate and a 4.7/5.0 Excellent Trustpilot score.
About Legal & General
Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with international businesses in the US, Europe, Middle East and Asia.
With over £1.2 trillion in total assets under management at 31 December 2019, we are the UK’s largest investment manager for corporate pension schemes and a UK market leader in pensions de-risking, life insurance, workplace pensions and retirement income.
We have also invested over £22 billion in direct investments such as homes, urban regeneration, clean energy and small business finance.
Legal & General Assurance Society Limited. Registered in England and Wales No. 00166055.
Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority.
Registered office for both companies: One Coleman Street, London EC2R 5AA.