This is part of our quarterly plan performance series. Catch up on last quarter’s summary here: How PensionBee’s plans are performing in 2021 (as at Q2).
The general outlook feels positive as almost 80% of the British population have now had both doses of a Covid vaccine, and UK stock markets have quickly recovered to pre-pandemic levels. Globally, more than 6.91 billion shots have been administered, and US stock markets continue to reach new highs. Nevertheless, economic fallout from the coronavirus pandemic may persist for some time, and investors could continue to experience some degree of market volatility, no matter where their pension savings are invested.
We began producing these quarterly performance updates last year, in response to feedback that you’d like to see the performance of your plan relative to our other plans. We provide this regular summary so you can do just that, as well as compare the performance of your plan with the major UK and US stock markets. We use these market comparators because they measure the performance of the biggest companies on each side of the Atlantic and because most of our customers have a significant portion of their pensions invested in both shares of UK-based and US-based companies. As the majority of our plans are diversified, most of our customers are invested in a mixture of geographies and asset classes.
As of the end of Q3 2021 (the first three-quarters of the year), UK and US stock markets returned 13% and 16% respectively. This is significantly higher than performance for the same period last year when the UK stock markets were down by 20% and US stock markets returned 6%. This offers hope that economies are recovering more rapidly than anticipated.
Against this backdrop, PensionBee plans have performed well. Plans designed for savers under 50 have a higher level of investment in company shares compared to plans for older savers. These plans have all benefited from economic recovery and have grown between 9% and 14% during the first three-quarters of the year. Our two responsible funds, the Fossil Fuel Free and Shariah plans have performed the best, and, each having grown by 14%, have outperformed the UK stock market. Most plans for those aged 50 and over have also recorded growth and continue to preserve savings for those who are close to retirement through relatively low exposure to company shares, or none at all.
When considering short term performance, it’s important to remember that your pension is a long-term investment. For example, in the five years to the end of 2020, our plans have experienced average annual growth ranging from 5% to 10%, which should put our customers in good stead to build healthy retirement pots. PensionBee is proud to offer long-term financial products in partnership with the world’s largest money managers: BlackRock, State Street Global Advisors, HSBC, and Legal & General.
Remember that past performance is not a guide to future performance and this blog has solely been prepared for informational purposes and not with the intent to influence future investment decisions. As with all investments, capital is at risk.
Savers under 50
| Plan / Index | Money manager | Performance over 2021 (%) | Proportion equity content (%)^ |
|---|---|---|---|
| UK stock market | N/A | 13% | 100% |
| US stock market | N/A | 16% | 100% |
| Fossil Fuel Free Plan | Legal & General | 14% | 100% |
| Shariah Plan | HSBC (traded via SSGA) | 14% | 100% |
| Tailored (Vintage 2043-2045) | BlackRock | 12% | 87% |
| Tailored (Vintage 2037-2039) | BlackRock | 10% | 76% |
| Tracker Plan | State Street Global Advisors | 9% | 80% |
Sources: Data is taken directly from the money managers. All performance is reported in gross figures. Past performance is not an indicator of future performance. Capital at risk. These tables do not take account of any fees that may be levied for a particular investment. Full fact sheets are available here: pensionbee.com/plans. Plan performance may vary slightly from published factsheets due to timing differences and other negligible methodological differences. ^Equity content refers to the amount of exposure each plan has to global stock markets and other listed risk-on assets, such as property.
Savers over 50
| Plan / Index | Money manager | Performance over 2021 (%) | Proportion equity content (%)^^ |
|---|---|---|---|
| UK stock market | N/A | 13% | 100% |
| US stock market | N/A | 16% | 100% |
| 4Plus Plan | State Street Global Advisors | 10% | 60% |
| Tailored (Vintage 2025-2027) | BlackRock | 6% | 51% |
| Tailored (Vintage 2019-2021) | BlackRock | 4% | 39% |
| Preserve Plan | State Street Global Advisors | 0% | 0% |
| Pre-Annuity Plan | State Street Global Advisors | -8% | 0% |
Sources: Data is taken directly from the money managers. All performance is reported in gross figures. Past performance is not an indicator of future performance. Capital at risk. These tables do not take account of any fees that may be levied for a particular investment. Full fact sheets are available here: pensionbee.com/plans. Plan performance may vary slightly from published factsheets due to timing differences and other negligible methodological differences. ^Equity content refers to the amount of exposure each plan has to global stock markets and other listed risk-on assets, such as property.
An important note of caution: It’s impossible to forecast what will happen from quarter to quarter, and past performance should never be used to predict future performance.
For our customers who are already in retirement, and are perhaps thinking about withdrawing their pension, we hope that you will take comfort in the range of plans we have on offer. You may want to consider only drawing down what you need and keeping a close eye on the markets. Our Investment Pathways can help you select a plan based on your personal retirement aims.
We will continue to keep you regularly updated on what’s happening with your savings and if you have questions about your plan’s performance, or anything else, you’re welcome to get in touch with your BeeKeeper.
This is part of our quarterly plan performance series. Check out the next quarter’s summary here: How PensionBee’s plans are performing in 2021 (as at Q4).
Have a question? Get in touch!
You can check out our Plans page to learn how your money is invested in different assets and locations. You can always send comments and questions to our team via engagement@pensionbee.com.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
