Why is the Impact Plan being closed?
The Impact Plan was created in 2022 in collaboration with the money manager BlackRock. It was initially selected on the basis of its ability to deliver a diversified portfolio of high quality impact investments.
Last year BlackRock informed us that they intend to modify the investment strategy of the Impact Plan due to market changes and internal considerations. This means that the current impact investing strategy, which closely engages with investee companies, will be replaced by a sustainable strategy that will use advanced computing systems with human oversight for stock selection.
After careful consideration, we believe this means the future of the Impact Plan no longer aligns with our customers’ expectations.
Despite extensive research, we haven’t been able to identify a suitable new impact investing plan that we believe meets our customers’ objectives, without introducing additional undue risk and cost.
As a result, we’ve made the difficult decision to close the Impact Plan in early May 2025.
BlackRock will continue to manage the Impact Plan in line with the current objectives and the strategy won’t change prior to the plan switch occurring in May. This means we’ll leave the Impact Plan before any changes are made.
Why did you select the Climate Plan as an alternative?
The Climate Plan is our newest sustainable plan, created in partnership with State Street Global Advisors (SSGA). It’s an upgraded sustainable plan that reflects customers’ feedback and goes beyond climate investing to exclude other industries that negatively impact the environment and society.
While the Climate Plan and the Impact Plan have different investment objectives, the Climate Plan is closely aligned with the Impact Plan in terms of exclusions.
Our Climate Plan is designed to reduce investment in polluters and heavy carbon-emitting companies over time, by continually reducing the total intensity of greenhouse gas (GHG) emissions produced by companies in the plan by at least 10% annually. So, even if the global economy uses more carbon over time, the Climate Plan will move in the opposite direction.
The plan’s objective is to align with the goals of the Paris Agreement to keep the rise in global surface temperature well below 2°C. Additionally, it seeks to take advantage of the financial opportunities associated with the low-carbon transition by investing more in green revenues.
The Climate Plan also excludes investing in other industries that harm the environment and society, by removing:
unsustainable palm oil use;
controversial, nuclear and other weapons;
adult entertainment;
alcohol;
gambling;
for-profit-prisons;
tobacco; and
environmental controversies.
View the Climate Plan’s top 10 holdings.
Why isn’t there a new alternative for impact investing?
Despite extensive research we haven’t been able to identify a suitable new impact investing plan that we believe meets our customers’ objectives. Other plans on offer would introduce either substantial additional risk or cost, or both.
Impact investing is more time-intensive due to the rigorous nature of due diligence and impact measurement. The smaller and niche markets many impact companies operate in come with higher risks, adding additional cost and the need for active management. Most impact investing funds therefore only invest in 30 - 40 total stocks. It’s this high concentration, along with the inability to offer 100% FSCS protection in line with our other investments, that brings additional risk.
Given these challenges, we don’t believe other impact investing options currently available are appropriate for our customers’ retirement needs.
How do the fees compare for the Climate Plan?
The Impact Plan costs 0.95% annually and the Climate Plan will have an annual management fee of 0.75% of your pension balance.
Additionally, if you have more than £100,000 in your pot, we’ll halve the fee on the portion above this amount.
How will the performance of the Climate Plan compare to the Impact Plan?
The new Climate Plan strategy launched on 30 September 2024. You can see the performance of the plan from that date using the Morningstar link.
You can also find the Climate Plan’s factsheet on our plans page. Please note the Climate Plan performance data begins from 30 September 2024.
What are my options if I don’t want to be switched to the Climate Plan?
If you don’t want to be automatically switched into the Climate Plan, you can switch into one of our other plans. To switch, log into your BeeHive (your online account) and tap ‘Account’ and then ‘Switch plans’.
With PensionBee you can switch to any new plan of your choice at any time, just note that the switch will take around 12 working days to complete.
Can I switch plans earlier if I want to?
Yes, you can switch to a new plan, including the Climate Plan, at any point before mid-April. You can view all PensionBee Plans on our plans page and you can request a plan switch in your BeeHive. Please be aware that from mid-April we need to prepare for switching by freezing activity in or out of the fund.
Can I continue to make contributions?
All your regular and ad hoc contributions will continue to be paid into your Impact Plan until your switch begins. Once the switch begins, your BeeHive balance will be frozen until it completes.
If you have a regular contribution set up, your funds will still be collected during this period and will be invested in the Climate Plan once the switch is complete.
What if I want to withdraw funds at this time?
Once the switch begins, your BeeHive balance will be frozen until it completes. We estimate this could take up to 20 working days. You won’t be able to withdraw funds during this time. If you have regular withdrawals set up on your account we’ll contact you separately to discuss this.
If you were planning to make an ad hoc withdrawal in April or May this year, we’ll give you around six weeks notice before the switch begins, so you can make any necessary withdrawals then.
Please note that if withdrawal requests are made before 12pm on a working day, we’ll aim to make a trade request on the same day. Requests made after 12pm may be processed the following working day. As long as there are no issues verifying your bank details, it should take around 12 working days for you to receive your money.
Will the value of my pension be impacted?
During the time of the switch, your balance will appear frozen and the graph on the ‘Analytics’ tab in your BeeHive will indicate a straight line. However, the majority of your funds invested will remain in the market at this time.
Therefore, your pension will still be subject to market movements, and its value may go down as well as up while the switch is in progress. Any changes in your pension’s value that occur during this period will be reflected in your balance once the switch has been completed.
What if the stock market is volatile, will you still switch me?
We’re working in close partnership with BlackRock and State Street Global Advisors to optimise the switching process for customers. If any extreme market turbulence occurs in the run up to the fund switch date, we’d review the switch timeline and notify customers of any changes. We will delay the plan switch in extreme market conditions.
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.
