The fact that the total value of lost pension pots in the UK has skyrocketed from £19,4 billion in 2018 to £26,6 billion in 2022¹ should be a compelling enough reason to look into unifying all your old pension pots in a retirement savings product like the Moneybox SIPP.

This guide will walk you through the key features and benefits of a Moneybox pension. 

With its user-friendly interface and a range of investment options tailored to both beginners and experienced investors, Moneybox aims to make the process of saving for retirement more accessible. 

However, it is essential to be aware of the limited advanced features compared to those of traditional SIPPs.

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Read on to find out if the Moneybox pension could be the right fit for your retirement planning needs.

Who Are Moneybox and How Do Their Pensions Work?

Moneybox is a UK-based financial services company that offers an innovative app to help users save and invest their spare change.

With a focus on simplicity, Moneybox aims to make investing accessible to everyone, regardless of their financial knowledge.

The app allows users to connect their bank accounts and round up everyday purchases to the nearest pound and invest the difference.

They offer a range of investment options tailored to various goals and risk appetites.

More to the point, Moneybox offers a personal pension plan that aims to make saving for retirement as easy as possible.

What Is a SIPP?

A SIPP stands for Self-Invested Personal Pension, a UK-based retirement plan that grants investors the freedom to select where their pension funds are invested.

This plan caters to individuals seeking direct involvement in their retirement planning.

Unlike traditional pension schemes, SIPPs provide access to a diverse array of investment opportunities, such as equities, government securities, and real estate, offering personalized retirement strategy options.

This distinct feature sets SIPPs apart in the realm of pension savings.

Does Moneybox Offer a SIPP?

No, Moneybox does not offer a SIPP.

Instead, it offers a personal pension that aims to make saving for retirement as simple and hassle-free as possible.

How Does the Moneybox Pension Work?

The Moneybox pension works as a purely app-driven retirement savings plan with the main aim of consolidating all your old pension pots into one account. 

Clients can set up a regular deposit, activate a payday boost, make ad hoc deposits, and link their current accounts to Moneybox so their transactions are rounded up to the nearest pound (and the difference invested in their pension).

How Does Pension Transfer Work With Moneybox?

With Moneybox, pension transfer works in one of two ways.

You can either enter the details of your existing pensions in the app and start the transfers that way or you can use Moneybox’s Pension Provider Search tool—and Pension Detectives—to locate old plans.

By transferring your pension into a Moneybox pension, you gain the ability to choose from a range of investment options, including stocks, bonds, and funds, to build a portfolio that aligns with your investment goals.

This flexibility and control over your pension funds can help you maximise your retirement savings and achieve your long-term financial objectives.

Transferring your pension to a Moneybox pension offers several benefits.

What Are the Benefits of a Moneybox Pension?

The benefits of a Moneybox pension are primarily centred around its ease of use, investment options, and tax advantages.

Firstly, it allows you to have a consolidated view of your pensions, simplifying the management of your retirement savings.

Secondly, by choosing to invest your pension funds in a Moneybox pension, you have the potential to generate higher returns by diversifying your investments across different asset classes.

Lastly, Moneybox provides a user-friendly mobile app that makes it easy to track and monitor your pension investments, ensuring that you stay in control of your financial future.

What Are the Drawbacks of Using Moneybox for a Pension?

The drawbacks of using Moneybox for a pension include the fees, which may be higher than other providers, the fact that there is no drawdown option on retirement, and the limited advanced features for experienced investors.

Is a Moneybox Pension a Good Option for Retirement Savings?

Moneybox offers a flexible and straightforward way to save for retirement, especially for those looking to manage their pension via an app.

One of the key advantages is the ability to round up small amounts of spending into savings, making it accessible for those who prefer a gradual approach.

Additionally, the platform’s clear fee structure and investment options make it appealing to many users.

However, Moneybox may not be the best fit for everyone.

Its relatively new status in the market and focus on a digital platform might not suit those who prefer traditional, face-to-face advice.

It is important to weigh these factors before deciding if it is the right option for you.

What Should You Consider Before Choosing a Moneybox Pension?

Before choosing a Moneybox pension, you should consider your investment knowledge, the fees, and whether the platform offers the investment options that suit your retirement goals.

What Are the Fees and Charges for a Moneybox Pension?

The fees and charges for a Moneybox pension include an annual fee of 0,45% for pots up to £100,000, 0,15% for anything above that, plus a fund provider fee ranging from 0,12% to 0,30%.

Investment Options

The investment options available with this pension may not be as extensive as those of SIPPs, but Moneybox does offer a simplified approach for individuals who may be new to investing or those who prefer a hands-off investment strategy for their retirement savings. 

You can choose from four Starter funds based on your preferences and risk tolerance. 

Specifically:

• Fidelity World Index Fund: Targets global equities.
• Old Mutual World ESG Index Fund: Focuses on ESG-compliant companies.
• BlackRock LifePath Fund: Adjusts asset allocation as you near retirement.
• HSBC Islamic Global Equity Fund: Complies with Islamic finance principles.

For more customisation, Moneybox provides seven additional tracker funds across various sectors and asset classes, such as Emerging Markets by Fidelity, Global Health & Pharmaceuticals by Legal & General, and Global Property Shares ESG by iShares by BlackRock. 

You have the flexibility to change your fund allocation at any time through the app.³

Flexibility & Accessibility

The Moneybox pension stands out for its flexibility and accessibility, largely thanks to its app-based management system, which allows you to track performance and make changes to your investment choices all in one place. 

However, there are some limitations on flexibility: Moneybox only allows transfers of old pensions—you cannot move a pension from your current employer into this pension.⁴

While this might not be a significant issue for some, it may restrict others who want all their pensions, including their current one, in a single location.

Tax Benefits & Implications

The tax benefits and implications of a MoneyBox pension are the same as those of any other personal pension, making it an appealing option for retirement savings. 

Contributions into the pension receive tax relief at your marginal rate, effectively reducing the cost of investing for your retirement. 

Furthermore

The investments within the pension grow untaxed, which means you will not pay capital gains tax or income tax on dividends.

However, it is essential to understand the tax implications upon withdrawal: You can typically access your pension funds starting at age 55, and up to 25% of your pension pot can be withdrawn untaxed.⁵

Remember

Tax rules can change at any time, so it is useful to consult a tax advisor to fully understand the implications based on your specific situation.

Withdrawal & Retirement Options

The withdrawal and retirement options in Moneybox pension allow you the option to start accessing your pension funds at age 55, although you can choose to only do so later on. 

One of the cons of this product is that it does not offer a direct drawdown feature, meaning you will first have to withdraw the entire amount and transfer it to a provider that offers drawdown. 

Alternatively, you could buy an annuity.⁶

Customer Support & Service

Moneybox’s customer service and support are in line with its digital-first approach of prioritising convenience and self-service over traditional customer service avenues.

Most interactions are through in-app chat, but the platform makes up for the lack of human interaction by providing a range of educational resources like easy-to-digest videos and blog posts that cover the basics of finance and keep users updated on the latest news. 

What Are the Contribution Limits of a Moneybox Pension?

The contribution limits of a Moneybox pension are governed by HM Revenue and Customs and are currently £60,000 or 100% of your earnings, whichever is the lower.⁷

Who Is the Moneybox Pension Best Suited to?

The Moneybox pension is suited to reasonably tech-savvy people who are new to investing and want a simplified way to save for retirement. 

You should consider a Moneybox pension if you are looking for a no-fuss option for managing your pension.

First off

Moneybox will help you track down any pension accounts you may have accumulated during your working life and tie them all neatly together in one pot. 

It also has a nifty round-up feature where spare change from everyday transactions is collected and invested.⁸

For example

Your daily £4,10 Costa cappuccino will be rounded up and the 90p difference will be deposited in your pension.

How Does a Moneybox Pension Compare With Other Options?

A Moneybox pension compares reasonably well with other options, despite the fact that it is not a true SIPP in the traditional sense, as it offers limited investment and withdrawal options. 

However, what it lacks in flexibility, it makes up for in convenience and ease of use. 

By contrast

Traditional SIPPs often offer a wider range of investment options and withdrawal features but require more hands-on management and investment experience. 

This makes Moneybox a more streamlined but less customisable option, suitable for those who prioritise simplicity over the ability to tailor their investments and withdrawal strategies.

Price-wise, it ranks up there with Hargreaves Lansdown at 0,45%, but with far fewer frills.⁹

Moneybox vs Nutmeg: Which Is Better for Pensions and ISAs?

Both Moneybox and Nutmeg offer a digital-first approach to pensions and ISAs.

Moneybox is known for its user-friendly app and ‘round-up’ feature, while Nutmeg is better suited to those looking for more tailored investment advice, as it offers a range of portfolios managed by financial experts.

Moneybox may appeal to those who prefer a more hands-off approach and lower starting contributions, while Nutmeg is a better option for those who want a more comprehensive financial management service.

Ultimately, the best choice depends on your personal financial needs and comfort with digital investment platforms.

What Are Clients Saying About Moneybox?

What clients are saying about Moneybox generally falls into two categories: praise for its user-friendly interface and criticism for its higher fees and limited features. 

On Apple’s App Store, Moneybox has garnered over 32,500 reviews with an average rating of 4,8 stars out of 5.¹⁰ 

The Google Play Store shows similar enthusiasm, with over 10,700 customer reviews resulting in an average rating of 4,3 stars.¹¹ 

Trustpilot adds another perspective, hosting over 1,600 reviews with an average customer rating of 4.5 stars out of five.¹² 

Opening a Moneybox Pension

Opening a Moneybox pension involves a few straightforward steps and requires some basic information about your previous pension plans.

What Steps Do You Need to Follow?

Opening a Moneybox pension starts with downloading the Moneybox app. 

After downloading, go to the account tab and sign up for the pension waiting list.

When your account becomes active, you will need to provide information about your previous pension funds and select an investment fund. 

The Moneybox team will handle the transfer process and keep you updated.

What Documents Do You Need?

Besides proof of identity and proof of UK residence, you will also need details about your old pension funds, such as the names of the providers and policy numbers. 

If you do not have this information readily available, Moneybox can assist in locating it for you.

Who Is Eligible to Open a Moneybox Pension?

UK residents over the age of 18 are eligible to open a Moneybox pension.

How Does the Moneybox App Work for Managing Your Pension?

The Moneybox app allows you to manage your pension from your smartphone with ease.

You can check your balance, track your investments, and make contributions all from the app’s intuitive interface.

The app also provides useful notifications, such as when fees are applied or when it’s time to top up your savings.

One of the key features is the ability to use ‘round-ups,’ which invest spare change from your purchases into your pension pot.

This makes it easy to save regularly without needing to set aside large sums of money upfront.

Regulatory Details

Moneybox is regulated by the Financial Conduct Authority (FCA), promoting compliance with financial laws and regulations.

Common Questions

Moneybox Pension Review: In Short

When it comes to potentially opening a Moneybox pension, your personal financial and retirement goals should guide your decision. 

Consulting a qualified financial advisor can provide tailored advice to see if this product aligns with your plans. 

A Moneybox pension may be a convenient option for some, but the fees and limited features may not suit everyone. 

Ultimately, assess your options carefully to determine if a Moneybox pension could be the right choice for you.