Penny is helping track down millions in lost pensions

Have you worked multiple jobs all with different pension pots? Are you struggling to locate and collate these savings? If so, you’re not alone. In fact, 63% of people don’t know where their pensions are. Bristol-based app, Penny, is looking to change this. 

Back in 2012, the UK government announced auto-enrolment. This meant more than 10 million people had now been enrolled in a workplace pension. For the first time in history, every employed adult has access to pension wealth, however, the majority don’t know how to see or manage this. As the average length of employment has fallen to three years since this policy change, there is a large growing group of individuals who have small pensions across various accounts that they cannot see. 

This is precisely the problem Penny is seeking to address. Penny is an app-based Pension company that is on a mission to make pensions simple and enjoyable to engage with. 

The issue is, younger people on lower incomes naturally have a much smaller pension pot. Most incumbents and big fintechs are focused on high value users – which entails those who know where their pensions are but are costly to acquire. 

Penny is a platform for people less familiar with pensions – by removing the jargon and hidden fees, Penny hopes to make pensions clear and easy for everyone to understand. David Henderson, Head of Pensions at Penny tells us that the startup was formed out of conversations with friends and colleagues about pensions and realising how little most people engage with their retirement planning: “Pensions have a image of being dull and not interesting, in part because you cant access them until much later in life. 

“But they are hugely important and one of the best ways to save for the future. As people move jobs they lose track of these pensions. Especially younger people who might have only been at a company for a short period so don’t realise that they still had a pension set up. The problem is massive though. In the UK the total value of  lost pensions is £26.6 billion.”

There is a large disparity in financial knowledge across the population, but this shouldn’t stop anyone from having access to their pension. But why should 25-45 year-olds be thinking about their pension just yet? The number of lost pensions in the last 4 years has risen by 75% to 2.8 million; this statistic disproportionately affects younger people, who are more likely to have switched jobs or been made redundant in the pandemic and in this upcoming recession. 

One of Penny’s goals is to build better financial inclusion in our communities. David explains, “Financial inclusion means that individuals have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.

“I have worked in Financial Services for over 20 years and dealt with companies that seem to go out of their way to make investing and saving for the future as complex as possible. This simply alienates people. We used to use the phrase “would your Granny understand it” at my previous employer, and that’s the same with Penny. Why use jargon? Despite the success of auto-enrolment we still all need to be saving more for retirement so let’s make it easy to understand and engage with.”

Penny does the hard work for you, sourcing all your pension pots and collating them on their easy-to-use app. But it wasn’t always this easy: “In the past, if you wanted to track down lost pensions this meant calling around pension companies in the hope that you got through to the right team that might be able to tell you whether you had a pension or not. This was painful and time-consuming. We have developed our own tech to allow us to electronically contact the companies in seconds. If a user has a pension we find the details and the value for them. Nationally the average value of lost pension pots is £9500.”

Earlier this year, Penny raised £4m with backing from Google Gradient Ventures and Monzo founder Tom Blomfield. Gradient Ventures is Google’s AI investment fund, which predominantly invests in US-based companies.

It’s an exciting time for the Bristol startup after being valued at $33m by Dealroom and the team has plans to launch in California in the future, whilst adding new features to the app such as trading in crypto currencies. David tells us, “The recent raise was great and it gave us confidence that investors believed in what we are doing. We previously partnered with an established pension provider to run our pension scheme, this investment has given us the chance to launch our own scheme, the Penny pension plan. This gives us more control over our offering and means we can better tailor our service to meet our user’s needs.”

Telling us more about why Penny chose the South West as its home, David explains, “Bristol has so much going on. Outside of London there are more tech meetups than anywhere else in the UK. FinTech is really starting to boom in the region with support from FinTech West and the local universities, who are all launching new FinTech courses. 

“We have just had the Bristol Technology Festival with 70+ events over the week, free and accessible to anyone. I love how open and supportive the tech community here is. Add this to the established companies in the region like Hargreaves Lansdown, Lloyds, NatWest, Seccl and Moneyhub and I think the region is on a pretty good trajectory for more success.”