About PensionBee

PensionBee is creating a global leader in the consumer retirement market, with £5.2 billion in assets on behalf of  252,000 customers.

Founded in 2014, we aspire to make as many people as possible pension confident so that everyone can enjoy a happy retirement.

We help our customers to combine their retirement savings into a new online account, which they can manage from the palm of their hand.

PensionBee accounts are invested by the world's largest investment managers, collectively looking after more than $10 trillion in savings between them. Each PensionBee customer has a personal account manager ('BeeKeeper') to guide them through their savings and retirement journey. PensionBee has an 'Excellent' Trustpilot rating based on over 10,000 reviews.

As a public company, we aspire to the highest standards in everything we do because our customers deserve peace of mind. Our team of c.200 professionals, based in London and New York, has one focus: you, our customer.

PensionBee is listed on the London Stock Exchange (LON:PBEE).

Forward-Looking Statements

Statements that are not historical facts, including statements about PensionBee's or management's beliefs and expectations, are forward-looking statements. The Interim Results contain forward-looking statements, which by their nature involve substantial risks and uncertainties as they relate to events and depend on circumstances which will occur in the future and actual results and developments may differ materially from those expressly stated or otherwise implied by these statements.

These forward-looking statements are statements regarding PensionBee's intentions, beliefs or current expectations concerning, among other things, its results of operations, financial condition, prospects, growth, strategies and the industry and markets within which it operates.

These forward-looking statements relate to the date of these Interim Results and PensionBee does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of the Interim Results.

Chief Executive Officer's Report

Creating a Global Leader in the Consumer Retirement Market

We are creating a global leader in the consumer retirement market. We exist to help our customers prepare for and enjoy a happy retirement. We enable our customers to combine their old retirement accounts into a new online plan. We enable them to make contributions, to invest in line with their objectives with money managed by the world's largest asset managers, and ultimately to withdraw and spend their retirement savings.

Our aspiration is to build a lifetime relationship with our customers, generating predictable and scalable revenue for our company and returns for our investors.

Our Mission and Vision

As we fast approach our 10th anniversary since inception, we have reflected on and refreshed our company's mission and vision, which guide us and remind us of our reason for being.

Our mission is to build pension confidence

Having made pensions simple, we have evolved our mission to reflect the ambition that we have for our customers: we want them to feel empowered and confident managing through all stages of their working life through to their retirement. We have supported this with continued product innovation designed to meet customer needs, through the prioritisation of excellent customer service and the maintenance of a leading technology platform. The need for retirement planning and pension ownership has never been greater, so our mission remains as critical as ever.

Our vision is a world where everyone can enjoy a happy retirement

Having successfully built and grown our UK business into a leading online pension provider, developing a depth and breadth of knowledge and expertise, we are leveraging this to create a global leader in the retirement market. Launching our US business and entering the world's largest Defined Contribution pension market, has enabled us to expand the reach of our award-winning customer proposition, innovative technology platform and unique marketing approach to millions of Americans. This represents a significant step towards the achievement of our vision.

Overview of Group Performance

2024 has provided a more supportive and stable market backdrop than previous years, but nonetheless continued geopolitical risks, a persistently high interest rate environment, and it being a critical election year in both the UK and the US, have meant some uncertainty has remained.

Our business has continued to demonstrate resilience, strength and substantial growth. Our customer-centric proposition, led by product and technological innovation, excellent customer service, and transparent and straightforward fees, has continued to resonate well in the enormous market of pension savers. An unwavering focus on serving our customers, together with our team's ability to execute and advance our strategic goals, have supported the delivery of strong Group financial and operational performance for the first half of 2024.

We have maintained our strong growth momentum, with Assets under Administration ('AUA') increasing by 40% to £5.2bn (1H 2023: £3.7bn), underpinned by £482m of Net Flows (1H 2023: £469m) from new and existing customers and £364m from supportive markets growing our customers' pension assets (1H 2023: £210m). Revenue increased by 41% to £15.4m (1H 2023: £10.9m) across the first half of the year, with Annual Run Rate Revenue increasing by 39% to £32m (June 2023: £23m).⁵

We achieved significant customer growth, efficiently acquiring 23,000 new Invested Customers across the first half of the year (1H 2023: 28,000) to reach 252,000 Invested Customers (1H 2023: 211,000). We achieved this customer growth while maintaining a Customer Retention rate of 96% (1H 2023: 97%) and continued strong customer satisfaction (4.7★ out of 5 Excellent Trustpilot score).¹ 

Efficient investment in marketing and in our scalable technology platform, together with overarching cost discipline, have driven rapid and efficient growth. Our ability to efficiently spend on marketing has seen us maintain our household brand name status, which has supported new customer growth with a declining customer acquisition cost.

United Kingdom: Successful Strategy drives Strong UK Business Performance

UK Overview

Efficient Investment in Customer Acquisition and Brand Awareness

In the first half of the year, we invested £5.8m in marketing expenditure (1H 2023: £6.8m), bringing our total marketing spend since inception to £61m (1H 2023: £52m). This investment has been instrumental in growing our brand presence and in enabling us to attract new customers efficiently.

Highlights include our National Geographic sponsorship, further investment in our award-winning 'Pension Confident' podcast, partnerships with other financial communities, and our longstanding Brentford Football Club sponsorship.

The strength of our marketing capability and our data-led multi-channel marketing approach, combined with PensionBee's strong brand recognition in the UK as evidenced by prompted brand awareness of c.55% (1H 2023: 50%), has continued to deliver marketing efficiency.² We achieved a 3% year-over-year increase in Net Flows with a 14% reduction in marketing expenditure, highlighting the efficiency and impact of our marketing investments. At the same time, Cost per Invested Customer ('CPIC') has continued to demonstrate a downward trajectory, in line with expectations and within the desired threshold, reducing to £242 (H1 2023: £247).

Leadership in Product Innovation

We continued to develop our product offering for the benefit of our customers, incrementally rolling out new features to enable greater customer engagement. Our data shows that engaged customers are more likely to grow their pensions with us and are therefore more likely to enjoy the type of retirement they deserve.

In the first half of the year, we launched several new features designed to enhance customer experience and engagement. Notably, we released our new fund past performance tracker, a feature which provides customers with a clearer understanding of our plans through more investment transparency and educational content.

The implementation of a new onboarding checklist feature in the app has provided our customers with a handy tool to help them more fully utilise the app's functionality. The checklist encourages customers to transfer more pensions to their PensionBee account, to add contributions and encourages deeper engagement with our services.

Investment in and Development of an Industry Leading Technology Platform

We continued to invest in our technology capability over the first half of the year in support of our growth ambitions. We invested in scaling our technology by enhancing internal automation, efficiency, security, and pension transfer processes. These efforts have boosted productivity, evidenced by a 23% improvement year-on-year to 1,264 (1H 2023: 1,026) in the Invested Customers per Staff Member metric (1H 2023: 12%).⁶

We have continued to explore the potential for adopting artificial intelligence ('AI') tooling within our departments, completing a company-wide trial of an AI platform, and prototyping large language model based analysis of customer feedback through our data warehouse. We are increasingly integrating our data platform within our daily product management operations, linking core Key Performance Indicators to projects to ensure our multidisciplinary development teams remain productive and impactful.

Finally, we continued to implement cyber security tools and best practices to keep our customers' data safe. We transitioned our Information Security Management System to the updated version of the ISO 27001 standard. Our InfoSec programme continued to reinforce a culture of security awareness through threat simulation, monitoring and automation in information security operations and compliance.

Focus on Excellent Customer Service

We continued our relentless focus on the provision of excellent customer service to create the best pension experience possible for our customers, to leave them delighted.

We are proud to have delivered excellent customer support, as demonstrated by rapid response times even through the busy end of tax year period, with live chat and phone waiting times of 14 and 45 seconds respectively. Consequently, we have continued to enjoy high ratings from our customers, giving our team great purpose and inspiration. We pay close attention to our Trustpilot and app store ratings, which serve as an indicator of customer satisfaction. We are pleased to have maintained our excellent ratings across both, with a 4.7★ Excellent Trustpilot rating having been achieved from 10,920 customer reviews (1H 2023: 4.6★).¹

Ensuring excellent levels of customer satisfaction is central to our ambition of retaining and serving our customers throughout their lifetimes. We demonstrated the continued strength of our customer value proposition by maintaining a Customer Retention Rate of 96% for the first half of the year (1H 2023: 97%). It is as a result of these high customer retention levels generating high levels of recurring revenues, combined with the scalability of our technology platform, that we can generate operating leverage over time.

UK Guidance and Outlook

United States: Launch builds on Growth Ambition and Leverages Execution Capability

US Overview

On 18 July 2024, we announced the launch of our US business, confirming that our subsidiary PensionBee Inc. had entered into a strategic partnership with one of our long-standing asset management providers, State Street Global Advisors ('State Street'). The United States is the world's largest Defined Contribution pension market, representing approximately 80% of the global total and $22.5tr in assets.⁴

PensionBee will deploy its award-winning online retirement proposition and proprietary technology, enabling US consumers to easily consolidate and roll over their 401(k) plans and Individual Retirement Accounts ('IRAs') into one new PensionBee IRA.

PensionBee Inc. offers a range of investment portfolio options, with underlying State Street model portfolios. Each investment portfolio is constructed exclusively with Exchange Traded Funds ('ETFs') managed by State Street.

The PensionBee IRA is offered under a wrap fee program, including the PensionBee advisory service, asset allocation and management fees and custody fees.

State Street will provide meaningful marketing support to PensionBee as we use our data-led, multi-channel customer acquisition approach to attract new customers. Under the terms of the agreement with State Street, the annual amount of the marketing support is variable based on the achievement of certain net new asset thresholds. Marketing support is expected to continue for 5-7 years.

PensionBee Inc. is a wholly owned subsidiary of PensionBee. PensionBee Inc. is financially managed separately to PensionBee Group's UK business. PensionBee Inc. is separately regulated by the Securities and Exchange Commission as an investment adviser, enabling it to operate federally and statewide without additional registrations.

US Objectives

Dividend

In line with our stated dividend policy, the Company does not intend to pay any dividends as we continue to execute our strategy and invest in growth in the UK and the US. Whilst the Company has not paid dividends since incorporation, it intends to revisit its dividend policy in future years and may revise its dividend policy from time to time.

Closing Remarks

Keeping the consumer firmly at the heart of what we do, we remain committed to serving their needs.

With more consumers consolidating their pensions than ever before, we will continue to capture market share in the vast UK pensions market, through our well established and trusted brand, continued product innovation and prioritisation of excellent customer service.

With nearly ten years' worth of experience building a scalable technology platform, developing marketing expertise and establishing a household brand, we are excited to have taken the transformative step of launching in the US. Inspired by the size and opportunity of the world's largest Defined Contribution pension market, we now look forward to helping millions of US consumers also enjoy a happy retirement.

As we continue on our journey, creating a global leader in the consumer retirement market and growing PensionBee for the success of all our stakeholders, I wish to pay special thanks to our dedicated team who continue to work tirelessly, and without whom none of this would be possible.

Romi Savova

Chief Executive Officer

28 August 2024

Notes:

1.     Trustpilot score of 4.7★ out of 5 (based on 10,920 reviews) recorded 11 July 2024.

2.     PensionBee prompted brand awareness tracker, April 2024. Prompted brand awareness measured through a consumer survey asking 'Which of the following have you heard of?' with respect to UK financial services brands: Aviva 82%, Scottish Widows 74%, Standard Life 68%, PensionBee 55%, Hargreaves Lansdown 40%, Nutmeg 37%, AJ Bell 33%, Interactive Investor 11%.

3.     £1.2tr UK transferable pensions market is as of 2023 while the £722bn reference previously used was as of 2019; as such the increase is driven due to growth over that time period (c.10% CAGR consistent with c.12.5% CAGR in the period before that).

4.     Investment Company Institute, 'Release: Quarterly Retirement Market Data' as at 13 December 2023. Includes the sum of DC Plans and IRAs.

5.     Annual Run Rate ('ARR') Revenue is calculated using the recurring Revenue for the relevant month multiplied by 12.

6.     Productivity, measured using Invested Customers per Staff Member metric, is calculated using an LTM average for the total workforce. Management information as at 30 June 2024.

Group Financial Review¹

Trading performance in the first half of 2024 was strong, as we maintained our dual focus: optimising growth whilst steering towards profitability.

The delivery of strong growth over the first half of 2024 was underpinned by a combination of new customer acquisition, asset growth from existing customers and sustained global equity markets. Accordingly, Invested Customers ('ICs') grew by 19% to 252,000 (1H 2023: 211,000), Assets under Administration ('AUA') increased by 40% to £5.2bn (1H 2023: £3.7bn) and Revenue increased by 41% to £15.4m (1H 2023: £10.9m).

In addition to driving strong growth, a powerful combination of the inherent scalability of our technology platform, together with increasingly efficient marketing spend and an overarching focus on cost control, have enabled us to clearly demonstrate the operating leverage in our business model.

Over the first half of the year, Group Adjusted EBITDA narrowed to £(2.0)m (1H 2023: £(7.9)m) and the Group Adjusted EBITDA Margin narrowed to (13)% (1H 2023: (73)%). Having achieved positive Adjusted EBITDA in the UK business for Q2 2024, we remain firmly on track and committed to achieving the profitability on this same basis for this full year.

Similarly, Group Profit/(Loss) before Tax narrowed to £(3.8)m (1H 2023: £(9.2)m).