Annual Report and
Financial Statements
2023
pensionbee.com
Contents
Strategic Report
1 PensionBee at a Glance
2 Chair’s Statement
3 Chief Executive Officer’s Review
4 About Us
Our History
Our Vision
Our Customer Proposition
Our Team
Our Values
Our Awards
5 Our Strategy
6 Our Business Model
7 Our People
Diversity, Inclusion and Equality
Remuneration
8 Market Opportunity
9 Operating and Financial Review
2
Page 5
Page 8
Page 10
Page 14
Page 14
Page 18
Page 20
Page 21
Page 22
Page 24
Page 25
Page 34
Page 36
Page 36
Page 46
Page 48
Page 52
10 Measuring our Performance
11 ESG Considerations
Stakeholder Engagement
Section 172 Statement
ESG Materiality Assessment
ESG Goals
Deep Dives
ESG Disclosures and Benchmarking
12 Climate-Related Disclosures
Streamlined Energy and Carbon Reporting
Task Force on Climate-Related Financial Disclosures
13 Managing our Risks
The Risk Management Framework
Principal Risks and Uncertainties
Summary of Risk and Mitigations
14 Viability Statement
Page 58
Page 60
Page 60
Page 67
Page 68
Page 69
Page 72
Page 75
Page 77
Page 77
Page 80
Page 90
Page 90
Page 98
Page 100
Page 102
PensionBee Group plcStrategic Report
Corporate Governance Report
Financial Statements
1 Chair’s Introduction to Governance
Page 104
1 Independent Auditor’s Report
2 Board of Directors and Executive Management
Page 107
2 Consolidated Statement of Comprehensive Income
3 Corporate Governance Statement
Page 114
3 Consolidated Statement of Financial Position
4 Nomination Committee Report
Page 122
4 Consolidated Statement of Change in Equity
5 Investment Committee Report
Page 126
5 Consolidated Statement of Cash Flows
6 Audit and Risk Committee Report
Page 129
6 Notes to the Consolidated Financial Statements
7 Directors’ Remuneration Report
Page 137
7 Company Financial Statements
Annual Statement by the Chair of the Remuneration Committee
Page 137
8 Notes to the Company’s Financial Statements
Page 161
Page 169
Page 170
Page 171
Page 172
Page 173
Page 190
Page 192
Directors’ Remuneration Policy
Annual Report on Remuneration
8 Directors’ Report
9 Statement of Directors’ Responsibilities
Page 141
Page 146
Page 153
Page 158
Other Information
1 Glossary of Terms
Page 197
2 Directors, Company Secretary and Shareholder Information
Page 199
3
Annual Report and Financial Statements 2023Strategic Report
Strategic
Report
4
Kezia | Age 33
PensionBee customer since 2022
PensionBee Group plcStrategic Report 1 PensionBee at a Glance
PensionBee is a leading online pension provider. Our mission is to make
pensions simple, so that everyone can look forward to a happy retirement
PensionBee is a leading online pension provider1 in the UK, with a mission to make pensions simple, so that everyone can look
forward to a happy retirement. We are a direct-to-consumer financial technology company with approximately 229,000
Invested Customers and £4.4bn of Assets under Administration (‘AUA’) as at 31 December 2023 (2022: 183,000
Invested Customers and £3.0bn of AUA).2
We deliver a leading customer proposition to pension holders in the UK Defined Contribution pensions
landscape, catering for the mass market of consumers that has often been ignored by the traditional pensions
industry. We seek to make our customers ‘Pension Confident’ by providing them with control and clarity,
enabling them to interact with their retirement savings through a unique combination of smart technology
and dedicated customer service.
Our technology platform allows customers to combine their pensions and invest in a range of online plans,
forecast how much they are expected to have saved by the time they retire, and make withdrawals from the
age of 55 (57 by 2028). Our customers rate our service highly, as evidenced by our Excellent Trustpilot score
of 4.6★ out of 5 (based on 10,000 reviews),1 our average app store rating of 4.7 out of 53 and our Customer
Retention Rate, which has consistently been in excess of 95% (2022: Excellent Trustpilot score of 4.6★ based on
8,270 reviews, average app store rating of 4.63 and Customer Retention Rate of >95%).2
For the year ended 31 December 2023, PensionBee’s Revenue was £23.8m, representing a growth rate of 35%
as compared to £17.7m for 2022.2 Adjusted EBITDA for 2023 was £(8.2)m as compared to £(19.5)m for 2022, with an
Adjusted EBITDA Margin of (35)% for 2023 as compared to (110)% for 2022, reflecting continued strong and scalable
investment in the Company’s growth balanced with careful cost control.2 With the Company achieving Adjusted
EBITDA profitability in the fourth quarter of 2023, Profit/(Loss) before Tax correspondingly narrowed to £(10.7)m for
2023 as compared to £(22.4)m for 2022, an improvement of 52%.2
1. Supported by PensionBee’s Trustpilot score as at 12 January 2024 of 4.6★ out of 5 (based on 10,004 reviews), comparing favourably to other key pension providers
who operate in the UK Defined Contribution pensions market, together with PensionBee’s industry awards as set out on page 24 of the About Us section of the Strategic
Report.
2. See definitions on pages 58 and 59 of the Measuring our Performance section of the Strategic Report. PensionBee’s Key Performance Indicators include an alternative
performance measure (‘APM’), which is, Adjusted EBITDA. APMs are not defined by International Financial Reporting Standards (‘IFRS’) and should be considered together
with the Group’s IFRS measurements of performance. PensionBee believes this APM assists in providing additional insight into the underlying performance of PensionBee
and aids comparability of information between reporting periods.
3. Average app store rating of 4.7 out of 5 for 31 December 2023, based on 4.8 Apple Store rating and 4.5 Google Play rating. Average app store rating of 4.6 for 31
December 2022, based on 4.7 App Store rating and 4.5 Google Play rating.
5
PensionBeeYour Aviva pension has transferred successfully. Annual Report and Financial Statements 2023Strategic Report £4.4bn
2023 Assets under Administration2
£23.8m
2023 Revenue2
£(8.2)m
2023 Adjusted EBITDA2
+44% on 2022
+35% on 2022
+58% on 2022
(35)%
2023 Adjusted EBITDA Margin2
+76ppt on 20224
£(10.7)m
2023 PBT2
+52% on 2022
(4.73)p
2023 EPS2
+53% on 2022
229k
>95%
2023 Invested Customers2
2023 Customer Retention2
+25% on 2022
stable
2. See definitions on pages 58 and 59 of the Measuring our Performance section of the Strategic Report. PensionBee’s Key Performance Indicators include an alternative performance measure (‘APM’), which is, Adjusted EBITDA. APMs are not defined by International Financial
Reporting Standards (‘IFRS’) and should be considered together with the Group’s IFRS measurements of performance. PensionBee believes this APM assists in providing additional insight into the underlying performance of PensionBee and aids comparability of information
between reporting periods.
4. Represents absolute change in Adjusted EBITDA Margin from (110)% as at 31 December 2022 to (35)% as at 31 December 2023.
6
PensionBee Group plcStrategic Report I want to play more golf abroad and
stay fit and healthy. I would like to
fund a house move for my later years.
Fiesal | Age 60
PensionBee customer since 2021
7
Annual Report and Financial Statements 2023Strategic ReportPensionBeeWe’ve invested your personal contribution. 2 Chair’s Statement
Dear fellow shareholder,
I write to you to report on the progress of our Company through the past year and to reflect on the
factors that have ensured our continuing success.
PensionBee will be 10 years old in 2024. Over the past decade we have consistently delivered our
performance targets. By the end of 2023 our Invested Customer base reached 229,000, our Assets
under Administration stood at £4.4bn and our Revenue for the year was £23.8m.5 A combination
of this growth, together with careful cost control, enabled the Company to achieve the important
milestone of Adjusted EBITDA profitability in the fourth quarter of the year, paving the way for full
year Adjusted EBITDA profitability in 2024.6 Your Board devotes a substantial proportion of its time
to providing oversight of the Company’s strategic direction and financial performance and you will
find full details later within this Annual Report.
Looking back over 2023, we were particularly delighted by the response from our customers
to the work we have done in three specific areas. Firstly, we have focused on knowledge tools
including targeted content - our customers tell us that this engaging and relevant content,
supplemented by the expertise of our dedicated customer account managers (‘BeeKeepers’),
enables them to more easily understand the performance of the investments which underpin
their saving for retirement. Secondly, we have enhanced the intuitive functionality within our
app - our customers tell us that navigating through any chosen task is straightforward, without
requiring them to read elaborate instructions or unnecessarily call for help. And lastly, our work
around autonomous pension transfers, untouched by humans but built to accommodate
traditional pension providers’ continuing dependency on completed paperwork, has meant
that our approach to pension transfers is widely regarded as being best in class, being both
faster and, in our judgement, more secure than the incumbents’ analogue approach.
However, I would like to open our Annual Report by focusing on the Company’s purpose. We are
resolute in our vision. We exist to help our customers enjoy a happy retirement. We seek to simplify the
ESG Considerations
steps that they need to take in order to make appropriate financial provision for their retirement, as they
seek to adjust the balance between work and life and indeed look beyond remunerated work entirely.
An adequate pension is recognised by our customers as being of paramount importance. Planning for
the accumulation of savings is central to all of our individual investment plans. Our job is to ensure
our customers can easily understand their pension to a level where they become ‘Pension Confident’.
We seek to simplify the management of retirement savings. However, as is so often the case in life,
the quest for simplicity is complex. The pensions industry is rightly highly regulated and technically
intricate; jargon is commonplace and at first glance the concepts are far from intuitive. We seek
to refine our practices, procedures and processes, thereby simplifying every element of what our
customers need to do. We believe that this simplicity is innovative and differentiates PensionBee in
the pensions market.
Central to this innovative simplicity is being ‘digital first’; our customers can use PensionBee with the
same ease which so many other aspects of daily life are dealt with. Our technology, coupled with our
industry expertise and processes designed from insights gained by carefully listening to our customers
while watching closely how they make use of the PensionBee product, results in ‘innovative simplicity’.
5. See definitions on pages 58 and 59 of the Measuring our Performance section of the Strategic Report.
6. See definitions on pages 58 and 59 of the Measuring our Performance section of the Strategic Report.
8
We believe that authentically and effectively managing our Environmental, Social and Governance
(‘ESG’) priorities will help drive long-term value for all our stakeholders. We continue to push ourselves
forward and to pursue our ESG work transparently, disclosing our targets and relevant metrics, which
we believe supports accountability and informs our stakeholders about our progress.
2023 has seen us expand our responsible investment offering, enabling savers to deploy their
pensions to build a better world whilst they save for retirement. We launched and embedded
our Impact Plan, a mainstream impact investing product and a PensionBee customer-led
innovation. We also continued to work closely with our asset managers to expand the scope of
ESG screening, in line with customer demand.
We secured Voting Choice and began voting on 85% of our asset base (Tailored, Tracker and
4Plus) through the ISS SRI Policy, reflecting the views of our customers in key decisions at the
companies they own through their pensions.7
7. Reflects 85% of the Assets under Administration across the Tailored, Tracker and 4Plus investment plans as at 31 December 2023.
See definitions on pages 58 and 59 of the Measuring our Performance section of the Strategic Report.
PensionBee Group plcStrategic Report Lastly, we made public our net zero commitments. Our focus for the year ahead will now be to work
We have also recently announced our plans to expand into the United States of America (‘US’), the
closely with our asset managers to ensure that our investment plan range continues to meet our
Scope 3 emissions reduction targets in line with the goals of the Paris Agreement.8
To achieve transparency across all the strands of ESG, we continue to disclose under the Sustainability
Accounting Standards Board, Workforce Disclosure Initiative, Streamlined Energy and Carbon Reporting
(‘SECR’) framework and the Task Force on Climate-related Financial Disclosures (‘TCFD’) framework.
Further details of our ESG activities can be found on pages 60 to 76 of the ESG Considerations section
of the Strategic Report, and our SECR and TCFD reporting are set out on pages 77 to 89 of the Climate-
related Disclosures section of the Strategic Report.
Diversity, Inclusion & Equality
Our mission is to help our customers save for a happy retirement. Inclusion and equality centres on
our team of people within PensionBee, which reflects society. We are confident we have created a
working environment in which everyone has equal access to opportunities and is treated with fairness
and dignity.
world’s largest Defined Contribution pension market. We see a clear opportunity to assist many
consumers in the US who also struggle to prepare adequately for retirement as they navigate a
complex and confusing pensions landscape. We believe that the simplicity we bring through our
customer proposition will resonate well with the US consumer and see this as an exciting next step in
our journey to help everyone save for a happy retirement.
A Final Word
Over the past year we have talked a great deal about resilience, concluding that sustainable resilience
must underpin every element of our maturing business. Of course this resilience, along with every
other aspect of our business, reflects the efforts of our exceptional people. All that we have achieved
has been accomplished by the application of considerable effort by the immensely talented, skilled
and expert team who continue to make PensionBee a leading online pension provider, supporting
peoples’ preparation for a happy retirement. My thanks and the thanks of my Non-Executive
colleagues on the Board, Mary, Michelle and Lara, goes to each of them.
We are proud of what has been achieved: 51% female and minority gender representation across our
employee population, 50% at Executive Management level and 57% at Board level, exceeding the
FCAs requirements for companies to have at least 40% women on the board and at least one senior
board position being held by a woman.9 PensionBee also achieved 37% Asian/Black/Mixed/Multiple/
Other ethnic representation across our entire employee population, 10% at Executive Management
level and 14% at Board level, again in line with the FCA’s requirement for at least one board member
being from an Asian/Black/Mixed/Multiple/Other ethnic background.10 There have not been any
changes to the composition of the Board in 2023 or in 2024 to date.
Mark Wood CBE
Non-Executive Chair
13 March 2023
The Next Phase
The Company’s journey over the last decade has seen it build a presence as a leading online pension
provider in the UK, helping customers across the country to save for their retirement. Having achieved
Adjusted EBITDA profitability in the fourth quarter of this year, we are well positioned to achieve
profitability across the full year 2024. Our trusted brand, award-winning customer proposition and
our unique combination of smart technology and dedicated customer service will see us continue to
grow our market share in the UK.
8. The Paris Agreement is a legally binding international treaty on climate change. It was adopted by 196 Parties at the UN Climate
Change Conference (COP21) in Paris, France, on 12 December 2015. It entered into force on 4 November 2016. Its overarching goal is
to hold ‘the increase in the global average temperature to well below 2°C above pre-industrial levels’ and pursue efforts to ‘limit the
temperature increase to 1.5°C above pre-industrial levels.’
9. Supported by analysis from PensionBee’s HR information system, December 2023. The Company’s Chief Executive Officer role has
been filled by a woman since the Company’s inception in 2014 and the Senior Independent Director role has been filled by a woman
since November 2020.
10. Supported by analysis from PensionBee’s HR information system, December 2023. There has been one board member from a
minority ethnic background at the Company since April 2022.
We are resolute in our
vision. We exist to help
our customers enjoy a
happy retirement.
Mark Wood CBE
Non-Executive Chair
9
Annual Report and Financial Statements 2023Strategic Report 3 Chief Executive Officer’s Review
Dear fellow shareholder,
2023 was not only a year of transition, but also a year of transformation. We began the year with an
While acquiring new customers is crucial to our growth, serving them for decades to come and
uncertain economic backdrop. Interest rates were hitting highs not seen in decades and consumer
maintaining our Customer Retention Rate of over 95% is crucial to our business. With this in mind,
sentiment was shaken. The war in Ukraine, simmering geopolitical tensions and the cost of living crisis
we continued to invest in our product experience. We released in-product content for our customers,
were taking their toll.
Nevertheless, PensionBee had a longstanding and ambitious goal of reaching ongoing monthly
Adjusted EBITDA profitability by the end of 2023, which we met.11 We focused on the key elements
of our strategy that together make us the pension provider of choice for our customers: our brand
enabling them to enjoy customised articles based on their profiles and access to our award-winning
Pension Confident Podcast, packed with helpful financial tips. We invested in tooling to help our
customers plan for the future, including a tax relief calculator, a state pension calculator and an
inflation calculator. For our at-retirement customers, we introduced functionality for regular in-
app withdrawals and the functionality for customers to take a salary through retirement. We also
and marketing capability, our innovative product offering, our leading customer service, our scalable
launched our life insurance partnership with LifeSearch, taking a broader view of our customers’
technology platform and our purpose-built investment range. As a result, we are proud to have
needs for retirement planning and helping them to protect themselves and their loved ones should
ended the year with Assets under Administration of £4.4bn representing annual growth of 44% (2022:
the worst happen. As a result, we maintained an impressive average app store rating at 4.7 out of 5
£3.0bn), Revenue of £23.8m representing annual growth of 35% (2022: £17.7m) and having achieved
Adjusted EBITDA profitability across the fourth quarter of 2023.12
(4.8 App Store rating and 4.5 Google Play rating) (2022: 4.6) and a Customer Retention Rate of over
95% (2022: >95%).15
Our strategy and £55m of investment in marketing since inception has seen us firmly established as
Key to managing in any economic environment, but especially in the volatile one we have found
a household brand name, enabling us to start 2023 with a majority of UK consumers having already
ourselves in for the last few years, is the provision of excellent customer support. At PensionBee we
heard of PensionBee. Historic investments in high profile advertising campaigns in train stations, on
celebrated the arrival of the Financial Conduct Authority’s Consumer Duty, in the hope that it would
tube panels and on taxis has embedded PensionBee into the consciousness of the consumer. In 2023,
raise standards across the board in the pensions sector, improving consumer trust and confidence in
we centred our brand awareness activities on the most economical impressions, achieved through
retirement savings. Our customer duty is firmly embedded in everything we do and especially in our
radio, television and sports sponsorship. Having done the hard work of teaching consumers about
customer service, where we strive to be available to our customers and to offer them the information
PensionBee and often about pension consolidation and the general importance of saving for a happy
they need, when they need it. We continued to maintain industry-leading call queue times of 23
retirement, we aspired to keep PensionBee top of mind. We complemented our refined brand strategy
with performance marketing led by our data insights, with strong results: our brand awareness was
stable at 50%13 and our 2023 cumulative Cost Per Invested Customer (‘CPIC’) was £241 (2022: £248),
continuing a downward trajectory through the achievement of an in-period CPIC of £213 for 2023
(2022: £251) - both well within our publicly communicated CPIC threshold of £200-250.14
seconds (2022: 115 seconds) and a Trustpilot rating of 4.6★ based on approximately 10,000 reviews
(2022: 4.6★).16 In 2023, we even took PensionBee on the road around the UK, visiting customers in
London, Brighton, Birmingham and Manchester.
11. See definitions on pages 58 and 59 of the Measuring our Performance section of the Strategic Report.
12. See definitions on pages 58 and 59 of the Measuring our Performance section of the Strategic Report.
13. Source: PensionBee brand tracker. Prompted brand awareness in January 2024 measured through a consumer survey asking ‘Which
of the following have you heard of?’ with respect to UK financial services brands: Aviva 86%, Scottish Widows 76%, Standard Life 68%,
Royal London 55%, PensionBee 50%, Hargreaves Lansdown 39%, Vanguard 36%, Fidelity 34%, Nutmeg 32%, AJ Bell 29%, Interactive
Investor 11%. Compares to PensionBee’s prompted brand awareness as at January 2023 of 52%, sourced from PensionBee brand tracker.
14. See definitions on pages 58 and 59 of the Measuring our Performance section of the Strategic Report.
15 . Compared to average app store rating of 4.6 out of 5 (4.7 App Store rating and 4.5 Google Play rating and a Customer Retention Rate
of over 95% for the year ended 31 December 2022.
16. Call queue time of 23 seconds calculated as the average time customers are waiting in a queue to be put through to a team member
(based on 41,622 phone calls in 2023) as compared to 115 seconds in 2022 (based on 44,956 phone calls). PensionBee’s Trustpilot
score as at 12 January 2024 of 4.6★ out of 5 (based on 10,004 reviews) as compared to 4.6★ out of 5 (based on 8,270 reviews) as at 31
December 2022.
10
PensionBee Group plcStrategic Report 2023 was not only a year of transition, but
also a year of transformation... PensionBee
had a longstanding and ambitious goal of
reaching ongoing monthly Adjusted EBITDA
profitability by the end of 2023, which we met.
We focused on the key elements of our
strategy that together make us the pension
provider of choice for our customers: our
brand and marketing capability, our innovative
product offering, our leading customer
service, our scalable technology platform
and our purpose-built investment range.
Romi Savova
Chief Executive Officer
11
Annual Report and Financial Statements 2023Strategic Report In a year where achieving Adjusted EBITDA profitability was a primary
goal, a focus on cost efficiency was of paramount importance. In
technology, the best way to maintain cost efficiency is to ensure
scalability by design and to invest in automation. Having built our
technology on cloud native platforms since inception, we have
further automated pension transfers and transactions in an often
paper-based industry. This year we continue to invest in the straight-
through-processing of pension transfers and seamless contributions
through Easy Bank Transfer (our capability of initiating a pension
top up in under 60 seconds directly from a customer’s bank). We
maintained the security of our technology platform, becoming
recertified to ISO 27001, a global information security standard.
Finally, we prioritsed our investing solution range and with a
significant proportion of our customers desiring investments that
make a difference in the world, we introduced our Impact Plan in
February 2023. Investing exclusively in companies with a proven
and measurable impact, the plan enables our customers to solve
the world’s great social and environmental problems while growing
their pensions for the long term. We secured Voting Choice and
began voting on 85% of our asset base (Tailored, Tracker and 4Plus)
through the ISS SRI Policy, reflecting the views of our customers in
key decisions at the companies they own through their pensions.17
We were pleased to receive another Excellent Value for Money score
for our at-retirement product range from our Governance Advisory
Arrangement.
While these have been the key pillars of our success to date, it is
clear that a new strategic pillar has gained importance in our
internal dialogue: Resilience. Having achieved Adjusted EBITDA
profitability in the fourth quarter of this year, we are well positioned
to continue to grow our market share from a position of trust.18 Key
to that growth is the ability to maintain the security and operational
resilience of our infrastructure for the benefit of our customers.
We will continue to deploy extensive resources in this area with a
particular focus on cyber security.
17. Reflects 85% of the Assets under Administration across the Tailored, Tracker and 4Plus
investment plans as at 31 December 2023. See definitions on pages 58 and 59 of the
Measuring our Performance section of the Strategic Report.
18. See definitions on pages 58 and 59 of the Measuring our Performance section of the
Strategic Report.
12
PensionBee Group plcStrategic Report
Proposed US Expansion
We have also recently announced our plans to expand into the United States of America (‘US’), having taken an important step by
entering into an exclusive, non-binding term sheet with a large, US-based global financial institution.
The US has the world’s largest Defined Contribution pension market, representing approximately 80% of the global total and
$22.5 trillion in assets.19 However, many consumers still struggle to prepare adequately for retirement amidst an array of confusing
and difficult to use investment options. Given the context of the enormous US market opportunity, we see the potential for our
US business to grow rapidly, becoming at least the size of its UK business over the next decade.
Under the proposed strategic relationship, PensionBee will deliver the US service through PensionBee Inc, a yet to be established
wholly-owned subsidiary of PensionBee Group plc. PensionBee Inc will be established in Delaware with operational headquarters
in New York. We will manage the operations of the US business, including the hiring of a local team, making available our award-
winning online retirement proposition and UK-based proprietary technology to consumers in the US Defined Contribution market.
We will enable US consumers to easily consolidate and roll over their 401(k) plans into a new Individual Retirement Account (‘IRA’).20
Our US-based partner will provide its expertise and substantial marketing funding. Correspondingly, our financial contribution
will be financed from the Company’s existing resources. Entry into a final binding agreement between the parties is subject to
confirmatory due diligence, legal documentation and regulatory approvals, with launch expected in late 2024.
Looking Forward
As we look forward to 2024, we continue to be inspired by the size and opportunity within the UK Defined Contribution pension
market. Our latest analysis indicates the UK Transferable Pension Market now exceeds £1 trillion of assets21 and that more and more
consumers are consolidating their pensions than before. As a result of our relentless focus on the consumer and their needs, we
will continue to grow our market share in the UK.
We are also excited to progress our plans for the US, the world’s largest Defined Contribution pension market, with $22.5 trillion of
assets. This transformative step for the Company will help millions of US consumers look forward to a happy retirement.
With our established brand and proven scalable technology platform, we remain committed to serving consumers and growing
PensionBee for the success of all our stakeholders. As we approach our 10 year anniversary since PensionBee was founded, we look
forward to 2024 being another exciting year for us.
Romi Savova
Chief Executive Officer
13 March 2024
19. Investment Company Institute, “Release: Quarterly Retirement Market Data” as at 13 December, 2023. Includes the sum of Defined Contribution Plans and Individual
Retirement Accounts (‘IRA’s).
20. A 401k is an employer-sponsored Defined Contribution retirement plan into which employees can contribute and into which employers may also make matching
contributions. An Individual Retirement Account (‘IRA’) is a tax-advantaged retirement savings account into which an individual can contribute either pre- or post-tax money
and which grows on either a tax-deferred or tax-free basis.
21. See pages 62 and 63 of the Market Opportunity section of the Strategic Report.
13
Annual Report and Financial Statements 2023Strategic Report 4 About Us
Our History
Since inception, we have been a consumer champion
in a highly complex industry, ripe for disruption
PensionBee was founded in 2014 to simplify pension savings in the UK, following a difficult pension transfer experience for our
CEO, Romi Savova, using traditional platforms and financial advisers, encountering archaic systems, excessive fees and complex
paperwork.
Since then, we have been challenging the status quo of an industry that has evolved without sufficient focus on consumer needs,
characterised by poor communication, opaque fees and cumbersome processes. PensionBee has sought to change the industry for the
better, modernising pensions, making pension management easy for its customers while they save for a happy retirement.
With approximately £4.4bn in Assets under Administration (‘AUA’) and 229,000 Invested Customers (‘IC’) at the end of 2023 (2022:
£3.0bn of AUA and 183,000 IC), we have grown rapidly through direct-to-consumer marketing activities, becoming a household brand
name for the mass market.22 Our consistently maintained Customer Retention Rate in excess of 95% (2022: >95%),23 together with an
Excellent Trustpilot rating from 10,000 customers,24 are reflective of our commitment to outstanding customer service.
Along the way, we have taken a series of important steps in our corporate development, including our initial public offering in April
2021 on the London Stock Exchange, to raise the capital that we need to support sustainable and profitable growth, while underscoring
our commitment to the highest level of corporate governance. The Company then became eligible and joined the FTSE UK Index
Series in March 2023, which has broadened the ownership base of its shares. Most recently and perhaps most notably, in line with its
longstanding guidance, the Company achieved its goal of Adjusted EBITDA profitability across the last quarter of 2023.25
22. See definitions on pages 58 and 59 of the Measuring our Performance section of the Strategic Report. PensionBee’s KPIs include alternative performance measures (‘APMs’).
APMs are not defined by International Financial Reporting Standards (‘IFRS’) and should be considered together with the Group’s IFRS measurements of performance. PensionBee
believes APMs assist in providing additional insight into the underlying performance of PensionBee and aid comparability of information between reporting periods.
23. See definitions on pages 58 and 59 of the Measuring our Performance section of the Strategic Report.
24. PensionBee’s Trustpilot score as at 12 January 2024 of 4.6★ out of 5 (based on 10,004 reviews) as compared to 4.6★ out of 5 (based on 8,270 reviews) as at 31 December 2022.
25. See definitions on pages 58 and 59 of the Measuring our Performance section of the Strategic Report.
14
PensionBee Group plcStrategic Report Jonathan Lister Parsons
Chief Technology Officer
Romi Savova
Chief Executive Officer
15
Annual Report and Financial Statements 2023Strategic Report 2014
2017
AUA: £108m
IC: 5k
2018
AUA: £328m
IC: 17k
2019
AUA: £745m
IC: 38k
PensionBee was born
Innovation and investment
The app was launched
We received industry acclaim
We broadened our mix of customers with
new product innovations. We introduced
Our app went live, giving customers the
We became the first pension provider
power to manage their pensions from their
to adopt the Simpler Annual Benefit
our drawdown service, enabling customers
smartphones.
Statement, winning acclaim from both the
government and pensions industry.
With the introduction of Open Banking, we
also became the first pension provider to
We introduced two new pension plans,
integrate with a number of banking and
4Plus and Preserve, to broaden our appeal
money management apps.
amongst customers nearing retirement, as
well as a Shariah-compliant plan.
Michelle Cracknell CBE also joined the
PensionBee Board as an Independent
Non-Executive Director, bringing over 30
years’ experience from the pensions and
retirement planning industry.
Our story began when Romi Savova
(CEO) tried to move her old workplace
pension and had great difficulty switching
providers. She decided there had to be a
better way.
2015
Work began
Romi and co-founder Jonathan Lister
Parsons (CTO) quit their jobs and started
building PensionBee, an online pension
provider that put the customer at its heart.
Our first employee joined the Company,
we moved into our first office and the team
began work on the BeeHive and creation of
the PensionBee brand.
16
to make withdrawals easily online. We
also launched our first responsible plan,
providing our savers with a climate-
conscious way of investing.
2016
AUA: £19m
IC: 1k
PensionBee went live
We launched our product with plans from
BlackRock and State Street Global Advisors,
helping savers combine their old pensions.
Mark Wood CBE, former Chief Executive of
Prudential UK, joined as Chair.
PensionBee Group plcStrategic Report 2020
AUA: £1.4bn
IC: 69k
2021
AUA: £2.6bn
IC: 117k
2022
AUA: £3.0bn
IC: 183k
2023
AUA: £4.4bn
IC: 229k
AUA exceeded £1bn and we launch
We became a publicly listed company
AUA exceeded £3bn and we
AUA reached £4.4bn, we achieved
the Fossil Fuel Free Plan
joined the Premium Segment of
Adjusted EBITDA Profitability
We campaigned to show the rest of the
pensions industry that there was demand
for a fossil fuel free pension, based on
customers’ feedback. We succeeded with
commitments of >£100m and launched
the Fossil Fuel Free Plan in partnership with
Legal & General.
We won praise for our high levels of
innovation and customer service, as well as
our industry-leading workplace diversity,
when we were named ‘Pension Provider of
the Year’ (UK Pensions Awards).
Mary Francis CBE joined our Board as Senior
Independent Director.
We became a publicly listed company with
the London Stock Exchange
and joined the FTSE
an IPO on the High Growth Segment of the
Main Market of the London Stock Exchange
We transitioned to the Premium Segment
We achieved Adjusted EBITDA profitability
(‘LSE’), also giving our customers access
of the LSE’s Main Market, underscoring our
in the fourth quarter of the year, paving the
to buy shares. This allowed us to further
commitment to upholding the highest
way for the Company to achieve full year
expand and to innovate, so that we could
standards of corporate governance and
profitability for 2024.
help even more people look forward to a
dedication to achieving our growth
happy retirement.
ambitions and increasing liquidity.
Having joined the Premium Segment of the
We were awarded the Internet Crystal
Mark and Plain English App Mark For our
accessibly-designed website.
Lara Oyesanya joined our Board as an
Independent Non-Executive Director.
Our ‘Believe in the Bee’ brand campaign
launched with an ad featuring Brentford
Football Club players, a cameo from our CEO,
plus our distinctive new animated honey bee.
We won multiple awards, including ‘FinTech
of the Year’ (UK FinTech Awards), ‘Financial
Inclusion’ (FSTech Awards) and ‘Employer
of the Year’ (FT Adviser Diversity in Finance
Awards). We are awarded five Boring Money
Best Buys 2022, including ‘Best for Customer
Service’ and are accredited with Good With
Money’s ‘Good Egg’ mark.
LSE’s Main Market, we became eligible to
join the FTSE, joining the FTSE All Share and
the FTSE4Good indices, which supported a
broader ownership of the Company’s shares.
17
Annual Report and Financial Statements 2023Strategic Report Our Vision
We strive to help our customers achieve a
happy retirement in the form of financial
freedom, good health and social inclusion.
Our vision acts as a blueprint for all our business activities, from outstanding customer
service and intuitive product design, to investment solutions with some of the world’s largest
money managers and impactful corporate and social responsibility initiatives. As a pensions
company with a long-term horizon for our customers, we seek to look beyond short-term
gains to help our customers achieve a sustainable retirement income.
Hi Ladé, thanks for sorting out my
pension. I can see all my pensions
have now transferred, fantastic!
1m ago
Hannah
PensionBee
customer
Hi Hannah, youEre welcome! Let me
know if there is anything else I can
help you with <;
Just now
Ladé
BeeKeeper
18
Financial Freedom
Our customers have a large variety of retirement goals
and ambitions, whether purchasing homes close to their
children, travelling around the world or simply living
without any financial worries. Each customer is unique, but
to achieve their ideal retirement, they all need sufficient
income to cover their living expenses for the rest of their
lives. This, at its core, is the concept of financial freedom.
For too long, consumers have struggled to manage their
retirement savings. Pensions are often complicated and,
combined with the added intricacies that can result from the
accrual of multiple pension plans from different employers
over the course of a career, present a significant obstacle
for consumers wanting to take control of their retirement
savings. PensionBee’s technology platform is designed to
make it easy for customers to consolidate their pensions, to
make contributions in line with their saving goals, to invest in
a range of diversified plans and, from the age of 55, to make
on-demand and appropriate withdrawals. Through access to
pension calculators and retirement forecasting tools, we seek
to help our customers understand how much they need to
save in order to achieve their desired income in retirement.
All time£51,528.00BalanceMarks & SpencerAlila pension+ £32,584.9407 MarPensionBee limitedEmployer contribution+ £183.4¡13 Feb PB(cid:15)12345¡Personal contribution+ £15005 Sept 21Jane SmithHMRC Tax Top up+ £2018 FebABC 8imitedNest pension+ £10,438.5012 JanAccountFundsAnalLt(cid:2)csBalancePensionBee Group plcStrategic Report Good Health
Social Inclusion
We believe that good physical and mental health can
be a major determinant of happiness in later life. Whilst
We believe that the Company’s product must be built to
We are also committed to encouraging other forms of
help people from all backgrounds to save for retirement.
equality in UK companies. Efforts to include, nurture
quality nutrition and safe living conditions are important
The UK’s statutory secondary school national curriculum
and progress employees from all backgrounds,
contributors to good health, we also believe that
financial wellbeing can have a significant role to play.
Our platform has been designed in a user-friendly
way so as to limit the stresses of engaging with
one’s pension and to help customers exercise
greater control over their financial future.
contains little formal financial education, and over the
including diverse ethnicities can translate into higher
course of their lives, individuals do not all have the
engagement and lower attrition rates. We believe that
same exposure to financial concepts. As a result, many
there is a strong moral and economic case for increased
struggle to navigate the pensions system as adults.
diversity in UK companies. Greater equality can
By designing and building our product in recognition
in turn supports the pension growth of our customers.
translate into improved Company performance, which
of these realities, we seek to help our customers
overcome these educational barriers. For example,
Our Diversity, Inclusion and Equality Policy sets our
Similarly, we also want to give our customers greater peace
our technology platform is designed to make it easy
approach and commitment to diversity and includes
of mind by offering more ethically and environmentally
and intuitive for customers to combine their pensions,
our broad goals, which include maintaining gender
conscious investment alternatives. Not only is there
we offer tools such as pension calculators and
balance at all levels and increasing representation of all
quantitative evidence from industry experts suggesting that
retirement forecasting modellers to help customers
minority ethnicities to match the UK population across
sustainable investments yield greater returns over time, but
plan ahead and make suitable contributions, we
all levels of the business. For 2023 we achieved 51%
there are significant financial risks associated with investing
help savers make on-demand and appropriate
female and minority gender representation across our
in pollutants such as oil and tobacco producers. These
financial risks can be aggravated by government action
(whether through outright bans or taxes), civil lawsuits,
and adverse media coverage. In facilitating sustainable
investments, we seek to enhance our customers’ long-
term pension wealth as well as their mental wellbeing.
withdrawals, and we support all of this with excellent
customer service and jargon-free communication.
In addition, we are an advocate for greater gender
equality in UK companies. There is a large body of
research suggesting that women have been held
back by a lack of equal opportunities and systemic
inequalities that prevent career progression. Research
conducted by PensionBee suggests that these
inequalities are perpetuated in later life with men
having significantly larger pensions than women after
the age of 45, despite having a shorter life expectancy.
entire employee base, 50% at Executive Management
Team level and 57% at Board level.26 We also achieved
37% Asian/Black/Mixed/Multiple/Other ethnic
representation across our entire employee base, 10% at
Executive Management level and 14% at Board level.27
26. Supported by analysis from PensionBee’s HR information system,
December 2023.
27. Supported by analysis from PensionBee’s HR information system,
December 2023.
19
Annual Report and Financial Statements 2023Strategic Report Our Customer Proposition
We are revolutionising the pensions industry through innovative
technology, product leadership and excellent customer service
Pensions are often complicated and difficult to understand, presenting an obstacle for consumers to engage with their savings. Against this backdrop,
PensionBee has developed a simple and easy to use mass market proposition that provides a solution to the consumer problem of saving for and managing
their income throughout retirement.
Our customer proposition can be summarised as follows:
Combine
Contribute
Invest
Withdraw
The average adult switches jobs multiple
Our customers can make one-off or regular
times over the course of their career. In doing
contributions to their PensionBee pension
so, they may accrue a number of disparate
via easy bank transfer in under 60 seconds.
pensions with differing providers and cost
For customers who make a personal pension
structures which, as a result of a variety
contribution and are eligible for tax relief, we
of factors which could include infrequent
will automatically claim their 25% tax top-up
reporting, limited online functionality, and
from HMRC and add this to their pension
cumbersome communications processes, can
balance. Customers can also make use of
prove difficult to manage effectively. By signing
our retirement calculator, which provides
up with PensionBee, either via our website or
an estimate of retirement income based
by using our app, our customers are able to
on a number of assumptions including the
combine and transfer their existing pensions
size of the pension plan, chosen retirement
into the PensionBee Personal Pension with ease.
age and ongoing contributions, to plan
Once their pensions have been transferred,
ahead for their retirement. Self-employed
customers are able to start managing their
customers can open a new pension plan
new pension online and can monitor their
without transferring any old pensions.
daily balance via our website or app.
20
We work with some of the world’s largest
From the age of 55 (57 by 2028), our customers
asset managers to enable our customers
can withdraw a portion of their pension online
to invest their pension savings easily and
in just a few clicks, bypassing a process which
appropriately. We offer a curated selection of
can in some cases involve many weeks filling
investment options, including our default plan,
out paperwork and jargon-filled forms, which
which tailors our customers’ asset allocation
are often sent only through the post. Customers
according to their ages, reducing the broad risk
may choose to take up to 25% of their
profile of their investments gradually as they
pension free of tax, withdrawing their chosen
grow older. For our at-retirement customers,
amount either as a lump sum or in portions.
we offer four options aligned with their
Customers can set up regular withdrawals to
broad objectives, including making regular
pay themselves a salary through retirement.
withdrawals and simply investing for a longer
period of time. For our ethically conscious
customers, we offer a fossil fuel-free plan, an
impact plan and a Sharia-compliant plan.
PensionBee Group plcStrategic Report Our Team
Our team has the breadth and depth
of experience across all disciplines to
deliver excellent customer outcomes,
drive growth and performance
Led by our founders Romi Savova and Jonathan Lister Parsons,
we have a strong and established Executive Management
Team. We have an experienced and diverse Board, led by our
Chair Mark Wood CBE (former CEO of Prudential UK).
Our diverse and inclusive total workforce of approximately 200 individuals28
is motivated and empowered to achieve great results across all areas of the
business, including customer service and engagement, brand and marketing,
product development, technology, finance, corporate, legal and risk.
We develop and support our talent and strive to ensure that our
people are actively engaged. Our strong culture and values enable us
to attract and retain people who passionately believe in our vision.
All our employees participate in long-term equity schemes, which
further helps to drive engagement and an ownership mentality.
Further details can be found on pages 36 to 47 of the Our People section
within the Strategic Report.
28. Total workforce of 198 as of 31 December 2023 includes 192 UK employees and six non-UK
contractors, but excludes four Non-Executive Directors. Total workforce of 208 as of 31 December 2022
includes 204 UK employees and four non-UK contractors, but excludes four Non-Executive Directors.
21
Annual Report and Financial Statements 2023Strategic Report Our Values
We are guided by our five core values,
so we do the right thing by our
customers, colleagues and society
We are dedicated to ensuring that our five core values remain as guiding principles behind everything
we do, so that everyone in the Company remains focused on doing the right thing for our customers,
colleagues and society. As we continue on our growth path, there is a particular focus on protecting
and maintaining the culture associated with these values - a strong focus on well-being, including
regular ‘Happiness!’ meetings between employees and managers, has helped to embed this approach.
We value our employees’ happiness and we believe that happy employees lead to happy customers.
We have built a programme to focus specifically on the development and enhancement of our values-
based culture and have embedded our values into our performance management approach and
throughout relevant policies in order to achieve our strategic goals.
Our Senior Independent Director, Mary Francis CBE, enjoys responsibility for employee engagement,
and we regularly report on our people and culture at a Board and Committee level, given the
importance we place on our culture and its success in driving the achievement of our strategy.
Further details and specific examples of how the Board and Company engage with our employees can
be found on pages 60 to 66 of the Stakeholders Engagement section within the ESG Considerations
section of the Strategic Report.
22
PensionBee Group plcStrategic Report Love
Honesty
Quality
The value of love drives everything we do at PensionBee. From
We strive for total transparency around the pensions our
People trust us with their pension savings, and we go above
engaging with our customers to product delivery, we go above
customers have, including what service they can expect,
and beyond to show them that we deserve that trust.
and beyond to create an exceptional customer experience.
the fees charged and how their pensions are faring.
We have partnered with some of the world’s largest money
As we continue building a pension product for
We continue to demand a more honest and ethical
managers on our pension solutions, and we apply the highest
everyone, we are dedicated to creating an inclusive
approach to pension investments, as we believe this is
level of corporate governance standards within the business.
company that reflects our diverse society.
crucial to our customers achieving a happy retirement.
Simplicity
Innovation
We are committed to making pensions less complex.
PensionBee would not exist without innovation. Our drive to
Whether we are picking up the phone or building
innovate means we are always seeking to ‘wow’ our customers
our product, we keep things simple, avoiding
confusing jargon and complicated processes.
and colleagues through new and improved ways of doing things.
We were one of the first pension providers to embrace Open
We have created simple tools for our customers to support
Banking by partnering with some of the UK’s leading money
their decision making, whether they are combining
management apps, to offer innovative ways of investing
pensions for the first time, getting contributions back
sustainably, and we seek to work closely with trade bodies
on track or are ready to start making withdrawals.
and the government to continue to modernise pensions.
23
Annual Report and Financial Statements 2023Strategic Report Our Awards
2023 has been another strong year for PensionBee as we
received acclaim for the strength of our product, innovation,
and success with our Pension Confident Podcast
PensionBee has received a high level of recognition from customers and third parties for our differentiated customer offering and
high standard of customer service, our technology, diversity achievements and our ESG credentials.
Since inception, we have received a total of 71 awards, including the following received in 2023:
★ Winner
Best Buy for Pensions
Boring Money’s Best Buy 2023
★ Winner
★ Winner
London: Innovation Entrepreneur of the Year
Pensions Innovation
Romi Savova, Great British
Entrepreneur Awards 2023
Finder Investing & Saving Innovation Awards
★ Winner
★ Winner
Best for Low-cost Pension less than £50K
Boring Money’s Best Buy 2023
Top Value for Money DIY Investing Platforms
2023 (based on customer ratings)
★ Winner
WDI Award
Most complete Workforce Disclosure
Boring Money’s Insights
Initiative response in 2023
★ Winner
Best for Beginners
Boring Money’s Best Buy 202
★ Winner
Online Investing Star 2023
Platforum Awards
Highly commended as Employer of the Year
in the FTAdviser Diversity in Finance Awards
Named in FT1000 Europe’s Fastest
Growing Companies 2023
24
★ Winner
Contingent Workforce
Data Award 2023
WDI Workforce Transparency Awards
★ Winner
Best Series in Podcasts
Lovie Awards
★ Winner
Best Branded Podcast or
Segment in Podcasts
Lovie Awards
Pension confident podcastPensionBee Group plcStrategic Report 5 Our Strategy
PensionBee’s strategy is to be the best
online pension provider for consumers
Our strategy starts with putting the consumer at the heart of everything we
do. We want to be a pension company that customers can believe in, trust
and be proud to be a part of.
Since inception we have focused on growing our customer base across
the UK, offering customers an excellent lifetime product and service
experience powered by industry-leading technology and world-class
investing solutions. Looking forward, we will also progress our plans to
help millions of US consumers also look forward to a happy retirement.
Acquisition and Growing Brand Awareness
Industry Leading Technology Platform
1 Efficient Investment in Customer
2 Leadership in Product Innovation
3 Investment in and Development of our
4 Focus on Excellent Customer Service
5 Focus on Investment Solutions
6 Resilience (New for 2023)
Designed for Customers
25
Actively invests only in companies addressing the world’s great social and environmental needs whilst saving for your retirement.Impact PlanInvests your money differently as you go through life, moving your money into safer investments as you get older.TailoredAnnual Report and Financial Statements 2023Strategic Report 1
Efficient Investment in
Customer Acquisition and
Growing Brand Awareness
Continued investment in marketing
is key to driving further growth in
customers, Assets under Administration
(‘AUA’) and Revenue.29 Due to
PensionBee’s broad customer
appeal, we can adopt large, mass
market advertising channels. We
remain focused on reinforcing our
brand identity and our presence
as a household brand name, while
advocating for our customers.
29. See definitions on pages 58 and 59 of the
Measuring our Performance section of the Strategic
Report.
26
Key Highlights for FY2023:
Customer acquisition continued to be a core pillar of our
We increased brand engagement through a continuous flow of
strategy for 2023 as we demonstrated our ability to effectively
content-led reports, a nationwide Roadshow, our award-winning
and efficiently deploy a sizable marketing budget of £9.7m,
Pension Confident Podcast series, blog stories, consumer
despite the challenging macroeconomic environment. By the
advocacy and national media campaigns. Customers can now
end of 2023, we reached 229,000 Invested Customers and held
also consume and engage with this content directly, keeping
£4.4bn of AUA.
our customers ‘Pension Confident’ as they use our product.
The majority of our marketing budget was spent in the first half
of 2023 across paid search, app campaigns and selected TV
and radio campaigns. Our data platform allowed us to further
optimise these channels, resulting in a falling Cost Per Invested
Customer (‘CPIC’) whilst focussing on higher AUA customers.
Our position as a consumer champion has continued to be
enhanced by our active participation in government working
groups, regulatory and policy developments and consultations.
We benefited from continued brand awareness of 50%30,
enabling us to translate this into a lower CPIC with a lower
marketing spend than in 2022. We invested in the most
Our Focus for FY2024:
• Using cost-efficient brand channels including social
media, radio and sports sponsorship (through our
economic brand channels, characterised by high frequency
partnership with Brentford FC). This also includes select
and cost effective impressions. We became the official Sleeve
TV and outdoor campaigns with high return potential,
Partner of Brentford Football Club (‘Brentford FC’), delivering
particularly with a focus on at-retirement customers.
substantial brand exposure at an attractive cost.
30. Source: PensionBee brand tracker. Prompted brand awareness in January
2024 measured through a consumer survey asking ‘Which of the following have
you heard of?’ with respect to UK financial services brands: Aviva 86%, Scottish
Widows 76%, Standard Life 68%, Royal London 55%, PensionBee 50%, Hargreaves
Lansdown 39%, Vanguard 36%, Fidelity 34%, Nutmeg 32%, AJ Bell 29%, Interactive
Investor 11%. Compares to PensionBee’s prompted brand awareness as at January
2023 of 52%, sourced from PensionBee brand tracker.
Our ‘BEElieve in the Bee’ campaign continued on selected TV
and radio channels and we deployed a YouTube test campaign
to reach consumers who don’t watch regular TV. We reached
millions of UK consumers through TikTok.
• Further optimising our performance marketing channels
to continue to reduce CPIC but also to use channels that
attract customers with more AUA per Invested Customer.
• Continuing to maximise our reach through effective
public relations campaigns, advocating for our customers
and complementing our consumer press activity with a
growing focus on the corporate and business press.
• Continuing investment in engaging content
(increasingly delivered through podcasts and videos),
tailored for customer profiles, aiming to attract,
retain and increase AUA per Invested Customer.
PensionBee Group plcStrategic Report 2
Leadership in
Product Innovation
Continued product innovation is
central to our strategy. The PensionBee
customer proposition has been
enabled by investment in continuous
innovation and automation, allowing easy
onboarding of customers and intuitive
lifetime self-service. We will continue
to develop products and features to
cater for consumer demand, building
on our proven track record of leading
the pensions industry with innovation.
Key Highlights for FY2023:
This was another year of strong innovations for the PensionBee
We increased the accessibility of engaging, relevant
product, helping to attract new customers, supporting their
and targeted content to help customers to understand,
engagement and enabling them to contribute more money
interact and engage with their pension, providing
into their pensions. Product developments that have reduced
opportunities to drive pension pot size growth through
friction have enabled us to serve our customers with less
additional contributions and consolidation. For example,
and less human intervention, supporting improvements in
efficiency and operating leverage over time.31
the award-winning Pension Confident Podcast was made
available within the app, making it easy for customers to
31. Operating leverage indicates scalability in terms of how revenue growth
translates into the improvement of profitability metrics.
directly access this valuable content on the go.
We have evolved and grown the helpful tools we provide to
offering, launching a partnership with LifeSearch to help
customers to help them to more confidently plan for their
our customers obtain a range of insurance products
retirement, including the tax relief, state pension and inflation
and critical illness cover to enable them to continue
calculators. We brought our customers a new pension statistics
to save for a happy retirement even in the event of
dashboard, to provide figures and information about pensions
unforeseen circumstances. This has been met with
in the UK, and have invested in the soon to be available
positive customer demand.
We have expanded beyond our pensions producing
retirement hub.
We have further
enhanced our online
withdrawal journey
for customers,
enabling at-retirement
customers to pay
themselves a salary
through retirement
directly from their
mobile phone.
Our Focus for FY2024:
•
•
•
•
Further enhancing the customer experience and future-proofing scalability by delivering
improvements in existing core product features, making it even easier for customers to self-
serve thereby reducing inbound queries.
Delivering investment clarity, we aim to further empower customers with the transparency,
knowledge and tools they need to better understand their pension and save for a happy
retirement.
Researching and exploring opportunities for pension product extension, including family
accounts, auto-transfer functionality and retirement planning support.
Having launched our partnership with LifeSearch and demonstrated that our customers
are interested in acquiring additional products from us, embedding this further, driving
improved performance of this product and learning about cross-sell over time.
27
Withdrawal summaryDate requested14 Sept 2020Tax free cash£0Taxable cash£0Emergency tax deducted (under PAYE)-£1,050,000E(cid:24)tnmated tota@ you recne‘ed£75,000E(cid:24)tnmated remannnng (cid:9)en(cid:24)non amount£#5,000Date requested14 Sept 2020Tax free cash£0Taxable cash£2,000Annual Report and Financial Statements 2023Strategic Report 3
Investment in and
Development of our
Industry Leading
Technology Platform
Our proprietary technology is modern,
scalable and secure, and designed
to support the growth, operational
efficiency and other objectives of the
business. The cloud-based and API-driven
platform provides the foundations on
which to continue to build dynamic and
innovative products, while maintaining
full control over the experience
delivered to customers in a cost-efficient
manner. The security and compliance
of the technology is a top priority,
and we maintain a robust information
security assurance framework that is
independently audited and certified
under ISO 27001. We make investments
in technology to drive further automation
and improve the customer experience.
28
We passed our ISO 27001 re-certification audit, underscoring
our commitment to safe and modern Information Security
Our Data Platform supported product teams with impact
dashboards and metrics to drive decisions about project
practices. We also successfully renewed our Cyber Essentials
prioritisation. We trained Data Champions within teams to
Plus certification and conducted our annual penetration and
ensure all departments were supported with their regular
business continuity testing programme. We onboarded a
reporting, including daily operations reports and to support
24/7 Security Operations Centre, security incident and event
Consumer Duty since it went into effect.
We continued to support operational efficiency gains through
automation, increasing our ratio of Invested Customers to
employees by 15%, from approximately 970 at the end of 2022
to approximately 1,112 at the end of 2023.32
32. See definitions on pages 58 and 59 of the Measuring our Performance section
of the Strategic Report.
management tool, and a Dark Web monitoring and threat
detection capability. We commenced reporting KPIs around
staff information security awareness and ran multiple internal
phishing campaigns.
To align more closely with IT service management good
practice, we implemented a single system to track incidents,
service requests and engineering bugs. Alongside this system,
we refreshed our incident management approach, introducing
prioritisation levels and service-level agreements.
To support projected growth, we improved unit accounting
and fee generation system efficiency. In addition, we rolled
out incremental automations and streamlining in operational
processes including pension payroll, regulatory reporting, bulk
pension transfer and trading.
We piloted the use of Artificial Intelligence (‘AI’) tools throughout
departments,
including
for copywriting, Search Engine
Optimisation and software development, and we published
internal guidelines on the safe and ethical use of AI tools.
We implemented Domain-Driven Design principles in our software codebases, emphasising the independence of code supporting teams’
domains. We diversified our technical infrastructure to leverage the serverless platform provided by Cloudflare’s global edge network.
Actively invests only in companies addressing the world’s great social and environmental needs whilst saving for your retirement.Impact PlanInvests your money differently as you go through life, moving your money into safer investments as you get older.TailoredPensionBee Group plcStrategic Report Our Focus for FY2024:
•
•
•
•
•
Transitioning
to
the updated
ISO 27001 standard,
maturing the information security KPIs and continuing to
prioritise staff awareness. Embedding the new monitoring
capabilities that were introduced in 2023.
Targeting increases in internal productivity through a
combination of technical improvements, process updates
and ongoing skill development. Working to improve key
conversion rates in the pension transfer and customer
acquisition journeys.
Embedding data-driven decision-making as standard
across departments, supported by a holistic data ecosystem
that leverages our platform capabilities as well as best-in-
class third party tooling, supported by strong levels of data
governance.
Implementing ongoing improvements to core pension
administration systems, including for payments, pension
payroll and digital transfers.
Promoting a culture of identifying promising opportunities
for the deployment of AI tooling within the business,
focusing on internal time-saving and quality improvement
use cases.
29
Annual Report and Financial Statements 2023Strategic Report 4
Focus on Excellent
Customer Service
We are focused on making pensions
easy to understand and accessible to
everyone through simple, straightforward
language and engaging visuals. Industry-
leading ratings evidence our excellent
customer service track record. Our
scalable technology-led platform is
supported by easily accessible human
interaction with ‘BeeKeepers’, providing
customers with a dedicated account
manager from the moment they are on
the platform, assisting them through the
on-boarding process and helping them
understand the platform functionality.
30
Customer service continues to be a distinguishing marker
of our offering to consumers. We have built and maintained
Testimony to the continued strength of our customer service,
we have maintained a consistently high Customer Retention
a culture that promotes employee, and in turn customer,
Rate of >95% over several years, including 2023, which supports
happiness. Being able to support and guide our customers is
the predictability of our recurring revenues.
as important as it has ever been.
We have continued to achieve exceptional response
times on communications on all channels (live chat,
phone, email), including call queue times of 23 seconds
and email response rates of 87% within 72 hours, even
with great
inbound communication as the
number of Invested Customers has continued to grow.33
levels of
33. Call queue time of 23 seconds calculated as the average time customers are
waiting in a queue to be put through to a team member (based on 41,622 phone
calls in 2023) as compared to 115 seconds in 2022 (based on 44,956 phone calls).
Email response rate calculated as 87% of email cases closed within 72 hours
(based on 194,237 emails in 2023).
Within customer service, we focused on greater specialisation,
with dedicated roles in Customer Communications, BeeKeeper
Operations and Nectar Collector Operations enabling us to
manage the simplicity, efficiency and effectiveness of our
customer service operations.
We introduced greater data capabilities in our measurement,
including daily reporting. The introduction of tooling like
Conversation Analyser has allowed us to provide valuable and
insightful feedback to the team, and enhanced training and
documentation have enabled the customer services team to
optimise their performance.
We maintained our Excellent Trustpilot Score of 4.6★ (based
on 10,000 reviews) and achieved an average app store rating
of 4.7 (4.8 on the Apple Store and 4.5 on the Google Play
Store) at the end of the year.34 Our internally measured Net
Promoter Score was 53.35
34. PensionBee’s Trustpilot score as at 12 January 2024 of 4.6★ out of 5 (based on
10,004 reviews) as compared to PensionBee’s Excellent Trustpilot score of 4.6★ out
of 5 as at 31 December 2022. Average app store rating of 4.7 as compared to 4.6
out of 5 (4.7 App Store rating and 4.5 Google Play rating) as at 31 December 2022.
35. PensionBee’s internally measured Net Promoter Score (‘NPS’) of 53 as at 31
December 2023. Compares to an NPS of 54 as at 31 December 2022. NPS is a
customer loyalty and satisfaction measurement taken by asking customers how
likely they are to recommend us to others on a scale of 0-10. NPS is calculated by
subtracting the percentage of customers who answer the NPS question with a 6
or lower (known as ‘detractors’) from the percentage of customers who answer
with a 9 or 10 (known as ‘promoters’).
Our Focus for FY2024:
• Continuing to deliver exceptional customer
service, focusing on the quality of our team, and
reinforcing the quality of our systems and processes
to maintain industry-leading response times.
• Improving our operations roadmap across the
Customer Success team through internal and external
initiatives, as well as discovery work in new areas.
• Seeking to better understand how AI tooling can
help our team increase their personal productivity.
• Further enhancing our data-led model of measuring
customer service productivity and effectiveness, to enable
us to report on customer service operations seamlessly.
PensionBee Group plcStrategic Report 5
Focus on Investment
Solutions Designed
for Customers
We continued to partner with
some of the world’s largest
money managers (BlackRock,
HSBC, Legal & General and
State Street Global Advisors) to
manage our customers’ pensions.
We engage with our customers
to ensure all our investment and
voting solutions continue to
meet and reflect their needs.
We maintained a market-leading investment proposition by
continuing our ongoing and active engagement with our
We worked to align our voting with the views and long term interests
of our customers. We began using ISS’s Voting Choice SRI proxy voting
asset management partners, solving for customer needs
policy for the Tailored, Tracker and 4Plus Plans, representing 85% of the
and ensuring they continue to provide the highest levels of
service and security. We worked with AgeWage, a provider
of universal value for money scores, to independently
benchmark our plans against the UK pensions markets; in
2023 our plans scored an average of 69.36
36. AgeWage scoring bases 50 as average, with anything above that
considered outperformance of the UK market.
asset base and voting is directed in Fossil Fuel Free and Impact Plans,
representing 11% of the asset base.38 We continue to expand the scope
of our voting over time and use our voice and vote to drive change in the
system, in line with the long term interests and views of our customers.
38. Reflects 85% of PensionBee’s Assets under Administration across the Tailored, Tracker
and 4Plus investment plans as at 31 December 2023. See definitions on pages 58 to 59 of the
Measuring our Performance section of the Strategic Report.
We began a review of our plan range to ensure that our
accumulation and decumulation solutions continue to
remain market leading in light of recent changes to the non-
workplace pension sector and evolving consumer sentiment.
We continued to engage with our asset managers to enhance the
ESG credentials of our investment offering, in line with our customers’
expectations. In 2023 we increased the number of exclusionary screens
on a further three plans. All eight of our plans have some element of
screening, which we will continue to expand in line with customer
surveying and availability of screened funds.
We worked with our asset managers to secure Scope 3
emissions data for 97% of the asset base. This data has now
enabled us to set a base year for our public net zero targets
and set interim (2030) and long term (2050) net zero targets
in line with the goals of the Paris Agreement.37
37. See pages 77 to 89 of the Climate-related Disclosures section of the
Strategic Report.
Our second full Governance Advisory Arrangement assessment, led by
ZEDRA Trustees, concluded that the PensionBee Investment Pathway
product provides excellent value for money, in a year of great market
volatility for UK at-retirement savers.
Our Focus for FY2024:
•
•
•
•
Maintaining a market-leading proposition by completing the review of our current investment plan range, ensuring that every plan
continues to maintain a sharp focus on value for money for our customers.
Continuing to provide an advanced range of responsible and sustainable investment options, responding to the changing needs of
investors and elevating the ambitions of all pension savers in the UK system.
Developing our voting approach as a responsible asset owner, in line with the views of the customer base, we will join other major
investors to support change in the major social and environmental issues of most importance to our customers. We will continue to
engage with our customer base to ensure we remain aligned with their views over time.
Meeting our public net zero commitments, to achieve net zero emissions across our entire business by 2050. We are committed to improving
the accuracy of these calculations over time and publishing our net zero roadmap, outlining our actions and expectations for stakeholders.
31
PensionBeeYour Aviva pension has transferred successfully. PensionBeeWe’ve invested your personal contribution.Annual Report and Financial Statements 2023Strategic Report 6
Resilience (New for 2023)
Resilience was formalised as the sixth
pillar of our strategy, in order to facilitate
a structured and systematic approach
and embed a risk and resilience mindset
as a fundamental part of our culture.
We focus on protecting our systems
and service for our customers through
effective risk management. We adapt
to change and uncertainty, enabling
the safe growth of our business.
32
We embedded a centralised change management process to
oversee the implementation of changes across the Company,
connecting all relevant stakeholders and decision-makers in a
coordinated approach.
We created a dedicated workstream to monitor the Consumer
Duty, to ensure that we continue to evidence good outcomes
for our customers.
Our strengthened third party management programme was
designed to help us address any vulnerabilities in the supply
chain and ensure a reliable flow of services, even in the face
of disruptions.
Our Focus for FY2024:
resilience model in which resilience becomes a
competitive advantage - both in times of disruption
and when developing new and updated products
and services. This includes building resilience into our
long-term strategic decision making and developing
cross-functional capabilities to strengthen
resilience in key strategic areas. The overarching
capabilities include classic risk management,
foresight skills, agile project management and
disruption and crisis response preparedness.
• Continuing to develop First Line of
Defence capabilities by building individual
resilience as well as resilience within teams,
encouraging interdisciplinary thinking and
embedding a risk and resilience mindset.
• Integrating the role of the Second Line
of Defence in the formal coordination of
administration, control, governance and the
Business continuity and cyber breach planning exercises were
standard processes for risk assessment with the
conducted to validate the effectiveness of the strategies and
activities of an overall resilience strategy.
procedures put in place to maintain essential operations and
identify any potential weaknesses.
We continued to monitor risk events
and metrics which help us
identify
patterns, vulnerabilities, and areas
for improvement in our security and
operational processes. This proactive
approach
allows us
to
respond
effectively to emerging threats or issues.
• Working to embed a holistic
• Further developing the Third Line of Defence
by evaluating external providers to perform an
outsourced Internal Audit function with a direct
reporting line to the Audit and Risk Committee.
• Monitoring risk culture by developing ‘culture
metrics’ as indicators of progress.
• Defining resilience investments to enable long-
term profitable growth. Consciously investing
in the resilience dimensions and developing
action plans for alternative futures.
PensionBee Group plcStrategic Report 33
Annual Report and Financial Statements 2023Strategic Report 6 Our Business Model
We have a simple business model: to increase our recurring revenues by
growing our customer base and helping them save for retirement, while
maintaining cost efficiency through our scalable technology platform
PensionBee provides an easy-to-use technology platform for the mass market,
Recurring Asset-Based Revenue
enabling customers to have control over their pensions. We adopt a simple,
transparent fee structure, based on the pension plan an individual chooses
PensionBee offers a lifetime customer proposition, designed to enable individuals to fulfil their retirement savings goals
after their pensions have been consolidated on our technology platform.
and withdrawal needs. Invested Customers generate growing lifetime value, with our straightforward charging structure
We do not provide financial advice and we do not charge a fee for the initial
driving predictable, recurring revenue that grows with Invested Customers’ savings on the technology platform.
consolidation of pensions, nor an additional platform fee, nor are there any
one-off fees for switching investments. The ongoing annual management fee
We earn Revenue through the administration of our customers’ retirement savings. Our Revenue is substantially
ranges from 0.50% to 0.95% of an individual’s pension assets, depending on
the investment plan chosen, with no minimum pension size requirement. Fees
halve on the portion of a customer’s pension assets in excess of £100,000.
recurring in nature as the annual charges are calculated daily as a percentage (basis points) of the value of Assets under
Administration (‘AUA’) and will continue to be earned on an ongoing basis whilst PensionBee administers those assets.39
The levels of fees charged, and by extension, the Revenue generated, are impacted by the mix of investment plans as well
as the value of the customers’ investment.
PensionBee’s business model is built around the following elements:
Efficient Direct-to-Consumer Distribution
AUA and Revenue have been underpinned by the strength of PensionBee’s customer proposition and our leading
market position. AUA and Revenue growth reflect customers’ attitudes and behaviours with respect to contributions,
consolidation of pensions and withdrawals over time. Growth comes through existing and new customers adding more
We have a direct-to-consumer acquisition model, reflecting the importance
investments into their accounts through pension consolidation and contributions. We aim to minimise asset outflows
of managing the end-to-end relationship with our customers and having total
through our continual delivery of excellent customer service, product innovation and investment solutions designed to
control over the quality of experience, which are key to customer retention.
meet our customers’ needs. The direct nature of our relationship with our customers has resulted in PensionBee achieving
Our direct-to-consumer distribution model encompasses scalable marketing
channels, including search, social media, television, out-of-home advertising,
high levels of Customer and AUA Retention Rates (each in excess of 95% as at 31 December 2023) generating predictable
lifetime revenues and cash flows.40
sports sponsorships and radio. The branding and digital proposition resonates
AUA and Revenue are a function of the underlying market value of the investments customers hold in their accounts,
with a mass market audience, allowing us to advertise efficiently across most
and are therefore inextricably linked to the health of the global markets, including stock markets and bond markets. Stock
prevailing media.
markets give an indication of investment growth and the most relevant proxy measure tends to be the movement in the
major global stock market indices, including those in the United States and in the United Kingdom. Whilst short-term
We are disciplined and responsive in our approach to marketing, deploying
fluctuations may decrease the value of AUA, pension investors’ exposure to the stock market has historically increased
spend across channels, with a focus on rapid payback - on average within the
their retirement savings, and therefore could be expected to increase our AUA and Revenue over the longer run.
first few years of acquiring a customer.
34
39. See definitions on pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
40. See definitions on pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
PensionBee Group plcStrategic Report PensionBee’s Business Model
£1.2tn Transferable Pension Market(41)
Proven Customer Acquisition
Customer solution
Revenue
Customer Fees: c.50-95bps(42)
AUA: £4.4bn(43)
Costs
Money Managers Fee
BlackRock,
Technology & Product
State Street Global Advisors,
Development
L&G
People
41. See pages 58 to 59 of the Market Opportunity section of the Strategic Report
42. Customer fees paid based on the range of funds on offer as at 31 December 2023.
43. Assets under Administration as at 31 December 2023.
35
Scalability of Operations
PensionBee only offers its customers highly liquid, scalable
investment management solutions from the world’s largest
asset managers. The investment solutions generally track
prominent global indices and provide unrestricted capacity
for inflows and the highest levels of liquidity.
We continually
invest
in our
technology, product
development and our people in an efficient and disciplined
manner. Our operations are highly scalable and we expect
to benefit from operating leverage and increasing cost
efficiency as we grow.
Our customer proposition is tech-enabled, allowing for
easy onboarding of customers and intuitive self-service
throughout a customer’s lifetime. We utilise technology
to ensure that our service is as efficient and automated as
possible, such that adding new customers and assets has
only a marginal cost impact. Our technology is scalable,
secure and reliable, built on dynamic, world-class cloud-
native platforms.
We pride ourselves on our excellent customer service,
complementing our digital offering with dedicated customer
account managers who offer lifetime customer support. The
customer success team benefits from a single view of the
customer, enabling efficient and personalised service.
Annual Report and Financial Statements 2023Strategic Report 7 Our People
Diversity, Inclusion and Equality
We have a well established history of fostering diversity and inclusion, aligning with our vision of living
in a world where everyone can look forward to a happy retirement. We believe that one aspect of
achieving a happy retirement is social inclusion. Our diverse workforce helps us serve pension savers
across the UK and to build a truly inclusive product that reflects the needs of society.
We have two main aims in our approach to diversity, inclusion and equality: to build a team that is
representative of all areas of society, across all levels of the business to better reflect and represent our
diverse customer base, and to create an inclusive working environment where everyone has equal
access to opportunities and is treated with fairness and dignity.
Our Diversity, Inclusion and Equality Policy sets out our approach and commitment to diversity and
includes our broad goals of gender balance at all levels and representation of all minority ethnicities
to at least match the UK population across all levels.
In 2023 we launched a new the Diversity and Inclusion programme, which aimed to foster and enable:
•
•
•
•
A culture that encourages our team to be themselves and to bring their whole selves to work so
that we can be productive and cohesive.
Open and honest conversations about the societal issues that impact us as a team and therefore
our customers.
Learning and acceptance of our differences to foster community and cohesion among individuals
and teams.
Authentic thought leadership advancement in these areas.
To deliver on this programme, we introduced nine topics spread over nine months of activities, with
each month dedicated to a particular area of diversity and inclusion. Executive Management Team
members were each responsible for organising different months of events, including leading our
lived-experience sessions. This reflected feedback from employees across the Company who wished
to see even greater leadership from Executive Management in this area. The topics were chosen to
reflect our team, guided by employee feedback on the areas that matter most to them.
36
PensionBee Group plcStrategic Report The nine months that made up this year’s programme were:
•
•
•
•
•
Social Mobility Awareness Month
Women’s Month
International Month
Mental Health Awareness Month
LGBTQ+ Awareness Month
•
•
•
•
South Asian History Awareness History Month
Parenting Awareness Month
Black History Month
Neurodiversity & Disability Awareness Month
After each month, an anonymous survey was sent out to the whole Company in order to solicit feedback
on the programme, which was then used to consider both how to evolve the programme for 2024
and how to evolve our policies and working practices. For example, in response to direct feedback
from Parenting Awareness Month, we took the decision to reduce the Company-wide working hours
by thirty minutes each day, in recognition of the needs of employees with caring responsibilities.
The Neurodiversity and Disability Month also inspired action, with PensionBee achieving Disability
Confident Employer status in December 2023, further solidifying our dedication to maintaining an
inclusive workplace.
Feedback from our annual Diversity, Inclusion, Equality & Support Survey reinforces that PensionBee
was a special place to work. Areas for improvement that were identified included: the need for more
opportunities to get to know each other and form personal or meaningful connections, a more
proactive diversity and inclusion agenda, and more clarity around training budgets and development
opportunities. The results of the survey and action plans were communicated to employees at a
Company-wide presentation, with materials also published in our PensionBee employee handbook.
Results from the survey were also shared in an annual deep dive with the Board to ensure they were
kept well-informed of our progress in this area, and to ensure that the Executive Management Team
maintained accountability. Regular updates regarding any team issues, changes and improvements
were also provided to the Board for the same reasons.
Living our Values
At PensionBee we work hard to protect and nurture our company culture by living by our values, as
when we do so, our culture thrives and our business grows. When we ignore our values, our culture
is undermined and our ability to serve our customers diminishes. Therefore, protecting and nurturing
our culture is of the utmost importance.
37
Annual Report and Financial Statements 2023Strategic Report Culture Code
Workforce Composition
By the end of 2023, PensionBee had a total workforce of 202 individuals.44 For 2023, we achieved
51% female and minority gender representation across the entire employee base and 42% male
representation, 50% female representation at Executive Management level and 57% at Board level.45
The Company satisfied the Hampton-Alexander Review46 requirement for at least 33% female
representation at Board level and the FCA requirement to have at least 40% women on the Board,
with at least one senior board position being held by a woman.47
The Company also achieved 37% Asian/Black/Mixed/Multiple/Other ethnic representation across
its employee base, 10% at Executive Management level and 14% at Board level.45 The Company
satisfied the FCA requirement for at least one Board member being from an Asian/Black/Mixed/
Multiple/Other background.47
There have not been any changes to the composition of the Board in 2023 or in 2024 to date.
Each year we ask everyone to complete an anonymous Diversity, Inclusion, Equality & Support Survey
about how they feel about diversity, inclusion, engagement and support at PensionBee. The results
for 2023 are shown in the Employee Engagement section that follows.
44. As of 31 December 2023. Total workforce of 202 includes 192 UK employees, six overseas contractors and four Non-Executive
Directors.
45. All employee data supported by analysis from PensionBee’s HR information system, December 2023.
46. gov.uk/government/publications/ftse-women-leaders-hampton-alexander-review
47. Chapter 9 of the Listing Rules, specifically LR 9.8.6R(9) states that at least 40% of individuals on the board should be women, at least
one at least one of the senior positions on the board (chair, chief executive, senior independent director or chief financial officer) should
be held by a woman, and at least one individual should be from a minority ethnic background. At PensionBee, the Chief Executive
Officer role has been filled by a woman since the Company’s inception in 2014, the Senior Independent Director role has been filled by
a woman since November 2020 and there has been one board member from a minority ethnic background since April 2022.
Our Culture Code is a practical guide to the positive behaviours which make up our culture, and keep
us close to our values of:
Love - communicate and collaborate
Honesty - feed back and take ownership
Quality - do good work and stay compliant
Innovation - grow efficiently and embrace change
Simplicity - be accessible and solve problems
Our Culture Code sets the expectations for how we expect our team to interact with each other, and
enables us to maintain the kind of workplace our team loves to call theirs, providing guidance on how
we should keep thriving together.
Inclusion Commitment
We are a respectful and inclusive workplace that aims to ensure everyone’s dignity. We value every
person working at PensionBee regardless of seniority, gender, race, origin, social background, religion,
size, age, marital status, parental status, sexuality, gender reassignment, disability, neurodivergence
or mental health.
We will not tolerate any conduct which harms others, such as discrimination, harassment, sexual
harassment, victimisation or bullying. It’s important that everyone is able to recognise and address
these issues so that they can be avoided and appropriately addressed.
We expect everyone to follow our Culture Code and Inclusion Commitment. We do this to foster
an environment where every person’s individual differences and contributions are valued and
respected, one that promotes open communication, encourages employees to speak up about
potential risks, fosters a sense of accountability and ownership and motivates employees to always
do the right thing by our customers.
38
PensionBee Group plcStrategic Report Composition of PensionBee’s Workforce by Race or Ethnicity48
Racial or Ethnic Background
PensionBee Survey Responses 202349
PensionBee Survey Responses 202250
PensionBee Survey Responses 202151
UK as per 2021 Census
Asian or Asian British
Black, African, Caribbean or Black British
13%
13%
Latina/o/x or Other
Included in Mixed or Multiple Ethnic Groups
Mixed or Multiple Ethnic Groups
White
No Response or Rather not Say
10%
55%
8%
Composition of PensionBee’s Workforce in Leadership Positions by Gender52
13%
14%
6%
7%
57%
3%
10%
17%
4%
10%
58%
0%
9%
4%
2%
3%
82%
-
Number of
Percentage of
Board Members
Board Members
Number of Senior
Positions on the Board
(CEO, CFO, SID and Chair)
Number of
Percentage of
Number of
Percentage of
Executive Management
Executive Management
Senior Leadership
Senior Leadership
Men
Women
Other Categories
Not Specified/Prefer not to Say
3
4
-
-
43%
57%
0%
0%
2
2
-
-
4
5
-
1
40%
50%
0%
10%
18
18
-
3
46%
46%
0%
8%
Composition of PensionBee’s Workforce in Leadership Positions by Race or Ethnicity53
Number of
Percentage of
Board Members
Board Members
Number of Senior
Positions on the Board
(CEO, CFO, SID and Chair)
Number of
Percentage of
Number of
Executive Management
Executive Management
Senior Leadership
Percentage of
Senior Leadership54
White British or Other White
Mixed/Multiple
Asian/Asian British
Black/African/ Caribbean/
Black British
Other Ethnic Group, including Arab
Not Specified/ Prefer not to Say
6
-
-
1
-
-
86%
0%
0%
14%
0%
0%
4
-
-
-
-
-
8
-
1
-
-
1
80%
0%
10%
0%
0%
10%
24
10
5
48. All employee data supported by analysis from PensionBee’s HR information system, December 2023.
49. Data is based on a 92% disclosure rate and 8% ‘rather not say’ disclosures.
50. Data is based on a 91% disclosure rate and 4% ‘rather not say’ disclosures.
51. Data is based on a 91% disclosure rate and 4% ‘rather not say’ disclosures.
52. Supported by analysis from PensionBee’s HR information system, December 2023.
53. Supported by analysis from PensionBee’s HR information system, December 2023.
54. The reporting groups for all ethnic backgrounds except ‘White’ is too small (<10 people) to report in line with our Diversity, Inclusion and Equality Policy.
62%
26%
13%
39
Annual Report and Financial Statements 2023Strategic Report Gender Pay Gap
Our vision is to live in a world where everyone can look forward to a happy retirement, one which
prioritises social inclusion. As a result we have been strong proponents of closing the gender pension
gap and the carers’ pension gap more broadly. Our research shows that where a gender pay gap arises,
We note there is a relatively higher distribution of male employees in the upper hourly pay quarter
and a relatively high distribution of female employees in the lower middle and lower hourly pay
quarters. At the end of 2022 we hired a small (but proportionally greater) number of women in Level 1
roles and conversely a small (but proportionally greater number) of men in Level 4 roles. This is a trend
to keep monitoring to ensure our representation remains as evenly distributed as possible across all
a gender pension gap will follow and will be magnified over time by the effects of compounding
levels as we grow.
investment returns. The gender pension gap in the UK is approximately 38% and up to 60% in some
areas of the country.55 We believe that bold action is required to challenge this gap, so that women
can enjoy similar levels of wealth in retirement as men. This is particularly important as women tend
to live longer and often bear their own care costs.
In order to close the gender pension gap, we believe it is important to close the gender pay gap.
Proactive measurement, monitoring and appropriate policies to promote gender equality in the
To further consider our data we calculated the mean gender pay gap at different levels of seniority to
establish whether our pay rates were the same for the same level of work. Our analysis demonstrated
that men and women are compensated equivalently for the same work as measured by being the
same seniority. Specifically, the pay gaps at each management level all fall within 5% variance either
side except at Levels 4 and 5 where the pay gap is 8%. We have grouped Levels 4 and 5 together to
protect anonymity of groups with fewer than 10 employees, which affects the pay gap number for this
workplace are a crucial component of this. The government has introduced requirements to report
level as there are more male than female employees at Level 5.
Management Level
Female Average Hourly Pay
Male Average Hourly Pay
Pay Gap
on the gender pay gap for companies with more than 250 employees. While our workforce is still
substantially below that requirement at approximately 200 employees, we believe that proactive
monitoring and measurement at an early stage is crucial to maintaining long term gender equality in
the workplace.56
Given our small workforce, our figures can fluctuate substantially through the addition or departure
of small numbers of employees. Due to these fluctuations, we will report our gender pay gap figures
Level 1
Level 2
Level 3
once we have reached the required 250 employee headcount. In the meantime, we will continue to
Levels 4 and 5
scrutinise our data through a number of different lenses to ensure we are in line with our objectives
and to consider appropriate policies to promote gender equality in our workplace.
Level 6
Level 7
13.23
15.83
21.00
31.14
70.77
91.99
13.43
15.92
20.75
33.67
69.54
92.62
2%
1%
-1%
8%
-2%
1%
For 2023 we are presenting the distribution of female and male employees in each hourly pay quartile
below. The data is based on a total of 158 full pay relevant employees in line with government
guidance.57
Percentage of Men and Women
in each Hourly Pay Quarter
Upper Hourly Pay Quarter
Upper Middle Hourly Pay Quarter
Lower Middle Hourly Pay Quarter
Lower Hourly Pay Quarter
Male
Female
Total
% Male % Female
23
20
14
16
16
20
25
24
39
40
39
40
59%
50%
36%
40%
41%
50%
64%
60%
55. Source: PensionBee research: ‘2021 gender pensions gap analysis by region’.
56. Total workforce of 202 as of 31 December 2023, includes 192 UK employees, six non-UK contractors and four Non-Executive
Directors. Total workforce as of 31 December 2022 was 208, 204 UK employees and four non-UK contractors.
57. Data excludes individuals who have not elected to disclose and individuals who do not qualify for inclusion. For the 2023 analysis
Board members have been included, in line with external guidance.
40
To maintain and improve gender equality in the workplace we will continue to:
•
•
Maintain diverse pipelines, with a particular focus on senior levels and technical roles.
Support the career development and progression of women at mid-tier level to senior roles.
PensionBee Group plcStrategic Report Ethnicity Pay Gap
We also considered the ethnicity pay gap at different levels of seniority to establish whether our pay
rates are the same for the same level of work. We have grouped together Levels 2 and 3 and Levels 4
The government has provided guidance to report on the ethnicity pay gap and although it is currently
and 5 to protect anonymity of groups with fewer than 10 employees. Our analysis demonstrated that
voluntary, in line with our approach to gender pay gap reporting, we believe proactive measurement,
white and minority ethnic employees are compensated equivalently for the same work as measured
monitoring and appropriate policies are crucial to build a team that is reflective of society and to
by being the same seniority. Specifically, the pay gaps per management level all fall within 5%
create an inclusive workplace.
Government guidance recommends a minimum group size of 50 employees for external publication,
to ensure statistical robustness and to protect individuals’ anonymity. We have therefore reported on
two groups: all white backgrounds combined and all minority ethnic backgrounds combined. We
recognise that this approach brings limitations as it hides potential differences between different
variance either side, except at Levels 4 and 5 where the pay gap is -10% (in favour of minority ethnic
employees), due to a higher representation of white employees at Level 4.
Management
Level
White Employees
Minority Ethnic Employees
Average Hourly Pay
Average Hourly Pay
Pay Gap
minority ethnic groups. As we grow our company size we aim to expand the number of reporting
Level 1
categories for ethnicity pay gap reporting in line with government guidance.
We also recognise that small changes in our relatively small workforce can have big impacts and
therefore that our numbers can fluctuate substantially from year to year. We take this into consideration
when analysing our data, setting objectives and creating action plans. In line with our approach to
gender pay gap reporting, we will report our ethnicity pay gap when we reach a minimum headcount
of 250 employees.
Levels 2 and 3
Levels 4 and 5
Level 6
Level 7
13.41
16.83
31.71
70.03
92.41
13.18
16.96
34.75
71.99
-
2%
-1%
-10%
-3%
-
Therefore, while minority ethnic employees are overrepresented at junior levels, we remain confident
that we maintain ethnicity parity within our workforce given comparable levels of compensation at
For 2023, we have presented the distribution of white and minority ethnic employees in each hourly
each seniority level.
pay quartile below. The data is based on a total of 156 full pay relevant employees in line with
government guidance.58
Percentage of White and
Minority Ethnic groups in
White
each Hourly Pay Quarter
Upper Hourly Pay Quarter
Upper Middle Hourly Pay Quarter
Lower Middle Hourly Pay Quarter
Lower Hourly Pay Quarter
27
24
25
21
Minority
Ethnic
Total
% White
% Minority
Ethnic
12
15
14
18
39
39
39
39
69%
62%
64%
54%
31%
38%
36%
46%
Although we have exceeded representation of all minority ethnic backgrounds to match the UK
population across the entire workforce, we see a relatively lower representation of minority ethnic
employees across the upper hourly pay quarters (31%), whereas we see a relatively high representation
of minority ethnic employees in the lower hourly pay quarter (46%).
To maintain and improve an inclusive workplace we will continue to:
•
•
•
Maintain diverse pipelines across all levels.
Continuously review and adapt our hiring processes where applicable.
Support the career development and progression of minority ethnic employees at lower
management levels to more senior roles.
PensionBee’s Parental Leave Policy
Becoming a parent is a life changing moment and providing support for all new parents as they
navigate this stage in their life journey is key. Our gender-inclusive Paid Parental Leave Policy aims to
address some of the challenges that face parents, and to support them in maintaining an engaging
and fulfilling career alongside their new responsibilities.59 It applies to anyone taking on parental
duties, regardless of their biological relationship to the new arrival and irrespective of gender. We are
immensely proud to report a new mother retention rate of 100% in the first year after parental leave.
58. Data excludes individuals who have not elected to disclose and individuals who do not qualify for inclusion. For the 2023 analysis
Board members have been included, in line with external guidance.
59. pensionbee.com/parental-leave-policy
41
Annual Report and Financial Statements 2023Strategic Report The parental leave policy has given me the opportunity to spend
quality time bonding with my daughter and it also gave me the
flexibility to support my family with my presence when most needed.
Parenthood contains unpredictable surprises, special occasions, and
in those precious first years I feel grateful I had the chance to take
extra time off to be with my daughter and family.
Paying a Living Wage
PensionBee is an accredited Living Wage Employer, furthering its mission to champion diversity
and representation in the pensions industry.60 We pay all our employees a London Living Wage as a
minimum, regardless of where they are located across the UK (effective as of January 2024).
We are also a member of ShareAction’s Good Work Coalition, regularly supporting public campaigns
to address income inequality, tackle in-work poverty and lobby FTSE 350 companies to pay their
employees a fair wage. In 2023, we supported campaigns calling for publicly-listed companies to
prioritise support for their lowest-paid employees and to meet the new real Living Wage rates during
the cost of living crisis.
These activities have helped us to facilitate fulfilling careers and to foster an even more diverse and
inclusive environment at PensionBee, as well as encouraging change in the wider business landscape.
Father at PensionBee
Employee Engagement
I am so grateful for PensionBee’s parental policies, they’ve made -
and continue to make - my experience of being a working parent
infinitely better. From taking my parental leave over two years, to
being able to collect my kids everyday, to the extra parental leave
days for those unexpected days off school, the flexibility to do what’s
right for me and my children is such a positive contributor to our
family life. And importantly, I’ve always felt supported to pursue both
my professional and personal goals. Having kids whilst working at
PensionBee has not been career-limiting for me as a woman, which I
know may not have been the case in other companies.
Mother at PensionBee
42
Aligning with our values of Honesty and Love, we took active steps to involve and consult employees
where possible, to ensure everyone is listened to and well-represented. We have a number of ongoing
initiatives in place to make sure we maintain and build upon our diverse and inclusive workplace so
that all employees can build fulfilling careers:
•
•
•
•
•
•
•
•
Weekly all-Company Show N Tell meetings with the Chief Executive Officer and Executive
Management Team.
A series of lived-experience panels, throughout the year, as part of the Diversity and Inclusion
Programme.
Bi-monthly ‘Happiness!’ meetings for employees to discuss their wellbeing with their manager.
Annual Diversity, Inclusion, Equality & Support Survey.
Bi-Annual manager feedback survey.
Board-led employee engagement events.
Anonymous channels for employees to submit any requests, concerns, or issues they may have.
Qualified Mental Health First Aiders, trained to provide mental health support to our employees.
The Board engaged with the wider workforce during the year via existing channels and initiatives that
are in place across the Company, to ensure that our employees were listened to and well represented.
60. pensionbee.com/press/pensionbee-becomes-accredited-living-wage-employer
PensionBee Group plcStrategic Report Engagements included, but were not limited to:
•
•
•
Operational deep dive sessions into business areas of interest, enabling the Board to gain valuable
direct insights and feedback from employees on workplace issues, and providing employees with
the opportunity to meet and engage with the Board. Participation in our Diversity & Inclusion
events programme as both attendees and panellists.
A Review of the Annual Diversity, Inclusion, Equality & Support Survey of all employees, to hear
feedback and measure progress.
Attendance of the Champions Awards Ceremony, where employees nominate each other as
Champions in relation to our Company values.
Employees fed back to us that they value in-person activities to build relationships with other
colleagues. We responded by organising the following events for colleagues across the UK in 2023:
•
•
•
•
•
•
•
•
•
•
Pride Picnic
Summer Party
Breast Cancer Awareness Event
PensionBee Family Day
South Asian History Awareness Movie Night
Charity Rowing
Mental Health First Aiders Sports Day
South Asian, International and
Black History Lunch & Learns
Christmas Party
Departmental Social Events.
Measuring our Progress
Measuring our progress and seeking feedback from our employees about how we are performing
in terms of facilitating fulfilling careers and maintaining a diverse and inclusive environment is
important. Our annual Diversity, Inclusion, Equality & Support Survey for all our employees explores
themes related to wellbeing, longevity and remuneration.
For 2023, the data suggested that employees felt aligned with the Company’s mission, vision and
values, and that their job helped them to stay connected to PensionBee’s goals. We felt proud to
have achieved a workplace in which 90% of colleagues informed us that they felt connected with
PensionBee’s mission, vision and values, particularly in a context where most people work remotely.
Would you recommend
working at PensionBee to a
friend?
Do you feel a sense of
belonging at PensionBee?
85%
Positive
12%
Neutral
4%
Negative
74%
Positive
20%
Neutral
6%
Negative
Do you feel listened to by
PensionBee?
Do you feel aligned with
PensionBee’s mission, vision
and values?
71%
Positive
19%
Neutral
10%
Negative
90%
Positive
8%
Neutral
2%
Negative
43
Annual Report and Financial Statements 2023Strategic Report Disability Confident Employer
Charters, Pledges and Social Impact Initiatives
‘Disability Confident’ organisations play a critical role in changing attitudes towards disabilities, by
altering behaviours and cultures within their own business practices and communities. As hidden
disabilities account for 80% of the disabled population, membership to this scheme allows prospective
employees and other businesses to easily identify PensionBee as a workplace which places great
importance on offering equal opportunities. Additionally, the scheme allows us to increase our
understanding of disabilities, and how to aid new and existing disabled employees in reaching their
full potential at work.
Following employee feedback in our 2021 annual Diversity, Inclusion, Equality & Support Survey, we
set ourselves an important goal of becoming a Disability Confident Employer. In 2022 PensionBee
joined the UK Government’s Disability Confident Employer Scheme, taking the first step and becoming
Disability Confident Committed (Level 1). In 2023 we reached our goal and became a Disability
Confident Employer (Level 2).61 As such, we have reconfirmed our commitment to employing people
from the widest pool of talent, securing skilled staff from diverse backgrounds. We also expanded
our Bee a Leader Training to include better guidance for managers supporting employees who are
neurodiverse and/or have disabilities.
As part of the scheme we have made five public commitments as an employer:
Inclusive and accessible recruitment.
Communicating vacancies to encourage applications from disabled people.
Offering an interview to disabled people.
Providing reasonable adjustments.
Supporting existing employees.
61. pensionbee.com/press/pensionbee-becomes-a-disability-confident-employer
44
To support our vision of living in a world where everyone can look forward to a happy retirement, and
to facilitate fulfilling careers in our diverse and inclusive workplace and beyond, we are proud to have
continued our public commitment to the following initiatives in 2023:
•
•
•
•
•
•
•
•
•
•
•
ABI Making Flexible Work Campaign and Charter62
ABI Transparent Parental Leave and Pay Initiative63
Accredited Living Wage Employer64
Careers & Enterprise Company65
Make My Money Matter66
Race at Work Charter67
Social Mobility Pledge68
Tech Talent Charter69
The Diversity Project70
The Workforce Disclosure Initiative Investor Coalition71
Time to Talk (Time to Change)72
These public commitments not only signal to our current and
prospective employees that we care about helping people from
all backgrounds thrive at PensionBee, they also encourage other
businesses to adopt more inclusive practices.
62. pensionbee.com/press/pensionbee-joins-abi-flexible-work-charter
63. pensionbee.com/press/abi-transparent-parental-leave-and-pay-initiative
64. pensionbee.com/press/pensionbee-becomes-accredited-living-wage-employer
65. pensionbee.com/press/pensionbee-work-experience-programme
66. pensionbee.com/press/pensionbee-joins-make-my-money-matter-campaign-launch
67. pensionbee.com/press/pensionbee-signs-the-race-at-work-charter
68. pensionbee.com/press/pensionbee-joins-social-mobility-pledge
69. pensionbee.com/press/pensionbee-signs-tech-talent-charter
70. pensionbee.com/press/pensionbee-announces-partnership-with-the-diversity-project
71. pensionbee.com/press/pensionbee-joins-the-workforce-disclosure-initiative
72. time-to-change.org.uk
PensionBee Group plcStrategic Report Volunteering
Each member of the PensionBee team is able to dedicate the
equivalent of a full day of work, each year, to volunteer for a
cause that is related to PensionBee. Our approach to working
with charities and our local communities is outlined in our
Community Involvement Policy, available on our website.
In 2023 we offered a number of charity events for colleagues to
participate in, support or volunteer for:
•
•
•
•
•
•
Bankside Futures - Supporting a summer employment
programme for local school-leavers in SE1 to meet local
businesses and gain valuable employment skills.
The AHOY Centre Charity - Raising funds through a
sponsored row to help disadvantaged children and
people with disabilities in Deptford, London.
Breast Cancer Now - Breast Cancer Awareness Month
events including ‘Wear it Pink Day’ to raise awareness and
funds.
Brentford FC Penguins - Supporting summer camp for a
team for players with Down’s Syndrome.
Woodside High School - Donating our laptops to increase
employability prospects.
YoungMinds - Our Mental Health First Aiders fundraised
to champion children and young people’s mental health.
Diversity Awards
In 2023, we were proud to have achieved recognition for our
focus and achievements in diversity, including:
•
•
Highly commended as ‘Employer of the Year’ in the
FTAdviser Diversity in Finance Awards
Winner of two WDI Workforce Transparency Awards
including the ‘WDI Award’ for most complete response
and the ‘Contingent Workforce Data Award’.
PensionBee ‘Wear it Pink Day’ event
45
Annual Report and Financial Statements 2023Strategic Report Remuneration
PensionBee has an established employee Remuneration Policy providing clear and guiding principles
for decisions around employee remuneration that ensures fair, competitive and appropriate pay for
all. Our goal is to maintain a mix and balance of remuneration that is appropriate to attract, motivate,
retain and fairly reward employees whilst balancing the needs of our business and customers. The
Remuneration Policy is underpinned by the PensionBee values:
Simplicity
We want to make our remuneration policy easy to understand.
Love
Our approach to remuneration aims to foster inclusivity and therefore
applies to the whole Company. Furthermore, we recognise the
social inequalities that exist within our society and aspire to close all
diversity pay gaps, including among genders and ethnicities.
Quality
We recognise that performance levels may differ between employees and for any
given individual at different periods of time. In addition, the time commitment,
level of responsibility and formal experience (including professional qualifications)
tend to increase with seniority. This variability is reflected in our compensation
structure.
Innovation
We aim to inspire an ownership mentality among our employees, therefore,
equity compensation will continue to be offered at all levels of the Company.
Honesty
We aim to keep our policies transparent at all levels of the Company.
46
Components of Employee Remuneration
Base Cash
Salary
Equity
Schemes
End of Year
Bonus
Pension
Scheme
Other
Benefits
for 2023
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
We aim to set base cash salaries at a level that enables us to attract and retain
the people that we need to thrive, whilst balancing our financial resources as a
company.
The primary driver for our base cash salary levels is external benchmarking. This
is conducted annually by the Executive Management Team in respect of their
departments and centrally reviewed by the People team.
The purpose of granting equity is to encourage everyone to think and behave
like owners, and to recognise the vital contribution every individual makes
towards achieving our mission and vision.
Prior to becoming a listed company, PensionBee operated an EMI and non-EMI
option scheme. Post-listing we operate long-term incentives and a deferred
bonus, both granted in the form of nil-cost options.
We structure Company bonuses based on metrics that incentivise collective
focus towards helping customers achieve good outcomes over the long term,
such as Truspilot scores, app ratings, NPS and complaints ratios.
The bonus structure is determined as a percentage of salary, ranging from 15-
100%. The percentage increases with seniority to reflect increasing levels of
responsibility and to remain competitive with market averages.
The proportion of the bonus based on Company vs. individual performance
also varies across all levels, with the Company proportion accounting for more
at senior levels where individual performance is more directly reflected in
Company performance.
The Company proportion of the bonus is deferred and paid with equity in the
form of nil-cost options. The individual performance-based bonus is paid entirely
in cash, except for at senior levels, where a portion is paid in equity to encourage
long-term engagement with our vision, mission and values.
Executive Management Team bonuses are also based on authentic leadership
and individual scoring for their Diversity and Inclusion events, as enabling
fulfilling careers to occur is a material ESG priority for PensionBee.
Employees who meet the automatic enrolment criteria set out by the
Government are automatically enrolled into the PensionBee Personal Pension,
within 6 weeks of their employment start date.
PensionBee contributes an amount equivalent to 5% (which is matched by the
employee) of qualifying earnings as part of monthly compensation.
Income Protection Insurance
UK HealthCare Cash Plan
Thrive Mental Wellbeing platform
SmartHealth GP online
Bippit financial coach
PensionBee Group plcStrategic Report Learning and Development
Health and Safety
At PensionBee we are committed to nurturing internal talent, in line with our company values of
PensionBee’s continued commitment to maintaining health and safety in the workplace is outlined
Love and Quality. We prioritise internal hiring and career development over external hiring wherever
in our Health and Safety Policy and Procedure. Everyone at work is responsible for health and safety,
possible. This allows us to boost engagement, increase retention and encourage high performance
including both employers and employees. This group effort is the key to achieving acceptable
at all levels of the Company. We offer ongoing role specific training for our BeeKeepers and Nectar
standards, reducing accidents and cases of work-related ill health.
Collectors, and a ‘Bee a Leader’ manager development programme for all new and existing line
managers.
PensionBee takes reasonable steps to:
In 2023 we gave all PensionBee employees access to Learnerbly, an online marketplace that offers
a wide range of training and development materials from more than 250+ learning providers.
Employees were given a personal learning budget to spend as they wished, based on their areas of
interest and preferred learning methods, such as online courses, coaching, books, or other training
materials. Courses ranged from business, design, leadership, marketing, communications, technology,
data to people management.
We also supported requests for external training to develop additional skills required for roles, such as
in Finance, Technology, People or Engagement teams.
•
•
•
•
•
•
•
Provide adequate control of any health and safety risks arising from its workplace activities.
Involve and consult where possible its employees on matters affecting their health and safety.
Provide and maintain safe equipment.
Provide information, instruction, and supervision for employees.
Prevent accidents and cases of work-related illness.
Maintain safe and healthy working conditions.
Review and revise its Health and Safety Policy and Procedure as necessary at regular intervals.
Compliance and Conduct
PensionBee Directors and managers share the responsibility of providing an environment that
complies with our Health and Safety Policy and Procedure, and the day-to-day responsibility for
In addition to the above, there is a mandatory annual compliance and conduct training programme
putting the Health and Safety Policy and Procedure into practice is delegated to a Health and Safety
for all employees across the organisation, at all levels including at Board level. The training and general
Officer and an Employee Health and Safety Representative.
compliance test is updated annually, to reflect changes to legislation and best practice. All employees
must pass each unit with a minimum score of 80% within a month of joining PensionBee and at least
Risk assessments are conducted by the Office Manager annually or when the work activity or work
once annually. Our annual compliance training comprises:
•
•
•
•
•
•
•
•
•
Consumer Duty
Anti-Money Laundering
Risk Compliance
Fraud Prevention
Market Abuse Regulation
Conduct Rules for Employees
Healthy Working
Equality and Diversity in the Workplace
Corporate Criminal Offences
location changes, whichever is the soonest. We review our fire safety risk assessment every 6 months,
and after each evacuation. Any employee who is concerned about health and safety at work can raise
a concern directly with our Health and Safety Officer. Any actions required to remove or control the
identified risks will be implemented in a timely manner.
Since PensionBee’s inception, we have reported zero accidents, work-related injuries and fatalities,
resulting in no occupational diseases nor any lost working days. This applies to all PensionBee
colleagues, including contractors.
47
Annual Report and Financial Statements 2023Strategic Report 8 Market Opportunity
We operate in the vast UK Defined Contributions private pensions
market, with a focus on the rapidly growing pension consolidation
opportunity within the £1.2tn Transferable Pensions Market
The Global Context
The global pensions market stands at more than $56tn of assets, with the top three countries
accounting for over 75% of all pension assets in the world: the United States of America (‘US’) leading
Automatic-enrolment has resulted in the number of active savers in DC schemes increasing rapidly,
with approximately 14m active members in DC schemes today, overtaking the number of active DB
savers.76 The growth in the UK DC pension market, both in terms of number of individual savers and
the aggregate wealth managed within schemes, is expected to continue.77
with $36tn of assets; Japan with approximately $4tn of assets; and the UK being the third largest with
approximately $3tn of assets.73
UK DC Market
Over the past decade the global market has seen a shift from Defined Benefit (‘DB’) towards Defined
Owing to the fragmented structure of the UK DC market, it is challenging to obtain precise market
Contribution (‘DC’) pensions, which are now the prevalent form of savings: in respect of the largest
size statistics and estimates from public sources. However, the Financial Conduct Authority (‘FCA’)
seven counties by pensions assets, DC assets have grown by 6.6% per annum whilst DB assets have
has released comprehensive DC statistics from its Financial Lives Survey, enabling a bottom up
grown at a slower pace of 2.2% per annum, resulting in approximately 58% of the pensions market
now being accounted for by DC assets.74 The US is the largest DC pensions market in the world with
approximately $24tn of DC pensions assets, followed by Australia, Canada and the UK.75
construction of 2022 market data. This, in combination with other data sources, enables us to present
a clearer view of the UK DC market today and its constituents.
The UK DC Market and the Transferable Pensions Market
PensionBee’s product proposition is focused on DC pensions. Unlike employer guaranteed (final
salary) DB pensions, DC pensions build up a pension pot using personal and employer contributions
(if applicable) plus investment returns and tax relief.
In the UK there has been a broad shift from DB to DC pensions, driven in the private pensions market
by the DB scheme closure (due to them becoming less attractive with labour market shifts) and
importantly the advent of automatic-enrolment (a regulatory requirement for employers to enrol
eligible employees into workplace pensions) and an increase in contributions supported by regulation.
The FCA estimated that of the 53m adults in the UK in 2022, approximately 21.5m (41%) had a DC
pension in accumulation and a further 1.5m had decumulated a pension in the last 4 years.78 Using a
broad sample of data, the FCA has looked at the distribution of DC pension savings for adults with a
DC pension in accumulation. Taking a conservative approach (looking at the lower end of estimates of
pensions pot sizes and excluding the pots that are of an unknown size), and applying this to the 21.5m
adult population with a pension in accumulation, yields an estimate of £1.27tn DC pensions assets.
Considering the 1.5m adults with a pension pot in decumulation, and applying an average DC pension
savings pot size of £80k to this, yields an estimate of £120bn DC pensions assets in decumulation.79
Therefore, our analysis suggests a conservative total estimate of £1.4tn in UK DC pension assets, with
approximately 91% of this in accumulation.
73. Source: Global Pension Assets Study 2024, Willis Towers Watson. Total global pensions market estimated for 2023 of $55,688bn of
pension assets for top 22 countries, including US at $35,600bn, Japan at $3,385bn and UK at $3,206bn.
74. Source: Global Pension Assets Study 2024, Willis Towers Watson. Top 7 countries include: Australia, Canada, Japan, Netherlands,
Switzerland, UK and US. Growth over the last decade measured from 2013 to 2023.
75. Source: Global Pension Assets Study 2024, Willis Towers Watson. US had 67% of $35,600bn of 2023 pensions assets in DC pensions
equating to $23,994bn, Australia had 88% of £2,448bn of 2023 pensions assets in DC equating to $2,152bn, Canada had 44% of $3,105bn
2023 pensions assets in DC equating to$1,357bn and UK had 26% of $3,206bn of 2023 pensions assets in DC equating to $818bn.
76. Source: Pensions Policy Institute DC Future Book 2023. 10.9m employees in the UK have been automatically enrolled as of June 2023,
with 14m active members in DC schemes compared to 930,000 active members in private sector DB schemes in 2022.
77. Source: Office for National Statistics - Pension Wealth: Wealth in Great Britain, April 2018 to March 2020, January 2022.
78. Source: The Financial Lives Survey 2022, FCA.
79. Source: Pensions Policy Institute DC Future Book 2023. Average pension fund size entering drawdown was c.£80,000 in 2022
(£114,000 in 2021).
48
PensionBee Group plcStrategic Report Transferable Pensions Market
Within the UK DC market, there are broadly speaking three segments, which in aggregate represent
approximately 55.5m memberships (pension pots):
•
•
•
Trust-based workplace schemes. These are regulated by The Pensions Regulator (‘TPR’). The TPR
has indicated that within the trust-based workplace schemes, there are 24.8m memberships
(number of pension pots).
Contract-based workplace schemes. These are also known as group personal pensions and are
regulated by the FCA. A joint FCA/TPR paper suggests that within this category there are 12m
memberships.80
Personal pensions (also regulated by the FCA). The same FCA/TPR paper implies that within
personal pensions there are 18.7m memberships.81 PensionBee sits within the personal pensions
segment.
We can further segment the market into active DC workplace pensions, which benefit from active
employer contributions and therefore are rarely transferred, and ‘Transferable Pensions’ (including
Pension Consolidation Activity
deferred workplace pensions that are no longer receiving employer contributions, and personal
Within the labour market, individuals are moving jobs more frequently and stand to be auto-enrolled
pensions) that are available to be moved and that therefore lend themselves more easily to pension
in a number of pension plans. As a result, there are many potential advantages to combining multiple
consolidation activities. This is the key target market that PensionBee primarily focuses on.
Taking the previously mentioned overall UK DC market size of £1.4tn and removing approximately
£600bn of workplace DC assets,82 implies a personal pensions market size of approximately £786bn
(representing significant growth since an earlier FCA estimate of £420bn in 2017/18).83 PensionBee sits
within this personal pensions segment.
Based on the previously mentioned PPI estimate of 14m active members in workplace schemes, we can
imply that there were approximately 22.8m deferred workplace accounts.84 Based on an average workplace
pension pot of around £16.3k, there is approximately £372bn in preserved workplace pensions.85
Adding the £786bn personal pensions market size and the £372bn preserved workplace pensions
market size yields an estimate of approximately £1.2tn for the Transferable Pensions Market.
pension pots, including keeping track of and managing pension savings more easily, reducing charges
and choosing desirable investments. Pension consolidation is a key part of the PensionBee customer
offering, and in most cases the start of the journey. Our customer proposition caters for those seeking
a consolidation solution and also enables customers to start a new self-employed pension.
Based on estimated data from the FCA and Mintel, there are approximately 14.7m personal pension
consumers.86 Overall estimates indicate that each pension holder has approximately 2.6 pension pots.87
The FCA presents pension consolidation data that indicates that approximately 1.1m people in the
UK consolidated pensions in the 12 months to May 2022 (5% of DC pension holders), representing
a substantial increase from the 570k that did the same in 2020.88 Of these 1.1m pension holders who
consolidated pensions, approximately 355,000 consolidated a personal pension and the remainder
did so in their workplace pension, or were unsure.89
80. Source: FCA and TPR 2021 joint framework for value for money press release. Indicates that the FCA has 30.7m memberships (likely a
conservative 2020 estimate), of which 12m are workplace accounts, implying 18.7m relate to personal pensions.
81. Source: FCA and TPR 2021 joint framework for value for money press release. Indicates that the FCA has 30.7m memberships (likely a
conservative 2020 estimate), of which 12m are workplace accounts, implying 18.7m relate to personal pensions.
82. Source: Pensions Policy Institute DC Future Book 2023. Between 2015 and 2023, aggregate assets in DC grew from £324bn to £600bn.
83. Source: FCA Sector Views 2020. FCA estimate of £420bn non-workplace pensions savings market, based on FCA, Retirement Income
Data 2017 and Broadridge, UK & RI Market Intelligence 2018.
84. 24.8m trust-based workplace scheme memberships + 12m contract-based workplace scheme memberships - 14m active
memberships = 22.8m deferred workplace memberships.
85. £600bn DC workplace assets / (24.8m trust-based workplace memberships + 12m contract-based workplace memberships) = £16.3k
average DC workplace pension pot. £16.3k average DC workplace pension pot x 22.8m deferred workplace memberships = £372bn
total workplace DC assets.
Consolidation activity was driven by a desire to have all pensions in one place (72%) or to more
easily access their financial savings (42%). Ease of consolidation was the most important factor (40%)
considered by those choosing a new provider, closely followed by product functionality (32%).
86. Source:The Financial Lives Survey 2022, FCA and the UK Personal Pensions Market Report, Mintel. 20.1m men with private pension
x 42% of male pension holders with a personal pension = 8.4m male personal pension holders. 18.5m women with private pension x
34% of female pension holders with a personal pension = 6.3m female personal pension holders. In aggregate a total of 14.7m personal
pension holders in the UK.
87. 55.5m memberships (pots) / 21.5m adults with a pension in accumulation.
88. Source:The Financial Lives Survey 2022, Pensions (accumulation and decumulation) Selected Findings data book July 2023, FCA.
89. Source:The Financial Lives Survey 2022, Pensions (accumulation and decumulation) Selected Findings data book July 2023, FCA.
49
Actively invests only in companies addressing the world’s great social and environmental needs whilst saving for your retirement.Impact PlanInvests your money differently as you go through life, moving your money into safer investments as you get older.TailoredAnnual Report and Financial Statements 2023Strategic Report Reasons given for Consolidating DC Pensions
PensionBee’s Market Share
To have all my pensions savings
in one place
To more easily access my
pension savings
Recommendation from a financial
adviser or accountant
Dissatisfied with the costs/charges
of my old pension provider
Other recommendation (eg. family,
friends, social media, press)
Dissatisfied with my old pension
provider for another reason
12%
10%
7%
6%
Special offer from the new provider
4%
Covid-19 prompted me to think
about my pension and retirement
Saw an advertisement about pension
consolidation
3%
2%
Other
4%
72%
42%
Depending on the definition of the market size, there are a number of ways to calibrate PensionBee’s
market share which we consider important benchmarks, including the following:
•
•
•
•
•
PensionBee’s £4.4bn Assets under Administration at the end of 2023 (‘AUA’) represented c.0.4%
of the £1.2tn Transferable Pension Market.
PensionBee’s £4.4bn AUA represented c.0.6% of the £786bn Personal Pensions Market (non-
workplace pensions).
PensionBee’s 229k Invested Customers (‘IC’) at the end of 2023 accounted for c.1.6% of 14.7m
Personal Pensions Members.
PensionBee’s 46k new ICs for 2023 accounted for c.4.3% of all 1.1m consolidators.
PensionBee’s 46k new ICs for 2023 accounted for 13.0% of 355k consolidators of personal
pensions.
The market share statistics all highlight that given the vast size of the UK pensions market, with
widespread pension membership across the country, despite PensionBee’s rapid growth since
inception, there is still substantial potential for further growth.
0.4%
£4.4bn AUA as a % of
£1.2tn Transferable
Pension Market
0.6%
£4.4bn AUA as a % of
£786bn Personal
Pension Market
1.6%
229k ICs as a % of
14.7m Personal
Pensions Members
4.3%
46k new ICs as a % of
1.1 Consolidators
13.0%
46k new ICs as a % of
355k Consolidators of
Personal Pensions
All who consolidated in the last 3 years to 2022
Source: The Financial Lives Survey 2022, Pensions (accumulation and decumulation) Selected Findings data book July 2023, FCA.
50
PensionBee Group plcStrategic Report Engagement with Pensions
Pension Engagement Metrics for Adults Currently Contributing to a DC Pension
Levels of engagement with pensions across the general population in the UK are
still low, although pensions consciousness is rising. Engagement can be measured
in many different ways including by looking at metrics such as consumer awareness
of their provider, awareness of their pot size, awareness of their contribution levels,
awareness that their pensions are invested and awareness of fees and charges, and
accessing pension statements and use of online services to check pensions.
By way of illustration, FCA sample data suggests for individuals with a DC pension:90
•
•
•
•
•
30% do not know who their pension provider is;
29% do not know how much their pension pot is worth;
79% have never reviewed where their pension is invested;
55% are not aware that fees are charged on their pension; and
66% had never reviewed where their pension is invested (or had not done so
since they joined their scheme).
90. Source:The Financial Lives Survey 2022 and associated Pensions (accumulation and decumulation) Selected
Findings data book July 2023, FCA.
t
o
p
n
o
i
s
n
e
P
t
n
u
o
m
a
t
o
p
n
o
i
s
n
e
P
t
n
u
o
m
a
29%
do not know broadly speaking how
much their pension pot is worth
47%
have not reviewed how much their
pot is worth in the last 12 months
s
n
o
i
t
u
b
i
r
t
n
o
C
d
n
a
s
e
g
r
a
h
C
s
t
n
e
m
t
s
e
v
n
i
d
n
a
s
e
g
r
a
h
C
s
t
n
e
m
t
s
e
v
n
i
37%
are not aware how much they or
their employer contribute to their
DC pension(s)
74%
have not personally chosen to
change their contribution levels
in the last 3 years.
21% not aware they could.
79%
have never thought a lot about
how much they should be paying
into the DC pension
29%
do not know broadly speaking how
much their pension pot is worth
56%
are not aware that fees are
charged on DC pensions
79%
have never reviewed where their
pension is invested (or not
reviewed since joined) or donʼt
know if they have or not
Source: The Financial Lives Survey 2022, Pensions (accumulation and decumulation) Selected Findings data book July 2023, FCA.
51
Annual Report and Financial Statements 2023Strategic Report
9 Operating and Financial Review91
The achievement of Adjusted EBITDA profitability across the fourth quarter
of 2023 was owing to a combination of continued significant growth,
the scalability of our technology platform and cost discipline
Trading for the financial year 2023 has been strong and in line with guidance, with high levels of growth achieved across our key performance indicators (‘KPI’s) along with the achievement of Adjusted EBITDA
profitability across the fourth quarter of the year, fulfilling one of our core financial objectives. We achieved this objective by virtue of our continued growth in terms of new customers and strong net inflows
from both new and existing customers, through the inherent scalability of our technology platform and with continued cost discipline. We have continued to demonstrate particular strength in customer
growth, with the number of Invested Customers (‘IC’) increasing by 25% to 229,000 (2022: 183,000) and Assets under Administration (‘AUA’) increasing by 44% to £4.4bn (2022: £3.0bn). This was underpinned
by strong Net Flows of £857m (2022: £863m) from new and existing customers together with positive market performance.92 Revenue for 2023 increased by 35% to £23.8m (2022: £17.7m). Profit/(Loss) before
Tax for 2023 was £(10.7)m (2022: £(22.4)m).
Growth in Invested Customers
Translates into Increasing AUA
(000s)
(£m)
Which Drives Revenue
(£m)
25%
229
44%
4,350
35%
24
183
3,025
18
Dec-22
Dec-23
Dec-22
Dec-23
Dec-22
Dec-23
91. See pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
92. As at 31 December 2023. Invested Customers (‘IC’) means those customers who have transferred pension assets or made contributions into one of PensionBee’s investment plans. Assets under Administration (‘AUA’) is the total invested value of pension assets within
PensionBee Invested Customers’ pensions. It measures the new inflows less the outflows and records a change in the market value of the assets. AUA is a measurement of the growth of the business and is the primary driver of Revenue. Net Flows measures the cumulative
inflow of PensionBee AUA from consolidation and contribution (‘Gross Inflows’), less the outflows from withdrawals and transfers out (‘Gross Outflows’) over the relevant period.
52
PensionBee Group plcStrategic Report Driving customer acquisition through efficient investment in brand awareness
As guided, the Cost per Invested Customer (‘CPIC’) has extended its downward trajectory this year.
Advertising and Marketing Expenses
Advertising and Marketing Expenses (£m)
Cost per Invested Customer (£)93
Customers
As at Year End
Dec-2023
Dec-2022
YoY
(9.7)
241
(16.6)
-41%
248 within threshold
This can be attributed to our increased brand awareness as a result of prior investment in marketing
as well as our data-driven acquisition capabilities, which have enabled us to acquire customers
efficiently. In 2023, we grew our Invested Customer base by 25%, with CPIC declining to £241 (2022:
£248). Continuing on this downward trajectory will be instrumental in driving ongoing sustainable
long-term Adjusted EBITDA profitability.95
Strong Asset Growth Momentum driven by High Retention Rates and Cost Disciplined Acquisition
As at Year End
Dec-2023
Dec-2022
YoY
Invested Customers (thousands)
229
183
25%
This year we continued to realise the benefits of our prior investment, fulfilling our growth strategy,
driving strong customer acquisition with less spend than the previous year. Marketing spend in 2023
was £9.7m (2022: £16.6m), bringing our cumulative marketing expenditure to more than £55m,
highlighting our commitment to investing in brand awareness while reducing our overall Cost per
Invested Customer (‘CPIC’). Our investment in the brand to date has helped to cement PensionBee as
a household name, with brand awareness of 50%.94 Our customer acquisition strategy continues to be
led by our in-house Data Platform which provides extensive and invaluable insights, guiding decision-
making and the optimisation of our performance marketing channels. Our focus has been on driving
Customer Retention Rate (% of IC)96
AUA Retention Rate (% of AUA)96
Opening AUA (£m)
Gross Inflows (£m)
Gross Outflows (£m)
Net Flows (£m)96
customer acquisition supported by insights from our data capability. With this approach, we are able
Market Growth/(Contraction)
to more effectively and accurately target customers who are likely to convert - a key reason why we
were able to grow our Invested Customer base by 25% to 229,000 (2022: 183,000).
and Other (£m)
Closing AUA (£m)
Our data-led, multi-channel approach to marketing focuses on trusted and cost-effective channels.
Through YouTube and Tik Tok, we have successfully reached millions of customers. We brought
educational initiatives to customers in ways that increase appeal and brand recognition, for example,
through in-person roadshows and our Lovie award nominated Pension Confident Podcast. In addition,
we maintained our brand name recognition through the renewal of our partnership with Brentford
Football Club (‘Brentford FC’). We have remained the official pension partner sponsor, and have
become the left sleeve sponsor for the Men’s first team and the ‘front of shirt’ sponsor for the B team,
Academy and Women’s team. Partnering with a Premier League team has helped the PensionBee
brand to reach millions of football spectators across the UK, building customer trust in the process.
Net Flows (£m)
Of which Net Flows from
New Customers (£m)
Of which Net Flows from
Existing Customers (£m)
96%
96%
3,025
1,174
(318)
857
468
4,350
857
729
127
93. Cost per Invested Customer (‘CPIC’) means the cumulative advertising and marketing costs incurred since PensionBee commenced
operations up until the relevant point in time divided by the cumulative number of Invested Customers at that point in time. This
measure monitors cost discipline of customer acquisition. PensionBee’s desired CPIC threshold is £200-£250.
94. Source: PensionBee brand tracker. Prompted brand awareness in January 2024 measured through a consumer survey asking ‘Which
of the following have you heard of?’ with respect to UK financial services brands: Aviva 86%, Scottish Widows 76%, Standard Life 68%,
Royal London 55%, PensionBee 50%, Hargreaves Lansdown 39%, Vanguard 36%, Fidelity 34%, Nutmeg 32%, AJ Bell 29%, Interactive
Investor 11%. Compares to PensionBee’s prompted brand awareness as at January 2023 of 52%, sourced from PensionBee brand tracker.
95. See pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
96. See pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
97%
97%
2,587
1,060
(197)
863
(424)
3,025
863
685
178
Stable at >95%
Stable at >95%
17%
11%
61%
-1%
n/m
44%
-1%
7%
-28%
53
Annual Report and Financial Statements 2023Strategic Report In 2023, we delivered 44% year-on-year growth in our AUA base from £3,025m to £4,350m. This
demonstrated our ability to continue to execute on our growth strategy, whilst simultaneously meeting
our profitability targets. We drove AUA growth primarily through acquiring new customers, building
trust and aiming to be the main pension provider of choice for our customers. Our product, which
includes various tools, features and capabilities, helps our customers feel more ‘Pension Confident’ as
they plan for a happy retirement. This is supported by our high Retention Rate of existing customers,
which continues to be more than 95%. We recorded £1.2bn of Gross Inflows this year (2022: £1.1bn).
Across the year we acquired 46,000 Invested Customers (2022: 66,000), from which we generated
£729m of Net Flows (2022: £685m Net Flows from New Customers). Leveraging our strong brand
awareness, coupled with our data-driven customer acquisition capability, we were able to generate
a 7% year-on-year increase in Net Flows from New Customers, even though we reduced marketing
expenditure by 41% over the same period. Additionally, the customers we acquired in 2023 had a
higher average age, and by extension, a higher incoming pension pot size.
Our existing customers have continued to entrust us with their retirement savings, selecting
PensionBee as their primary pension provider, adding additional pensions and making regular
pension contributions. Growth from existing customers represented £127m of AUA in 2023 (2022:
£178m). Since inception, we have been able to maintain high Customer and AUA Retention Rates
of >95%, with this trend continuing in 2023. This reflects PensionBee’s commitment to continuous
product development which helps to drive engagement. Our app, which supports our aim of making
pensions simple, provides a rich content experience to help customers make decisions around core
pension management and retirement planning, such as how much to contribute. As is customary in
the industry, our customers’ pensions are predominantly invested in global equity capital markets
and therefore the performance of the market drives movements in AUA. As such, given that global
equity markets largely recovered from last year’s period of extreme volatility, we saw positive market
movement account for £468m of the overall AUA growth this year (2022: £(424)m).
Resilient Revenue Margin drove an Overwhelming Majority of Recurring Revenue
Net Flows by Customer Cohorts (£m)
4,350
Cumulative Market Impact
Revenue Margin (% of AUA)97
Revenue (£m)
As at Year End
Dec-2023
Dec-2022
0.64%
23.8
0.63%
17.7
YoY
+1bp
35%
3,025
2,587
1,358
745
328
108
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Dec-23
54
Cumulative Net Flows
Cohort 2023
Cumulative Net Flows
Cohort 2022
Cumulative Net Flows
Cohort 2021
Cumulative Net Flows
Cohort 2020
Cumulative Net Flows
Cohort 2019
Cumulative Net Flows
Cohort 2016-2018
We translated strong year-on-year AUA growth of 44% for 2023 (2022: 17%) into Revenue growth
of 35%, reaching £23.8m (2022: £17.7m), by virtue of our resilient Revenue Margin (the annual
management fee after discounts) of 0.64% (2022: 0.63%).
Since the vast majority of our Revenue is derived from annual management fees charged as a
percentage of AUA, the high retention of Invested Customers and AUA makes the overwhelming
majority of our Revenue recurring in nature. Revenue is also inclusive of revenue generated from other
activities, including our partnership with intermediaries such as LifeSearch, as well as ad-hoc income,
although this currently represents an immaterial portion of our overall Revenue.
Efficient Investment in our Industry Leading Technology Platform, People and Product
Money Manager Costs (£m)
Employee Benefits Expense
(excluding Share-based Payments) (£m)
Other Operating Expenses (£m)
Technology Platform Costs & Other
Operating Expenses (£m)
As at Year End
Dec-2023
Dec-2022
(3.2)
(12.3)
(6.8)
(2.8)
(9.6)
(8.2)
(19.1)
(17.8)
YoY
15%
29%
-18%
7%
97. See pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
PensionBee Group plcStrategic Report Our Technology Platform
During 2023, we continued to make further investments into enhancing the capabilities of our modern,
scalable and secure proprietary technology, to help position PensionBee for future growth. Our cloud-
based, API-driven platform allows for a granular level of optimisation, enabling us to deliver new
innovative features, refinements and increased automation at pace. The scalability of our technology
platform is highlighted by the achievement of a year-on-year decrease in Technology Platform Costs
& Other Operating Expenses as a percentage of Revenue from (101)% in 2022 to (80)% in 2023 driven
in part by a reduction in Other Operating Expenses to £(6.8)m (2022: £(8.2)m). Continuing on this
trajectory of improving cost efficiency is central to driving long-term operating leverage.
The Company has continued to invest in the scalability of its technology platform through a focus on
internal automation, efficiency, security and pension transfer improvements to support productivity.
There has been further integration with the Company’s proprietary data platform and its product
development processes to facilitate best practice decision-making. We have emphasised the
improvement of our internal automation to support productivity, including the streamlining of our
provider processes. One of the ways we measure productivity is through the Invested Customers per
Staff Member metric, which saw an improvement of 15% from 970 in 2022 to 1,112 in 2023.98 Benefits
from investment in automation were instrumental in achieving Adjusted EBITDA profitability across
the fourth quarter of 2023.
We have continued to explore and adopt artificial intelligence tooling within our departments to
leverage its many benefits. For instance, we have begun to use it for initial content generation, project
research and coding problem resolution, to name a few areas. We are also progressively integrating our
data platform within our daily product management operations, linking core KPIs to projects to ensure
our multidisciplinary development teams remain productive and impactful. To facilitate company-wide
data-led decision making, we have also trained employees of varying disciplines in utilising the platform.
Given our focus on security, we continued to implement cyber security tools and best practices.
Our data supports our conclusion that engaged customers are more likely to grow their pension
savings with us and are therefore more likely to enjoy the type of retirement they deserve. That is why
this year, our multidisciplinary ‘empowered teams’ continued to develop our product offering for the
benefit of our customers, incrementally rolling out new features aimed at increasing engagement
with our customers. Our searchable FAQs and enhanced help functionalities were developed to
guide our customers to more easily find our helpful content. Improving our educational content was
a key focus for us. Our customers can now read our content in-app and are served with personalised
content features based on our predictions of their interests, to help them make the most of their
money. This includes educating them on helpful complements to their pension, such as life insurance.
We continuously explore ways in which we can help our customers manage their pensions more easily. Our
new Regular Withdrawals feature enables our customers to take a regular income from their PensionBee
pension by setting up automatic monthly payments, via our desktop or app, directly to their bank account,
effectively saving our customers time and improving convenience. Listening to our customers is important
to us and their feedback helps us to design products that make managing their pensions easier.
To help our customers with their long-term financial planning we launched our State Pension Age
Calculator, designed to help savers evaluate if they can retire before they’re eligible to receive the
State Pension. We also launched a new online tax relief calculator which encourages our customers to
make the most of their pension contributions ahead of the tax year-end.
Given that the safety and security of our customers’ data is of paramount importance to us, we also
implemented mandatory two-factor authentication for all our customers.
Our customers’ overall financial wellbeing is important to us. This is why we recently launched a
partnership with LifeSearch to help our customers obtain a range of insurance products including
life and critical illness cover, to enable them to continue to save for a happy retirement with the
confidence that they have a source of financial support even if the worst does occur. Initial customer
We reinforced a culture of security awareness through increasing standardisation, monitoring and
demand has been positive and we look forward to seeing this progress.
automation of information security operations and compliance.
Our Product
PensionBee has developed an excellent record of delivering industry leading customer service, which
is demonstrated by our continued Excellent Trustpilot rating of 4.6★ (2022: 4.6★), as well as our
consistently high Customer Retention Rate of >95%. This is a result of our emphasis on customer
satisfaction and continuous product innovation.
Our People
We continued to invest in automation and therefore our overall headcount remained relatively stable
at approximately 206 average full-time employees in 2023 (2022: 189), while the associated Employee
Benefits Expense increased to £(12.5)m for 2023 (2022: £(9.6)m), reflecting the advancement of our
team and ensuring we support employees during a high inflation environment.
98. Total workforce of 198 as of 31 December 2023 includes 192 UK employees and six non-UK contractors, but excludes four Non-
Executive Directors. Total workforce of 208 as of 31 December 2022 includes 204 UK employees and four non-UK contractors, but
excludes four Non-Executive Directors. The Invested Customer per Staff Metric is calculated by dividing the number of Invested
Customers by the total workforce at the end of the period.
55
Annual Report and Financial Statements 2023Strategic Report Our Money Managers
Adjusted EBITDA Margin in 2023
Money Manager Costs increased to £(3.2)m in 2023 (2022: £(2.8)m), a lower rate than the increase in
Revenue, due to the maintenance of competitive pricing with money managers.
11%
Profitability Metrics
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Adjusted EBITDA (£m)
Adjusted EBITDA Margin (% of Revenue)
As at Year End
Dec-2023
Dec-2022
(8.2)
(35)%
(19.5)
(110)%
YoY
58%
+76ppt
Profit/(Loss) before Tax (£m)
(10.7)
(22.4)
52%
(98)%
(17)%
(50)%
In 2023, we made significant progress towards Adjusted EBITDA profitability, achieving sustained
Adjusted EBITDA profitability across the fourth quarter of the year. The effective deployment of our
discretionary marketing budget and continued cost discipline, as well as the benefits of operating
leverage gained through the scalability of our technology platform, were instrumental in achieving
this pivotal milestone.
Adjusted EBITDA Margin improved from (110)% in 2022 to (35)% in 2023. Adjusted EBITDA
profitability was achieved in Q4 2023, with a positive Adjusted EBITDA Margin of 11% as compared
to (98)%, (50)% and (17)% in Q1, Q2 and Q3 respectively. Adjusted EBITDA captures Advertising
and Marketing Expenses but excludes the Share-based Payment costs and Listing Costs.
As at Year End
Dec-2023
Dec-2022
Share-based Payment (£m)
Transaction Costs (£m)
Profit/(Loss) before
Tax (£m)
Taxation (£m)
(2.2)
-
(10.7)
0.1
(1.9)
(0.7)
(22.4)
0.3
Basic Earnings per Share
(4.73)p
(9.97)p
YoY
15%
-100%
52%
n/m
53%
Profit/(Loss) before Tax narrowed to £(10.7)m for 2023 from £(22.4)m in 2022, reflecting our progress
towards profitability and showcasing the operating leverage in our model, whilst we continue to grow.
Share-based Payment costs increased during the period to £(2.2)m (2022: £(1.9)m).
Taxation included enhanced tax credits in relation to routine Research and Development refunds. No
deferred tax asset was recognised with respect to the carried forward losses.
Basic Earnings per Share (‘EPS’) was (4.73)p for 2023 (2022: (9.97)p), the improvement reflecting the
progress made towards profitability.
56
PensionBee Group plcStrategic Report Financial Position
The Group’s balance sheet remains strong and the Company is confident in its ability to maintain an
appropriate cash balance going forward. The Cash and Cash Equivalents balance was £12.2m at the
end of this year (2022: £21.3m) having decreased by £9.1m in the 2023 financial year due to continued
investment in marketing as well as our technology platform, to generate future returns (2022: net
decrease of £22.2m). As of the end of 2023, the Group had no borrowings.
Regulatory Capital and Financial Resources
PensionBee Limited, a subsidiary of the Company, is authorised and regulated by the FCA and therefore
adheres to capital requirements set by the FCA. As of December 2023, the capital resources stood at
£12.6m (unaudited) as compared to a capital resource requirement of £1.6m (unaudited), resulting
in coverage of 7.9x. We have maintained a healthy surplus over our regulatory capital requirement
throughout the year and continue to manage our financial resources prudently.
Summary Financial Highlights*
As at Year End
Dec-2023
Dec-2022 YoY
Revenue (£m)
23.8 17.7 35%
Money Manager Costs,99 Technology Platform
Costs & Other Operating Expenses (£m)100
(22.3)
(20.6)
8%
Adjusted EBITDA (£m)**
Adjusted EBITDA Margin (% of Revenue)**
(8.2)
(35)%
(19.5)
(110)%
58%
+76 ppt
Profit/(Loss) before Tax (£m)
(10.7)
(22.4)
Basic Earnings per Share
(4.73)p
(9.97)p
52%
53%
* See definitions on pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
** PensionBee’s Key Performance Indicators including an alternative performance measure (‘APM’), which is Adjusted EBITDA. APMs
are not defined by International Financial Reporting Standards (‘IFRS’) and should be considered together with the Group’s IFRS
measurements of performance. PensionBee believes this APM assists in providing additional insight into the underlying performance of
PensionBee and aid comparability of information between reporting periods. A reconciliation to the nearest IFRS number is provided in
Note 25 of the Financial Statements ‘Alternative Performance Measures’ on page 189.
99. Money Manager Costs are variable costs paid to PensionBee’s money managers.
100. Technology Platform Costs & Other Operating Expenses comprises Employee Benefits Expense (excluding Share-based Payment)
and Other Operating Expenses.
57
Annual Report and Financial Statements 2023Strategic Report
10 Measuring our Performance
When considering the overall performance of PensionBee, we use a range of key performance indicators (‘KPI’s) to monitor and assess our progress against our strategy.
Financial Performance Measures
Measure
Revenue
Adjusted EBITDA*
Adjusted EBITDA Margin*
Profit/(Loss) before Tax (‘PBT’)
Basic Earnings per Share (‘EPS’)
Net Cash Flow
Year-End Metric
Growth
Definition
2023: £23.8m
2022: £17.7m
2023: £(8.2)m
2022: £(19.5)m
2023: (35)%
2022: (110)%
2023: £(10.7)m
2022: £(22.4)m
2023: (4.73)p
2022: (9.97)p
2023: £(9.1)m
2022: £(22.2)m
35%
58%
Revenue means the income generated from the asset base of PensionBee’s customers, essentially annual management fees
charged on the AUA, together with a minor revenue contribution from other services.
Adjusted EBITDA is the operating profit or loss for the year before taxation, finance costs, depreciation, share based
compensation and listing costs. This measure is a proxy for operating cash flow.
+76 ppt101
Adjusted EBITDA Margin means Adjusted EBITDA as a percentage of revenue for the relevant year.
52%
53%
59%
Profit/(Loss) before Tax is a measure that looks at PensionBee’s profit or losses for the year before it has paid corporate
income tax.
Basic Earnings per Share is calculated by dividing the profit or loss attributable to ordinary equity holders of the Group by
the weighted average number of ordinary shares in issue during the period.
Net Cash Flow is the sum of cash generated by operations, investments and financing activities, less cash used in operations,
investments and financing activities.
* PensionBee’s Key Performance Indicators include an alternative performance measure (‘APM’), which is Adjusted EBITDA. APMs are not defined by International Financial Reporting Standards (‘IFRS’) and should be considered together with the Group’s IFRS measurements of
performance. PensionBee believes this APM assists in providing additional insight into the underlying performance of PensionBee and aids comparability of information between reporting periods. A reconciliation to the nearest IFRS number is provided in Note 25 of the Financial
Statements ‘Alternative Performance Measures’ on page 189.
101. A ppt is a percentage point. A percentage point is the unit for the arithmetic difference of two percentages.
58
PensionBee Group plcStrategic Report Non-Financial Performance Measures
Measure
Year-End Metric
Growth
Definition
Assets under Administration
(‘AUA’)
2023: £4.4bn
2022: £3.0bn
Assets under Administration is the total invested value of pension assets within PensionBee’s Invested Customers’ pensions. It
44%
measures the new inflows less the outflows and records a change in the market value of the assets. This KPI has been selected
because AUA is a measurement of the growth of the business and is the primary driver of Revenue.
AUA Retention Rate
2023: 96%
Stable
AUA Retention measures the percentage of retained PensionBee AUA from transfers out over the average of the year. High AUA
(% of AUA)
2022: 97%
at >95%
retention provides more certainty of future Revenue. This measure can also be used to monitor customer satisfaction.
Net Flows
Invested Customers
(‘IC’)
2023: £857m
2022: £863m
2023: 229k
2022: 183k
-1%
25%
Net Flows measures the cumulative inflow of PensionBee AUA from consolidation and contribution (‘Gross Inflows’), less the
outflows from withdrawals and transfers out (‘Gross Outflows’) over the relevant period.
Invested Customers means those customers who have transferred pension assets or made contributions into one of PensionBee’s
investment plans.
Customer Retention Rate
2023: 96%
Stable
Customer Retention Rate measures the percentage of retained PensionBee Invested Customers over the average of the year. High
(% of IC)
2022: 97%
at >95%
customer retention provides more certainty of future Revenue. This measure can also be used to monitor customer satisfaction.
Cost per Invested Customer
2023: £241
Within
(‘CPIC’)
2022: £248
threshold
Cost per Invested Customer means the cumulative advertising and marketing costs incurred since PensionBee commenced
operations up until the relevant point in time divided by the cumulative number of Invested Customers at that point in time. This
measure monitors cost discipline of customer acquisition. PensionBee’s desired CPIC threshold is £200-£250.
Revenue Margin
(% of AUA)
2023: 0.64%
2022: 0.63%
+1bp
Realised Revenue Margin expresses the recurring Revenue over the average quarterly AUA held in PensionBee’s investment plans
over the period.
59
Annual Report and Financial Statements 2023Strategic Report 11 ESG Considerations
Stakeholder Engagement
We are dedicated to understanding the
views, interests and concerns of all our
stakeholders to inform our decision making.
Proactive and regular engagement ensures
we remain responsive to changing needs.
We regularly engage with our stakeholders to better understand their views, interests and concerns.
Engaging with stakeholders enables us to inform our decision-making process and ensure we all
benefit from the value PensionBee generates as a company. Engagement takes place with all our key
stakeholder groups, across all levels throughout the Company. Such engagement is reported annually
to the Board to inform decision-making and business outcomes. The Board also participates in direct
engagement with certain stakeholder groups and importantly, with our employees. Please see pages
36 to 47 of the Our People section of the Strategic Report for more information on the programme of
employee engagement events in 2023.
A summary of the ways in which the Company has engaged with stakeholders, having regard to what
is most likely to promote the long-term sustainable success of the Company, follows.
60
1 Customers
2 Employees
3 Shareholders
4 Suppliers
5 Communities
6 Planet
7 Government and
Regulators
PensionBee Group plcStrategic Report Customers
Why they matter to us
1
Customers have been at the heart of everything we do since PensionBee’s inception.
This culture has been woven into the fabric of our business. Our mission and vision are
customer-centric; we strive to make pensions simple, so that everyone can look forward
to a happy retirement. We are focused on doing the right thing by our customers, seeking
best outcomes for them and fostering a two-way relationship where we both seek and
take on board their feedback in a regular and structured way.
How we engaged
We listened to our customers and took action on their needs. We did this through
extensive surveying, one-to-one interviews, focus groups and via our feedback channels.
Our HoneyMakers UX community was composed of PensionBee customers who helped
shape our products and service by participating in selected surveys, focus groups and
testing new features. We used interdisciplinary research projects to take a deep dive
into particular themes and to enhance our customers’ experience with our product and
service.
How we created value
•
•
•
•
•
•
•
4.6★ Excellent Trustpilot score, based on 10,000 reviews (2022: 4.6★) indicating
continued strong customer satisfaction in our products and service.
96% of calls received by BeeKeepers had an average call queue time of 23 seconds.
95% of live chats received had an average queue time of 15 seconds.
87% of all emails received were responded to and closed within 72 hours.
1,000 HoneyMakers joined our UX community in 2023.
Our UX team analysed more than 185,000 incoming emails and live chats.
85% of the asset base voted using Voting Choice, to better align voting with
customer views.
Top three material issues
•
•
•
Excellent value plan range
Open portable pensions data
Climate leadership
61
Annual Report and Financial Statements 2023Strategic Report Employees
Why they matter to us
2
PensionBee’s culture and values enable us to attract and retain people who passionately believe in our
vision and mission. We measure performance against our values and our ambition is to be a workplace
where all PensionBee employees feel they can succeed as themselves. Our diverse workforce helps us
better serve pension savers across the UK, and to build a truly inclusive product that reflects the needs
of everyone in society.
How we engaged
We regularly sought feedback from employees to measure our progress against our goal of maintaining
a diverse and inclusive environment and in making PensionBee a place where everyone can succeed
as themselves. Our annual Diversity, Inclusion, Equality & Engagement Survey explored themes related
to wellbeing, satisfaction and remuneration. Our Diversity and Inclusion programme raised awareness
and facilitated employee engagement around a variety of topics. We also sought feedback through our
annual managers’ survey and our weekly all-company Show N Tell with CEO and Executive Management
participation. We invited anonymous feedback directly to management via our Slack reporting tool.
How we created value
•
•
•
•
•
•
90% of employees felt positively aligned with PensionBee’s vision, mission and values (2022: 91%).
85% of employees would positively recommend working at PensionBee to a friend (2022: 82%).
PensionBee’s Diversity and Inclusion programme led by Executive Management included
34 events aimed at raising awareness and having dialogue on Social Mobility, Mental Health,
Women, LGBTQ+, South Asian Heritage, Parenting, Black History and Neurodiversity & Disability.
Following feedback from employees with caring responsibilities, we reduced daily working
hours for everyone.
We became a Level 2 Disability Confident Employer.
We continued to be an accredited Living Wage Employer, paying a London Living Wage as a
minimum, regardless of where employees were located across the UK.
Top three material issues
Fulfilling careers
Gender and ethnicity pay gaps
Product innovation and inclusivity
•
•
•
62
PensionBee Group plcStrategic Report Shareholders
Why they matter to us
3
Suppliers
Why they matter to us
4
We are committed to proactive and constructive engagement with our investors and
Strong relationships with suppliers help ensure sustainable, high-quality delivery for both parties.
we are keen to ensure that investors’ views are well-understood. We value the views
We engage with our suppliers to find ways to innovate and improve our product for our customers.
of all our shareholders, who range from large institutional investors to individual retail
Transparency over our supply chain reinforces our business accountability and credibility. At
investors, our pre-IPO investors and customers who became shareholders at the time
PensionBee we act ethically in all business dealings and we expect our suppliers to adhere to
of our IPO or since.
How we engaged
ethical business principles too.
How we engaged
Regular virtual and
in-person engagements
including one-to-one shareholder
We know that when companies understand their supply chains, conditions for all workers are
meetings, group presentations and roadshows for both existing and prospective
more likely to be improved. We are therefore committed to achieving a better understanding
institutional and retail shareholders. Regular communication of financial and operational
of the structure and complexity of our supply chain to identify actual and potential risks to our
results, including quarterly trading updates, interim results and annual results, with
business and employees. We do this through day-to-day responsible sourcing decisions taking
presentations to shareholders and analysts with Q&A, together with recordings being
into account our core values, and through engagement with our biggest suppliers on their
made available on our website.
How we created value
workforce issues.
How we created value
•
•
•
•
We adhered to the highest standards of corporate governance and complied with
the UK Corporate Governance Code.
We chose to report frequently and to communicate with the market to foster
an understanding of the Company’s performance against expectations, and the
overall equity story.
Management invested significant time with the investor community directly,
providing valuable access.
We remained resilient in a challenging market environment and reached our
Adjusted EBITDA profitability target in the fourth quarter of 2023, meeting our IPO
commitment to investors and the market.
•
•
•
•
•
•
We enhanced our supplier due diligence framework, expanding our Information Security
evaluation matrix and assessment of supplier responses.
We published our PensionBee Supplier Code of Conduct.
We engaged multiple times with our asset managers’ stewardship teams.
We were an investor signatory and disclosed under the Workforce Disclosure Initiative (‘WDI’),
achieving a WDI disclosure score of 99% (2022: 89%).
We won two WDI awards in 2023; the ‘WDI Award’ for the company with the most complete
response and the ‘Contingent Workforce Data Award’.
We participated in the WDI’s technology working group to work collaboratively with other
investors on how to effectively hold technology companies to account and gain better
transparency over their supply chains.
Top three material issues
•
•
•
Corporate governance
Cybersecurity
Excellent value plan range
Top three material issues
•
•
•
Workforce rights in supply chain
Cybersecurity
Corporate governance
63
Annual Report and Financial Statements 2023Strategic Report Communities
Why they matter to us
5
In seeking to achieve our vision of a world where everyone can look forward to a happy retirement, we
aspire to be a corporate role model in society and to lead by example. We listen and work to ensure
all voices, including those of marginalised groups, are heard in the pensions system. We regularly
engage with local community organisations to learn more about the challenges they face and look for
opportunities to support them in achieving their goals.
How we engaged
Each year we survey thousands of members of the public about a broad range of themes such as their
experiences of the cost of living crisis, savings habits and their views on climate change. We regularly invite
inspirational speakers to raise awareness about important topics to help us deepen our understanding of
wider communities. We recruit from all backgrounds with no prior experience or degree required, with the
aim of having a workforce that reflects society at every level within our business.
How we created value
PensionBee Charity Rowing event
•
•
•
•
•
•
•
We volunteered with Bankside Futures, a summer employment programme for local school-leavers.
We fundraised for Micro Rainbow, a non-profit organisation dedicated to supporting LGBTQI asylum
seekers and refugees in London.
We fundraised for The AHOY Centre Charity, helping disadvantaged children and people with
disabilities in London by rowing 8.5 miles down the Thames.
We hosted Breast Cancer awareness month events, including educational presentations and ‘Wear it
Pink Day’ both in the office and virtually, to raise awareness and funds for Breast Cancer Now.
We sponsored a summer camp for the Brentford FC Penguins, a team for players with Down’s Syndrome.
We donated laptops to our partner school, Woodside High School, to increase employability prospects.
Pride Picnic
Our Mental Health First Aiders (MHFA) fundraised for YoungMinds, to champion children and
young people’s mental health.
Top three material issues
Engaging with local communities
Diversity & Inclusion
Gender and ethnicity pay gaps
•
•
•
64
PensionBee Group plcStrategic Report Planet
Why they matter to us
6
Our planet both affects and is affected by business decisions in a significant way. Since the effects
of climate change jeopardise our customers’ chance to enjoy retirement in a safe, fair and healthy
world, we seek to both minimise our own negative impact on the environment and to offer an
investment range that does the same. As a pension provider, PensionBee has the opportunity to offer
its customers peace of mind about their financial future, knowing that their pension does not cause
harm to the planet or society.
How we engaged
We focus on offering a core range of ESG screened plans and we continue to work with asset managers
to further expand the scope of ESG integration into our plans. PensionBee works collaboratively with
environmental organisations and supports campaigns that help further the aims of our customers and
build a safer, cleaner world to retire into.
How we created value
•
•
•
•
•
•
We launched our Impact Plan, the latest in a series of PensionBee customer-led plan innovations
for the UK pensions market.
We received recognition as part of the Mayor of London’s Business Climate Challenge for
reducing our energy consumption and carbon emissions.
We joined Pensions for Purpose and became an Adopter of the Impact Investing Principles for
Pensions.
We supported environmental and climate-related shareholder resolutions at the annual general
meetings of investee companies through Voting Choice.
We became a signatory of the United Nations Global Compact, committing to the principle of
promoting greater environmental responsibility.
We published our public interim and long-term net zero targets, in line with the 1.5C goals of the
Paris Agreement.
Top three material issues
•
•
•
Climate leadership
Preventing greenwashing and environmental transparency
Pensions with purpose and stewardship
65
Annual Report and Financial Statements 2023Strategic Report Government and Regulators
Why they matter to us
7
Our policy framework is set by the Department for Work and Pensions (‘DWP’) and our regulator, the Financial
Conduct Authority (‘FCA’). The Minister for Pensions, alongside the DWP, seeks to deliver a reliable, high-quality
pensions system to improve retirement outcomes for all. The FCA seeks to protect consumers, protect integrity
of the system and promote healthy competition. Engaging with the Government and our regulators enables
us to positively influence the development of regulation and policies which impact upon PensionBee, its
customers and all UK pension savers.
How we engaged
PensionBee directly and regularly engaged with Government Ministers, other government officials and
regulators. We are frequent commentators on issues of national importance to our customers and all pension
savers via the media, and regular contributors to public consultations on topics of key importance to our
customers and those in retirement across the UK. In 2023, PensionBee was a member of the Steering Group
of the Government’s Pensions Dashboard Programme and a member of the Pension Scams Industry Forum.
How we created value
• We met the DWP to discuss the impact of its scam legislation on the pension transfer market, continuing
to highlight the need for changes to the wording so that transfers are no longer unnecessarily obstructed.
•
Via our membership of the Association of British Insurers (‘ABI’), we engaged on issues that affected the
wider pensions industry, such as the Mansion House reforms, Pensions Dashboards and the new ‘Lifetime
Pot’ proposals, sharing our views on how we believe reforms will either help or hinder pension savers.
• We shared our ‘Carer’s Pension Gap’ report with the Pensions Minister, the ABI and the Pensions and
Lifetime Savings Association to encourage fresh thinking around the problem of retirement under-
provision for people who have to become carers.
• We were one of the ten signatories of a joint investor letter from ShareAction in response to the FCA
Consultation Paper on Diversity & Inclusion, where we advocated for transparency on ethnicity pay gaps
to act as a catalyst to create more equal workplaces.
Top three material issues
Corporate governance
Product innovation and inclusivity
Excellent value plan range
•
•
•
66
PensionBee Group plcStrategic Report Section 172 Statement
Section 172 of the Companies Act 2006 (‘s172’) requires Directors to act in the way they
consider, in good faith, would be most likely to promote the success of the Company
for the benefit of its shareholders as a whole and, in doing so, have regard to matters
including the items set out in the tables that follow.
The Board seeks to understand and carefully consider our key stakeholders’ interests,
concerns and perspectives. The Board recognises that each decision will have a different
impact and relevance to each stakeholder, so a sound understanding of their priorities
is key. While the Board engages directly with some groups of stakeholders, engagement
takes place at all levels of the Company, across the business.
Feedback from the engagement at Board level and across the business is reported back
to the Board and the Board Committees to help inform decision-making. The Board
exercises independent judgement when balancing any competing interests in order to
determine what it considers to be the most likely outcome to promote the long-term
sustainable success of the Company.
Further details and specific examples of how the Board and Company engage with
our stakeholders, and their interests and needs, can be found above on pages 60 to 66
(Stakeholder Engagement) within the ESG Considerations section of the Strategic Report.
Further details of how the Board operates, including certain of the matters it discussed
during the year, having regard to its s172 duties, are contained on pages 114 to 121 of the
Corporate Governance Statement within the Corporate Governance Report.
Section 172 Requirement
Further Information
The likely consequences of any
About Us, pages 14-24
decisions in the long term
Our Strategy, pages 25-33
Our Business Model, pages 34-35
Our People, pages 36-47
Operating and Financial Review, pages 52-57
Measuring our Performance, pages 58-59
ESG Considerations 60-76
Climate-related Disclosures, pages 77-89
Managing our Risks, pages 90-101
The interests of the Company’s employees
About Us, pages 14-24
The need to foster the Company’s
business relationships with suppliers,
customers and others
Our People, pages 36-47
ESG Considerations 60-76
About Us, pages 14-24
ESG Considerations 60-76
The impact of the Company’s operations
About Us, pages 14-24
on the community and environment
Our Strategy, pages 25-33
Climate-related Disclosures, pages 77-89
ESG Considerations 60-76
Managing our Risks, pages 90-101
The desirability of the Company
Managing our Risks, pages 90-101
maintaining a reputation for high
standards of business conduct
Corporate Governance Statement, pages 114-121
Audit and Risk Committee Report, pages 129-136
The need to act fairly as between
ESG Considerations 60-76
shareholders and the Company
Corporate Governance Statement, pages 114-121
67
Annual Report and Financial Statements 2023Strategic Report ESG Materiality Assessment
In 2022 we conducted our first ‘ESG Materiality Assessment’, aimed at giving us deeper insight into the environmental, social and governance themes that matter most to our stakeholders. In 2023 we revisited
our ESG Materiality Assessment to ensure our stakeholders’ priorities continued to align with our work. We also included ESG considerations in our annual employee engagement survey, to measure how views
were evolving over time. The updated scores are below.
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Priority Level
Tier 1
Tier 2
Tier 3
Priority Level
Tier 1
Tier 2
Tier 3
1.
2.
3.
4.
5.
6.
Tier 2
Fullfilling careers
Pensions with purpose and stewardship
Product innovation and inclusivity
Excellent value plan range
Cyber security
Diversity & inclusion
Fullfilling careers
Pensions with purpose and stewardship
Product innovation and inclusivity
Excellent value plan range
Climate leadership
Cyber security
Gender and ethnicity pay gaps
Diversity & inclusion
A pension switch guarantee
Open, portable pensions data
Corporate governance
Preventing greenwashing and environmental transparency
Climate leadership
Gender and ethnicity pay gaps
A pension switch guarantee
Open, portable pensions data
Consumer rights & campaign to prevent detriment
Corporate governance
Engaging with local communities
Preventing greenwashing and environmental transparency
Workforce rights in supply chain
Tier 3
7.
8.
9.
10.
Tier 2
11.
12.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Tier 3
13.
14.
15.
Consumer rights & campaign to prevent detriment
Engaging with local communities
Workforce rights in supply chain
4
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68
Materiality matrixTier 1Impact on PensionBeeImportance to StakeholdersMateriality matrixTier 1Impact on PensionBeeImportance to StakeholdersPensionBee Group plcStrategic Report
ESG Goals
Description
Activities
Progress in FY 2023
Goals
Status
Topic 1: Excellent Value Plan Range
To offer market leading
• Conducting our annual Value for
• Maintained our 4.6★ Excellent
investments that generate
returns for our customers
Money exercise (Outcome 2 of the
Trustpilot score on an annual basis
FCA’s Consumer Duty) to compare
across a total of 10,000 reviews (2022:
the price and performance of our plan
4.6★ based on 8,270 reviews)
• Maintained an ‘Excellent’ value
for money score from our GAA,
ZEDRA Trustees (2022: Excellent)
• Achieved an average AgeWage
score of 69 for our plan range (a
score of 50 is above average)
range to comparators to ensure we
continue to offer excellent value for
money plans for our customers
• Externally scoring the performance of our
plans against the UK pensions market
• Working with our Governance
Advisory Arrangement, (‘GAA) ZEDRA
Trustees, to assess value for money
in our decumulation range
• Continuing to deliver exceptional
customer service across all channels
Topic 2: Product Innovation and Inclusivity
“Excellent or
good” value for
money score
from our GAA
(yearly goal)
Alignment with UN Sustainable
Development Goals (‘SDGs’)
SDG 1 - No Poverty
SDG 8 - Decent Work and
Economic Growth
A product that is simple, safe
and reactive to changing
customer needs, designed
with a range of needs and
vulnerabilities in mind whilst
enhancing access to financial
products and knowledge
• Delivering our investment clarity
project to increase range of plan
• Began delivery of accessible and
comparable plan data for customers in
and performance data available to
the BeeHive and on the public facing
Maintain our 4.7 /
5 aggregated App
Store and Google
SDG 8 - Decent Work
and Economic Growth
customers and non-customers
website, including fund breakdown,
ratings (yearly goal)
SDG 10 - Reduced Inequalities
• Increasing accessibility of engaging,
relevant and targeted content
• Making transfers more efficient for all
customers, regardless of their old provider
geographic location, holdings, risk level,
past performance and via fees via API
• Made content available by serving
personalised and targeted content
to customers via our app
• Secured Plain English Campaign
accreditation marks for clarity in language
use on both our website and app
• Conducted our first Open Standards
electronic transfers with new providers
to enable quicker and more efficient
transfers for our customers
69
Annual Report and Financial Statements 2023Strategic Report Description
Activities
Progress in FY 2023
Goals
Status
Topic 3: Pensions with purpose and stewardship
A responsible plan range
focused on creating a safer,
fairer, kinder future whilst
using voice and vote to drive
positive change in companies
Topic 4: Cyber Security
Cyber security practices in
place to ensure the highest
levels of protection
• Supporting environmental and social
• Secured Voting Choice for the
shareholder resolutions through Voting Choice
Tailored, Tracker and 4Plus Plans
• Inviting the majority of the customer
base to share their investment views
• Measuring 2022 baseline for
Scope 1 & 2 emissions
• Measuring 2019 baseline for
PensionBee investment portfolio
emissions (Scope 3 Category 15)
• Launching our Impact Plan
• Conducted our fourth annual Tailored
Plan customer survey to assess views
on investment decision making
• Obtained baseline Scope 3 emissions data for
majority of the investment portfolio, set our base
year and published our public commitments
• Nominated for Pensions with Purpose
‘Impact Investing Adopter’ Award
100% of eligible
customers invited
to share their
voting views via
survey or interview
(yearly goal)
• Successful recertification of ISO
27001 and Cyber Essentials Plus
• 99.9% Website and App Uptime Availability102
achieved in 2023 (2022: 99.9%)
• Email Phishing Test Click Rate Average103 for 2023
= 6.8% (our target was =<10%) (2022: n/a)
• Implementing of mandatory 2FA on
the PensionBee Online website and
Mobile Applicatication to support
Strong Customer Authentication
• Go-Live of the 24x7 / 365 Security Operations
Centre (SOC) to improve threat detection,
identification, prevention and response
capabilities across critical Information Assets
0 incidents that
have a meaningful
impact on
confidentiality,
integrity or
availability in
the production
environment
(yearly goal)
Topic 5: Diversity & Inclusion
To recruit from all backgrounds,
• Exceeding FCA requirements on gender
• 37% of workforce identified as coming from
Workforce
requiring no degree or prior
and ethnic diversity for our Board
a minority ethnic group (2022: 42%)
experience, ensuring we
reflect society at every level
• Maintaining a workforce that reflects
UK society at every level
• Moving up the Disability Confident Scheme
levels (achieving Level 2 qualification)
• Working towards gender parity
in the customer base
composition to
reflect the UK
• 10% of Executive Management identifies as
coming from a minority ethnic group (2022: 20%)
society (2021
• 14% of the Board identified as coming from
a minority ethnic group (2022: 14%)
• 57% female representation on Board (2022: 57%)
• Achieved Level 2 Disability Confident
Employer status (2022: Level 1)
• Increased female representation to 43% of
our Invested Customers. (2022: 38%)
Census) at every
level by 2027
in line with
Parker Review
recommendations
Alignment with UN Sustainable
Development Goals (‘SDGs’)
SDG 3 - Good Health
and Well-being
SDG 7 - Affordable
and Clean Energy
SDG 8 - Decent Work
and Economic Growth
SDG 10 - Reduced
Inequalities
SDG 13 - Climate Action
SDG 9 - Industry, Innovation
and Infrastructure
SDG 4 - Quality Education
SDG 5 - Gender Equality
SDG 8 - Decent Work
and Economic Growth
SDG 10 - Reduced Inequalities
102. Website and App Uptime Availability measures the percentage of time that the web application is available to customers.
103. Email Phishing Test Click Rate Average measures the percentage of employees that clicked on a link in an email designed to resemble those used to commit fraud by tricking people into entering credentials in clones of legitimate websites.
70
PensionBee Group plcStrategic Report Description
Activities
Progress in FY 2023
Goals
Status
Topic 6: Fulfilling careers
A culture in which people
can find meaning in their
work and build a happy
and fulfilling career
• Measuring progress on our success
in facilitating fulfilling careers and
• In 2023, 90% of PensionBee employees
said they felt aligned with PensionBee’s
maintaining a diverse and inclusive
mission, vision and values (2022: 91%)
environment through employee surveys
• Annual benchmarking and review of our
• Implemented an 8.1% increase (entry-level) and
a £2,000 increase (all levels) to reflect changes
remuneration packages at all levels and roles
in the Living Wage and the cost of living crisis
Employee
engagement
and satisfaction
of at least 80%
(yearly goal)
• Executive Management team-led
Diversity & Inclusion programme
of monthly themed events
• Enhancing training and development
opportunities for all employees via a
new learning platform (Learnerbly)
• Reduced daily working hours by 30 minutes
with no impact on pay across the organisation
as a result of feedback from our Diversity
Programme about flexible working for
those with additional caring needs
Alignment with UN Sustainable
Development Goals (‘SDGs’)
SDG 8 - Decent Work
and Economic Growth
Topic 7: Climate leadership
A pension provider, focused
on a climate transition that
• Overseeing progress towards near-term
(2030) and long-term (2050) net zero
• Published our Scope 1 and 2, and Scope 3
Reporting on
interim and long term net zero targets in line
progress against
is safe and fair for all
targets for carbon emission reduction
with 1.5C goals of the Paris Agreement
our science-based
• Committing to decarbonising
the portfolio through additional
ESG screening in our plans
• Participating in Mayor of London’s
Business Climate Challenge
• Cloud-hosted web services powered
by 100% renewable energy
• Completed energy reduction targets in Scope 1
and 2 emissions, from the baseline year of 2022
• Received recognition in the Mayor of London’s
Business Climate Challenge as a leading
London business taking action to reduce
energy consumption and carbon emissions
public net zero
2030 and 2050
targets that align
with 1.5C Paris
Agreement goals
(yearly target)
SDG 1 - No Poverty
SDG 7 - Affordable
and Clean Energy
SDG 11 - Sustainable
Cities and Communities
SDG 13 - Climate Action
Project Status:
Completed
On Track
In Development
71
Annual Report and Financial Statements 2023Strategic Report Deep Dives
AgeWage scoring
In 2023 we continued to work with AgeWage, a
provider of universal value for money scores, to obtain
independent benchmarking on all our plans. We do
this because ensuring our plans offer value for money
to customers is a key strategic objective of the business
and a material ESG issue. We use the AgeWage score,
which tells us how well our plans have performed
compared to a UK market average (by market segment)
using a baseline index. The score shows the financial
performance of our plans based on standardised
contribution histories and taking into account fees.
In 2023 our plans scored an average of 69. A score of
50 indicates the plan is outperforming the associated
benchmark and offering good value for money
compared to other plans in the UK market. A score
above 50 means plans are outperforming the average
UK market.
We will continue to use AgeWage scoring as an
independent assessment and benchmark of whether
our plans continue to represent value for money in
future years. We also use this score as the basis for
discussion with our asset managers, to compare their
performance against the rest of the market.
I’ve been self-employed for
over 10 years, PensionBee made
everything so straightforward and
not scary. I’m in complete control!
Ed | Age 51
PensionBee customer since 2023
72
PensionBeeWe’ve invested your personal contribution. PensionBee Group plcStrategic Report Deep Dives
Product Innovation
Voting Choice & ESG Screening
Good Work Coalition
In 2023 we gave our customers enhanced control over accessing
In 2023 we secured Voting Choice across 85% of the asset base
Since 2020, we have been an active member of ShareAction’s
their pensions (from age 55), by enabling them to make lump
(our Tailored, Tracker and 4Plus plans) and now vote using the
Good Work Coalition. We join other accredited Living Wage
sum or regular withdrawals via our website or mobile app. This
ISS Socially Responsible Investment Policy. This means we can
investors to collectively engage companies on good work
gives customers flexibility to receive pre-set, consistent amounts
support environmental and social shareholder resolutions, in
standards, such as paying the Living Wage, providing secure
each month, leading to better consumer outcomes such as taking
line with our customers’ views. The SRI policy can also vote
work through Living Hours and taking action on diversity and
fewer, larger amounts to cover uncertainty.
against management of significant GHG emitting companies
inclusion through the Ethnicity Pay Gap Campaign.
where ISS determines they are not taking the minimum steps
We now offer the ability for customers to consume content
needed to be aligned with a net zero by 2050 trajectory.
In 2023 we have continued to add our name to calls for
via our web and mobile apps, helping them to gain a better
publicly listed companies to prioritise support for their lowest-
understanding of their pension and the broader concepts
We completed our fourth annual survey of customers in our
paid employees and meet the new real Living Wage rates
related to their investments, as well as keeping them up to
default plan, the Tailored Plan, on their voting preferences
during the cost of living crisis. We also supported shareholder
date with current market and industry news.
and investment views, including ESG screening. In 2023
resolutions on the Living Wage.
we launched a user research project including in-depth
We developed and implemented the ‘Stronger Nudge’ to
interviews with customers (across our plan range) on voting
We have participated in numerous engagements with FTSE-
guidance initiative for the over 50s, to ensure that we are
and responsible investing.
listed target companies on issues related to insecure work and
adhering to the latest regulatory requirements and that
priorities around employee rights.
customers are informed at key points where they may
These views form the basis of updates to our ESG policy,
benefit from receiving guidance on their financial decisions.
approach to screening and voting policy. In 2023 we were
Additionally, in 2023 we supported the Ethnicity Pay Gap
We focused on pension provider-based onboarding,
resolutions on behalf of our customers, and publish a full
they add ethnicity pay gap reporting to disclosure proposals
deepening proprietary relationships and improving
voting record on our website for customers to view.
outlined in their Diversity & Inclusion Consultation.
able to support environmental and social shareholder
Campaign and co-signed a joint letter to the FCA requesting
communication, to create efficiency improvements that
help make our customers’ transfers easier and faster.
73
Annual Report and Financial Statements 2023Strategic Report Workforce Disclosure Initiative
Attaining Gender Balance
The Business Climate Challenge
PensionBee is an investor signatory of the Workforce
PensionBee is a vocal advocate of gender equality. We want
PensionBee is part of the Mayor’s Business Climate Challenge
Disclosure Initiative (‘WDI’), an investor coalition of
everyone to have a happy retirement, regardless of gender.
(‘BCC’), an ambitious energy efficiency programme which
60 institutions, with approximately $10tr in assets
supports businesses to reduce their energy consumption, to
under management that sets the global standard
Since 2020 we have published our UK Pensions Landscape to
accelerate building-decarbonisation efforts and contribute to
for workforce disclosures and campaigns for the
draw attention to the huge pension gaps that exist across the UK.
London’s target of becoming a net zero city by 2030.
improvement of working conditions around the
We have launched a dedicated Gender Equality page to publish
world.
all our progress towards gender equality and as part of the
Entry and participation in the BCC is run as a competitive process,
The WDI aims to improve corporate transparency
Bloomberg Gender Equality Index.
led by Better Bankside, our Business Improvement District. As
part of the Challenge we pledged and succeeded in reducing
and accountability on workforce issues, provide
In 2023 we prioritised closing the gender pension gap by
our energy consumption by more than 10% in 2023. We received
companies and investors with comprehensive and
campaigning for gender parity across the UK pensions market
technical advice from specialised energy consultants to help
comparable data and help increase the provision
and to work towards a more representative customer base. As
make our workplace more energy efficient and throughout 2023
of good jobs worldwide. In 2023, 166 global
a result of structural features of the UK pensions market, in 2016
we worked to implement some of the recommended measures.
companies took part in the Initiative, demonstrating
our Invested Customer base was 27% female.
their commitment to transparency. In 2023 our WDI
disclosure score was 99%, compared to a financial
Our campaign has included events such as the “Ladies’ Lootcamp”
sector average of 64%.
hosted by Boring Money, to empower female investors with the
confidence to make better financial choices for their lives. We have
Supporting our Local Community
As part of our disclosure process, PensionBee
also worked in partnership with parenting websites Mumsnet
In 2023 PensionBee participated in Bankside Futures, a summer
committed to carrying out an assessment - as
and Peanut, to provide financial education to women on topics
programme for local school leavers aged 16-18 years old,
part of our human rights due diligence - to map
that impact them. Additionally, three episodes of our Pension
designed to get students ready for the world of work by meeting
our supply chain. We annually engage with our
Confident Podcast have covered gender related topics in pension
a range of employers and creating social action projects in their
suppliers on their workforce issues, including
savings.
topics such as the use of contractors, whether our
community.
suppliers pay a Living Wage to their employees,
The outcome of the campaign has so far been successful and our
Better Bankside collaborated with Bankside businesses to
contractors in their own supply chains, upholding
Invested Customer base in 2023 is now 43% female. We continue
help young people build their awareness of different careers
human rights (including in their own supply chains),
to work towards achieving gender parity in our customer base,
through a series of skills-based workshops, employer encounters,
rights of association and policies on discrimination
and to closing the UK gender pensions gap.
networking opportunities and mock interviews.
and harassment. We also asked all of our suppliers
to disclose under the WDI.
In 2023 we won two WDI Awards for our submission
and efforts in collecting data; the WDI Award for the
company with the most complete response and the
Contingent Workforce Data Award.
74
We hosted a workplace visit and a career spotlight in our office
where students met PensionBee colleagues who shared their
work experience and answered questions about themselves and
their achievements. Students were particularly impressed by our
inclusive company culture. At PensionBee we recruit from all
backgrounds with no prior experience or degree needed so that
our business can better reflect UK society at every level.
PensionBee Group plcStrategic Report ESG Disclosures and Benchmarking
PensionBee has received recognition across numerous ESG frameworks, rating agencies and indices. We
voluntarily submit our ESG data to organisations such as the Sustainability Accounting Standards Board,
the Workforce Disclosure Initiative, Global Reporting Initiative, S&P’s Corporate Sustainability Assess-
ment and Bloomberg’s Gender Equality Index. We have also been independently assessed by ESG raters
such as ISS, Refinitiv, and EthiFinance.
In 2023 we joined both the FTSE All Share and the FTSE4Good Index (which is owned by LSE’s
FTSE Russell). Additionally, we became an active participant in the UN Global Compact and made a
commitment to conduct our business in alignment with universal sustainability principles.
Framework / Rater / Index
2023 Score
Bloomberg Gender Equality Index
GEI data published on
pensionbee.com/gender-equality
EthiFinance
FTSE4Good
Global Reporting Initiative
ISS ESG
77 / 100 (higher scores indicate better practices)
Index constituent from December 2023
GRI data published on
pensionbee.com/investor-relations/esg
3 / 10 average across E, S and G
score (lower scores better)
Pensions for Purpose
Participant member
LSEG ESG
60 / 100 (higher scores indicate better practices)
Sustainability Accounting Standards Board
Asset Management & Custody Activities
Third year of SASB disclosure under
/ Software & IT Services industries.
S&P Corporate Sustainability Assessment Global Submitted
Task Force on Climate-related
Financial Disclosures
11 / 11 metrics disclosed
United Nations Global Compact
Participant member
Workforce Disclosure Initiative
99 / 100 disclosure score
Global Reporting Initiative (GRI)
FTSE Russell FTSE4Good
Sustainability Accounting
S&P Corporate Sustainability
Standards Board (SASB)
Assessment (CSA)
Workforce Disclosure Initiative
(WDI)
75
Annual Report and Financial Statements 2023Strategic Report I can easily adjust my pension withdrawals
depending on my earnings from work and
my expenditure, meanwhile keeping a
check on my pension forecast.
Moira | Age 63
PensionBeecustomer since 2020
76
PensionBee Group plcStrategic Report 12 Climate-related Disclosures
Streamlined Energy and Carbon Reporting
This section has been prepared in accordance with our regulatory obligation to report GHG emissions
pursuant to the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon
Report) Regulations 2018 which implement the government’s policy on Streamlined Energy and
Carbon Reporting (‘SECR’).
•
•
•
Scope 2 emissions reporting methods - application of location-based and market-based emission
factors to the electricity supplies.
Inclusion of all the applicable Kyoto gases, expressed in carbon dioxide equivalents, or CO2e.
Presentation of gross emissions, as the Company does not purchase carbon credits (or
This is our third year of reporting under the SECR requirements. The reporting period is the same as
equivalents).
the Company’s financial year, 1 January to 31 December 2023.
Organisation Boundary and Scope of Emissions
Absolute Emissions
The total Scope 2 GHG emissions from the Company’s operations in the year ending 31 December
We have reported on all emission sources required under the Companies Act 2006 (Strategic Report
2023 were as follows:
and Directors’ Reports) Regulations 2018. These sources fall within the Company’s consolidated
financial statements.
An operational control approach has been used to define our organisational boundary. This is the
basis for determining the Scope 1, 2 and 3 emissions for which the Company is responsible.
All carbon dioxide emissions and energy consumption figures relate to emissions in the United
•
•
9.91 tonnes of CO2 equivalent (tCO2e) when using a ‘location-based’ emission factor methodology
for Scope 2 emissions;
0.00 tonnes of CO2 equivalent (tCO2e) when using a ‘market-based’ emission factor methodology
for Scope 2 emissions.
Kingdom. The Company does not have any operations in offshore areas.
The Scope 2 emissions reported above include purchased electricity, which covers the energy used
for heating its facilities.
Methodology
The following methodology was applied in the preparation and presentation of this data:
report. Scope 3 emissions are also not included because quoted companies are not required to report
Note that no Scope 1 emissions were generated by PensionBee, so these are not included in this
•
•
The calculation of the energy consumed for the following categories:
•
•
•
Combustion of fuel (not applicable to the Company).
Operation of its facilities.
Purchase of electricity, heat, steam or cooling by the Company for its own use.
Selection and application of appropriate emission factors (‘DEFRA 2023’) to the Company’s
activities to calculate GHG emissions in line with the Greenhouse Gas Protocol published by
the World Business Council for Sustainable Development and the World Resources Institute
(‘WBCSD/WRI GHG Protocol’).
on any Scope 3 categories. For a breakdown of our Scope 3 financed emissions, please refer to the
TCFD report on pages 80 to 89.
77
Annual Report and Financial Statements 2023Strategic Report Intensity Ratio
Key Figures
As well as reporting the absolute emissions, the Company’s GHG emissions are reported below
using the metric of tonnes of CO2 equivalent per million pounds of Revenue. This was selected as
the most appropriate metric due to its relevance and importance to the Company’s investors.
PensionBee - Breakdown of Emissions by Scope (tCO2e)
The intensity metric is as follows:
•
•
0.42 CO2e per million pounds revenue using the location-based method.
0.00 CO2e per million pounds revenue using the market-based method.
Target and Baselines
Our objective is to maintain or reduce our GHG emissions per £m revenue each year and we will report
each year whether we have been successful in this regard. Our absolute emissions in 2023 have seen a
decrease of 17.8% using the location-based method for Scope 2 emissions. Absolute emissions using
the market-based method have remained consistent at 0.00.
In 2023 we participated in the Mayor of London’s Business Climate Challenge, an energy efficiency
programme led by Better Bankside. Participants who committed to reducing their energy consumption
by 10% in one year benefitted from an energy efficiency audit of the building by technical consultants.
As part of this audit of our office unit and building on Blackfriars Road, we took forward a number
of energy efficiency recommendations that resulted in an 11% decrease in our office energy usage.
PensionBee was commended by the Mayor’s Office as a leading London business in taking action to
reduce energy consumption and carbon emissions between 2022 and 2023.
Additionally, as part of the energy audit, a number of observations were made on how to improve
efficiency of the building’s communally charged air conditioning and heating systems, which make
up a portion of PensionBee’s energy consumption. Changes to how temperature was controlled in the
building’s public areas resulted in a significant decrease in overall energy consumption for all tenants
in 2023. These changes impacted on our overall energy usage and also contributed to the marked
decrease we observed this year. This being the case, the Company’s intensity ratio metric decreased
from 2022 to 2023. Our GHG emissions per £m Revenue has decreased to 0.42 tCO2e, down 0.25 tCO2e
from 0.67 tCO2e in 2022.
78
2021
8.4
2022
12.1
2023
9.9
0%
20%
40%
60%
80%
100%
Scope 2 (location-based)
Scope 2 (market-based)
PensionBee Group plcStrategic Report 2021
2022
2023
Efficiency Actions
GHG Emissions
Tonnes
CO2e
tCO2e/£m
Revenue104
Tonnes
CO2e
tCO2e/£m
Revenue105
Tonnes
CO2e
tCO2e/£m
Revenue106
-
8.36
-
-
-
-
-
0.64
12.07
0.67
9.91
-
-
-
-
-
0.42
-
8.36
0.64
12.07
0.67
9.91
0.42
-
-
-
-
-
-
Scope 1107
Scope 21082
Scope 21093
Total GHG
Emissions
(location-based)
Total GHG
Emissions
(market-based)
Total Energy Use
Our Company’s total energy use for FY2023 was 47,841 kWh.
Electricity (kWh)
Total Energy Use (kWh)
2023
2022
2021
Total
47,841
62,407
39,361
149,609
47,841
62,407
39,361
149,609
104. 2021 Revenue of £12.8m.
105. 2022 Revenue of £17.7m.
106. 2023 Revenue of £23.8m.
107. Scope 1 being emissions from the Company’s combustion of fuel and operation of facilities.
108. Scope 2 being electricity (from location-based calculations), heat, steam and cooling purchased for the Company’s own use.
109. Scope 2 being electricity (from market-based calculations), heat, steam and cooling purchased for the Company’s own use.
In 2023 we undertook the following measures to reduce our Scope 2 emissions, including:
•
•
•
•
•
•
•
•
Conducting an energy audit of our building and office with technical consultants, as part of the
Mayor’s Business Climate Challenge.
Implementing energy efficiency measures, as recommended as part of the energy audit, in order
to reduce energy consumption in our office.
Working with the building management team to understand how to reduce energy consumption
in communally charged areas, including AC units situated on the roof, on the basis of observations
made by the technical consultants.
Continuing to use 100% Renewable Energy Guarantees of Origin (‘REGO’) backed electricity.
Maintaining low business travel emissions, being a remote company with all meetings held
virtually by default or in central London (with the exception of a small number of meetings
outside of the UK).
Continuing to be a paperless pension provider and increasing the number of digital transfers
with ‘paper providers’.
Setting public energy reduction targets for Scope 1 and 2 emissions from the baseline year of
2022.
Receiving recognition as a Leading London Business taking action to reduce energy consumption
and carbon emission by more than 10%, from the Mayor of London’s office.
79
Annual Report and Financial Statements 2023Strategic Report
Task Force on Climate-related Financial Disclosures
We are pleased to present our second year of Task Force on Climate-related Financial Disclosures
(‘TCFD’). We’ve continued to apply a proportionate and appropriate approach to TCFD, assessing the
Governance
reasonableness of the TCFD Implementation Guidance (2021) with respect to the Company’s size,
Describe the Board’s oversight of climate-related risks and
business model and continuing constraints of data coverage.
Given our online business model and limited direct carbon footprint, we are an emission-light company
opportunities:
• We have outlined how the Board oversees climate-related risks and
opportunities through our Climate Change Governance Framework.
with respect to Scope 1 and Scope 2 emissions. Owing to the underlying Assets under Administration
•
The Board monitors progress against climate targets
of the PensionBee Personal Pension, which are managed by third-party asset managers, we are reliant
through the Audit and Risk Committee.
Reference
Consistency
Page 82
Section 1.1
on the availability of Scope 3 data. We are pleased in our second reporting year to be able to disclose
Scope 3 financed emissions (category 15) for the majority of the asset base.
In accordance with Paragraph 8(a) of Listing Rule 9.8.6R, all of the disclosures presented here are
consistent with the TCFD Implementation Guidance (2021) to the extent described in the table below:
Describe management’s role in assessing and managing climate-
related risks and opportunities:
• We have outlined management’s role in assessing
and managing climate-related risks through our risk
management framework described below and in the
Managing our Risks section of the Strategic Report.
Page 83
Section 1.2
Pages 90 to
101 of the
Managing our
Risks section
Full:
Partial:
None:
With respect to our long-term ambitions, PensionBee is committed to achieving net zero emissions
Describe the climate-related risks and opportunities the
across the entire business by 2050. This commitment is applicable to all direct (Scope 1) and indirect
organisation has identified over the short, medium, and long term:
Page 83
Section 2.1
Strategy
Reference
Consistency
(Scope 2) operational emissions, as well as material emissions from our wider value chain (Scope 3).
As a result of calculating our base year emissions, we are now able to set near-term (‘interim’)
targets for 2030 and long-term (‘net zero’) targets for 2050. These targets are detailed as part of
our 2023 disclosure below. We commit to these science-based targets in line with the 1.5C goals
of the Paris Agreement.
• Climate-related risks and opportunities identified over the short,
medium and long-term have been described, considering
scenario analysis across three different timeframes and impacts.
Describe the impact of climate-related risks and opportunities on
the organisation’s businesses, strategy, and financial planning:
• We have outlined plans to support the transition
Page 85
Sections
2.2/2.3
to a low carbon economy. We have also identified
opportunities and risks to our business.
Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°c or
Page 86
Section 2.3
lower scenario:
• We have described how resilient our strategies are to climate-
related risk and opportunities under different climate-related
scenarios; orderly, disorderly and failed transition. We have also
described the quantitative as well as qualitative impact to our
revenue as a result of these different transition scenarios.
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PensionBee Group plcStrategic Report
Risk Management
Reference
Consistency
Describe the organisation’s processes for identifying and assessing
climate-related risks:
Page 87
Section 3.1
• We have described our processes for identifying
and assessing climate-related risk.
Describe the organisation’s processes for managing climate-related
risks:
We have described our processes for managing climate-related risk.
Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation’s overall
risk management:
• We have described how our processes for identifying,
assessing, and managing climate-related risks are integrated
into our overall risk management framework.
Page 88
Section 3.2
Page 88
Section 3.2
Metrics & Targets
Reference
Consistency
Disclose the metrics used by the organisation to assess climate-
related risks and opportunities in line with its strategy and risk
Page 88
Section 4.1
management process:
• We have disclosed the metrics currently used by PensionBee
to assess climate-related risk and opportunity.
Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas (GHG) emissions, and the related risks:
Page 88
Section 4.2
• We have disclosed Scope 1 and Scope 2 GHG
emissions for 2023 as per our SECR obligations.
• We have disclosed our Scope 3 (Category 15) financed
emissions for 2022, as this data is available with
a one year delay from our asset managers.
Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance against
Page 88
Section 4.3
targets:
• We have committed to long-term climate action.
We will now report progress against targets for the
management of climate-related risks and opportunities.
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Annual Report and Financial Statements 2023Strategic Report 1 Governance
Climate Change Governance Framework
1.1 Our Board
Our Board has the ultimate responsibility for Climate Risk, a Principal Risk. The Board takes responsibility
for the approval of PensionBee’s approach in relation to climate-related matters, which includes our
PensionBee has made a public commitment to achieve net zero emissions across the entire business
Environmental, Social and Governance (‘ESG’) Policy and oversees the selection of plans and managers,
by 2050. Progress towards this commitment is monitored and overseen by the Board, both annually
which form our investment range.
and on an ongoing basis where required. Day to day accountability for climate matters is delegated
to Executive Management, including the Chief Executive Officer, who is supported by the Chief
Process and Frequency by which Board and Committees are informed about Climate-related issues
Engagement Officer and Chief Risk Officer in discharging this responsibility.
Governance of sustainability issues, including climate-related risks and opportunities, are covered by
Executive Officer’s update. This means that the Board has the opportunity for approximately ten
the Board and Committees as outlined below and as part of our Annual Reporting Protocol and Target
updates a year on climate-related matters, together with additional updates from its Committees.
Each Board meeting includes a sustainability-related update as a standing agenda tabled in the Chief
Review Process.
Ownership of Climate-related Metrics and Targets Governance
The Board delegates day-to-day oversight of sustainability matters and ongoing progress against
goals and targets for addressing climate-related issues, also known as the Annual Reporting Protocol,
to two of its sub-committees: the Audit and Risk Committee and the Investment Committee.
The Engagement Team, led by the Chief Engagement Officer, is the business owner for the Climate Change
Governance Framework, comprising the Annual Reporting Protocol and the Target Review Process.
Audit and Risk Committee
The Board delegates responsibility for oversight of our Annual Reporting Protocol to the Audit and
The Audit and Risk Committee manages the Company’s Principal Risks, including Climate Risk. It
Risk Committee. Oversight of the Target Review Process is provided by the Investment Committee.
oversees mandatory climate-related reporting (currently TCFD and SECR disclosures) and monitors
annual reporting against public net zero targets.
Board
The Board delegates responsibility to the Audit and Risk Committee to provide a rigorous challenge to
Climate Change Governance Framework
Executive Management on progress against goals and targets under the Annual Reporting Protocol.
Audit and Risk Committee
Annual Reporting Protocol
Investment Commitee
Target Review Process
The Chief Engagement Officer formally reports back on progress against targets to the Audit and Risk
Committee on an annual basis, in line with the Annual Reporting Protocol. In addition, ad hoc reporting
Ongoing monitoring of progress against our public targets
Occurs as and when any changes impact the Company’s
takes place throughout the year to cover any ongoing changes to data quality, data availability, metric
takes place on an ongoing basis throughout the year,
public targets, or minimum every five years. Baseline
coverage or the reporting boundary. The purpose of this ad hoc reporting is to act as an early warning
as data becomes available. Progress against targets is
recalculations will be triggered by non-organinc growth,
system for any changes to data or reporting that may impact our ability to meet an existing target.
reported to the Audit and Risk Committee.
but also by changes to reporting boundaries and
• Reporting progress against public climate target metrics
calculation methodologies, to keep apace with developing
The Chief Financial Officer, a management co-sponsor of the Audit and Risk Committee, is responsible
•
Ensuring the Company meets minimum threshold
understanding of climate science. Any such updates are
for production of the Group’s financial statements, including climate-related market risks connected
for metric coverage by % portfolio AUA
• Monitoring ongoing changes to reporting boundaries
• Monitoring ongoing changes in
data availability and quality
• Developing and mantaining engagement
channels with money managers
82
reported to the Investment Committee, for sustainability by
to our investments.
the Chief Executive Officer or as separate agenda item by
the Chief Engagement Officer.
The Chief Risk Officer, also a management co-sponsor of the Audit and Risk Committee, is responsible
• PensionBee net zero strategy (incorporating Scope 1&2
considerations and Scope 3 manager strategy) from 2024
• PensionBee transition roadmap from 2024
for the Company’s risk management, including oversight of its risk identification and mitigation
activities, implementation of the risk management framework, and reporting on the risk assessments
against Board’s risk appetite.
PensionBee Group plcStrategic Report All Board members are invited to the Audit and Risk Committee, however, the Chair may also request
We also received regular support from an external sustainability and climate partner, Verco, who
a private meeting with the second line of defence (the Risk Management Team) or external assurance
assisted with reporting, calculations and formulation of our longer-term roadmap to net zero, in line
providers (independent third parties). For more information on our lines of defence, refer to pages 90
with best practices for the sector. Verco joined the Board and Executive Management Team teach-ins
to 101 of the Managing our Risks section of the Strategic Report.
across the year to enhance and widen our understanding of climate reporting. We continue to work
with external experts to ensure our climate-reporting and targets are accurate, consistent and always
The Audit and Risk Committee meets at least seven times a year and has ad hoc meetings as and when
kept up to date reflecting the latest changes in climate science and metrics.
required.
Investment Committee
The Investment Committee oversees the delivery of PensionBee’s Target Review Process. This is the
system by which we review baseline and metric choices as the business and market evolves. This
includes changes to the boundary or calculation methods that can impact a target as well as oversight
over the fund range and our asset managers. The Investment Committee oversees the ESG Policy,
including the Company’s approach to responsible investment, screening and voting, which is then
approved by the Board.
PensionBee’s Target Review Process monitors our asset managers and investment plans, data quality
and availability of Scope 3 emissions, as well as climate science, sector ambition and calculation
methodologies. Any material changes that impact the Company’s target or trigger a recalculation of
the baseline would be reported by the Investment Committee directly to the Board.
The Investment Committee meets at least three times a year and has ad hoc meetings as and
when required.
Maintaining and Enhancing Climate Competence
The Chief Engagement Officer is the owner of Climate Risk, owns our ESG policy and oversees all
climate-related reporting and initiatives. The Senior ESG Manager, who reports directly to the Chief
Engagement Officer, is a dedicated ESG-focused team member with oversight of the reporting
process. The Chief Risk Officer has extensive risk management experience managing across all risks,
including Climate Risk and is responsible for risk oversight.
Climate-reporting and TCFD training has taken place with both external expert advisors and our asset
managers as they relate to the investment plans. We meet on a regular basis with the TCFD teams of our
asset managers. ESG-focused team members have also attended TCFD training workshops delivered
by the London Stock Exchange, BlackRock, Deloitte, KPMG and others in relation to our requirements.
In 2023 the Board had a teach-in from Deloitte’s Sustainability and Corporate Reporting team on
developments in EU and UK sustainability reporting, as well as a number of structured discussions on
climate reporting at both the Audit and Risk Committee and the Investment Committee.
1.2 Our Management
PensionBee’s culture is one of our most fundamental tools for effective risk management. Our
management promotes risk awareness, transparency and accountability, and places a strong
emphasis on the timely identification, escalation and reporting of risks.
Management’s role in assessing and managing climate-related risks through our risk management
framework is described in detail on pages 90 to 101 of the Managing our Risks section of the Strategic
Report.
2 Strategy
2.1 Climate-related Risk and Opportunity
Climate Risk is included in the Company’s internal risk register as a Principal (or Level 1) Risk, and
climate-related sub-risks (Business Continuity, Compliance, Liability and Third Party Supplier risks)
are included as Level 2 risks. These risks are evaluated as a part of our periodic risk and control
assessment process, as well as on an ad hoc basis following any climate-related risk events.
Overall, Climate Risk has been rated as Low based on our assessments of Level 2 risks.
Physical risk, classified under the Level 2 category Business Continuity Risk (and to a lesser
extent Third Party Supplier Risk), poses a relatively minor risk to the business, given our
small physical footprint and cloud-based operations. Transition risks are more pertinent
for the business and are broadly grouped under both Compliance and Liability Risks.
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Annual Report and Financial Statements 2023Strategic Report
Climate Risks (Physical and Transition)
Risk (Level 1)
Risk (Level 2)
Description
Response
Residual Risk Quantification
Risk Rating
Climate Change
Business
Climate-related physical damage to facilities/
Low exposure given small physical
(Physical)
Continuity Risk
equipment or impact on staff materially affecting
footprint and a resilient operation
Likelihood/Impact:
Unlikely/Moderate
the ability to conduct critical business activities
(cloud-based operation, flexible/remote working)
Loss Estimate:
£15k
Risk transfer policies in place including the
Engineering Policy covering physical risks
Climate Change
Compliance Risk
Failure to adapt to the changing
Compliance with regulatory (e.g.
(Transition)
regulation and disclosure requirements
TCFD, SECR) requirements
Likelihood/Impact:
Unlikely/Moderate
associated with climate change
Ongoing regulatory compliance is monitored
Loss Estimate:
by the second line risk function
£15k
Low
Low
Climate Change
Liability Risk
Liability resulting from changes in climate-
Screenings are applied in our funds to reduce harmful
Likelihood/Impact:
Low
(Transition)
sensitive investment exposures
exposures (Tailored Plan, Fossil Fuel Free Plan) Launch
Possible/Moderate
of Impact Plan in January 2023 to diversify further by
introducing a more varied set of underlying holdings
Loss Estimate:
£30k
FinTech Insurance Policy in place covering
detrimental changes in our income statement.
Climate Change
Third Party
Disruption of business activities due to
Resilient, cloud-based operation
Likelihood/Impact: Rare/Major
Low
(Physical)
Supplier Risk
critical third-party service providers being
impacted by climate-related events
Asset managers, banking and cloud providers
Loss Estimate:
are all investment grade financial institutions
£20k
with established business continuity plans
The above-mentioned sub-risks are generally of relevance across a combination of the short (one to five years), medium (five to ten years) and long-term (10 to 30 years) time horizons. Acknowledging that
some may become more or less likely over time, due to the changing physical and transition risk profile of our geography and sector, we have assessed the following as the key climate-related risks and
opportunities over each time horizon. We will reassess these risks at least on an annual basis, or as important issues arise, in line with the risk management framework.
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PensionBee Group plcStrategic Report Short-Term
2.2 Impact on the Business
Within the next one to five years, we expect regulation and policy to be the predominant climate-
related risks facing the business. These are managed under the Level 2 Compliance Risk and will
primarily be driven by changes in the pension industry regulatory regime and continuously evolving
policy actions. Associated legal risks will also increase as the expertise and resources needed to meet
increasing climate-related regulatory, mitigation and adaptation demands also rise.
We are already starting to see increased opportunities through greater capital availability driven by
demand from investors for more sustainable investment products, as evidenced by the demand
for our newest Impact Plan. We also see an increase in public-sector incentives such as the Mayor’s
Business Climate Challenge Programme, from whom we received recognition in 2023 for our action
to reduce energy consumption.
Medium-Term
In the next five to ten years, climate-related risks will focus more on the potential market and
reputational risks associated with indirect exposure to high-emitting sectors through investee
companies or sectors otherwise exposed to climate risk. This will be managed under the Level 2
Liability Risk and addressed through the asset managers.
Over this time horizon, opportunities will develop as the market grows. We will continue to monitor
consumer trends, which currently point towards increased demands for low-carbon products. We
will proactively seek the views of our customer base through regular engagement to make sure the
investment plans continue to meet our customers’ needs, and access new markets where appropriate.
Long-Term
Over the next 10 to 30 years, which comprises our longer-term horizon, we recognise that there are
difficulties in accurately predicting the specific market, policy or environmental context in which our
business will operate. As a pension provider interested in the long-term financial performance of our
investments, the exposure of our investee companies to both Climate Risk and climate opportunity is
of great importance.
We expect to see an increased Level 2 Business Continuity and Third Party Supplier Risk through
business interruption and damage across operations and supply chains, with consequences for input
costs, revenues, asset values and insurance claims. Crucially, the quantum of assets which may be
stranded may increase with a delay in the transition to net zero. However, over this time horizon
we also see a significant opportunity to be seen as a leader in our field, in addressing the challenges
of climate change through our products and services, resilience and risk management strategy.
Leadership will be shown through addressing the challenges of climate change through both our
asset base (choice of investment plans), our corporate citizenship (strong ESG ratings) and our voting
record (on climate-related issues).
All of the key climate-related risks identified with the greatest potential to impact our business, have
had some impact on the organisation’s business, strategy or financial planning.
As evidenced through our stakeholder engagement, climate-related issues are of importance to
our customers and have therefore impacted our product offering. Minimising Liability Risk in our
investment portfolio, resulting from changes in climate-sensitive investment exposures, or from
failure to communicate our climate change strategy and targets, is a priority for our business and our
customers.
As trillions of pounds are invested globally in companies that can improve or harm the planet and
society through their business models, pensions have the collective power and potential to change
the world for the better. PensionBee’s asset managers are members of the Net Zero Asset Managers’
Initiative (‘NZAMI’). Membership includes a commitment to specifically work in partnership with their
asset owner clients on decarbonisation goals, consistent with an ambition to reach net zero emissions
by 2050 or sooner across all assets.
PensionBee applies baseline ESG exclusionary screens, where both the asset class and the plan
investment objectives allow,1104 and we are working with our asset managers to reduce our holdings
in companies that harm the environment through their business activities. We seek to increase
screening over time, in-line with the views of our customer base. As of December 2023, >95% of the
asset base was screened for thermal coal.1115 Across our plan range, seven out of our eight plans used
some ESG-screened or ESG-tilted underlying building blocks.
The Tailored Plan, our default solution and largest plan by customers and assets, has a number of
sustainable objectives including climate targets to achieve an absolute reduction of 50% of the
carbon emission intensity score over a 10-year period from 2019. BlackRock, the plan’s asset manager,
has also set a number of criteria relating to positive ESG tilting across the portfolio, to ensure that at
least 80% of the underlying funds related to corporate and sovereign issuers are held in ESG optimised
or screened funds.
PensionBee offers two fossil fuel free plans, in response to customer demand to completely remove
companies that hold fossil fuel reserves, as well as those companies involved in the manufacture,
production, sale, distribution and marketing of fossil fuels. The Impact Plan, our newest plan, also goes
much further in its exclusionary approach, only investing in companies that are making a material,
additional and measurable positive impact on the planet and society through their sole product or
110. See pensionbee.com/investor-relations/esg for full details on screening by plan.
111. Fully screened plans include: Tailored, Tracker, Fossil Fuel Free, Pre-Annuity, Impact, and Preserve Plans. The 4Plus Plan’s
underlying SSGA funds are fully screened for thermal coal, however, as the fund has an actively managed component the managers
have discretion to use unscreened third party funds to meet the objective. The Shariah Plan is not screened for thermal coal as the
objective of the plan is to invest in line with Islamic values.
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Annual Report and Financial Statements 2023Strategic Report service.
BlackRock to consider three scenario types, based on internal BlackRock models:
PensionBee’s Investment Committee assists the Board in discharging its responsibility for oversight
of PensionBee’s investment proposition, including the selection or change of asset managers and the
performance and ESG profile of our plans. The Investment Committee oversees the Target Review
Process, monitoring and taking action on any changes that may impact our ability to meet our interim
and long-term emissions targets.
Our full set of Company policies are reviewed annually and include the Environmental, Social and
Governance Policy, which can be found on the Company’s website.
Beyond our products and services, we have also taken steps in our direct operations to reduce waste
and increase our use of renewable electricity, as well as reducing energy use through our participation
in the Mayor’s Business Climate Challenge, for which we were commended in 2023, as well as adopting
our Responsible Supplier Policy and Code of Conduct.
•
•
•
‘Orderly transition’ scenarios, which assume climate policies are introduced early and become
gradually more stringent, reaching global net zero CO2 emissions around 2050 and likely limiting
global warming to below 2°C on pre-industrial averages;
‘Disorderly transition’ scenarios, which assume climate policies are delayed or divergent, requiring
sharper emissions reductions achieved at a higher cost and with increased physical risks in order
to limit temperature rise to below 2°C on pre-industrial averages; and
‘Hothouse world’ scenarios, which assume only currently implemented policies are preserved,
current commitments are not met and emissions continue to rise, with high physical risks and
severe social and economic disruption and failure to limit temperature rise.
In the above scenarios, transition risk is defined as the risk to the value of an asset as a result of the
transition to a lower carbon economy (i.e. the risk due to the potential changes to the economy from
such a transition). Physical risk is defined as the risk to the value of an asset as a result of change to the
2.3 Resilience of PensionBee Strategy to Climate Change
physical environment from climate change.
PensionBee has maintained its relatively small environmental footprint in 2023, being an office-based
organisation that primarily uses cloud-based technology. We offer fully flexible, remote working to
all employees and are a paperless pension provider. The focus of our efforts in 2023 was to gain a
better understanding of our Scope 3 emissions, including the financed emissions from our investment
portfolio (a challenging area which we are committed to improving over time, subject to forthcoming
and reliable data from our asset managers).
Following the industry’s common practice in climate regulatory reporting, the ‘hothouse world’
scenario was defined as the counterfactual base case which assumes no future transition and therefore
no associated transition risk; this scenario is assumed to be fully priced into markets and therefore
represents no additional risk to security valuation from transition. This scenario does have potential
physical climate risk, as defined above, and so we report transition risk for the ‘orderly transition’ and
‘disorderly transition’ scenarios, and physical risk for the ‘hothouse world’ scenario.
In 2023 we calculated our base year emissions, as the first step towards our commitment to achieve
net zero emissions across the entire business by 2050, a goal which would both support both the UK’s
net zero target for 2050 as well as the global efforts to achieve a societal transition to a low carbon
economy. In order to achieve this, we have committed to setting interim targets, which are detailed
in Section 4.3 below.
During 2023 we focused on understanding the resilience of our overall strategy to climate-related
issues under different future scenarios, and how our strategy may need to adapt to meet the challenges
of each scenario. As noted above, given PensionBee’s limited direct environmental footprint, we have
focused specifically on the Scope 3 emissions within our default plan, the PensionBee Tailored Plan,
managed by BlackRock. The Tailored Plan represents a substantial majority of our asset base and,
given its global market-oriented asset base, is a reasonable proxy for asset exposures within our other
Plans as well.
Securities within the Tailored Plan were classified as ‘high-risk’, ‘medium-risk’ or ‘low-risk’ depending
on how the companies today are exposed to the different scenarios within BlackRock’s underlying
proprietary climate risk models. The model assumes there are no new business segments in an
individual company’s response to the transition and so the modelled response takes into account the
behaviour and structure of issuers as currently configured without any changes to their activities. In
addition to this, similar to any model, assumptions and the quality of data inputs may pose limitations
to the accuracy and precision of the scenario outcomes.
The analysis showed what proportion of the portfolio is classified within each category, with the
categories defined based on the modelled risk to the valuation of the business within each scenario.
The ‘high-risk’ category contains securities that are estimated to be at risk of a 50% reduction or greater
to their current valuation if the assumptions of the model transpire. The medium-risk category contains
securities with a risk to valuation between 10% and 50%, and low-risk contains the remaining securities.
We recognise that the key climate-related risks and opportunities identified, particularly over the
medium and long-term time horizons, are highly dependent on assumptions made regarding the
ways in which climate-related issues will manifest over the coming years. We therefore worked with
None of the securities were classified as ‘high-risk’ and the overwhelming majority of securities were
classified as ‘low-risk’. Considering the upper estimate of risk to valuation in the ‘low-risk’ category,
which is 10%, the overall valuation risk to assets within the Tailored Plan and by proxy, the PensionBee
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PensionBee Group plcStrategic Report investment plans overall, is approximately 10%.
PensionBee’s Finance Team then considered the impact on PensionBee’s Revenue of a 10% reduction in
valuation in PensionBee’s overall asset base. PensionBee’s Revenue is almost entirely derived from fees
earned on its Assets under Administration and therefore PensionBee’s Revenue is sensitive to changes
in market valuations. Because the exact nature of the climate transition is unknown, PensionBee also
considered the impact of a 20% Reduction in security valuations for prudence. The impact of a 10% and
our Risks section of the Strategic Report.
Risk Assessment Process at PensionBee
Climate Risk quantifications are forward-looking estimates of the losses/gains within a given time
horizon, at a particular probability. The PensionBee risk scoring methodology takes into account the
impact and the likelihood of the climate risks materialising. We estimate the plausible worst-case
20% reduction in valuations would be to reduce PensionBee Revenue by 7.5% and 15% respectively.
impact expected over a five-year time horizon.
3 Risk Management
Assessments are performed of inherent and residual risks in order to understand how effective our
controls are. Inherent risk is defined as risk without taking into account mitigating controls, whereas
Climate Risk is defined as the risk of negative impact of climate change or its broader economic,
residual risk is defined as risk after considering the effectiveness of mitigating controls.
financial and societal consequences on the Company, or the Company’s failure to meet sustainability
requirements from a commercial, regulatory and stakeholder perspective. Climate Risk is one of
In cases where risks are scored as Medium or High, a specific risk management procedure is followed
PensionBee’s Principal Risks, which are set out on pages 90 to 101 of the Managing our Risks section
to ensure adequate mitigating controls are established. Hypothetically, if the residual Climate Risk
of the Strategic Report.
quantification score obtained was Medium or High, this would mean the Company was operating
outside of the Low risk appetite set by the Board. Where the risk appetite set by the Board was
Climate Risk drivers can be grouped into categories of sub-risks relevant to PensionBee:
breached, additional measures to mitigate, transfer, accept or control the risk would be agreed by the
•
•
•
•
Business Continuity Risk: Climate-related physical damage to facilities/equipment or impact on
staff materially affecting the ability to conduct critical business activities.
Compliance Risk: Failure to adapt to the changing regulation and disclosure requirements
associated with climate change.
Liability Risk: Liability resulting from changes in climate-sensitive investment exposures or failure
to communicate our climate change strategy and targets.
Third Party Supplier Risk: Disruption of business activities due to supply chains/critical third party
provider services being impacted by climate-related events.
3.1 Identification and Assessment
Climate Risk management is a part of our comprehensive risk management framework. The framework
components ensure adequate identification, management and communication of climate risks as they
arise so that decisions can be made on a timely basis. In 2023 we revisited our ESG Materiality Assessment
to ensure our stakeholders’ priorities, including climate-related issues, continued to align with our work.
Further details are set out on pages 60 to 76 of the ESG Considerations section of the Strategic Report.
Climate risks facing the business are managed within the Low risk appetite level set by the Board.
The Board confirms its risk appetite for Principal Risks in the Audit and Risk Committee as a part of
its review of the Risk Governance Framework twice a year. For most risks, risk appetite is Low. The
assessments against the Board’s risk appetite are based on an analysis of the impact, likelihood and
internal controls related to climate risks. Further details are set out on pages 90 to 101 of the Managing
Board with the support of the Risk Stakeholder Group and the Audit and Risk Committee.
Active Asset Ownership at PensionBee
PensionBee is an active asset owner, supporting well framed environmental and social resolutions that
seek to promote good corporate citizenship while enhancing long-term shareholder and stakeholder
value, in line with ISS’s Socially Responsible Investment (‘SRI’) voting policy. From May 2023, 85% of
the PensionBee asset base was voted according to this policy.1126Under the SRI policy, climate risk
mitigation requires investee companies that are significant greenhouse gas (‘GHG’) emitters to
demonstrate they are taking minimum steps to be aligned with a net zero by 2050 trajectory or risk
a routine vote against their incumbent responsible committee chair or other directors. Expectations
include publishing a TCFD disclosure statement, a net zero by 2050 target and setting medium-term
targets for reducing GHG emissions. The SRI policy can also vote against directors owing to material
ESG failures, including a failure to adequately manage or mitigate ESG risks.
We have a history of working with other institutional investors to publicly endorse climate-related
environmental resolutions, including those associated with risks of new fossil fuel financing. We work
in coalition with investors who share an ambition to mitigate climate risk in investee companies and
as part of a broader movement to increase transparency for and accountability to shareholders in the
system. We also do this as part of our vision to live in a world where everyone can look forward to a
happy retirement.
112. Reflects 85% of the Assets under Administration across the Tailored, Tracker and 4Plus investment plans as at 31 December 2023
See definitions on pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
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Annual Report and Financial Statements 2023Strategic Report 3.2 Management and Response
All employees are responsible for operating and maintaining an effective system of internal controls,
for the escalation of risks or issues, and for reporting incidents in accordance with PensionBee’s Risk
Management Policy and Incident Management Policy. Through the processes identified above,
climate-related risks are identified and monitored effectively within the business. The Chief Risk
Officer heads the Risk Management Team and chairs the Risk Stakeholder Group (‘RSG’). The Risk
For Scope 3 (Category 15 GHG Protocol) emissions reporting, TCFD recommends that asset owners
and asset managers disclose the WACI of their portfolios in tCO2e / million revenue. In accordance
with the guidance we have used this metric for our first year of Scope 3 emissions reporting.
We are committed to ensuring that we use the most up to date and relevant calculation methodologies
as climate science for our sector evolves. Our metrics are reviewed regularly as part of our Target
Review Process, which is overseen by the Board.
Management Team produces all risk reporting including the Monthly Risk Report which they present
in the RSG meetings, notifying the Board about the meetings’ outcomes. The Risk Management Team
4.2 Emissions
is also responsible for performing all second line of defence risk tasks.
Scope 1 and 2 Emissions
In addition to its role in assessing and managing climate-related issues, the Risk Management Team is
also responsible for providing appropriate training on the risk management framework. The purpose
of this training is to:
•
•
•
Ensure the consistent application of the risk management framework, including tools and
processes.
Enhance the clarity of roles and responsibilities for risk management across the three lines of
defence.
Embed an effective risk culture within the Company that maintains high standards of risk
awareness, transparency and accountability.
4 Metrics & Targets
4.1 Metrics
PensionBee tracks a number of metrics in order to measure and manage exposure to climate-related
risks and opportunities.
These currently include energy and emissions as part of our SECR reporting obligations, our TCFD
reporting and our public commitment to achieve net zero emissions by 2050.
The range of portfolio metrics (and units) we used for reporting in 2023 were:
•
•
•
•
Weighted average carbon intensity (‘WACI’) (tonnes CO2e per $m Revenue)
Carbon intensity (tonnes CO2e per $m)
Absolute emissions (Scope 1 and 2) (tonnes CO2e)
Data quality reported / estimated (%).
For our Scope 1 and 2 operational emissions we use an absolute emissions metric (tonnes CO2e), as
per the SECR guidance.
88
GHG Emissions
2021
2022* Base Year
2023
Tonnes CO2e
tCO2e / £m
Revenue11377
Tonnes
CO2e
tCO2e / £m
Revenue1148
Tonnes
CO2e
tCO2e / £m
Revenue1159
Scope 111610
Scope 2 GHG Emissions
(location-based)11711
Scope 2 GHG Emissions
(market-based)11812
-
8.36
-
-
-
-
0.64
12.07
0.67
9.91
0.42
-
-
-
-
-
Scope 3 (Category 15 GHG Protocol) Emissions
2019* Base Year
2022
178.4 tCO2e / $m Revenue
121.3 tCO2e / $m Revenue
Weighted Average Carbon
Intensity (CO2e / $m Revenue)
4.3 Targets
In 2021 we began reporting our Scope 1 and 2 absolute emissions. As we moved into new long term
office premises in 2022, we are using this as our base year. In 2023 our operational emissions were
9.91 tCO2e. This encompasses purchased electricity for leased office space. All our electricity is 100%
renewable REGO certified.11913PensionBee generates no Scope 1 emissions.
113. 2021 Revenue of £12.8m.
114. 2022 Revenue of £17.7m.
115. 2023 Revenue of £23.7m.
116. Scope 1 being emissions from the Company’s combustion of fuel and operation of facilities. PensionBee generates no Scope 1 emissions.
117. Scope 2 being electricity (from location-based calculations), heat, steam and cooling purchased for the Company’s own use.
118. Scope 2 being electricity (from market-based calculations), heat, steam and cooling purchased for the Company’s own use.
119. The Renewable Energy Guarantees of Origin (‘REGO’) scheme provides transparency to consumers about the proportion of
electricity that suppliers source from renewable electricity. It provides certificates called REGOs which demonstrate electricity has been
generated from renewable sources.
PensionBee Group plcStrategic Report
In 2023, with support from technical specialists, we calculated our Scope 3 (Category 15) emissions,
Target Detail 2030
the financed emissions from our investment portfolio. For Scope 3 emissions we are using 2019 as
our base year, to mirror the base year for our default plan Tailored, representing the vast majority of
our asset base. We back-cast emissions data to 2019 from other plans to obtain Scope 3 emissions
for 97% of the asset base by Assets under Administration (‘AUA’) value, against a target ambition of
90% coverage.12014Base year metrics have been calculated on fund holdings as of 31 December 2019.
In 2019 our scope was 97% of Scope 3 (Category 15) emissions by AUA value and the baseline WACI
value was 178.4 tCO2e / $m revenue.
As a result of the lag in asset managers obtaining emissions data from third party providers, we have
reported Scope 3 emission data one year in arrears.12115 In 2022 our Scope 3 (Category 15) emissions
were for 97% of the portfolio by AUA value and our WACI value was 121.3 tCO2e per $m Revenue.
As a result of this data calculation, PensionBee is now able to set near-term (interim) targets for 2030
and long-term net zero targets for 2050. These targets are aligned with the Paris Agreement and are
consistent with emissions reductions required to keep warming within 1.5°C by 2100.
Near-term (interim) Targets for 2030
PensionBee has committed to reducing Scope 1 and 2 GHG emissions 38% by 2030 from a 2022
baseline. Our near-term target for Scope 1 and 2 emissions by 2030 is 7.5 tCO2e.
The Company has also committed to reduce Scope 3 (Category 15) emissions associated with the
investment portfolio by 50% by 2030 from a 2019 baseline. Our near-term target for WACI is 89.2 tCO2e
/ $m Revenue by 2030.
Long-term (‘net zero’) Targets for 2050
PensionBee has committed to achieving a long-term Paris-aligned reduction in GHG emissions
across all operations and investments.
To achieve this, PensionBee will reduce Scope 1 and 2 GHG emissions by 90% by 2050 from a 2022
baseline. Our long-term target for Scope 1 and 2 absolute emissions by 2050 is 1.2 tCO2e.
The Company will also reduce Scope 3 (Category 15) emissions associated with the investment
portfolio by 90% by 2050 from a baseline of 2019. The long term target for WACI is 17.8 tCO2e per
$m Revenue by 2050.
120. Key metrics have been summarised for PensionBee’s four largest investment plans by assets as fund holdings as at 31 December
2022 (Tailored, Tracker, 4Plus and Fossil Fuel Free), which made up 97% of the asset base.
121. PensionBee will therefore be reporting Scope 3 emissions data one year in arrears going forward, with 2023 data reported as part
of our 2024 Annual Report disclosure. We will monitor changes to the availability of third party emissions data from managers, to align
Scopes 1 and 2 and Scope 3 reporting in the future.
Target element
Scope 1 and 2
Target element
Scope 1 and 2
Base year
Target year
Metric
2019
2030
WACI
Base year
Target year
2022
2030
Metric
Absolute emissions
Baseline value
178.4 tCO2e/$mn revenue
Baseline value
12.07 tCO2e/$mn
revenue
Target value
82.9 tCO2e/$mn revenue
Target ambition
50%
Coverage
97%
Target Detail 2050
Target value
7.51 tCO2e/$mn revenue
Target ambition
37.8%
Coverage
100%
Target element
Scope 3 (Category 15)
Target element
Scope 1 and 2
Base year
Target year
Metric
2019
2050
WACI
Base year
Target year
Metric
2022
2050
Absolute emissions
Baseline value
178.4 tCO2e/$mn revenue
Baseline value
12.07 tCO2e
Target value
17.8 tCO2e/$mn revenue
Target value
1.21 tCO2e
Target ambition
90%
Coverage
97%
Target ambition
Coverage
90%
100%
Commitment to Review
The Company has also made a commitment to review target ambition and metrics regularly (at
least every five years) to ensure that we remain aligned with the best understanding of the science
required to achieve 1.5°C limited warming by 2100. This forms the basis for our Target Review
Process, which is overseen by the Investment Committee and Board (refer to Section 1.1 for more
details).
89
Annual Report and Financial Statements 2023Strategic Report 13 Managing our Risks
The Risk Management Framework
PensionBee maintains a comprehensive risk management framework, with risk management
acknowledged as the collective responsibility of all employees. It puts in place the structure and
processes required to ensure that the risks assumed in the execution of our strategy are understood
and managed across the Company within the acceptable levels set by the Board, and that the
Company meets its obligations to key stakeholders including customers, employees, shareholders,
regulators and broader society.
The components of the risk management framework are designed to ensure adequate identification,
communication and management of risks as they arise, so that decisions can be made on a timely
basis. It also enables a proactive, forward-looking risk management approach focused on identifying
Risk Culture
Mindset and behaviour of all individuals and departments inside the Company play a
crucial role in the execution of the Company’s risk management strategy. Risk culture is
considered to be the backdrop against which the actual risk management practice takes
place. The PensionBee culture and values are our most fundamental tools for effective risk
management.
Our Executive Management Team and our Board promote risk awareness, transparency and
accountability, with emphasis placed on the timely identification, escalation and reporting
of risk. They ensure that the employees understand our approach to risk management and
that everyone is held accountable for behaviours and actions that support our risk culture.
Keeping our employees informed and providing adequate training has enabled everyone
to take responsibility for the risk within their areas of work. In addition to the onboarding
training and the mandatory Company-wide annual risk and compliance training, training
programs such as team-specific training and Company-wide refreshers were rolled out
across the year to ensure the consistent application of the risk management tools and
any emerging risks and preventing them from materialising. The below diagram captures the main
processes.
framework components:
Risk
Appetite
Through the continuous strengthening of our policies and procedures, we have evolved the
workflows across the Lines of Defence, reinforced individual and collective risk management
roles and responsibilities, encouraged constructive dialogue and challenge, and promoted
timely, transparent and honest communication. We integrated risk management lessons
learned into communication and training in order to continue strengthening our control
environment and to ensure the success of future activities.
Risk Monitoring
and Reporting
Roles and
Responsabilities
Risk Appetite
Risk
Culture
Risk and Control
Assessments
Policy and
Governance
Risk
90
The Board expects the Company to be able to manage its operations with no disruptions to
the core services and no impact on the ability of the Company to carry out its obligations
to customers and other key stakeholders. It therefore expects the risks to be managed
in a proactive and systematic manner within the Board’s risk appetite. The risk appetite
is set by the Board, and the Risk Appetite Statements are maintained within the Risk
Governance Framework (‘RGF’) - a fundamental document which serves as the corporate
point of reference for key aspects of PensionBee risk management. The standards laid
out in the RGF are reflected in the more detailed policies and procedures governing risk
management. The RGF is reviewed by the Board twice per year to ensure any changes in
external environment, internal operational processes or the Company’s business strategy
are adequately reflected.
PensionBee Group plcStrategic Report Risk appetite allows our Executive Management Team and our Board members to systematically
manage the risks associated with strategic and operational decisions, assess whether the risks are
acceptable, put in place mitigating controls to reduce risks to acceptable levels, and maintain the
correct balance between the risks and rewards - thus ensuring the Company remains resilient by
taking informed decisions.
Regular risk reporting uses risk appetite as a benchmark. This way each risk is either within or outside
of risk appetite. Where a risk is outside of risk appetite, a number of actions may be taken: reduce the
risk by implementing additional controls or altering the business strategy, determine the conditions
for risk acceptance, or reassess the risk appetite.
Where risks are accepted, the Company only accepts a risk where it: is consistent with the Company’s
core purpose, strategy and values; it is well understood; it can be effectively managed; it is inline with
stakeholder expectations; and it offers commensurate rewards. This means the accepted risks: should
be consistent with the Company’s Strategic Pillars and financial objectives; should only be accepted
where relevant approvals have been attained through risk governance to confirm, on the basis of
objective evidence, that sufficient reward is achievable in a safe manner; should be actively monitored
and controlled through the appropriate allocation of resources; and should be underpinned by the
maintenance of a healthy business culture.
In consideration of our customers, other stakeholders and given the public nature of PensionBee, the
risk appetite can broadly be described as Low, with the exceptions noted within the Risk Appetite
Statements section below. The three possible risk appetite levels are defined as follows:
•
•
Low: The Company is not willing to accept risks in most circumstances. When considering options,
the Company should choose taking risks which will most likely result in successful delivery providing
a worthwhile level of reward, with manageable downsides. Low risks should be managed at
business-level and strictly in accordance with the PensionBee Risk Management Policy.
Medium: Medium risk appetite is generally adopted where a risk arises as a function of the
business model and/or we are unable to completely mitigate it due to the evolving external
factors. Where the Company is eager to innovate or choose options based on potential higher
rewards, it should ensure that the cost/effort applied in managing such risks is appropriate given
the potential downside. The Board should monitor whether the impact and/or probability of a
Medium risk materialising is increasing, and decide whether the benefits outweigh the costs and
this risk is worth taking.
Risk Appetite Statements
Unless stated otherwise in the following Risk Appetite Statements, the Board’s risk appetite is Low
across all Principal (Level 1) Risks.
A higher risk appetite may be adopted for specific Level 2 sub-risks (which are more granular risk
categories that sit below Principal Risks), generally where a risk arises as a function of the business
model and/or external factors that we are unable to completely mitigate.
Principal Risk
Risk Appetite Statements
Regulatory Risk
The Board expects the Company to meet the applicable legal
Information
Security Risk
and regulatory requirements at all times, and expects its
employees to comply with the internal Company policies and
with the applicable legal and regulatory requirements.
The Board expects the Company to aim to avoid at all times
any material compromise of IT systems and data, and expects
no preventable interruptions to the business and its ability to
provide critical services to new and existing customers.
The Board has currently set Medium risk appetite for ‘Emerging Cyber Threats’
(a Level 2 sub-risk of Information Security Risk), as the Company has, due to
its digital operation, an inherent exposure to Cyber Risk which is constantly
evolving and impossible to completely mitigate due to factors outside of our
control. The Board continues to closely monitor this risk and its mitigations.
Operational Risk
The Board expects the Company to design and implement the processes
and systems in compliance with internal policies and procedures, within
a control environment that ensures products, services and reporting are
effectively and efficiently delivered in accordance with the evolving needs
and expectations of its customers, regulators and other stakeholders.
Financial Risk
The Board expects the Company to aim to manage at all
times the losses due to market variables or its reliance on key
financial partners, and expects it to maintain sufficient quality
and quantity of capital to fulfil regulatory obligations.
•
High: The Company does not expect to have a sustained High risk appetite for any risk. However,
from time to time and in exceptional circumstances, the Company may temporarily tolerate
The Board has currently set Medium risk appetite for ‘Market Risk’
(Level 2 sub-risk of Financial Risk), as the Company has an inherent
periods of exposure to this risk level in pursuit of its strategic objectives. The Board should
exposure to price risk on investments held on behalf of our customers.
ultimately decide whether the High risk is worth taking, and if so, establish the conditions
The Board continues to closely monitor this risk and its mitigations.
(including the time period) for risk acceptance.
91
Annual Report and Financial Statements 2023Strategic Report Strategic Risk
The Board expects the Company to remain aligned with its
Strategic Pillars in its day-to-day business operations and change
activities, and expects adequate resources to be deployed to deliver
quality, meet stakeholder obligations and monitor its strategic
positioning with respect to the evolving external landscape.
The Board has currently set Medium risk appetite for ‘Macroeconomic Risk’ and
‘Geopolitical Risk’ (Level 2 sub-risks of Strategic Risk) as the Company, due to its
business model, has exposure to potential economic environment downturns
or unanticipated geopolitical events which may lead to unpreventable losses.
The Board continues to closely monitor these risks and their mitigations.
Climate Risk
The Board expects the Company to proactively manage the potential
impacts of climate-related risk drivers on its business and on the environment
in which it operates, and expects the Company to meet sustainability
requirements from a commercial, regulatory and stakeholder perspective.
Roles and Responsibilities
The Board is responsible for determining the Company’s risk appetite. It has overall responsibility for
the risk management framework and for ensuring that an adequate system of internal controls is
maintained, which is appropriate for the Company’s business and the risks to which it is exposed. The
Audit and Risk Committee assists the Board with the oversight of all risk management activities.
PensionBee risk management roles, responsibilities and processes are defined to facilitate timely and
transparent risk and control management and strong operational resilience. The Company adopts
the ‘Three Lines of Defence’ model which ensures adequate checks and balances are in place for
maintaining a fit-for-purpose risk management framework and enables the Company to operate
within the risk appetite set by the Board. This model adopts the segregation of risk management
activities and reporting lines, and it incorporates additional external assurance from reputable third
parties. The key responsibilities of the Three Lines are described on the left.
First Line of Defence
All individuals and departments in the Company are considered to be the First Line of Defence,
responsible for adhering to internal policies and applicable regulatory requirements. The First Line
is accountable for identifying, assessing and managing risks, and for designing, operating and
maintaining an effective system of internal controls. All employees are expected to operate effective
controls in their roles, and to report any new risks, incidents or suspicious activity promptly. Department
heads manage day-to-day business operations in accordance with the departmental procedures, and
promote a risk mindset which fosters risk awareness, transparency and accountability.
Third Line provides independent assurance to the
Board over the effectiveness of the Risk Framework
Second Line of Defence
The Second Line of Defence consists of our Risk Management and Second Line Compliance Teams, as well
as the Second Line Committees (the Risk Stakeholder Group and the Information Security Committee).
Second Line is responsible for maintaining the
Risk Framework, providing support and challenge
to the First Line, reporting to the Audit and Risk
Committee on the risk exposures and the control
enviroment
The Risk Management Team is responsible for maintaining the Company’s risk framework and for
oversight of the First Line’s risk management activities. This includes assurance on the risk assessments
and monitoring the adequacy of controls, in order to ensure that the residual risk exposures are within
the risk appetite. The Risk Management Team manages the policy framework and oversees the First
Line’s annual policy reviews. They also report on the risk profile and our adherence to the risk appetite
set by the Board.
First Line is responsible and accountable for
internal compliance. This includes ensuring that the Company has proportionate and risk-based
identifying, assesing and managing the risks in all
regulatory policies, procedures and processes in place to be compliant with regulatory obligations,
areas of the Company
working with First Line to advise on regulatory developments and ensuring that business changes are
The Second Line Compliance takes ownership of oversight for all matters related to regulatory and
implemented as required, and promoting awareness related to financial crime and Consumer Duty
risks and requirements.
92
PensionBee Group plcStrategic Report Third Line of Defence
Board of Directors
External assurance providers, performing the independent reviews of our operating model and
outcomes by assessment against industry or regulatory standards, are considered to be the Third Line
Committee oversight
Investment
Committee
Audit and Risk
Committee
Nomination
committee
Remuneration
committee
of Defence. These external parties provide the Board with additional assurance over the effectiveness
of the risk framework and they are appointed based on their sector expertise, for example, investment
management, finance, regulatory compliance and information security expertise. Their reviews
include independent checks of our strategy, systems and processes and the Audit and Risk Committee
is kept up to date with the progress and outcome of these reviews. For the avoidance of doubt, the
external auditor’s ultimate duty is to shareholders.
Parties currently appointed to provide external assurance are shown in the governance diagram below.
In addition, during 2024 and in line with the Company’s ongoing growth, the Board will consider a
number of external providers for an outsourced Internal Audit function with a direct reporting line to
the Audit and Risk Committee. The Internal Audit function would be tasked with utilising a risk-based
approach to evaluate and report on the effectiveness of risk management and governance within
the Company. Additionally, they will be expected to provide assurance that appropriate controls and
processes are in place and that they are functioning efficiently and effectively.
Policy and Governance
External assurance
Governance Advisory
Arrangement (Zedra)
Information Security
Auditing (BSI & Assent)
Information Security
Assessment (Cyber
Essentials Plus)
Pension Technical
Auditor (Enhance)
Second Line of
Defence
Risk Management, Second Line Compliance, Risk Stakeholder Group,
Information Security Committee
First Line
of Defence
Operations (Customer Success, Compliance and Banking), Technology (including Information
Security), Finance, Product Management, Marketing, Engagement, First Line Committees
The Risk Stakeholder Group (‘RSG’) and the Information Security Committee (‘ISC’) provide oversight
below the level of the Audit and Risk Committee. The Audit and Risk Committee and the Board are
periodically kept informed of the meeting discussions and outcomes.
The overarching governance structure is designed to ensure the Board oversees the risk management
The RSG which meets monthly consists of the Executive Management Team, the VP Information
framework and processes. As set out in the following diagram, the Board has established four sub-
Security, the VP Technical Solutions, the Head of Compliance and other senior managers as required.
committees (‘Committees’) to assist it with the oversight of the Company. Each Committee is chaired
The RSG discusses the Monthly Risk Review topics including risk assessments considered against risk
by a Non-Executive Director. All Board members, select members of the Executive Management
appetite and any relevant control improvement actions and projects. All materials and the outcome
Team and the Company Secretarial function are invited to attend Committee meetings. The Chair of
of the RSG meetings are shared with the Board. This year the RSG welcomed a visit by several Board
each Committee may also request a private meeting with the Second Line of Defence or the external
members who observed the September 2023 meeting and shared their valuable insights.
assurance parties if required.
The ISC meets three times a year and provides oversight of the effectiveness of the Information Security
Management System (‘ISMS’), including processes, risks and controls. The primary aim of the ISC is to
ensure compliance to the ISMS, which is certified to the ISO 27001 information security standard,
and to ensure continuous improvement. The Chief Executive Officer, Chief Financial Officer, Chief Risk
Officer, Chief Technology Officer (‘CTO’) and the VP Information Security are members of the ISC.
The Second Line Compliance function was formally established during 2023, with responsibility for
oversight of all matters related to regulatory and internal compliance. Its focus has been: working with
the First Line to advise on the regulatory developments, ensuring business changes are implemented
as required, strengthening our financial crime procedures, and the implementation of the FCA’s
Consumer Duty which sought to introduce higher standards of care for consumers.
93
Annual Report and Financial Statements 2023Strategic Report We are focused on safe operation and ensuring that we make sound, risk-based decisions, including
full risk profile by the Audit and Risk Committee and the Board. The control environment is aligned to
when managing changes to our business activities or products. A new Centralised Change Approval
Level 3 of the risk taxonomy (as shown in the diagram below). This risk taxonomy overall ensures that
process was implemented in 2023 to ensure risks introduced by significant business changes are
there is completeness in the capture of risks, facilitates effective reporting and oversight, and ensures
proactively identified and mitigated. The Product Steering Group, a First Line committee that
consistency of assessments across all risks. As such, during 2023 risk assessments were performed for
includes stakeholders from across the business, meets weekly to coordinate change activities and
162 Level 3 risks, enabling consolidated reporting on the full risk profile across 43 Level 2 risk categories.
approval requirements.
The Company maintains a set of internal policies which are reviewed annually. The Company policies
account the existing controls and mitigating factors, in order to understand how effective the internal
are a set of internal requirements that establish the rules for the Company and help our employees to
controls are. Where residual risks are assessed as ‘outside’ of risk appetite, steps are taken to bring
understand their responsibilities and the expectations on them. Where relevant, procedures are also
those risks within acceptable bounds. The Audit and Risk Committee oversees progress with all
The risk assessments are performed for inherent and residual risks, i.e. before and after taking into
documented that describe the operational processes necessary to implement and comply with the
relevant actions and projects.
policies. All employees are responsible for ensuring they adhere to the Company policies at all times.
A Policy Governance Framework has been introduced this year as a new policy which details the
to risk through the collation of a risk register, which is managed by the Risk Management Team. The
Company’s requirements for the creation, implementation and maintenance for the internal policies.
risk register captures all risks and the assessments of the Company’s exposures against the Board’s
It sets out the standards for policy content, responsibilities of policy owners, reviewers, approvers and
risk appetite. The results of the risk and control assessments are reviewed to understand the levels of
oversight committees, and the steps required for approval of new and existing policies through the
residual risks in order to address any unacceptable risks that have emerged.
appropriate governance channels. All Company policies are stored in a policy portal and are managed
and governed in accordance with the Policy Governance Framework.
Our risk and resilience frameworks enable us to anticipate possible adverse scenarios or events,
The PensionBee Executive Management Team has documented the Company’s perceived exposure
Risk Identification and Assessments
prepare for them, withstand or absorb their impacts, recover from the effects and adapt to changing
conditions. Our internal procedures are designed so that we can also respond and adapt to
opportunities and take prompt and informed decisions with confidence.
We are focused on proactive risk management, ensuring we monitor on an ongoing basis and regularly
assess the Company’s risks. The PensionBee Risk Management Policy contains the requirements
related to periodic risk and control assessments, which are required to be performed at least annually,
and is also where any potential changes to the risk profile are captured. The Board, via the work of the
When identifying external factors for our horizon scanning, we consider the potential emerging risks
within the following categories: political, economic, social, technological, legal and environmental.
When performing our analysis, we evaluate the threats and weaknesses against our existing control
Audit and Risk Committee, periodically reviews the Company’s principal and emerging risks.
environment, as well as analysing our strengths and opportunities.
The risk taxonomy sets out Principal (or Level 1) Risk categories to which the Company is exposed. The
risk and control reporting is aligned to Level 2 of the taxonomy, which enables the oversight of the
Areas of focus in 2023 have been cybersecurity, fraud prevention, change management, climate and
sustainability, third party management and developments in regulation including the new Consumer Duty.
Level 3 Risks
Working-level risks capturing key business
Level 2 Risks
Risk groupings by the risk areas across
Level 1 Risks
Principal Risks or high-level risk categories
processes across the Company, assessed
departments, used to report on the full risk
to which the Company is exposed, defined
periodically within the risk register
profile to the Audit and Risk Committee
within the Risk Governance Framework
94
PensionBee Group plcStrategic Report Risk Monitoring and Reporting
The Risk Management Team reports on the risks, mitigating controls and any additional measures
required to reduce the risk exposures. A regular risk report (‘Monthly Risk Review’ or ‘MRR’) includes
information on any emerging trends and tracks the control improvements being implemented
in order to prevent risks from materialising. The MRR also provides an overview of policy reviews,
incidents for the month, an update on the risk appetite-relevant open actions and a summary of the
change management activities.
The MRR summarises the Second Line risk assurance activities during the month. These include the
monthly checks of key financial and operational processes, relevant deep dive reviews and scenario
analysis, incidents trends and root cause analysis, and other ad-hoc assurance activities. The report also
includes highlights of Information Security risks and controls, information security incidents (including
third party supplier related incidents), updates on progress of information security related assurance
activities (such as ISO surveillance audits, Cyber Essentials and penetration testing), information
security training updates and the overall progress with the information and cyber security programme.
The MRR is presented to the Risk Stakeholder Group monthly, the Information Security Committee
three times per year, and is shared with the Board monthly.
In addition, the Risk Management Team produces a risk report which is presented at each Audit and
Risk Committee. This report, combined with topics raised at the Committee meetings, enables the
Committee to effectively oversee the Company’s risk profile and its approach to risk management.
The Audit and Risk Committee periodically reviews the entire risk profile across all Principal Risks, with
extensive discussions during the meetings focused on the progress with control improvements for risks
which are assessed as being outside of the risk appetite set by the Board. During 2023, a special Audit
and Risk Committee working group session was dedicated to a deep dive into the Information Security
risks and controls. The Board also receives a monthly update on the Second Line control assurance
outcomes, as well as the details on progress with all risk and control related open actions and projects.
Risk Systems
Towards the end of 2023, the Company onboarded new governance, risk and compliance software,
RiskSmart, to support scalability as the Company grows, by facilitating the consistent embedding of
a structured Risk and Control Control Self Assessments process, enhancing the policy governance,
automating the risk reporting and promoting the risk culture through its user-friendly interface.
The platform will also improve communication and efficiency through its automated workflow
management and its ability to integrate with other systems.
Information Security Risk Management Framework
PensionBee is focused on evolving the Information Security risk management framework and related
processes and investing appropriate resources in ensuring the Company’s digital assets and its
customers’ data are protected.
Approach
We use a risk and threat driven approach to ensure our information security controls are adequately
designed and implemented. By using this approach, we understand the risks to our assets and the
threats that these assets are exposed to, which in turn allows us to protect them more effectively.
The approach is driven by our ‘BeeSecure’ information security strategy, which is underpinned by four
key pillars:
•
•
•
•
BeeAware - focuses on security culture and raises awareness across the entire organisation to
ensure Information Security risk is everyone’s responsibility. A key component of BeeAware is to
simplify security concepts and raise awareness using a human-centric approach.
Threat Prevention, Detection and Response capability - focuses on increasing observability of
the technology estate (including third party applications where necessary), and responding to
anomalies or malicious behaviour in a timely manner.
Integration with the business - focuses on integrating with the business, so that systems,
applications and any new processes are built with a secure-by-design approach, and Information
Security requirements and risks are addressed during inception of new initiatives and projects.
Security Assurance - focuses on providing adequate assurance that security controls are
Risk management systems play a crucial role in enabling us to identify, assess, monitor and mitigate risks.
operating effectively and efficiently (including third party supplier controls).
We implemented a new internal support system, HappyFox, to streamline the IT help-desk and
incident workflows and to improve our overall IT Service Management and Incident Management
processes. This has resulted in a more coordinated approach between the Technology and Risk
Management Teams. The system has also enabled a standardised and structured method for
managing IT and business-related incidents, facilitated improved cross-departmental collaboration,
enabled consistent escalation processes for incidents, provided more transparency and visibility of
the end-to-end incident lifecycle for audit trail purposes, and improved incident reporting which now
includes additional metrics, root cause and trend analysis.
Our Information Security Team uses real-life scenarios to create plausible cyber security and data
compromise simulations, in order to proactively manage cyber risk.
Framework and Governance
The VP Information Security is responsible for the Information Security Management System (‘ISMS’),
which includes the delivery of the BeeSecure programme. This is overseen by the CTO, who has
ultimate accountability for information security at PensionBee.
95
Annual Report and Financial Statements 2023Strategic Report PensionBee maintains a comprehensive ISMS, which is certified to the internationally recognised
ISO 27001 information security standard. We completed successful recertification of the ISO 27001
All data centres are compliant with multiple internationally recognised standards and information
security frameworks, such as ISO 27001, SOC 2 Type II, UK Cyber Essentials Plus, NIST and PCI DSS.
standard in November 2023. We also hold the Cyber Essential Plus (‘CE+’) certification, which relates
to a government-backed scheme that helps organisations improve cyber security controls.
The BeeSecure programme has been developed using the National Institute of Standards and
Technology Framework (‘NIST’), which complements ISO 27001 and is one of the leading frameworks
to help manage and mitigate cyber security risk.
The three frameworks used, ISO 27001, NIST and CE+, complement each other and ensure
comprehensive coverage of controls for information and cyber security.
Our security controls are tested on an annual basis by independent experts, and PensionBee
maintains certification to the ISO 27001 standard for information security management systems. Our
systems undergo regular security penetration testing and regular vulnerability assessments as a part
of certifying to the Cyber Essentials Plus scheme.
Customers are additionally protected from identity fraud and account compromise using a variety of
techniques including digital customer identity verification, which incorporates a cutting-edge facial
similarity check and bank account verification. PensionBee also made multi-factor authentication
mandatory for all customers in the second quarter of 2023.
Security metrics in the form of key performance indicators (‘KPIs’) are reviewed by senior stakeholders
at the Information Security Committee, and are used to measure the progress of the ISMS against its
Resilience
objectives to ensure we remain focused on continuous improvement.
Information Security Culture
The Information Security Team conducts regular email phishing exercises across the Company. The
results are reported at Company-wide Show N Tell meetings to ensure transparency and visibility to
all employees.
The security training and awareness programme is delivered in different forms, including via interactive
training, regular notifications of significant data breaches across the globe, and personalised classroom
training which includes plausible cyber incident scenarios. As a result, we saw a significant decrease
in the email phishing campaign fail rate KPI, from 22% in May 2022 to 2% in August 2023. This was a
positive result especially as email phishing is still considered the most effective method to conduct a
cyber attack.
In addition, the Executive Management Team participated in the bi-annual Cyber Breach Exercises to
test and refine the Company’s cyber response plan.
Data Security and Privacy Controls
The security of our online application and ensuring that our customers’ personal data is well-protected
are of paramount importance. The data is protected at rest, in transit and in use, through a defence-
in-depth approach.
All communications and the flow of data between our customers’ browsers and our website is secured
using 128-bit TLS encryption, to ensure that only people authorised to view personal information can
During 2023 we strengthened our operational resilience through the enhancement of a number of
risk-focused policies which govern the planning, testing, operation and monitoring of controls to
manage our ability to prevent, adapt, respond to, recover and learn from operational disruptions.
This includes the PensionBee Risk Management, Information Security, Incident Management, Business
Continuity and Third Party Management Policies.
Our Business Continuity Plan and cyber breach planning exercises were successfully conducted this
year to ensure that our critical functions could continue to operate under stress and during disruptions.
The goal of these drills was to identify any potential weaknesses in the Company and to validate the
effectiveness of the strategies and procedures put in place to maintain essential operations.
We also introduced the Centralised Change Management process to ensure all significant changes
are implemented in a structured manner and only once relevant internal stakeholder sign-offs have
been provided.
Given our increasing focus on maintaining safe operations and meeting and exceeding the
expectations of our customers, regulators and other stakeholders, Resilience was added as one of the
Company’s Strategic Pillars, supporting our mission to focus on protecting our systems and service for
our customers through effective risk management, adapt to change and uncertainty, and enable the
safe growth of our business.
As we believe full resilience cannot be achieved with a siloed approach, we adopted a holistic
approach. Our definition of Resilience therefore expanded from a more narrow focus on maintaining
critical services, to embodying the entire Company across technology, finance, people, facilities and
operational processes. The key Resilience components below are broadly aligned with the Principal
do so. Information is stored in secure databases and data segregation between systems is also in place.
Risks, and we will continue the embedding process throughout 2024.
96
PensionBee Group plcStrategic Report Resilience Area
Cross-functional Capabilities
Financial Resilience
• Maintaining a solid financial position to enable the Company to weather rapid drops in Revenue, increased costs or credit issues.
Operational Resilience
• Maintaining robust operational capacity and the provision of services to customers that can pivot to meet changes
in demand or remain stable in the face of operational disruption, all without sacrificing quality.
• Ability to keep pace with customer needs, competitive demands, and regulatory requirements.
• Capability to maintain quality customer service even under stress, including failure of third parties, natural
catastrophes, geopolitical events, economic downturns and technological disruptions.
Regulatory Resilience
• Ensuring capacity and flexibility to adapt quickly to future regulatory changes as they emerge.
• Ensuring future short-term responses and implementations do not have a negative long-term impact.
• Maintaining an open dialogue with our regulators.
• Upholding the highest standards including Consumer Duty and ensuring best practice.
Technological Resilience
• Ensuring secure and flexible infrastructure to manage cyber threats and avoid technology breakdowns.
• Maintaining data in ways that respect privacy and remain compliant with all regulatory requirements.
• Implementing IT projects to high standards , on time and within budget.
• Maintaining robust business continuity and disaster recovery capabilities.
Strategic Resilience
• Ensuring the business strategy can adapt to dynamic and uncertain environments including significant shifts in
customer preferences, the competitive landscape, technological evolution changing regulation.
• Continuous innovation, valuing entrepreneurship and the ability to excel in a crisis.
Climate Resilience
• Looking at the Company holistically and understanding possible risks and opportunities given the current business model and strategies, and adapting them dynamically.
• Creating an ESG roadmap and developing action plans for climate emergencies.
• Using qualitative and quantitative approaches to manage exposure to climate risk under all relevant scenarios.
• Building capabilities to integrate climate risk into decision-making.
Cultural Resilience
• Attracting and developing talent in areas critical to our future growth.
• Fostering a diverse workforce where everyone feels included and can perform at their best.
• Implementing strong people processes that are free of bias and maintaining robust succession plans throughout the Company.
• Maintaining an empowering culture and putting in place thoughtful rules and standards that promote agile decision-making and customer focus.
Reputational Resilience
• Aligning our actions and words with the Company values.
• Flexibility and openness in listening to and communicating with stakeholders, anticipating and addressing
societal expectations, and genuinely responding to criticism and complaints.
• Holding ourselves accountable for our actions, brand promise and our stance on ESG issues.
97
Annual Report and Financial Statements 2023Strategic Report Principal Risks and Uncertainties
Principal Risks
Information Security Risk
We have identified six top-level risks which could potentially have a
material adverse impact on the Company’s business or long-term
performance, and if not appropriately mitigated they could result in
unfavourable public perceptions of the Company’s business prospects
and cause significant reputational damage. These risks could arise
from internal or external events, acts or omissions. The risks mentioned
below do not purport to be exhaustive, as there may be additional
risks that the Company has not yet identified or has deemed to be
immaterial.
Regulatory Risk
Our business is subject to risks relating to changes in UK government
policy and applicable regulations. Whilst we have historically been
beneficiaries of favourable regulatory changes, including through
the introduction of Automatic Enrolment and Pension Freedoms, any
regulatory changes which are negative for our business could have a
material adverse effect on our prospects.
PensionBee’s operations are subject to authorisation and supervision
from the Financial Conduct Authority (‘FCA’), and supervision from
HMRC and the Information Commissioner’s Office. PensionBee may fail,
or be held to have failed, to comply with regulations. Such regulations
and approvals may change making compliance more onerous and
costly. If the FCA or other regulators concluded that PensionBee had
breached applicable regulations, this could result in a public reprimand,
fines, customer redress or other regulatory sanctions. PensionBee must
also comply with relevant regulatory capital and liquidity requirements.
We may be subject to complaints or claims from customers and
third parties in the normal course of business. If a large number of
complaints, or complaints resulting in substantial customer and third
party related losses, were upheld against PensionBee, it could have a
material adverse effect on our business and financial condition.
98
PensionBee faces various risks related to the confidentiality, availability and integrity of our IT systems.
We hold confidential and personal data, which is subject to strict data protection and privacy laws in the UK, including
the Data Protection Act and UK GDPR. The loss or misuse of data could result in a material loss of business, financial losses,
regulatory enforcement actions and significant harm to our reputation. If our information security processes, policies and
procedures relating to personal data are not fully implemented and adhered to by our employees, or if any of our third party
service providers fail to manage data in a compliant manner, we could face financial sanctions and reputational damage.
Furthermore, our operations are susceptible to cybercrime and loss or theft of data. Failure to prevent such actions, including
circumvention of our information security processes, policies and procedures, could result in financial losses, business
interruption and unauthorised access or disclosure of personal data.
There is also a risk of ineffective controls, or control failures, that are in place to ensure our technology architecture is fit for
purpose, including the infrastructure required to support applications, networking, hardware and software, resulting in our
inability to meet the standards required to deliver to internal and external user expectations.
Operational Risk
During the regular course of business, we may be exposed to adverse financial or reputational impact due to inadequate or
failed internal processes, people performance or IT systems, or due to third-parties or external events. Key operational process
risks are linked to our customer service, banking, finance, marketing and change implementation processes. Operational Risk
also includes our risks in the areas of human resource management, risk management and internal governance.
PensionBee is dependent on third-party technology and financial services providers for the provision of asset management,
banking and technology services. Any termination, interruption or reduced performance of the services provided by these
third parties could negatively impact the provision of our services and have a material adverse effect on our reputation and
profitability.
Our operational infrastructure and business continuity may be affected by other failures or interruption from events, some
of which are beyond our control. Our systems and the systems of our third-party providers may be vulnerable to fire, flood
and other natural disasters, power loss or telecommunications or data network failures, improper or negligent operation by
employees or service providers, unauthorised physical or electronic access, or other causes. There is no guarantee that our
preventative measures would protect us from all potential damage arising from any of the events described above.
PensionBee Group plcStrategic Report Financial Risk
Market Risk
Our business may be adversely affected by negative sudden or prolonged fluctuations in global capital
markets. We generate the vast majority of Revenue in the form of fees charged on a recurring basis
calculated by reference to the value of our Assets under Administration. Our Revenue and profitability
are therefore directly influenced by the health of the global capital markets. A general deterioration
in the global economy and a resulting decline in capital markets, or an increase in volatility, may have
a negative impact on the value of our customers’ pensions and their overall confidence to make new
contributions to, or to consolidate new pensions into, their PensionBee pension.
Credit Risk
PensionBee is dependent on third-party financial services providers for the provision of asset
management and banking services. We are reliant upon these third parties for the safekeeping of our
own and our customers’ assets. A default by one of these third parties would have a material adverse
effect on our reputation and financial position.
Strategic Risk
The pensions market is competitive and there is no guarantee that we will be able to continue to
maintain the growth levels we have achieved to date, nor that we will be able to maintain our financial
performance either at historical or anticipated future levels. Our competitors include a variety of financial
services firms and our market is characterised by ongoing technological progression, including of the
underlying infrastructure and user experience. There is no guarantee that we will continue to outpace
our competitors. In addition, the pension market remains cost-sensitive and competitors could materially
undercut our fees, thereby generating pressure on our revenues. Any failure to maintain our competitive
position could lead to a reduction in revenues and profitability as well as lower future growth.
We are dependent upon the experience, skills and knowledge of our Directors and our Executive
Management Team to implement our strategy. The loss of a significant number of Directors, Executive
Management and/or other key employees, or the inability to recruit suitably experienced, qualified
and trained staff as needed, may cause significant disruption to our business and the ability to achieve
our strategic objectives.
Climate Risk
As climate change intensifies, dangerous weather events are becoming more frequent and
more severe. More frequent and intense droughts, storms, heat waves, rising sea levels, melting
glaciers and warming oceans can directly harm life and wreak havoc on people’s livelihoods and
communities. These significant shifts in the global climate have a potential to adversely affect
our employees, customers and other stakeholders, and have broader implications on economic,
social and cultural assets.
Physical risks from increased variability and extremity of climatic conditions can reduce the
value of certain assets and income streams. Climate change could also affect monetary policy
by slowing productivity growth (for example, through damage to health and infrastructure)
and heightening the uncertainty and inflation volatility. This can justify the adaptation of
monetary policy to the new challenges. Any of these changes could in turn have a material
adverse effect on our business and financial position.
99
Annual Report and Financial Statements 2023Strategic Report Summary of Risks and Mitigations
Through the risk management processes described above, we have taken the appropriate steps to manage risk in accordance with the Board’s risk appetite. The summary of the key mitigating factors is presented below.
Principal Risk
Risk Definition
Key Mitigations
Regulatory Risk
The risk of regulatory sanctions, material financial loss, or
• Maintaining a robust risk management framework and a set of internal policies which are reviewed regularly
reputational damage the Company could suffer as a result
of its failure to comply with applicable laws, regulations,
rules, or related internal standards and codes of conduct
• Ensure adequate staff training and communication for key policies and procedures
• Comprehensive second line assurance programme in place providing oversight
over the effectiveness of regulatory compliance and related controls
Information
Security Risk
• Robust change approval process requiring regulatory compliance checks
• Regulatory capital and liquidity planning and monitoring through the Finance function
• Regular interactions with industry bodies to proactively monitor trends
• Values-based culture and strategy centred around Consumer Duty
The risk of data loss, theft or disruption of information
• Regular Data back-up and restoration testing to allow for recovery in the event of cyber attack or corruption of data
systems both internally and throughout the supply chain,
which impacts confidentiality, integrity and availability
• Proactive technical and analytical vulnerability assessment and mitigation
• Monitoring key third party services and performance metrics as part of the ISMS
• Ongoing infrastructure assessments against business requirements
• Ongoing compliance and certification to ISO 27001 and Cyber Essentials Plus
• Ongoing monitoring of compliance with applicable regulation and legislation in respect of Data Protection
• Maintaining a robust policy set and controls to keep information secure
• Frequent training for all employees to promote a culture of security awareness
• Continuing to invest in the Information Security Programme in order to mitigate the evolving cyber risks
• Robust business continuity plans in place for critical assets and functions, which are tested regularly
• 24x7 / 365 threat detection, monitoring and response on critical assets to detect
and prevent malicious behaviour proactively and reactively
Operational Risk The risk of loss, disruption of business or adverse
• Implementing automation to reduce manual processing
regulatory action resulting from inadequate or failed
internal processes, people performance, systems,
or due to third parties or external events
• A comprehensive set of internal controls, operational procedures and Company policies
• Periodic training for all employees and specialised training for customer service teams
• Structured performance management for all employees and formalised succession planning for key roles
• Robust external supplier selection and due diligence process with ongoing monitoring of key suppliers
• Effective internal governance to adequately oversee and challenge the risk positions
• Maintaining a risk-aware corporate culture based on accountability and transparency
100
PensionBee Group plcStrategic Report Principal Risk
Risk Definition
Key Mitigations
Financial Risk
The risk of the Company’s inability to fulfil its financial
• Geographic and asset class diversification of the plans
obligations or internal objectives due to loss of
revenue resulting from adverse price movements
in the capital markets, or the impact of worsening
creditworthiness or default of a key financial partner
• Recurring Revenue from long-duration assets
• Financial planning based on scenario analysis
• Partnering with only large and reputable asset managers and banking institutions
• Internal controls in place monitoring capital quality and reserves
• Robust processes in place to ensure the integrity of financial data
Strategic Risk
The risk of failures in strategic planning and execution
• Core objectives calibrated using customer and regulatory trends and feedback
leading to the Company not achieving its core objectives
• Robust strategic change management internal controls in place
• Employing agile product development and deployment cycles
Climate Risk
The risk of negative impact of climate change
• Small physical footprint, remote working, cloud-based technology
or its broader economic, financial and societal
consequences on the Company, or the Company’s
failure to meet sustainability requirements from a
commercial, regulatory or stakeholder perspective
• Risk transfer policies
• Ongoing monitoring of regulatory compliance
• Screenings applied in our funds to reduce harmful exposures (Tailored Plan, Fossil Fuel Free Plan, Impact Plan)
• Using asset managers, banking and cloud providers that have robust business continuity plans in place
• Clearly assigned climate risk-related roles and responsibilities
• Monitoring climate risks faced today and under future scenarios
101
Annual Report and Financial Statements 2023Strategic Report 14 Viability Statement
In accordance with provision 31 of the UK Corporate Governance Code, the Board has assessed the
•
Information Security Risk - The materialisation of a confidentiality, availability or integrity event
viability of PensionBee Group plc and its subsidiary PensionBee Limited (together the ‘Group’) for the
that undermines our reputation and reduces conversion and reduces average pension pot sizes.
four-year period to December 2027, considering this to be an appropriate period over which to assess
The analysis assumed a material reduction in the customer conversion rate and average pension
the Group’s strategy and its capital requirements, considering the investment needs of the business
pot size of newly acquired customers over the forecast period, whereby they would decrease
and the potential risks and uncertainties that could impact the Group’s ability to meet its strategic
Assets under Administration by 10%.
objectives. The Board considers a four-year period to be an appropriate time frame because it would
likely capture the length of a potential downside business cycle and provide sufficient time to identify
In the event that such modelled scenarios were to manifest, the Board has identified a number of
and execute mitigating actions required to address the stress test scenarios as outlined below.
potential mitigating actions that management could take. The primary lever for consideration
would be the reduction of discretionary marketing expenditure and the implementation of fixed
This assessment has been made giving consideration to the financial position, regulatory capital and
cost savings. The Board considers this approach to be reasonable, especially given that the Group’s
liquidity requirements of the Group (as set out on pages 52 to 57 of the Operating and Financial
financial position has strengthened further over 2023 (in light of it achieving ongoing Adjusted EBITDA
Review within the Strategic Report), in the context of the Company’s strategy, business model and
profitability in the fourth quarter of 2023) and given the strength of PensionBee’s positioning within
medium-term business plan, together with an assessment of the principal risks and uncertainties (as
the UK competitive landscape. The results of the modelling have confirmed that the Group would be
set out on pages 90 to 101 of the Managing our Risks section of the Strategic Report). Such risks
able to withstand the adverse financial impact of these aforementioned scenarios occurring together
have been categorised into Regulatory Risk, Information Security Risk, Operational Risk, Financial Risk,
over the four-year assessment period and that it would continue to be able to meet its liabilities and
Reputational Risk, Strategic Risk and Climate Risk, in accordance with our risk management framework.
capital requirements.
PensionBee Limited is an FCA regulated entity and therefore is required to hold appropriate levels
The Group’s medium term plan underwent rigorous review and was approved by the Board in
of own funds which are at all times in excess of its Liquid Capital Requirement and other capital
December 2023. The stress test scenarios and associated mitigating actions were reviewed in
requirements.
February 2024 and were subsequently approved in March 2024. The Directors confirm that they have
a reasonable expectation that the Group will be able to continue to operate and meet its capital
The Board-approved medium term plan assumes the business continues to grow Invested Customers
requirements and liabilities as they fall due over the four-year period to December 2027.
and AUA through continued investment in its customer proposition, marketing, people and
technology. It is assumed that there are no significant or prolonged market movements in underlying
The Strategic Report was approved by the Board on 13 March 2024 and signed on its behalf by:
asset values from the time the plan was approved by the Board.
The Board has also considered the potential impact of the following stress test scenarios, which
together represent a severe and unlikely, but possible scenario. The stress test scenarios would impact
the plan from 2024 onwards:
Romi Savova
Chief Executive Officer
13 March 2024
•
Financial Risk (Market Risk) - A material reduction in global equity markets as a result of global
macroeconomic uncertainty (such as geopolitical disruptions, persistent inflation and a high
interest rate environment) and prolonged equity market volatility has been assumed over the
forecast period. More specifically, the analysis assumed a significant decline in the global equity
markets, falling by 50% in the first year and remaining depressed until 2025, with a linear recovery
to the pre-crisis level assumed for the remainder of the forecast period.
102
PensionBee Group plcStrategic Report Corporate
Governance
Report
1 Chair's Introduction to Governance
Mark Wood CBE
Non-Executive Chair
Dear fellow shareholder,
Board Composition and Succession Planning
On behalf of the Board, I am pleased to present our Corporate Governance Report for the year ended
31 December 2023, which details our approach to corporate governance and describes areas of focus
for the Board during 2023.
Customers
We exist to help our customers achieve a happy retirement. Correspondingly, we vigorously support
the Financial Conduct Authority’s (‘FCA’s’) regulatory framework entitled ‘Consumer Duty’, which sets
high and clear standards of consumer protection across financial services requiring firms to put their
customers’ needs before all other considerations, as we do.
Ensuring that we continue, both operationally and culturally, to adhere to the Consumer Duty
principles, has occupied the Board and the Audit and Risk Committee throughout 2023. Consumer
Duty review and oversight were incorporated into the terms of Schedule of Matters Reserved for
the Board and the Audit and Risk Committee Terms of Reference respectively. We were pleased
to appoint Michelle Cracknell, the Chair of the Audit and Risk Committee, as our designated Non-
Executive Director Consumer Duty Champion. Michelle’s extensive industry experience, including
her experience as the CEO of The Pensions Advisory Service, has amply equipped her for the role.
104
Our Nomination Committee has vigilantly ensured that the Board is equipped with the optimal
blend of skills, knowledge and experience, coupled with diversity of thought to effectively oversee
the execution of the Company’s strategy, the performance of the Company and to chart its course
going forward. The Nomination Committee, drawing on the outputs of the Board evaluation process,
confirmed that the composition of the Board was appropriate for this stage in the Company’s
development, with no further appointments currently required.
The Company has maintained a 57% female representation and a 14% Asian/Black/Mixed/Multiple/
Other ethnic representation across its Board.1 Two senior Board positions continued to be held by
women, with Mary Francis in the role of Senior Independent Director and Romi Savova the Chief
Executive Officer. We are therefore happy to report that as at 31 December 2023, the Company
continued to comply with the board diversity targets as set out in the FCA’s Listing Rules.2 During 2023,
the Nomination Committee reviewed updates to the Company’s Diversity, Inclusion and Equality
Policy, available on our website, setting out details of the Board’s diversity policy, implementation
and reporting.3 Further details are set out on pages 122 to 125 of the Nomination Committee Report
within the Corporate Governance Report and on pages 36 to 47 of the Our People section of the
Strategic Report.
1. Supported by analysis from PensionBee’s HR information system, December 2023.
2. Chapter 9 of the Listing Rules, specifically LR 9.8.6R(9) states that at least 40% of individuals on the board should be women, at least
one at least one of the senior positions on the board (chair, chief executive, senior independent director, or chief financial officer) should
be held by a woman, and at least one individual should be from a minority ethnic background. At PensionBee, the Chief Executive
Officer role has been filled by a woman since the Company’s inception in 2014, the Senior Independent Director role has been filled by a
woman since November 2020 and there has been one board member from a minority ethnic background since April 2022.
3. PensionBee Diversity, Inclusion and Equality Policy can be found at pensionbee.com/investor-relations/esg.
PensionBee Group plcCorporate Governance Report PensionBee Board Gender Representation
PensionBee Board Ethnicity Representation
The UK Corporate Governance Code 2018 requires FTSE 350 companies to have an externally
43%
14%
57%
86%
Women: 4
Men: 3
White: 6
Asian/Black/Mixed/Multipe/Other: 1
The Nomination Committee’s 2023 agenda included consideration of both Non-Executive and
Executive Director succession plans in the context of the ongoing needs of the business.
The Chief Executive has identified high-performing individuals at both the Executive and senior
management levels. The resultant succession plan demonstrates that the Company’s talent pool has
strength and depth across the business, providing operational resilience.
Further details of our leadership team can be found on pages 107 to 113 of the Board of Directors
and Executive Management section of the Corporate Governance Report. Further details relating to
succession planning are set out on pages 122 to 125 of the Nomination Committee Report within the
Corporate Governance Report.
Board Evaluation and Effectiveness
For 2023, we completed an internally facilitated evaluation process reviewing the performance of
the Directors, the Board as a whole, its Committees and its Chair and Senior Independent Director.
The results of the evaluation indicated that the Board and Committees continue to operate
effectively with strong, professional and constructive relationships between the Non-Executive and
Executive Directors. Themes that surfaced and resulting actions that have been identified will form
a development plan for 2024.
facilitated board evaluation at least every three years. The Company is not currently a member of
the FTSE 350 and therefore not subject to this Code provision. Nonetheless, we will keep this under
review and may choose to adopt an externally facilitated Board evaluation in due course.
Further detail relating to the Board evaluation process, including the progress that has been made
against the prior year’s action points, is set out on pages 122 to 125 of the Nomination Committee
Report within the Corporate Governance Report.
Environmental, Social and Governance
As set out in my Chair’s Statement, we believe that effectively managing our Environmental, Social and
Governance (‘ESG’) priorities will help drive long-term value for all our stakeholders. Our approach to
ESG and our continued initiatives in this area resulted in our admission to the FTSE4Good UK Index at
the end of 2023. We are proud to have met the criteria for inclusion in an index tool used by investors
seeking to invest in companies that demonstrate good sustainability practices.
However, we cannot become complacent. Continuing to engage with and be accountable to
our stakeholders will help ensure that this is not the case, particularly given our public net zero
commitments. This also underscores the importance of our disclosures under the Sustainability
Accounting Standards Board, Workforce Disclosure Initiative, Streamlined Energy and Carbon
Reporting (‘SECR’) framework and Task Force on Climate-related Financial Disclosures (‘TCFD’)
framework.
Concerning the topic of disclosure, during 2023 we received correspondence from the Financial
Reporting Council (the ‘FRC’) notifying that the Company’s Annual Report and Financial Statements
2022 had been included in the sample used for a thematic review covering climate-related metrics
and targets and net zero plans. I am pleased to report that the correspondence confirmed that based
on the FRC’s review, there were no questions or queries it wished to raise.4
Further details on our ESG activities can be found on pages 60 to 76 of the ESG Considerations
section of the Strategic Report and the TCFD and SECR can be found on pages 77 to 89 of the
Climate-related Disclosures section of the Strategic Report. Information relating to how we engage
with our employees, shareholders and all our other stakeholders is set out on pages 36 to 47 of the
Our People section of the Strategic Report and pages 60 to 76 of the ESG Considerations section
of the Strategic Report.
4. The FRC letter dated 7 October 2023 provides no assurance that the Company’s Annual Report and Financial Statements 2022 were
correct in all material respects. The FRC's role was not to verify the information provided but to consider compliance with reporting
requirements.
105
Annual Report and Financial Statements 2023Corporate Governance Report Culture
As part of the Board’s evolving colleague engagement programme, during 2023, Directors were
provided with further opportunities to see the Company’s vision and values in practice. Directors
attended operational deep dive employee engagements where we saw first hand how the values-based
culture has been embedded into day to day operations to achieve the Company’s strategic goals. This
insight strengthens the Board’s consideration of the Company’s vision and values when it makes strategic
decisions. The values-based culture is embedded into performance management and the Remuneration
Committee reviews the Remuneration Policy to ensure that incentives continue to align appropriately.
Risk
Protecting the retirement savings that our customers have entrusted us with, protecting their data
and providing an uninterrupted service is of paramount importance. We recognise that cyber security
threats will, unfortunately, continue to increase in sophistication and persistence. Accordingly, the
addition of a sixth strategic pillar, Resilience, to our planning process demonstrates our on-going
commitment to managing risk.
During 2023, the Board received regular updates from the Risk Stakeholder Group and the Information
Security Committee, as well as cyber security training. In addition, the Board, with the support of the
Audit and Risk Committee, oversaw the implementation of the Risk Governance Framework supported
by a revised PensionBee Risk Management Policy. The Risk Governance Framework supports the Board
and the Management Team in discharging their regulatory and corporate responsibilities, providing a
robust governance structure with well-defined and transparent Board standards for risk management.
Further details of our new Resilience pillar, risk management framework and initiatives in this area are
set out on pages 90 to 101 of the Managing our Risks section of the Strategic Report.
Conclusion
Further details setting out how the Board has discharged its corporate governance responsibilities
during the year are set out in this Corporate Governance Report.
The Board looks forward to welcoming shareholders to the Company’s Annual General Meeting
(‘AGM’), which will be held on 16 May 2024. The Notice of the 2024 AGM will be distributed to
shareholders and made available on the Company’s website.
Mark Wood CBE
Non-Executive Chair
13 March 2024
106
PensionBee Group plcCorporate Governance Report 2 Board of Directors and Executive Management
Mark Wood CBE
Non-Executive Chair
Committee Membership:
Investment Committee (Chair), Nomination
Committee (Chair), Remuneration Committee
Mary Francis CBE
Senior Independent Director
Director responsible for Employee Engagement
Committee Membership:
Audit and Risk Committee, Investment Committee, Nomination
Committee, Remuneration Committee (Chair)
Date of Appointment: February 2021
Date of Appointment: February 2021
External Appointments:
• Non-Executive Chair, Utility Bidder Limited5
• Non-Executive Chair, Ondo InsurTech Plc
• Chair, Everest Funeral Concierge (UK) Limited
• Non-Executive Chair, Acquis Insurance Management Limited
Senior Independent Director, RAC Group Limited6
•
• Non-Executive Chair, Digitalis Reputation Limited
• Non-Executive Chair, Walbrook Advisors Limited
Trustee, The Gregory Centre for Church Multiplication
•
• Chair, Multiple Sclerosis Society Research Appeal Board
• Operating Partner, Advent International
•
•
Senior Advisor, Warburg Pincus
Senior Advisor, Investec
Career and Experience:
Mark Wood CBE has had a long and distinguished career, serving as Chief Executive of some of the
country’s largest financial service companies, including Prudential UK & Europe and Axa UK. Mark
is a regular commentator in the press on pensions and insurance.
He has been at the helm of several financial services and technology start-ups, including
Paternoster, a regulated insurance company which he founded in 2005. Mark is a qualified
Chartered Accountant.
Mark was previously the Chairman of the NSPCC and was awarded a CBE in 2017 for services to
children. He now serves as Chair of the Multiple Sclerosis £100m Research Appeal Board.
5. Including subsidiary appointments.
6. Including subsidiary appointments.
External Appointments:
• Non-Executive Director, Barclays plc and Barclays Bank plc
• Member of the UK Takeover Appeal Board
•
Senior Adviser, Chatham House
Career and Experience:
Mary Francis CBE has extensive and diverse board-level experience across a range of industries,
including previous Non-Executive Directorships at the Bank of England, Alliance & Leicester, Aviva,
Centrica and Swiss Re Group.
Through her former senior executive positions with HM Treasury, the Prime Minister’s Office, and
as Director General of the Association of British Insurers, Mary brings strong governance values to
the Board, a strong understanding of the interaction between public and private sectors, and skills
in strategic decision-making and reputation management.
Mary was awarded a CBE in 2006 for her services to business.
107
Annual Report and Financial Statements 2023Corporate Governance Report Michelle Cracknell CBE
Independent Non-Executive Director
Consumer Duty Champion
Lara Oyesanya FRSA
Independent Non-Executive Director
Committee Membership:
Audit and Risk Committee (Chair), Investment Committee, Nomination Committee,
Committee Membership:
Audit and Risk Committee, Investment Committee, Nomination Committee,
Remuneration Committee
Remuneration Committee
Date of Appointment: February 2021
Date of Appointment: April 2022
External Appointments:
• Chair, Fidelity Wealth Management Limited7
•
Independent Non-Executive Director, Fidelity Holdings (UK) Limited, Financial Administration
Services Ltd8
• Non-Executive Director and Trustee, Lloyds Banking Group Pensions Trustees Limited
•
Independent Non-Executive Director, Just Group Plc9 Non-Executive Director, Sport England
External Appointments:
• Group General Counsel, Chief Legal Officer and Company
Secretary, WorldRemit Group Limited
Trustee, Shaw Trust
•
• Co-opted Member, Committee on Benefactions, External and Legal Affairs,
a Committee of the University of Cambridge
Career and Experience:
Michelle Cracknell CBE has a portfolio career as a Pension Trustee and Non-Executive Director. She
Career and Experience:
Lara Oyesanya FRSA is the General Counsel and Company Secretary at Zepz Group and has
has over 30 years’ experience in pensions and retirement planning, including most recently as the
extensive legal, regulatory and commercial experience across multiple industries, as well as
Chief Executive of the Pensions Advisory Service. During her time there she significantly grew the
significant compliance, governance and data privacy expertise. She was previously General
number of customers and increased the channels offered, transforming the service to provide
Counsel and Chief Risk Officer at Contis Group and has held a number of senior roles at FTSE 100
greater support on pension freedom legislation, pension scams and transfers from pension schemes.
and financial services businesses including Klarna and Barclays.
Michelle started her career at a financial advice business where she became a shareholding
Lara is a barrister of the Supreme Court of Nigeria and a Solicitor of the Senior Courts of England
Director prior to selling it to Aegon, and subsequently worked as a Strategy Director at Skandia/
and Wales. She is a member of the Nominating and Governance Committee, Plan International
Old Mutual. Michelle is a qualified Pensions Actuary.
Michelle was awarded a CBE in 2019 for her services to the pensions industry.
Worldwide. Additionally, Lara is a co-opted Member, Committee on Benefactions and External and
Legal Affairs, a committee of the University of Cambridge Council, advising the Vice Chancellor.
7. Including subsidiary appointments.
8. Including subsidiary appointments.
9. Including subsidiary appointments.
108
PensionBee Group plcCorporate Governance Report
Romi Savova
Chief Executive Officer
(Executive Director)
Jonathan Lister Parsons
Chief Technology Officer
(Executive Director)
Committee Membership:
Investment Committee, Nomination Committee
Committee Membership:
None
Date of Appointment: February 2021
Date of Appointment: February 2021
External Appointments:
• Director, PensionBee Trustees Limited
• Advisory Board Member, Fintech Growth Fund
• Director, Seen on Screen
Career and Experience:
Romi Savova founded PensionBee in 2014 to simplify pension savings in the UK,
External Appointments:
• Director, PensionBee Trustees Limited
Career and Experience:
Jonathan Lister Parsons co-founded PensionBee with Romi in 2014. In his role as the Chief
Technology Officer, he is passionate about bringing customers’ pension experience into
the 21st century, and using technology to transform pension transfer processes that
following a difficult pension transfer experience of her own. As the Chief Executive
typically take months to a five-minute process on a smartphone. Jonathan champions a
Officer, she has led the company on its journey from startup to household name and
tech-forward culture within the business, aiming to raise the level of technology literacy
publicly listed company.
among employees, and creating opportunities for people to develop technical skills as
they move through different roles in their career at PensionBee.
Prior to founding PensionBee, Romi worked at Goldman Sachs, Morgan Stanley and
Credit Benchmark, holding varied roles in risk management, investment banking
Prior to co-founding PensionBee, Jonathan founded a digital consultancy, Penrose,
and financial technology. Romi received an MBA from Harvard Business School as a
and worked at British Telecom. Jonathan holds an MSci in Experimental and
George F. Baker scholar and graduated summa cum laude from Emory University.
Theoretical Physics from the University of Cambridge.
109
Annual Report and Financial Statements 2023Corporate Governance Report
Christoph J. Martin
Chief Financial Officer
(Executive Director)
Lisa Picardo
Chief Corporate Officer
Committee Membership:
None
Date of Appointment: June 2022
External Appointments:
None
Career and Experience:
Christoph J. Martin is the Chief Financial Officer of PensionBee, having joined the
Company in 2019. He is Responsible for financial reporting, and business planning
at PensionBee. Christoph regularly engages with the public markets, including
PensionBee’s investors, to communicate the Company’s financial objectives.
Christoph previously worked in private equity investment at Providence Equity Partners,
focusing on investments in technology, media, telecommunications and education.
Prior to that he worked in mergers and acquisitions, covering financial institutions at
Morgan Stanley. Christoph holds a BSc in Business Administration from WU Vienna.
Joined PensionBee: March 2020
External Appointments:
•
Founding Member, Breast Cancer Now Development Board
Career and Experience:
Lisa Picardo is the Chief Corporate Officer of PensionBee, having joined the Company
in 2020. She leads the corporate development of PensionBee, which has included
leading on the Company’s IPO and subsequent transfer to the Premium List, and plays
a broader management role across many aspects of the business.
Lisa previously worked at Morgan Stanley for thirteen years, with the first seven years
spent in the European Mergers and Acquisitions department, where she gained
extensive experience working on many large and complex UK and cross-border
public transactions including acquisitions, restructurings, take-privates, financings
and IPOs. She also played a role in firm management. Lisa then joined the Morgan
Stanley Private Equity Fund, focused on investing in global mid-market opportunities
across sectors, with an interest in consumer-facing businesses. In 2015, Lisa founded
LITTLECIRCLE, an online luxury childrenswear retailer with a platform for pre-loved
fashion. Lisa holds a BSc in Economics from Bristol University.
Lisa is a founding member of the Breast Cancer Now Development Board.
110
PensionBee Group plcCorporate Governance Report
Matt Loft
Chief Design Officer
Clare Reilly
Chief Engagement Officer
Joined PensionBee: September 2015
Joined PensionBee: January 2017
Career and Experience:
Matt Cevik Loft is Chief Design Officer at PensionBee, having joined the company
Career and Experience:
Clare Reilly is the Chief Engagement Officer of PensionBee, having joined the
in 2015. He leads the Product, Design and User Research functions at PensionBee
company in 2017. She is responsible for the investment range and managing the
and is responsible for the customer experience of PensionBee’s products and
environmental, social and governance framework in line with the PensionBee vision.
the Company’s visual brand. Bringing over twenty years experience in designing
customer-centric digital experiences, he is passionate about inclusivity, accessibility
Clare previously worked in the not-for-profit sector, in Corporate Relations at Citizens
and sustainability in design.
Advice and Fellowship at the Royal Society of Arts. Clare holds a BA Hons from
University College London and an MSc from the University of Oxford in Russian and
Prior to joining PensionBee, Matt worked at design agencies and in-house across a
East European Studies.
wide range of sectors for clients including The Money Advice Service, Legal & General,
The Ministry of Justice, Oxford University and the V&A.
111
Annual Report and Financial Statements 2023Corporate Governance Report Matthew Cavanagh
Chief Legal Officer and General Counsel
Jasper Martens
Chief Marketing Officer
Joined PensionBee: September 2023
Joined PensionBee: September 2015
Career and Experience:
Matthew Cavanagh is the Chief Legal Officer and General Counsel of PensionBee,
having previously worked as General Counsel to the company in 2015 and re-joining
the company in September 2023. Matthew heads PensionBee Group’s legal function,
with responsibility for the provision of legal advice to all aspects of the business and its
External Appointments:
• Advisor, Sprive
Career and Experience:
Jasper Martens is the Chief Marketing Officer of PensionBee, having joined the
respective boards, and managing PensionBee’s external legal advisory relationships.
company in 2015. He is responsible for marketing across the business and brings
extensive multichannel marketing experience to PensionBee, gathered over fifteen
A lawyer with over 20 years experience in private practice at leading international law
years working in financial services and digital agencies.
firms Clifford Chance, Linklaters and Skadden Arps Slate Meagher & Flom,a partner
at King & Wood Mallesons SJBerwin, General Counsel & Partner at Christofferson,
Jasper advises and has advised other fintechs such as Sprive, Statement and
Robb & Company and Director, Executive Legal Counsel at the Qatari sovereign
Superscript on their marketing strategy. Prior to joining PensionBee, Jasper was Head
wealth fund (the QIA).
of Marketing and Communications at small business insurance provider, Simply
Business. Before moving to London, Jasper ran his own online marketing agency
He is a solicitor qualified in England & Wales, Ireland and Australia (Queensland and
which he founded in the Netherlands.
High Court of Australia). Matthew holds an LLM (specialising in Commercial Law), LLB
(Hons) and BA (Double Major in Chinese) from The University of Queensland
112
PensionBee Group plcCorporate Governance Report Tess Nicholson
Chief Operating Officer
Petra Miskov
Chief Risk Officer
Joined PensionBee: August 2015
Joined PensionBee: September 2022
Career and Experience:
Tess Nicholson is the Chief Operating Officer of PensionBee, having joined the
Career and Experience
Petra Miskov is the Chief Risk Officer of PensionBee, having joined the company in
company in 2015. She is responsible for a range of operational activities across the
2022. She is responsible for enterprise risk management, including maintaining an
business, including customer success, compliance and banking operations.
integrated risk framework, with a special interest in collaborative risk culture.
Tess was previously Operations Manager and UK Commercial Manager at GO Markets
Prior to joining PensionBee, Petra was a Managing Director at the London Stock
UK Trading Limited (formerly Vantage FX UK Trading Limited). Tess holds a BA Hons
Exchange, and she worked at Goldman Sachs, Ernst & Young, KPMG and Mercer,
degree in Fashion Design with Communication from Birmingham City University and
in a variety of senior roles in the areas of risk management, quantitative advisory,
a masters in Social & Political Theory from Birkbeck, University of London.
investment management and pension consulting.
Petra holds a MSci in Mathematics and Statistics from the New York University and she
graduated summa cum laude from the City University of New York.
113
Annual Report and Financial Statements 2023Corporate Governance Report 3 Corporate Governance Statement
UK Corporate Governance Code Compliance Statement
• Responsibility for leadership, purpose, values and standards, monitoring progress against each.
The Company has applied all of the principles of the UK Corporate Governance Code 2018 (the
‘Code’) as they apply to it and has complied with all relevant provisions of the Code for the financial
year ended 31 December 2023.
• Approving annually a strategic plan and objectives.
• Approving operating and capital expenditure budgets and any material changes to them.
• Approving changes relating to capital and corporate structure.
• Approving the financial results including the annual accounts, interim and preliminary results.
Full details of the Code are available at frc.org.uk. Details explaining how the Company has applied
• Approving the Group’s risk management and treasury policies.
the principles of the Code can be found throughout the Annual Report.
Role of the Board
In accordance with the Code, the role of the Board is to promote the long-term sustainable success
of the Company, generating value for shareholders and contributing to wider society. The Board
of PensionBee considers how to promote the success of the Company giving due regard to all its
stakeholders, including shareholders and employees. As such, the Board participates in direct
• Approving major capital projects, investments or contracts in excess of the delegated amount.
• Approving changes to the structure, size and composition of the Board.
•
•
Ensuring a satisfactory dialogue with shareholders.
Ensuring the maintenance of a sound system of internal control and risk management.
• Maintaining oversight of whistleblowing arrangements.
A copy of the ‘Schedule of Matters Reserved for the Board’ can be found on the Company’s website at:
engagement with certain stakeholder groups and engagement is reported to the Board to inform
pensionbee.com/investor-relations/esg.
the decision-making and business outcomes.
The Board provides overall leadership, setting the Company’s purpose, values and strategy, and
supporting the Executive Directors and the broader Executive Management Team in the delivery
of that strategy. The Board ensures that the Company has the necessary resources in place to meet
its objectives, measuring performance against them and that it operates a framework of effective
controls, enabling risk to be appropriately managed.
Further information on the Company’s vision, values, strategy, risk management framework and
engagement with stakeholders can be found with the Strategic Report on pages 14 to 24 of the
About Us section, pages 25 to 33 of Our Strategy section, pages 90 to 101 of the Managing our
Risks section and pages 60 to 66 (Stakeholder Engagement) of the ESG Considerations section of the
Strategic Report.
Matters Reserved for the Board
Governance Structure
PensionBee Group plc Board of Directors
Audit and Risk Committee
Investment Committee
Remuneration committee
Nomination committee
Chief Executive Officer
Executive Management
Team
Company Secretary
Risk Stakeholder Group
Information Security
Committee
Disclosure Panel
The Board operates a policy of matters reserved for its collective decision, which includes items
that are material to delivering on the Company’s strategy and purpose, including strategic issues,
The Disclosure Panel is responsible for monitoring the existence of inside information and its
structure and capital, financial reporting and controls, material agreements, communications with
disclosure to the market. The Disclosure Panel comprises the Chair, the Chief Executive Officer (‘CEO’),
shareholders, board appointments and remuneration, risk assessment and internal controls, and
the Chief Corporate Officer (‘CCO’), the Chief Financial Officer (‘CFO’), the Chief Legal Officer and
corporate governance. These matters include, but are not limited to:
General Counsel and the Company Secretary.
114
PensionBee Group plcCorporate Governance Report Details of the Risk Stakeholder Group and the Information Security Committee can be found on
A copy of the ‘PensionBee Charter of Expectations and Role Profile’ document can be found on the
pages 90 to 101 of the Managing our Risk section of the Strategic Report.
Company’s website at: pensionbee.com/investor-relations/esg.
Board Committees
Role of the Chair
The Board has delegated a number of its responsibilities to the Audit and Risk Committee, the
The Chair (Mark Wood) is responsible for leadership of the Board and ensuring its overall
Nomination Committee, the Investment Committee and the Remuneration Committee. Each of
effectiveness in directing the Company and in all aspects of its role, including the satisfaction of its
these Committees has a terms of reference document, which is reviewed annually by the respective
legal, regulatory and shareholder responsibilities, and promoting the highest standards of integrity,
Committee and the Board to ensure that they remain appropriate to support effective governance.
probity and corporate governance. The Chair has responsibilities relating to Board meetings, Board
Details of the role, composition and activities of each Committee during the year are set out in their
composition, induction and performance evaluation processes and relations with shareholders
respective reports on the following pages within this Corporate Governance Report.
and other stakeholders. At appropriate intervals during the year, the Chair holds meetings with the
A copy of the Terms of Reference for each of the Board Committees can be found on the Company’s
discussion. The Chair is responsible for ensuring that the Board listens to the views of stakeholders
website at: pensionbee.com/investor-relations/esg.
to understand their issues and concerns. During the year this took place through regular Board
Non-Executive Directors without the Executive Directors present in order to facilitate a full and frank
shareholder updates on the Company’s results and employee engagements.
The Operation of Board & Committee Meetings
The Board generally aims to meet up to twenty times per year across the Board and Committees, with
Role of the Chief Executive Officer
each meeting’s activity being planned ahead of time and set out in a formal Annual Board Activity
The Chief Executive Officer (Romi Savova) leads the team with executive responsibility for running
Calendar, which is approved by the Board. The Board and Committee meetings are generally planned
the businesses of the Group. The CEO reports to the Board, and is responsible for all Executive
around key events in the corporate calendar, which ensures that the Board receives appropriate
Management matters of the Group.
information at the appropriate time and that all key operational, financial reporting and governance
matters are discussed during the year.
Role of the Independent Non-Executive Directors
With respect to Board and Committee meetings, the Chair, the CEO, the relevant Executive
The Non-Executive Directors (Mary Francis, Michelle Cracknell and Lara Oyesanya) are all
Management sponsor and the Company Secretary set the Board’s agenda, ensuring that there is
independent, providing constructive challenge, strategic guidance, offering specialist advice and
sufficient focus on strategy, performance, value creation, culture, stakeholders and accountability. A
holding management to account, given their experience in both executive and non-executive
detailed presentation is prepared and circulated in advance of each meeting, including updates from
roles throughout their careers. The Non-Executive Directors also contribute to the identification of
the CEO, the CFO and other Executive Management Team members. The Company Secretary also
principal business risks and the determination of risk appetite and monitoring of the internal control
prepares a report every quarter for Board meetings, covering matters including the latest governance
framework. They provide independent judgement to the Board and also monitor compliance with
and company law updates.
Roles and Responsibilities
the regulatory principles and requirements. The Independent Non-Executive Directors have a prime
role in appointing and, where necessary, removing Executive Directors.
The Board acknowledges the importance of a clear division of responsibilities between Non-
Role of the Senior Independent Director
Executive and Executive roles, and in particular the delineation between the Chair’s responsibility to
The Code requires that the Board should appoint one of the Independent Non-Executive Directors
lead the Board and the Chief Executive Officers responsibility to run the business. During the year the
to be the Senior Independent Director, providing a sounding board for the Chair and serving as
Board put into place the PensionBee Charter of Expectations and Role Profiles document to clearly
an intermediary for the other Directors and shareholders if they have concerns that have not
outline the roles and expectations of the Board. It outlines the role profiles for all of the positions
been resolved through the normal channels of the Chair or the Chief Executive Officer. Led by the
on the PensionBee Group plc Board and states the expectations of each of the Directors and Group
Senior Independent Director, the Non-Executives meet without the Chair present at least annually
Company Secretary. The performance of the Board, its Committees, and each Director is measured
to appraise the Chair’s performance, and on other occasions as necessary. Mary Francis has been
against these expectations.
appointed as the Senior Independent Director.
115
Annual Report and Financial Statements 2023Corporate Governance Report Company Secretary
The Company Secretary (Michael Tavener) supports the Board and each of the four Board committees
Director
and is in attendance at all meetings. All Directors have access to the services of the Company
Secretarial team, who are available to advise on matters including company law, governance and
best practice. The Company Secretary ensures that the correct policies, processes and information
Mark Wood
are tabled for discussion, noting or recording approval at the correct point in time throughout the
Mary Francis
year. The Company Secretarial team works with members of the Executive Management Team and
the respective Chairs of the Board and Committees to ensure that Board meeting packs are circulated
to Directors in a timely manner and that the information contained in them is clear and accurate.
Composition, Independence and Attendance in 2023
The Board’s size, structure, and composition is reviewed regularly to ensure that the balance between
Michelle Cracknell
Lara Oyesanya
Romi Savova
Jonathan Lister
Parsons
Board
Audit and Risk
Remuneration
Nomination
Investment
Meetings
Committees
Committee
Committee
Committee
Eligible/
Attended
Eligible/
Attended
Eligible/
Eligible/
Eligible/
Attended
Attended
Attended
10/10
10/10
10/10
10/10
10/10
10/10
-
7/7
7/7
7/6
-
-
-
3/3
3/3
3/3
3/2
-
-
-
3/3
3/3
3/3
3/3
3/3
-
-
3/3
3/3
3/3
3/3
3/3
-
-
Non-Executive and Executive Directors allows the Board to exercise objectivity. The Nomination
Christoph J. Martin
10/10
Committee, having considered circumstances which could be likely to impair a Non-Executive
Director’s independence, determined that Mary Francis, Michelle Cracknell and Lara Oyesanya were
considered to be independent and that the Company continued to comply with Provision 11 of the
Code, with at least half of the Board (excluding the Chair) being composed of independent Non-
Executive Directors.
Further details setting out the experience, skills and professional experience of the Non-Executive
Directors are set out on pages 107 to 113 of the Board of Directors and Executive Management
section of this Corporate Governance Report.
The Non-Executive Directors are committed to devoting adequate time to the business to discharge
their responsibilities effectively. As set out in their appointment letters, the Non-Executive Directors
are required to attend scheduled Board and Committee meetings and to become more involved for
periodic special activities if required. All Directors must advise the Board of any changes to existing
commitments or new commitments that may have implications on their ability to commit sufficient
time to their duties. During 2023, Mark Wood disclosed additional positions. The Board was satisfied
that he continued to be able to meet the required time commitment due to these positions being
advisory positions.
During the course of 2023, the Board held 10 formally scheduled meetings, with additional ad
hoc meetings or calls convened to deal with various matters in between. Meetings were held
via video conference to ensure attendance and inclusivity. The Executive Management Team
were also frequently present at Board and Committee meetings, together with other advisors
or contributors as appropriate. The table below shows the attendance of each Director at
the formal scheduled meetings of the Board and Committees of which they are a member:
Where Directors are unable to attend a meeting, they are encouraged to submit any comments on
papers or matters to be discussed to the Chair in advance to ensure that their views are recorded
and taken into account during the meeting. We note Lara Oyesanya’s one instance of absence at
the Remuneration and Audit and Risk Committee meetings held on the same day in February 2023.
These particular meetings were rescheduled with limited notice to a date that conflicted with Lara’s
other pre-arranged commitments. This absence was therefore out of Lara’s control.
116
PensionBee Group plcCorporate Governance Report Key Activities During The Year
The annual Board Activity Calendar setting out agenda items for each scheduled Board and Committee meeting is approved by the Board each year.
The calendar takes into account key points in the regulatory and financial cycle, and includes regular business, corporate, investor and employee updates from the CEO and the CCO, regular updates on the
financial performance and business planning from the CFO and quarterly updates on governance and company law matters from the Company Secretary. In addition, the Board has received updates from
the work of the Committees, other members of the Executive Management Team and from external advisors and contributors where appropriate.
Strategy
Finance
Operational
• Participated in a deep dive on the competitive landscape and
market review, led by the Executive Management Team.
• Participated in the annual Board strategy session.
• Added Resilience as a sixth strategic pillar of the Company.
• Reviewed and approved the FY2024 budget and financial
strategy, including going concern considerations and
stress testing.
• Reviewed and approved the full-year results, the half-year
results and the quarterly trading announcements and
presentations.
• Reviewed regular operational updates provided in the CEO’s
Report.
• Participated in Executive Management Team led deep dives on
the operational elements of the Company’s strategy including:
• Marketing.
• Customer Service.
• Reviewed monthly management accounts, performance
• Operational Resilience.
analytics and regular finance updates.
•
Product.
People
Environment & Social
Governance & Risk
• Participated in operational deep dive events to engage with
employees and gather business area insights.
• Reviewed work on Diversity, Inclusion and Equality and approved
the associated goals and policy.
• Reviewed the Company’s Diversity Survey Results (via Nomination
• Reviewed and approved the PensionBee net zero target.
• Participated in a deep dive session on TCFD and net zero
reporting requirements (via the Investment Committee).
• Oversaw the ISS Socially Responsible Investment Voting
Policy in respect of the Tailored Plan managed by
• Reviewed and input into the implementation of the FCA’s new
Consumer Duty and reviewed and approved the Consumer
Duty Report.
• Reviewed the outputs from the 2023 Board and Committee
Evaluation.
Committee).
BlackRock and certain plans managed by State Street
• Reviewed and approved key corporate governance
• Reviewed the Diversity, Inclusion and Equality Support Survey
Global Advisors (via the Investment Committee).
documentation and policies.
Update (via the Nomination Committee).
• Received updates on the workforce and workforce engagement in
the CEO’s Report.
• Reviewed and approved the ESG Policy.
• Reviewed the ESG rating scores (via the Investment
• Reviewed the principal and emerging risks and uncertainties
which could impact the Company.
Committee).
• Reviewed and input into the implementation of a new Risk
• Reviewed the workforce updates provided in the people updates.
• Reviewed the health and safety updates.
• Oversaw the implementation of the Impact Plan (via the
Governance Framework.
Investment Committee).
• Reviewed and approved the Board Charter of Expectations and
Role Profiles and the new Directors’ Conflict of Interest Policy.
• Reviewed Information Security Committee Updates.
• Participated in a Risk deep dive session (via the Audit and Risk
Committee).
• Reviewed the Succession Plan Framework (via the Nomination
Committee).
117
Annual Report and Financial Statements 2023Corporate Governance Report Information and Support
Board Evaluation and Effectiveness
Agendas and accompanying papers are distributed to the Board and Committee members in
At the end of the year, a formal and rigorous internal performance evaluation was conducted in respect
advance of each Board or Committee meeting. Where necessary, separate papers are prepared
of the Board and each of its Committees, covering processes that underpin the Board and Committee
to support specific matters requiring Board decision or approval and the Non-Executives provide
effectiveness, Board and Committee constitution and commitment, Board dynamics, culture, values
ongoing feedback to the CEO, CCO and Company Secretary on the content of papers to ensure they
and strategy and stakeholder oversight. The evaluations were conducted by way of questionnaires
continue to support effective debate and decision-making by the Board.
for each Director to complete, with responses provided to the Chair and the Company Secretary,
Minutes of all Board and Committee meetings are taken by the Company Secretary and circulated to
also discussed by the other Non-Executive Directors, led by the Senior Independent Director, and
followed by further calls with the individual Directors and the Chair. The Chair’s performance was
the Board for approval as soon as practicable following the meetings. Specific actions arising from
feedback was subsequently relayed to the Chair.
meetings are recorded both in the minutes and on a separate tracker, thereby facilitating the effective
communication of actions to those responsible and allowing the Board to monitor progress.
A summary of the responses was provided and discussed at the Board’s meeting in December 2023.
Any Director may instigate an agreed procedure whereby independent professional advice
Senior Independent Director, Board and Committees. Full details are set out on pages 122 to 125 of
reasonably necessary to enable them to carry out their duties may be sought at the Company’s
the Nomination Committee Report within the Corporate Governance Report.
The results of the Board evaluation indicated strong performance and effectiveness of the Chair,
expense. No such advice was sought by any Director during the year.
Details of the progress that was made during 2023 against the themes and outputs from the 2022
Training and Development
Board Evaluation process are set out as follows:
On appointment Directors are provided a full, formal and tailored induction programme comprised
of:
•
The provision of a comprehensive set of documentation covering key financial, operational,
strategic and governance matters.
• One-to-one meetings with each of the other Directors and members of the Executive Management
Team.
Throughout the Director’s time in office they are provided ongoing training, this has included
training sessions for the Board on the following topics:
• Cyber security
•
•
ESG reporting requirements.
Legal and governance updates.
• Annual Report and Accounts reporting requirements.
• Annual compliance training (including a diversity and inclusion module).
118
PensionBee Group plcCorporate Governance Report Theme
Progress Update
Further strengthening the skills or knowledge at a Board
This matter was discussed by the Nomination Committee at its March 2023 meeting. It was agreed that
level in areas including cyber risk and marketing.
the Board was content with the current composition, skills and scale of the Board and did not see a need
to expand at this stage. The Company was focused on ensuring that the Board utilised communication lines
with the Executive Directors and their direct reports, responsible for cyber/digital, marketing and sustainability,
in order to gain industry development insights to enable the Board to discharge their duties effectively.
During 2023 the Board received cyber security updates and training, and a marketing deep dive.
Shifting the temporal balance of Board meetings towards horizon scanning
A standing ‘Deep Dive’ item was added to the Board’s meeting agenda. This has provided the Board with the
and strategic discussion as the Company moves towards profitability.
opportunity to review operational and strategic matters in detail engendering forward-looking discussions.
Regular operational and risk focused deep-dives,
to include themes such as resilience.
During 2023 the Board received deep dives focused on the following topics:
• Risk
• Customer Service
• Competitor Landscape and Market (Strategy)
• Operational Resilience
• Budget
• Product
Continuing to evolve the Company’s succession plan.
During 2023 the Nomination Committee reviewed the Company’s Succession Plan with a focus on identifying
high-performing individuals and their development at both the Executive and Senior Management levels.
The plan further developed the arrangements for the unexpected incapacity of an Executive Director and the
succession of Non-Executive Directors including the Chair as well as short-term incapacity considerations.
Reviewing external relationships and in particular the
During 2023 the Board and its Committees dealt with the following matters with each providing an
perspectives of the Company’s key stakeholders.
opportunity to consider and/or have insight and perspective from the Company’s key stakeholders.
Implementation of the FCA’s new Consumer Duty.
Customers
•
• Customer Service deep dive.
• Review of the Price and Value Report.
Environment and Society
• Adoption of Company’s Environmental Social
and Governance (’ESG’) Policy.
TCFD reporting.
• Adoption of the Company’s net zero target.
•
•
•
ESG Scores.
• Voting Choices.
Introduction of the Impact Plan.
Employees
• Review of the Company’s Diversity
and Inclusion programme.
• Regular CEO Updates.
• Participation at Town Hall events.
Shareholders
• Regular investor relations updates, including
research analyst sentiments and investor
perspectives provided to the Board.
119
Annual Report and Financial Statements 2023Corporate Governance Report Appointment and Election
Following the Board and Committee performance evaluation conducted at the end of 2023, the
Board has confirmed that it considers all Directors to be effective, committed to their roles and to
have sufficient time to perform their duties.
All Directors are subject to election by shareholders at the first Annual General Meeting following
their appointment and to annual re-election thereafter, in accordance with the Code.
Current Service Contracts and Terms of Engagement
All of the Directors have service agreements or letters of appointment, details of which are set out below.
Executive Directors
Name (Position)
Date of Service
Notice Period by
Notice period by
Agreement
Company (months)
Director (months)
Romi Savova (CEO)
16 March 2021
Jonathan Lister Parsons (CTO)
16 March 2021
Christoph J. Martin (CFO)
30 June 2022
6 months
6 months
6 months
6 months
6 months
6 months
The current appointment term for Mark Wood, Mary Francis and Michelle Cracknell will expire on 20
April 2024. Subject to Nomination Committee review and Board approval, it is anticipated that their
appointment periods will be extended for a further three-year period to 20 April 2027. No director
participates in discussions and decisions pertaining to their own appointment.
We recognise that Mark Wood has served as Chair of the prevalent PensionBee Group entity since 2016
(including as Chair of the listed entity since 2021). The extension of his tenure to 2027 means that by then
he would have served as Chair for a total of 11 years. This will be two years over the recommended nine-
year period stated in Provision 19 of the Code: ‘The chair should not remain in post beyond nine years
from the date of their first appointment to the board.’
Whilst this is not a matter of non-compliance against the Code for the financial year ended 31 December
2023, we believe it is important to highlight and explain. The Nomination Committee, excluding Mark, has
assessed that Mark continues to demonstrate objective judgement and promote constructive challenge
as well as bringing his skills, knowledge and extensive experience to his role as Chair. Mark has played a
vital and leading role in steering the Company from start-up to IPO and into its early years as a successful
listed business. As such, and as a matter of good governance, maintaining continuity of leadership is
vital in the short to medium term, whilst also providing time for consultation with shareholders and a
considered and orderly succession planning process. In coming to this conclusion we have reviewed
Financial Reporting Council materials and best practices in this area.
Non-Executive Directors
Conflicts of Interest
Name
Date of Appointment
Mark Wood
Mary Francis
2 February 202110
2 February 202111
Michelle Cracknell
2 February 202112
Lara Oyesanya
21 April 202213
Notice Period by
Notice Period by
Company (months)
3 months
Director (months)
3 months
3 months
3 months
3 months
3 months
3 months
3 months
Rules concerning Directors’ conflicts of interests are set out in the Company’s Articles of Association
and the Company’s Directors’ Conflict of Interest Policy. All other significant commitments and
potential conflicts of interest which a Director may have are required to be disclosed both before
appointment and on an ongoing basis, and arrangements would be put in place, as and when
it is considered appropriate, to manage conflicts, including any which result from significant
shareholdings. All Directors are generally asked to confirm that they do not have any conflicts of
interest at the beginning of each Board and Committee meeting.
Both the Non-Executive and Executive Directors are subject to annual re-election by the Company at
each annual general meeting. The Non-Executive Directors (including the Chair) do not have service
contracts, but are instead appointed by letters of appointment.
Each Non-Executive Director appointment is for a fixed three-year term which may be terminated at any
time with three months’ written notice. Non-Executive Directors may be invited by the Company to serve
for a further three-year period.
10. Director’s term runs until 20 April 2024.
11. Director’s term runs until 20 April 2024.
12. Director’s term runs until 20 April 2024.
13. Director’s term runs until 18 May 2025.
120
Whistleblowing
The Company’s Whistleblowing Policy outlines the Company’s approach to whistleblowing. The
policy recognises that whistleblowing is an important activity that helps firms to learn about and
resolve problems before they escalate further. Whistleblowing also helps the FCA regulate the
financial services sector and information provided by whistleblowers has contributed to fines,
permissions changes and other interventions. The aim of the policy is to ensure the Company has
a fit-for-purpose whistleblowing procedure that encourages employees to come forward with
disclosures without fear of reprisal. The Company’s whistleblowing champion is Michelle Cracknell,
Chair of the Audit and Risk Committee.
PensionBee Group plcCorporate Governance Report Stakeholder Engagement
Relations with Shareholders
The Directors recognise their duty under Section 172 of the Companies Act to consider the interests
The Board is committed to proactive and constructive engagement with the Company’s shareholders
of stakeholders, and the nature of our business means that the interests of our stakeholders (including
and is keen to ensure that shareholder views are well-understood. The Company’s shareholders
customers, employees, suppliers, shareholders, our communities, government and regulators and
include shareholders who had invested in the Company when it was a private business, institutional
our planet) are front of mind in the Board’s decision-making process. Further information relating
investors, customers (some of whom became shareholders at the time of the Company’s listing) and
to how we engage with our stakeholders, together with the Section 172 Statement, are set out on
our employees who either are, or will become, shareholders in PensionBee.
pages 60 to 76 of the ESG Considerations section of the Strategic Report.
Many of the stakeholder relationships are managed by the CEO and other members of the Executive
analyst engagement. Virtual one-to-one investor meetings and roadshows are structured around the
Management Team, with regular updates provided to the Board and Committees as appropriate. The
regular communication of financial and operational results, including quarterly trading statements
Chair of the Board or Committees will offer support on any significant matters relating to their areas
and presentations to investors and analysts, with recordings being made available on the Company’s
and direct engagement where appropriate.
website. Regular engagement aims to ensure that shareholders and sell-side analysts understand the
Investor relations is managed by the CEO, CFO and the CCO, who regularly drive shareholder and
Company’s investment case, strategy and performance.
Employee Engagement
The Board engaged with the wider workforce during the year via existing channels and initiatives that
topics, such as financial performance and environmental, social and governance considerations.
are in place across the Company to ensure that our employees are listened to and well represented,
Feedback from external advisors to the Company, including its corporate brokers and press agency,
including (but not limited to):
who are actively engaged with the investor and analyst communities, is also given as required.
Regular updates are provided to the Board so that they are well-informed of views on a variety of
• Board members carried out deep dive sessions into business areas of interest,
providing employees with the opportunity to meet and engage with the
Board, and enabling the Board to gain valuable direct insights.
• Participation from Board members in diversity events.
• Review of Annual Diversity, Inclusion, Equality & Support Survey of
all employees, to seek feedback and measure progress.
Further information relating to how we engage with our shareholders is set out on pages 60 to 66 of
the ESG Considerations section of the Strategic Report.
Going Concern and Viability Statement
The Directors have assessed the viability of the Group over a period that exceeds the 12 months
• Board members attended the Champions Awards Ceremony to show support for employees.
required by the going concern provision. Details of that assessment are set out in the Viability
Statement on page 102 of the Strategic Report.
The Board was kept apprised of employee matters and engagement through updates provided by
the Senior Independent Director, the CEO and other members of the Executive Management Team
Annual General Meeting
at Board and Committee meetings.
Further detail relating to how we engage with our employees is set out on pages 36 to 47 of the Our
(‘AGM’), which will be held on 16 May 2024. The Notice of the 2024 AGM will be distributed to
People section and pages 60 to 66 (Stakeholder Engagement) within the ESG Considerations section
Shareholders and made available on the Company’s website, and where appropriate, by an
of the Strategic Report.
announcement via a Regulatory Information Service, if any changes are required to be made to the
The Board looks forward to welcoming shareholders to the Company’s Annual General Meeting
AGM arrangements.
Mark Wood CBE
Non-Executive Chair
13 March 2024
121
Annual Report and Financial Statements 2023Corporate Governance Report 4 Nomination Committee Report
Mark Wood CBE
Chair, PensionBee Nomination Committee
Dear fellow shareholder,
On behalf of the Board, as Chair of the Nomination Committee
('Committee'), I am pleased to present the Nomination Committee
Report for the year ended 31 December 2023. This report is intended
to provide shareholders with insight into the areas of focus considered
and the nature of the work undertaken by the Nomination Committee.
This year the Committee has given its time and attention to the
Company’s Diversity, Inclusion & Equality Policy and the results of its
annual survey, reviewing the progress made against its goals - these
are matters which sit critically at the heart of our business and are
key to ensuring that we continue to look after our people and foster
an inclusive environment that allows all of our team to thrive and to
ultimately serve our customers.
Roles and Responsibilities
The role of the Nomination Committee is set out in its terms of reference, which is available on the Company’s website. The
duties of the Nomination Committee include, but are not limited to the following:
Duties of the Nomination Committee
Regularly reviewing the structure, size and composition of the Board (including skills,
knowledge, experience and diversity) and recommending changes
Putting in place and reviewing Board and senior management succession plans and
appointments and overseeing the development of a diverse pipeline
Taking an active role in setting and meeting diversity objectives and strategies and monitoring their impact
Overseeing the hiring and evaluation process for new Directors and
ensuring they receive a full, formal and tailored induction
We have also focused on further evolving our succession plan,
Reviewing the leadership needs of the organisation with a view to ensuring the continued
deepening and broadening the exercise to not only consider the
ability of the organisation to compete effectively in the marketplace
Board, and the full Executive Management Team, but importantly to
examine in more detail the strength of the pipeline of talent that sits
Reviewing the results of the Board evaluation process that relate to the composition of the Board and succession planning
across the next layers of management across the Company.
Reviewing annually the time commitment required from Non-Executive Directors
We have continued to strengthen and evolve our governance
framework. And lastly, we have reviewed the key action items from the
2022 board evaluation process, and have developed and completed
our Board and Committee evaluation process for 2023.
122
PensionBee Group plcCorporate Governance Report Committee Members and Attendance
Committee Member
Position
Eligible
Meetings
Attended
Meetings
Committee Key Activities
2023 Key Activities
Reviewing Committee Terms of Reference
Mark Wood
Chair of the Committee
Mary Francis
Senior Independent Director
Michelle Cracknell
Independent Non-Executive Director
Lara Oyesanya
Independent Non-Executive Director
Romi Savova
Chief Executive Officer
3
3
3
3
3
3
3
3
3
3
The Nomination Committee must comprise not less than three Directors, with the majority of
Reviewing Committee Work Plan for 2023 and approving Committee Programme for 2024
Reviewing membership of Board and Committees
Reviewing time commitment from Non-Executive Directors
Reviewing the Board Succession Plan
Reviewing the Board Evaluation process
Completing the Nomination Committee evaluation process
members being Non-Executive Directors who are independent. Mark Wood, Michelle Cracknell,
Reviewing the Board Charter of Expectations
Mary Francis, Lara Oyesany and Romi Savova were all members of the Nomination Committee for the
year to 31 December 2023. Further biographical details are set out on pages 107 to 113 of the Board
Reviewing the Directors’ Conflict of Interest Policy and Register
of Directors and Executive Management section of the Corporate Governance Report.
Reviewing updates on the Culture Programme and Diversity, Inclusion & Equality
Meetings are held at least twice a year at appropriate times and otherwise as required. The
Committee met three times across the year to 31 December 2023, with all meetings being held by
video conference. In addition to the Committee members, other regular attendees included the CTO
and the CCO, the latter being the Executive Management sponsor of the Committee.
After each meeting, the Chair of the Committee reports to the Board on the Committee’s proceedings
in respect of all matters within its duties and responsibilities.
Board Composition
During the year the Committee completed its annual review of the composition of the Board and
Committees, the independence of Non-Executive Directors and their time commitment. As part of
this process a Board skills matrix was developed and applied to more methodically measure against
the current and future needs of the Company as they evolve. The Nomination Committee confirmed
to the Board that it remained satisfied that the balance of skills, experience, independence and
knowledge on the Board and Committees was appropriate.
Governance Framework
We have evolved our corporate governance framework to develop a publicly available Charter
of Expectations and Role Profiles (‘Charter’). Implementing the Charter helped to streamline
documentation and now provides a centralised reference point and framework for appointments,
inductions and on-going performance and effectiveness reviews.
We have also enhanced how we govern conflicts of interest, through the implementation of a
Directors’ Conflict of Interest Policy and an associated register with a process for keeping this updated.
123
Annual Report and Financial Statements 2023Corporate Governance Report Succession Planning
Board Evaluation
In relation to succession planning, the Nomination Committee oversaw the continued evolution of
During the year the Board addressed the feedback from the 2022 Board Evaluation.
the succession plan, which was expanded this year to provide a deeper look into the structure of the
operations of the business and to provide insight into the depth and strength of the talent pipeline
The Nomination Committee agreed that the Company’s annual board evaluation for 2023 should
that reports into the Executive Management team.
remain consistent with the previous year’s approach. A formal and rigorous internal performance
evaluation was undertaken in respect of the Board and each of its Committees, covering processes
Given the nature of the business as a founder-led Company, and given that there were no planned
that underpin the Board and Committee effectiveness, Board and Committee constitution
departures or retirements, the succession plan continued to primarily focus on scenarios such as
and commitment, Board dynamics, culture, values and strategy and stakeholder oversight. The
the unexpected incapacity of the Non-Executive Directors, the Executive Directors, the Executive
evaluations were conducted by way of online questionnaires, with responses provided to the Chair
Management team and the Company Secretary.
and the Company Secretary, followed by further calls between each of the individual Directors and
the Chair and the Company Secretary. A summary of the responses was provided and discussed at
It was agreed that were the Chair of the Board to become incapacitated, the Senior Independent
the Board’s meeting in December 2023. The Senior Independent Director met with the Directors to
Director would fill this role on an interim basis, and that if one of the Independent Non-Executive
review the Chair’s performance.
Directors was to become incapacitated, another Non-Executive Director would cover the position
of Chair of the relevant Committee as required. If a Non-Executive became unable to perform their
The results of the Board evaluation continued to indicate strong performance and effectiveness of
duties, the Company would need to ensure that the Independent Director majority was maintained,
the Board and Committees. It was noted that they were well chaired and supported by the Company
and as such, the Company would seek to look to the Board’s own pipeline of candidates and/or
Secretarial department and by the Executive Management sponsors. The corporate governance
appoint a recruitment specialist to assist with completing the recruitment process optimally and
structure was considered to be commensurate with the Company’s size and requirements.
expediently.
Importantly, the dynamic between the Non-Executive Directors and the Executive Directors was
considered to be strong and professional, with the appropriate level of constructive challenge and
Succession plans and process steps were agreed with regards to the unexpected incapacity of any of
support being provided.
the three Executive Directors, with the approach dependent on the anticipated period of absence.
In regards to short-term periods of absence, plans are in place to support each of the relevant roles
Key themes that surfaced for focus and development included:
internally with the support of the Chair. As regards any periods of longer-term absence, the Board
would consider both internal candidates and external recruitment as appropriate at that point in
time.
•
•
Further strengthening the skills or knowledge at a Board level in areas including cyber risk and
marketing.
Increasing the focus on strategic and commercial matters.
Succession plans for the Executive Management team and the Company Secretary were also agreed,
• Continuing to review the key risks to the business.
having more closely examined the breadth and depth of the Company’s pipeline of talent against
• Continuing to consider opportunities to receive insights from and engage with third parties.
the responsibilities of each person. A contingency plan was agreed for each role/department to
ensure business continuity in the case of unexpected incapacity. Generally, in the case of short-term
absence, coverage would be provided by other Executive Management team members, or direct
• Continuing to progress colleague engagement initiatives.
• Continuing to evolve the Company’s succession plan.
reports with Executive Management oversight. For longer term absences, the approach would be
The Nomination Committee will consider adopting an externally facilitated Board evaluation in due
to either fill the position internally, reallocate the role and responsibilities to other existing Executive
course, aligning with the UK Corporate Governance Code requirement for FTSE 350 companies to
Management team members or hire externally as appropriate.
carry out an externally facilitated evaluation of the Board at least every three years.
The Nomination Committee was satisfied that the succession plan and contingency arrangements
in place were appropriate for the Company’s stage of development and in line with its risk appetite.
We agreed that we would continue to evolve the succession plan further each year as required and
to consider development plans for high performing individuals as necessary.
124
PensionBee Group plcCorporate Governance Report Diversity, Inclusion & Equality
Nomination Committee Evaluation
PensionBee’s vision is to live in a world where everyone can look forward to a happy retirement.
During 2023, the Board carried out an internally facilitated Board Effectiveness evaluation that
As such, the Company’s approach to diversity, inclusion and equality is centred around building a
included an assessment of the Committee’s performance. I am pleased that this concluded that
team that is reflective of society as a whole and that is therefore reflective of our diverse customer
we continue to operate effectively. The Board was satisfied that the Committee’s composition was
base. PensionBee welcomes everyone regardless of gender, race, religion, size, age, sexuality or
appropriate with the right balance of skills and experience among its members.
disability and aims to create an inclusive working environment in which everyone has equal access
to opportunities and is treated with fairness and dignity. The Company is committed to promoting
Nomination Committee Priorities for 2024
equality, diversity and inclusion, preventing unlawful discrimination and ensuring that all colleagues
feel respected and safe at work. The Company promotes diversity, inclusion and equality through
For 2024, the Committee will focus its work around the further evolution of its succession plan
measures such as training, anonymised hiring and promotion cycles and inclusion in the Company’s
and team development, continuing to consider any actions that need to be taken with respect to
performance matrices, but also importantly through its annual diversity programme which is led by
supporting the business, with a lens of increasing diversity as needed.
the Executive Management Team.
During the year, the Company has proudly achieved: 51% female and minority gender representation
Appointment of Directors
across its entire employee base, 50% at Executive Management level and 57% at Board level
The Committee is satisfied with the Board’s effectiveness and has recommended that all members of
achieving the Company’s broad goal to achieve gender balance at all levels and exceeding the FCAs
the Board be put forward for appointment at the 2024 Annual General Meeting.
Mark Wood CBE
Chair of the Nomination Committee
13 March 2024
requirements for companies to have at least 40% women on the board and at least one senior board
position being held by a woman.14 The Company also achieved 37% Asian/Black/Mixed/Multiple/
Other ethnic representation across its entire employee base, 10% at Executive Management level
and 14% at Board level, in line with the FCA’s requirement for at least one board member being
from an Asian/Black/Mixed/Multiple/Other ethnic background.14 Appointments to the Board and
Committees are based on merit, taking into consideration the individual’s skills, knowledge and
experience, but there is also a focus on promoting diversity among the Board and Committees so as
to ensure the composition is appropriately balanced.
As part of the work of the Nomination Committee, we reviewed the Diversity, Inclusion and Equality
Policy, together with the results of the Company’s annual Diversity, Inclusion, Equality & Support
Survey, reviewing progress made across the year and discussing next steps and improvements that
could be made. We also examined the FCA’s consultation paper on diversity and inclusion in the
financial sector to consider what the implications would be going forward on the way we report.15
Further detail is set out on pages 60 to 66 (Stakeholder Engagement) witin the ESG Considerations
section and on pages 36 to 47 of the Our People section of the Strategic Report.
14. Chapter 9 of the Listing Rules, specifically LR 9.8.6R(9) states that at least 40% of individuals on the board should be women, at least
one at least one of the senior positions on the board (chair, chief executive, senior independent director, or chief financial officer) should
be held by a woman, and at least one individual should be from a minority ethnic background. At PensionBee, the Chief Executive
Officer role has been filled by a woman since the Company’s inception in 2014, the Senior Independent Director role has been filled by
a woman since November 2020 and there has been one board member from a minority ethnic background since April 2022. Supported
by analysis from PensionBee’s HR information system, December 2023.
15. On 25 September 2023, the FCA published CP23/20: Diversity and inclusion in the financial sector - working together to drive change,
setting out its proposed regulatory framework on Diversity and Inclusion within the sector: fca.org.uk/publication/consultation/cp23-20.pdf
125
Annual Report and Financial Statements 2023Corporate Governance Report 5 Investment Committee Report
Mark Wood CBE
Chair, PensionBee Investment Committee
Dear fellow shareholder,
Roles and Responsibilities
On behalf of the Board, as Chair of the Investment Committee (‘Committee’), I am pleased to present
The role of the Investment Committee is set out in its terms of reference, which is available on the
the Investment Committee Report for the financial year ending 31 December 2023. This report
Company’s website. The duties of the Investment Committee include, but are not limited to the following:
provides shareholders with insight into the areas of focus considered and the nature of the work
undertaken by the Investment Committee.
2023, whilst not without volatility and inflation, has been a better year for long term savers, who have
benefited from growth in global equity markets and a much improved outlook for bonds. During the
Duties of the Investment Committee
Reviewing the available range of product options for customers,
including in accumulation and decumulation
year, the Investment Committee focused time and attention on reviewing the PensionBee pension
Reviewing the selection or change of plans and asset managers
product offering, monitoring the associated performance and risk profiles and ensuring that we
continue to offer our customers value for money. Independent assessment of our plan range by
Reviewing the choice architecture available to customers
AgeWage concluded that our plans offered better value compared to the average UK pension in
Reviewing the pricing of each plan relative to peers
2023. Our second full Governance Advisory Arrangement (‘GAA’) assessment, led by ZEDRA Trustees,
concluded that the PensionBee Investment Pathways product decumulation range continued
Reviewing the performance of each plan relative to peers
to provide excellent value for money, despite 2022’s extreme market volatility. The Investment
Reviewing the risk profile of each plan
Committee has continued to ensure our asset managers are held responsible for providing the
highest levels of service and security for our customers.
Additionally, we are pleased to have overseen the expansion of our responsible investment offering,
which has enabled our customers to invest in companies addressing the world’s great social and
Reviewing the processes around customer communication and support
Reviewing the administration, service, and core financial transactions
Reviewing the environmental, social and governance considerations
environmental problems through our Impact Plan, another customer-led innovation for the UK
Reviewing the retirement offering
market. We also enabled Voting Choice, directing proxy voting for 85% of the investment plan range.16
We have continued to work closely with our asset managers to expand the scope of ESG screening
in line with customer demand and with a focus on the continuous evolution of our investment plan
range, to ensure it remains market-leading.
16. Reflects 85% of the Assets under Administration across the Tailored, Tracker and 4Plus investment plans as at 31 December 2023. See
definitions on pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
126
Reviewing fund manager terms and performance, including service
levels, breaches and changes to terms and conditions
Overseeing the selection process for the appointment of, and ongoing
relationship with, the Governance Advisory Arrangement
PensionBee Group plcCorporate Governance Report The Investment Committee assists the Board in discharging its responsibility for oversight of
Committee Key Activities
PensionBee’s investment proposition. The Investment Committee is responsible for reviewing the
Company’s product offering. This includes the range of options available to customers, the selection
2023 Key Activities
or change of asset managers, the pricing of the plans, as well as the performance and the risk profile
of each plan. We also review the performance of our asset managers.
The Investment Committee assists the Board, including by making recommendations regarding
the appointment and removal of asset managers, coordinating the tender process, approving
Ensuring our plans and plan range offer value for money
2022 Price and Value Report (as part of the FCA’s Consumer Duty)
Confirming the plans continued to offer value for money
remuneration and overseeing the relationship with the GAA, which assesses the design and
Reviewing our accumulation and de-culmulation plan ranges
implementation of PensionBee’s investment pathways solution.
Committee Members and Attendance
Committee Members
Position
Governance Advisory Arrangement review of value for money of Investment Pathways plan range,
led by ZEDRA Trustees (scored excellent for the second year running)
Comparing value across plans using AgeWage scoring, as part of our ongoing value for money
Eligible
Meetings
Attended
Meetings
assessment
Monitoring fund manager performance
Mark Wood
Chair of the Committee
Michelle Cracknell
Independent Non-Executive Director
Lara Oyesanya
Independent Non-Executive Director
Mary Francis
Romi Savova
Senior Independent Director
Chief Executive Officer
3
3
3
3
3
3
3
3
3
3
The Investment Committee must comprise not less than three Directors, of which at least two must
Assessing asset manager performance against our contractual terms
Annual review of duties and responsibilities to report back to the Board
Transition to electronic trading with asset managers via Calastone
Reminding all our managers of their legal obligations and liability with regard to customer funds
ESG integration
Expanding ESG integration in the core plan range
be Non-Executive Directors who are independent. Further biographical details are set out on pages
Launching the Impact Plan
107 to 113 of the Board of Directors and Executive Management section of the Corporate Governance
Report.
Implementing and voting using the ISS SRI Voting Policy (for our Tailored, Tracker and 4Plus Plans)
Meetings are held at least three times a year at appropriate times and otherwise, as required. The
Investment Committee met three times during the year to 31 December 2023, with all meetings
Surveying customers to ensure our plans align with their ESG views
being held by video conference. In addition to the Committee members, other regular attendees
Disclosed our Scope 3 emissions for the portfolio and published our net zero targets in line with
included the Chief Engagement Officer and other members of the Executive Management Team.
1.5C Paris Agreement
Completing our second year of TCFD
The Chair of the Committee reports to the Board on the Committee’s proceedings in respect of all
Investment Committee Evaluation
matters within its duties and responsibilities on an ongoing basis, as required.
During 2023, the Board carried out an internally facilitated Board evaluation that included an
assessment of the Committee’s effectiveness and performance. I am pleased that this concluded that
we continue to operate effectively in our oversight of the Company’s investment proposition and
asset managers’ performance. The Board was satisfied that the Investment Committee’s composition
was appropriate with the right balance of skills and experience among its members.
127
Annual Report and Financial Statements 2023Corporate Governance Report Investment Committee Priorities for 2024
For 2024, the Committee will focus its work on
reviewing the plan range to ensure we continue
to offer an optimal product range that prioritises
customer needs and desired outcomes.
Now that we have made public our net zero
commitments, the Investment Committee will
oversee the Target Review Process, monitoring
any changes that may impact our ability to
meet Scope 3 emissions reduction targets, in
line with the goals of the 1.5C Paris Agreement.
This includes rigorous oversight of the asset
managers and plans, keeping pace with the
developing understanding of climate science.
Finally, we will conduct our third GAA assessment
and ongoing value review of the plan range
through 2024. We will use our external AgeWage
scoring to ensure our plans remain excellent
value for our customers and that they continue
to meet our customers’ evolving needs and
preferences.
Mark Wood CBE
Chair of the Investment Committee
13 March 2024
I’ve transferred a few pensions and each has
been done with ease. I’ve also been kept up
to date at each stage of the process.
128
Suzette | Age 46
PensionBee customer since 2021
PensionBee Group plcCorporate Governance Report 6 Audit and Risk Committee Report
Michelle Cracknell CBE
Chair, PensionBee Audit and Risk Committee
Dear shareholder,
Role and Responsibilities
On behalf of the Board, as Chair of the Audit and Risk Committee (‘Committee’), I am pleased to
The role of the Audit and Risk Committee is set out in its terms of reference, which is available on
present the Audit and Risk Committee Report for the year ended 31 December 2023.
the Company’s website. The duties of the Audit and Risk Committee include, but are not limited to:
This report highlights the work that has been performed over the year and outlines how we have
Duties of the Audit and Risk Committee
discharged the responsibilities delegated to the Committee by the Board.
Over the year, the Committee focused on its key responsibilities in respect of assisting the Board by
Monitoring the integrity of the financial statements of the Group and reporting
to the Board on significant financial reporting policies and judgements
overseeing the Group’s financial reporting, the effectiveness of the financial control environment
Reviewing the content of the annual report and financial statements and
and the audit tender process and by providing oversight of the external auditor relationship and
advising the Board on whether it is fair, balanced and understandable
processes. The Committee also assessed the independence and objectivity of the external auditor.
The Committee assists the Board in its oversight of risk within the Group and protection of the
Overseeing the relationship with the external auditor and making recommendations to
the Board regarding the appointment and re-appointment of the external auditor
Company’s shareholders’ interests in relation to the integrity of the Group’s financial reporting and
Reviewing and approving the annual audit plan
the processes and controls that support it. It has a particular focus on monitoring the effectiveness
of, and improvements being made to, the Group’s risk management framework. This includes the
Assessing the external auditor’s independence and objectivity
documentation and communication of the Group’s policies, the activities of the First Line and Second
Reviewing effectiveness of external audit process, taking into consideration
Line of defence in managing risks in accordance with the Group’s risk appetite and the auditing
relevant UK professional and regulatory requirements
activities with respect to regulatory and information security compliance. As is customary, the Board
as a whole remains responsible for the Group’s risk management and strategy, and for determining
the appropriate risk appetite.
Further information on the Committee’s activities is provided as follows.
Assisting the Board with the definition and execution of a risk
management strategy, risk policies and current risk exposure
Reviewing the adequacy and effectiveness of the Group’s
risk management and internal control system
Reviewing the adequacy and security of the Group’s whistleblowing arrangements
and procedures related to fraud, bribery and money laundering
129
Annual Report and Financial Statements 2023Corporate Governance Report Committee Members and Attendance
Committee Key Activities
Committee Member
Position
Eligible
Meetings
Attended
Meetings
2023 Key Activities
Financial Statements
Michelle Cracknell
Chair of the Committee
Mary Francis
Senior Independent Director
Lara Oyesanya
Independent Non-Executive Director
7
7
7
7
7
6
The Audit and Risk Committee comprises three independent Non-Executive Directors as per the UK
Corporate Governance Code. All members of the Committee are also members of the Remuneration
Committee.
Michelle Cracknell, Mary Francis and Lara Oyesanya were members of the Audit and Risk Committee
for the year ended 31 December 2023. Michelle Cracknell is a qualified actuary with more than
30 years’ experience in financial services and more than 25 years’ experience as a Board Director,
including over seven years’ experience as an Audit and Risk Committee Chair. Further biographical
details are set out on pages 107 to 113 of the Board of Directors and Executive Management section
of the Corporate Governance Report.
Meetings are held at least four times a year at appropriate times in the financial reporting and
audit cycle, and otherwise as required. The Committee met seven times during 2023. In addition
to the Committee members other regular attendees included the Chair, Chief Executive Officer,
Chief Financial Officer, Chief Risk Officer, Chief Technology Officer, Chief Corporate Officer and the
Finance Director. The external auditor, Deloitte LLP (‘Deloitte’), also attended on most occasions. Lara
Oyesanya’s one instance of absence at the Audit and Risk Committee meeting held in February 2023
related to a meeting that was rescheduled with limited notice to a date that conflicted with Lara’s
other pre-arranged commitments and was therefore out of her control. After each meeting, the Chair
of the Committee reports to the Board on the Committee’s proceedings in respect of all matters
within its duties and responsibilities.
130
Reviewing the 2023 reporting timeline:
The Committee considered and concluded that the 2023 reporting timeline would meet the
requirement for timely reporting to shareholders and advised the Board on its reasonableness.
Reviewing the Annual Report and Financial Statements for
fair, balanced and understandable reporting:
The Committee assessed whether the Group achieved fair, balanced and understandable
reporting in its Annual Report and Financial Statements 2023, informing its review by challenging
management on the accuracy, transparency and completeness of disclosures, considering
the content and tone used, and reviewing the external auditor’s report to the Committee. The
Committee considered the narrative section of the Annual Report and Financial Statements 2023
to ensure its consistency with the information reported and that appropriate weight had been
given to both positive and negative aspects of the performance of the Group. Having evaluated
all of the available information, the assurances provided by management and underlying
processes used to prepare the Group’s financial information, the Committee concluded, and
advised the Board as such, that the Annual Report and Financial Statements were fair, balanced
and understandable and established the context necessary to give shareholders and other
stakeholders a balanced view between successes, opportunities, challenges and risks.
Reviewing the Interim Report for fair, balanced and understandable reporting:
The Committee assessed whether the Group achieved fair, balanced and understandable reporting
in its Interim Report 2023, informing its review by challenging management on the accuracy,
transparency and completeness of disclosures, considering the content and tone used, and
reviewing the external auditor’s report to the Committee. The Committee considered the narrative
section of the Interim Report 2023 to ensure its consistency with the information reported and
that appropriate weight has been given to both positive and negative aspects of the performance
of the Group. Having evaluated all of the available information, the assurances provided by
management and underlying processes used to prepare the Group’s financial information, the
Committee concluded, and advised the Board as such, that the Interim Report 2023 was fair,
balanced and understandable and established the context necessary to give shareholders and
other stakeholders a balanced view between successes, opportunities, challenges and risks.
Reviewing the going concern assumption and liquidity risk:
The Committee assessed the appropriateness of the going concern assumptions by reviewing
the stress testing assumptions and results, the capital and liquidity forecast and the Group’s
strategy. The Committee concluded that the financial statements should be prepared on a going
concern basis and that there were no material uncertainties that would impact the Group’s ability
to continue in operational existence for the foreseeable future which would require disclosure.
The Committee recommended the going concern assumptions and liquidity risk to the Board.
PensionBee Group plcCorporate Governance Report External Audit
Reviewing the management representation letter:
The Committee reviewed the content of representation by management to the external
auditor and concluded that sufficient representation was achieved as requested by the
auditor. The management representation letter was recommended to the Board.
Reviewing the Committee terms of reference:
The Committee reviewed its terms of reference to confirm that they were still reflective
of the most up to date UK Corporate Governance Code requirements and the Group’s
risk profile. No material changes were deemed necessary. The Committee will continue
to monitor any future changes to the UK Corporate Governance Code and the
Group’s risk profile and ensure that its terms of reference are kept up to date.
Reviewing the half-year audit programme, auditor’s report on the financial
statements and auditor’s report to the Audit and Risk Committee:
The Committee met with key members of the Deloitte audit team to discuss the 2023 interim audit
review plan, materiality and the auditor’s areas of focus. The Committee had detailed discussions
Risk Management and Internal Controls
Reviewing principal risks and uncertainties:
The Committee reviewed the Group’s principal risks and uncertainties to confirm their
with the auditor on the audit report and the auditor’s report to the Committee, with most of
completeness and the assessed potential impact on the Group operations and financial
the focus being on the audit procedures performed and the findings. The Committee approved
performance. The Committee considered the identified principal risks and uncertainties to
the interim audit plan and confirmed its satisfaction with the reports issued by the auditor.
be complete, and that the Group’s strategy was appropriate in respect of such risks.
Reviewing the full year audit programme, auditor’s report on the financial
statements and auditor’s report to the Audit and Risk Committee:
The Committee met with key members of the Deloitte audit team to discuss the 2023 full year
Reviewing overall internal controls and risk management systems:
The Committee reviewed the appropriateness of the risk management systems,
and design and operating effectiveness of key controls through regular reports and
audit plan, materiality and the auditor’s areas of focus. The Committee had detailed discussions
updates from management. Audit findings on internal controls were discussed with
with the auditor on the audit report and the auditor’s report to the Committee, with most of
the auditors and management. The Committee considered the Group’s internal
the focus being on the audit procedures performed and the findings. The Committee approved
controls and risk management systems to be sufficient and appropriate.
the interim audit plan and confirmed its satisfaction with the reports issued by the auditor.
External audit tender process
Deloitte is the Group’s external auditor, with 2023 being their third financial year as the Group’s
Reviewing whistleblowing and anti-bribery and corruption policies:
The Committee reviewed the whistleblowing and anti-bribery and corruption policies, giving
consideration to the changes in the regulatory landscape and changes in the business since
external auditor. The Group is required to have a mandatory external audit tender after ten
2022. The Committee considered the existing policy sufficient and appropriate for the Group.
years. Ahead of the mandatory rotation, the Committee oversaw a formal competitive external
audit tender process. Subject to member approval at the 2024 Annual General Meeting, in
November 2023 the Committee recommended to the Board Deloitte for reappointment. For
more information on the external audit tender process, refer to the External Audit section below.
Governance
Reviewing the Audit and Risk Committee 2024 meeting calendar:
The Committee reviewed its 2024 meeting calendar, giving consideration to its duties and
Reviewing the related parties list:
The Committee monitors the related parties list which is used to assess the accuracy
of disclosures by management in the financial statements. The list was considered
complete based on inquiries with Executive Management and the Board.
Approving the 2024 risk management plan:
The Committee approved the 2024 risk management plan, following a detailed review of
the plan presented by the Risk Management Team. The Committee considered the risk
responsibilities as set out in the UK Corporate Governance Code. The Committee concluded that
management plan to be appropriate and sufficient to address the risks applicable to the Group.
its calendar had sufficient and appropriate content to enable it to discharge its responsibilities.
Undertaking the Committee effectiveness evaluation:
The Committee conducted an effectiveness review as part of the evaluation process and
was satisfied that the Committee composition was appropriate, there was an adequate
balance of skills and experience, and the Non-Executive Directors remained independent. The
effectiveness review confirmed that the Committee was operating effectively with appropriate
levels of engagement with the Board, external auditor and Executive Management.
131
Annual Report and Financial Statements 2023Corporate Governance Report
Financial Reporting
Group Financial Statement Reporting
Income Taxes
The Committee considered the Group’s tax position and the accounting
standard requirements on recognition of a deferred tax asset. The Committee
reviewed the policy and recommended it to the Board for approval.
One of the core responsibilities of the Audit and Risk Committee is to ensure the integrity of the
Leases
The Committee reviewed the basis of accounting for all types of leases;
financial statements of the Group. For the financial year, the Audit and Risk Committee:
short term and long term, low value and high value leases. The Committee
• Reviewed the Interim Report and Annual Report and Financial Statements and recommended
approval to the Board.
• Reviewed the completeness of the financial reporting disclosures.
• Reviewed the application and appropriateness of accounting policies.
• Reviewed the going concern assumptions and viability statement.
Significant Matters Considered by the Committee in Relation to the Financial Statements
Significant accounting policies and accounting judgements are identified by management and the
external auditor and are reviewed and challenged by the Committee. The significant accounting
policies and judgements considered by the Committee, and details of how they were addressed, in
respect of the year ended 31 December 2023 are set out below:
recommended the policy to the Board for approval.
Investment in
The Committee reviewed the assessment for impairment of the investment
Subsidiary Valuation
held by the Company in the Subsidiary. The Committee recommended
the investment in the subsidiary valuation to the Board for approval.
FRS 102 for PensionBee
Due to practical reporting considerations, the Committee reviewed the
Group plc Standalone
existing accounting frameworks mix within the Group. The Committee
Financial Statements
recommended the approval of the continued adoption of FRS 102 by
PensionBee Group plc standalone accounts to the Board.
In each case the Committee reviewed and challenged management on the appropriateness of these
accounting policies and how they were being applied to the Group’s financial statements. Having
reviewed all the available information, the Committee concluded that the accounting policies are
being appropriately applied to the Group’s financial statements.
Areas for Consideration Committee Review and Conclusion
Revenue Recognition
The Committee considered the relevant revenue streams and recognition
Going Concern and Viability Statement
criteria stipulated
in
the accounting standard. The Committee
recommended the policy to the Board for approval.
Contract Assets
The Committee challenged the application of IFRS 15 (Revenue from
Contracts with Customers) in relation to customer acquisition costs
(incremental costs of obtaining a contract). An analysis of the different
types of customer acquisition costs was undertaken by management
and reviewed by the Committee. The Committee was satisfied with the
application of the accounting policy and recommended it to the Board
for approval.
Share-based Payment
The Committee considered the grant date fair value, vesting conditions,
initial recognition and subsequent measurement of share options as set
out in the accounting standard. The Committee recommended the policy
to the Board for approval.
Research and
Development
The Committee reviewed the current accounting treatment of Research
and Development, the relevance, and whether an intangible asset should
be recognised in accordance with IAS 38 (Intangible Assets). The Committee
reviewed the policy and recommended it to the Board for approval.
132
In addition to considering significant accounting policies and judgements, the Committee plays an
important role in the production of the Annual Report and Financial Statements and the Interim
Results. This includes reviewing and challenging the assumptions that support the use of the going
concern basis for the preparation of the financial statements and the statement given by the Directors
as to the Group’s longer-term viability.
The Committee reviewed detailed management analysis elaborating on the going concern
assumptions and the Viability Statement. This included the KPIs, profit and loss, cash flow, balance
sheet and capital forecasts on a monthly basis. The Committee considered additional stress tests,
including a sharp decline in equity markets, the worsening of conversion and lower transferred-in
pension pot sizes, all of which could potentially be caused by the increased cost of living in the UK,
geopolitical disruption and/or interest rate rises. Furthermore, the Committee considered mitigating
actions that could be taken by management in the stress scenarios and considered the growing
strength of the Group’s financial position over 2023 (in light of it achieving ongoing Adjusted EBITDA
profitability in the fourth quarter of 2023) and given the strength of PensionBee’s positioning within
the UK competitive landscape.
PensionBee Group plcCorporate Governance Report After due consideration, the Committee recommended to the Board that it was appropriate for the
Risk Appetite
Group to adopt the going concern basis of accounting in the preparation of the Annual Report and
Financial Statements 2023 and that based on the current information, the Directors could make the
The Risk Governance Framework has been established and approved by the Board. It contains the
Viability Statement as shown on page 102 of the Strategic Report.
Risk Appetite Statements which set out the acceptable risk levels for all Principal Risks. Regular risk
reporting throughout the year uses risk appetite as a benchmark. This way each risk was assessed as
Principal Risks
either ‘within’ or ‘outside’ of risk appetite.
The Board has identified and set out key risks which, if they were to materialise, could have an impact
Going forward the Board will review the Risk Governance Framework twice per year, and may vary
on the Company’s ability to meet its strategic objectives (‘Principal Risks’). These Principal Risks
as necessary the risk appetite of the Group in order to adjust to the changes in the internal and
include Regulatory Risk, Information Security Risk, Operational Risk, Financial Risk, Strategic Risk and
external environments. With respect to most risks the risk appetite is Low, and it is generally Medium
Climate Risk and are further detailed on pages 90 to 101 of the Managing our Risks section of the
where the risk arises as a function of the business model, for example, the Market Risk arising from
Strategic Report.
Risk Management Framework
fluctuations in capital markets or the constantly evolving Cyber Risk.
There are currently no residual risks rated High and in cases where residual risk is rated Medium
and is outside of (the Low) risk appetite, prompt action is taken to reduce the risk by implementing
The Audit and Risk Committee is responsible for monitoring the risk profile of the Group and for
additional controls. The Committee monitors all risks and oversees the progress of the control
reviewing the effectiveness of the Group’s internal controls and the risk management framework
improvement work.
overall. The Group’s risk management framework and the associated systems and processes are
designed to identify, evaluate and manage risks within the risk appetite set by the Board.
2024 Risk Roadmap
The Second Line of Defence risk reporting is designed to allow the Audit and Risk Committee to
The risk roadmap is reviewed and approved each year by the Audit and Risk Committee. It is a vital
form its view on how effectively risks have been assessed, how they have been mitigated, and
tool for the Group to systematically evolve the risk management framework, align risk management
whether necessary actions are being taken promptly to remedy any failings of key controls, therefore
with strategic objectives for the year and ensure the Group continues to operate in a secure and
ensuring that the Group continues to operate in line with its business objectives, internal policies and
resilient manner. The Group’s focus for the coming year is on risk culture, risk systems and data
regulatory requirements.
governance, continuing to embed the Resilience strategic pillar and to streamline and embed the
In addition, the Third Line of Defence independent assurance activities are performed in accordance
with a schedule overseen by the Audit and Risk Committee. The Group employs external parties to
Information Security Risk Management Framework
provide this assurance, and these parties are appointed based on their sector expertise, for example
risk and control management processes.
investment management, finance, compliance and information security expertise. Additional
PensionBee completed a successful recertification of the ISO 27001 Information Security Management
external assurance activities are conducted as required including where there are emerging risks.
System (‘ISMS’) in November 2023. The ISMS is a part of a wider strategic aim and the successful
The Audit and Risk Committee is kept up to date with the work of these parties.
recertification demonstrates our commitment to continuous improvement in information security.
Through its oversight, the Audit and Risk Committee is able to maintain a good understanding of
Our Information Security risk management framework is integrated with the Group’s overall risk
principal and emerging risks, and also review management’s effectiveness and decision-making
management framework. PensionBee acknowledges that the sources of Information Security Risk
processes.
and Cyber Risk will always exist, and subsequently treats Information Security Risk as a business-
wide risk rather than a standalone technology department risk. This gives a consistent and joined-up
Key 2023 PensionBee risk management developments are summarised as follows.
approach when managing those risks.
133
Annual Report and Financial Statements 2023Corporate Governance Report Information Security and Cyber Risks are mitigated using a defence-in-depth approach, providing
Information Security Certifications
multiple layers of complementary controls. This approach includes improving controls around human
resources risk (e.g. the risk of staff clicking on phishing emails), as well as implementing technical
PensionBee’s ISMS is certified to the internationally recognised ISO 27001 standard for the
controls across the IT estate. External expertise and specialist sources are utilised to ensure evolving
management of information security. PensionBee also holds the Cyber Essentials Plus certification,
and emerging cyber risks are proactively managed. Our Information Security Team uses real-life
which is a Government-backed scheme to help organisations improve cyber security controls. The
scenarios to create plausible cyber security and data compromise scenarios, which are simulated to
BeeSecure information security strategy has also been developed using principles of the National
help focus on continuous improvement.
Institute of Standards and Technology’s Cybersecurity Framework, which is commonly used in the
financial services industry as a comprehensive framework to manage cyber risk. The three frameworks
PensionBee has invested in the ‘BeeSecure’ information security programme to further improve
are complementary and help improve information and cyber security controls under the ISMS.
controls to mitigate Information Security and Cyber Risks. In 2023, PensionBee achieved a major
milestone of this programme by implementing a 24x7 / 365 Security Operations Centre, to monitor,
The ISMS is also subject to a comprehensive annual audit programme, which provides independent
detect and respond to malicious behaviour across critical company information assets. This has
and objective assurance on the system. The Information Security Committee (‘ISC’) provides
significantly increased the threat detection and response capability and enabled a more proactive
oversight of the ISMS, tracks progress against its objectives and monitors the results of the audit
approach to information security overall.
External Assurance
programme. The ISC is held three times per year and the members include senior stakeholders from
the business, such as the VP Information Security, members of the Executive Management Team and
the Risk Management Team. Ultimate oversight of the ISC is provided by the Committee.
The external assurance activities are performed to ensure the accuracy and credibility of reporting,
External Audit
gain required assurance over the management of risk, demonstrate a commitment to responsible
and transparent business practices and to build trust among stakeholders. The Committee oversees
Deloitte is PensionBee’s external auditor, with 2023 being their third financial year as the Group’s
the external assurance scope, activities and findings. This includes the following audits.
external auditor. Kieren Cooper has fulfilled the role as lead audit partner for all three financial years.
Regulatory Audit
The Committee oversees the audit relationship with Deloitte. The Committee’s responsibilities include
appointing, re-appointing and removing the external auditor and overseeing their effectiveness,
The Group employs Enhance Support Solutions consultancy to verify that it continues to operate
independence and objectivity.
in compliance with relevant laws, regulations and industry standards. In 2023 this audit included
an independent review of: the discharge of the Group’s regulatory obligations including the Senior
During 2023, the Committee approved the re-appointment of the auditor, the proposed audit fee
Managers and Certification Regime, employee training, administration standards and management
and terms of engagement for the financial year ended 31 December 2023. The Committee assessed
information, reporting obligations, identification of risk and risk oversight, business planning,
the effectiveness of the external auditor by reviewing the audit plan presented by Deloitte to assess
products and internal governance. The Committee had visibility of the progress and satisfactory
the adequacy and appropriateness of the proposed audit procedures, completeness and relevance
completion of the audit.
Internal Audit
of the identified audit risks and the audit team composition. Discussions were held between the
Chair of the Committee and the lead audit partner, in the absence of management. The Committee
considered and concluded that Deloitte was effective and independent.
In line with the Code, the Committee reviewed the need for internal audit. The plan was approved
External Audit Tender
to consider onboarding an outsourced Internal Audit function during 2024 as part of the Group’s
governance structure, providing further independent assurance over the effectiveness of risk
In consideration of PensionBee’s listing in 2021 and the requirement for public companies to re-tender
management, internal controls, governance processes and operational efficiency within the Group.
their audit every 10 years, the Group’s audit mandate would need to be re-tendered by 2031. Ahead
A multi-year Internal Audit agenda and roadmap will be determined using a risk-based approach and
of the mandatory rotation and to allow sufficient time for a transition period should it be needed,
will be approved by the Committee in due course.
134
and to enable an incoming auditor to become independent following any appointment decision,
the Committee oversaw a formal competitive external audit tender process during the year under
PensionBee Group plcCorporate Governance Report review. The external audit tender process was conducted to select an audit firm in respect of the
financial year ending 31 December 2024, which included Deloitte. The scope of the tender consisted
of the interim review and statutory audits of all Group companies, as well as the performance of
assurance services required by regulation in respect of CASS.
To ensure a robust selection process, a selection panel was established to evaluate the participating
firms. The selection panel was chaired by the Chair of the Committee and included the other members
from April 2024, after the three year grace period as a public interest entity (‘PIE’) from the time of
the IPO.
The external auditor did not undertake any non-audit work during the year and none was undertaken
in 2022. The Committee is satisfied that the external auditor’s independence has not been impaired
by their provision of non-audit services.
of the Committee and the Chief Financial Officer. The Committee retained ultimate authority over
External Auditor Fee
the tender process. Participating firms were requested to confirm their independence on acceptance
of the invitation to tender for external audit services and to provide details of any matters of which
An overview of the total fees paid to Deloitte are shown in the table that follows:
they were aware that could have an impact on independence, which were reviewed against internal
agreements and proposals in place. Following a review of the supplied audit proposals and formal
evaluation of potential candidates, a shortlist of eligible audit firms were invited to present to the
Item
selection panel in October 2023. Audit quality, a perceived understanding of the Group’s business
Other Assurance Services
and industry, the experience of the audit team, audit approach, commercials, cultural fit and value-
add were considered important selection criteria. Subject to member approval at the 2024 Annual
Tax Structuring Services
General Meeting, Deloitte was recommended by the Committee to the Board for reappointment in
Audit Related Services
2023
£ 000
-
-
47
168
2022
£ 000
-
-
58
138
November 2023.
Non-Audit Services Policy
The Committee reviewed the existing non-audit services policy (‘NAS Policy’) and confirmed that
it was still sufficient and appropriate for the Group. The NAS Policy is reviewed annually by the
Committee to safeguard the ongoing independence of the external auditor and to ensure compliance
with the Financial Reporting Council’s Ethical Standard.
The Committee acknowledged the benefits that can be realised in using the external auditor for
non-audit services due to their understanding of the business. In the circumstance where Deloitte is
engaged to provide non-audit services, the NAS Policy governs the provision of these services and
ensures they do not impair the external auditor’s independence and objectivity.
Before proceeding with a non-audit service, the fee comparative to the audit, types of services, and
external auditor independence are considered. The Committee’s approval has to be achieved before
the external auditor is engaged to provide non-audit services. For permitted non-audit services that
are deemed to not be material, the Committee has pre-approved the use of the external auditor for
cumulative amounts totalling less than £50,000. The threshold up to £20,000 requires the approval of
the CFO or the CEO. Non-audit fees within the threshold of £20,001 to £50,000 require the approval
of the CFO and the CEO.
Non-audit fees paid to the external auditor should not exceed 70% or more of the average audit fees
for three consecutive financial years starting from the Company’s IPO. The cap will become effective
Financial Statements Audit Services
Details of the fees paid to Deloitte during the year are shown in Note 9 of the Financial Statements.
Compliance, Whistleblowing, Anti-Bribery and Corruption and Financial Crime
The Group maintains a robust set of Compliance policies that are documented and managed on a
dedicated platform. During the year there were no whistleblowing incidents reported (2022: nil).
Whistleblowing
The Group’s Whistleblowing Policy outlines the Group’s approach to whistleblowing. The policy
recognises that whistleblowing is an important activity that helps firms to learn about and resolve
problems before they escalate further. The aim of the policy is to ensure the Group has a fit-for-
purpose whistleblowing procedure that encourages employees to come forward with disclosures
without fear of reprisal. The Group’s whistleblowing champion is Michelle Cracknell, Chair of the
Audit and Risk Committee.
Anti-Bribery and Corruption
The Group has a zero-tolerance for bribery and corrupt activities, as outlined in its Anti-Bribery and
Corruption Policy. The aim of the policy is to help PensionBee uphold all laws relating to anti-bribery
and corruption. The anti-bribery policy applies to all Directors, officers, employees, consultants,
contractors, interns, or any other person or persons associated with the Group (including third
parties), no matter where they are located (within or outside of the UK).
135
Annual Report and Financial Statements 2023Corporate Governance Report All PensionBee employees must complete anti-corruption, anti-bribery and financial crime
training, as part of their annual Compliance Test. They must complete this within a month
of joining the Company and at least annually. Training is compulsory for employees at all
levels, including the Board. Training is updated annually to reflect changes in legislation
and best practice. Employees are required to pass a test on each unit with a minimum
pass mark of 80%.
Financial Crime
PensionBee has a regulatory and legal responsibility to assist the authorities in countering
the perpetration of financial crimes. Financial crimes include but are not limited to money
laundering, terrorist financing and fraud. Financial crime is perpetrated by individuals and
therefore this policy is closely linked to the Group’s Know Your Customer Policy. Fraud
can lead to highly damaging outcomes for customers and is particularly relevant when
transactions are being processed out of the PensionBee Personal Pension. Fraud risks are
therefore also closely linked to the Transfer Out Policy and the Banking Policy, which cover
the risks of making inaccurate payments.
Audit and Risk Committee Evaluation
During 2023, the Board carried out an internally facilitated Board effectiveness evaluation
that included an assessment of the Committee’s performance. The review concluded
that we continued to operate effectively. The Board was satisfied that the Committee
members had the relevant financial and commercial competence relevant to our sector
and that there was the right balance of skills and experience among its members.
Audit and Risk Committee Priorities for 2024
For 2024 the focus areas for the Audit and Risk Committee are expected to include a
review of the effectiveness of the Finance function and the timetable for production of
the financial information, oversight of the embedding of the risk management framework,
a review of the Consumer Duty reporting, considering the appointment of an internal
auditor and a review of the links between the risk assessments and remediation activities
for the Group’s most significant risks (including Information Security risk). The Committee
will also review the work of the external assurance providers and reports from the external
assurance providers.
Michelle Cracknell CBE
Chair of the Audit and Risk Committee
13 March 2024
136
PensionBee Group plcCorporate Governance Report 7 Directors’ Remuneration Report17
Annual Statement by the Chair of the Remuneration Committee
Mary Francis CBE
Chair, PensionBee Remuneration Committee
Dear fellow shareholder,
Roles and Responsibilities
I am pleased to present our third Directors’ Remuneration Report for the year ended 31 December
2023, which has been prepared by the Remuneration Committee ('Committee') and approved by
the Board.
The Report comprises three sections:
This statement, being our annual report on the activities of the Remuneration Committee during
the year.
The role of the Remuneration Committee is set out in its terms of reference, which are available on
the Company’s website. The duties of the Remuneration Committee include, but are not limited to
the following:
Duties of the Remuneration Committee
Determining the Company’s framework and policy for executive remuneration
The Directors’ Remuneration Policy (‘Policy’) which was approved by a binding vote at the 2023
Annual General Meeting with 99.28% of votes in favour. No changes are proposed.
Setting remuneration for all Executive Directors and reviewing remuneration for senior management
Reviewing workforce remuneration and related policies and the alignment of incentives and rewards
The Annual Report on Remuneration, which explains how the Directors have been rewarded in
2023 and how the policy will be applied in 2024 and will be subject to an advisory vote at the 2024
Annual General Meeting.
with culture
Considering remuneration arrangements with respect to the UK Corporate Governance Code
requirements for clarity, simplicity, risk mitigation, predictability and proportionality
•
•
•
We have prepared this report with reference to the principles of remuneration as set out in the UK
Corporate Governance Code. Our objectives for the Policy and how they align with the Company’s
strategy and values are laid out on page 141. Our process and approach is laid out on pages 141 to 145.
17. The Directors’ Remuneration Report that follows has been prepared in accordance with the Listing Rules, the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 and the Companies Act 2006.
137
Annual Report and Financial Statements 2023Corporate Governance Report Committee Members and Attendance
Committee Members
Position
Mary Francis
Chair of the Committee
Michelle Cracknell
Independent Non-Executive Director
Lara Oyesanya
Independent Non-Executive Director
Mark Wood
Non-Executive Chair of the Board
Eligible
Attended
Meetings
Meetings
3
3
3
3
3
3
218
3
The Remuneration Committee must comprise not less than three Directors, all of whom are Non-
Executive Directors who are independent. The Chair of the Remuneration Committee must not be
the Chair of the Company, and should have served on a remuneration committee for at least 12
months prior to being appointed.
Mary Francis, Michelle Cracknell, Lara Oyesanya and Mark Wood were members of the Remuneration
Committee throughout 2023. Further biographical details are set out on pages 107 to 113 of the
Board of Directors and Executive Management section of the Corporate Governance Report.
Meetings are held at least twice a year at appropriate times and otherwise as required. The Committee
met three times during 2023.
The Chief Executive Officer (‘CEO’), the Chief Operating Officer (‘COO’), Company Secretary and other
members of the Executive Management Team attended meetings by invitation to provide valuable
input. However, no member of management plays any part in determining his or her remuneration.
After each meeting, the Chair of the Committee reports to the Board on the Committee’s proceedings
in respect of all matters within its duties and responsibilities.
The Company-Wide Context
2023 was an important year for PensionBee, as the Company pursued customer growth and the
achievement of Adjusted EBITDA profitability. Customer numbers continued to grow throughout
the year, and profitability (on an Adjusted EBITDA basis)19 was achieved in the fourth quarter of 2023,
in line with the Company’s expectations and despite continuing challenges in the macroeconomic
environment.
18. We note Lara Oyesanya's one instance of absence at the Remuneration Committee meeting held in February 2023. This meeting
was rescheduled. with limited notice, to a date that conflicted with Lara’s other pre-arranged commitments and was therefore out of
her control.
19. See definitions on pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
138
The Company’s Remuneration Policy remained consistent for 2023. Our approach continues to be
underpinned by the Company’s duty of fairness to both its customers and employees, as it continues
to balance cash preservation with investment for growth, exercise vigilant control over risk, and
ensures that it can recruit and retain talented employees.
In recognition of the very considerable achievements of the entire team in achieving profitability this
year and above expectation Revenue and Adjusted EBITDA, as permitted under the Remuneration
Policy, the Remuneration Committee decided that it was appropriate for all employees to receive a
marginally higher proportion of their bonus in cash than in equity compared to 2022.
Overall, the arrangements in place during 2023 were fully in accordance with our Remuneration
Policy. The Committee considered that they demonstrated an appropriate and conservative
approach, with remuneration levels in line with (and at the most senior levels, below) equivalent
market levels. Performance-linked elements remained largely awarded in restricted share awards
with a longer time horizon for vesting. The Company’s desire to conserve cash for investment and
growth has thus continued to be very much respected.
At the same time, we were satisfied that the policy continued to ensure that rewards were at fair
levels that enabled our Company to recruit and retain high quality employees. Emphasis continued
to be placed on applying a similar reward structure right across the Company, albeit geared more
heavily to share-based performance rewards at the more senior levels.
The Company maintained its commitment to being a Living Wage employer for its most junior
employees and conducted a benchmarking exercise for other roles across the Company, ensuring
that base salaries for 2024 reflect UK labour market conditions.
For 2023, we had 51% female and minority gender representation across the entire employee
employee base.20
Directors’ Remuneration Policy
I now turn in more detail to the way we pay our Executive Directors. The Directors’ Remuneration
Policy requires approval every three years. In 2023 we sought and gained shareholders’ approval for
our Directors’ Remuneration Policy at the AGM, for a three-year period. There are no changes to the
policy approved at the 2023 AGM, and we are confident that our approach continues to support the
delivery of the Company’s key objectives.
The Policy is set out in detail on pages 141 to 145 of the Directors’ Remuneration Policy section of this
report, but the main features include:
20. Supported by analysis from PensionBee’s HR information system, December 2023.
PensionBee Group plcCorporate Governance Report • Below-market salaries until profitability is established: this principle is well embedded in the Company,
Implementing the Policy for 2024
noting that the bonus and restricted share awards are also set by reference to these salaries.
• Pension alignment with the wider workforce.
• Annual performance-related bonus of up to 100% of salary, with at least 75% of the bonus being
deferred into shares.
• A restricted share award of up to 125% of salary, subject to performance underpin, vesting over
3-5 years and with a post-vesting holding period until the fifth anniversary of grant.
•
Shareholding guidelines of 200% of salary, which continue to apply in full for a period of two years
post the cessation of employment.
• Comprehensive malus and clawback provisions.
Directors’ 2023 Bonus and Restricted Share Awards
As reported last year, the base salary for each of the Executive Directors was increased to £200,000 in
2023 as included in the Remuneration Policy approved at the 2022 AGM, and will remain the same in
2024. Across the company the average salary increase was an increase of 11%.22
Restricted share awards, in line with previous years, are expected to be granted in March 2024,
following the Company’s 2023 year-end results announcement.
The annual bonus structure for 2024 will remain broadly unchanged, with a combination of financial
performance measures (including Revenue and Adjusted EBITDA Margin)21 accounting for 50% of
the total, a Customer Love Composite metric (including the equally weighted subcomponents
of the Company’s Invested Customers, Trustpilot Score, App Reviews, Complaints Ratio and Net
Promoter Score) accounting for 25% of the total, and personal performance accounting for 25% of
The annual bonus plan includes a mix of financial and non-financial performance measures.
the total. These metrics are considered to provide a balanced scorecard of the Executive Directors’
Financial measures account for 50% of the total potential, with quantifiable customer service
responsibilities to key stakeholders.
measures accounting for a further 25% and personal measures, which include a combination
of strategic, operational, financial and risk control measures, accounting for the remaining 25%.
Advisors
Similar factors provide an underpin to the annual restricted share plan awards. The Company is
committed to delivering excellent outcomes for our customers and the Committee considers the
The Committee reappointed FIT Remuneration Consultants LLP (‘FIT’) as their independent advisor
Company’s approach to risk management and other environmental, social and governance factors,
during the year. FIT advised on all aspects of our Directors’ Remuneration Policy and practice and
when assessing the appropriateness of the out-turn both in terms of the assessment of personal
reviewed remuneration structures against corporate governance requirements. FIT is a member
performance and also the thresholds for Company performance in relation to the annual bonus plan.
of the Remuneration Consultants’ Group and complies with its Code of Conduct which sets out
As detailed on pages 52 to 57 of the Operating and Financial Review section of the Strategic Report,
out any other work for PensionBee or its subsidiaries. The Remuneration Committee is satisfied that
guidelines to ensure that its advice is independent and free of undue influence. FIT does not carry
the Company delivered strong top line growth across its core performance indicators, including
Assets under Administration (£4.4bn), Revenue (£24m) and Invested Customers (229,000).21 Through
appropriate cost discipline and investment in technology to drive productivity, the Company
achieved its primary financial objective for the year of Adjusted EBITDA profitability across the fourth
quarter of 2023, and improved its Adjusted EBITDA Margin to exceed its maximum objective.21 In
addition, the Company maintained strong performance against its customer-focused objectives,
the advice is objective and independent, taking into account that during the year FIT was paid time-
based fees of approximately £38,951 including VAT.
Remuneration Committee Evaluation
During 2023, the Board carried out an internally facilitated evaluation of the Board’s effectiveness and
including its Trustpilot score (Excellent 4.6★) and its app store ratings (an average of 4.6 out of 5).
an assessment of the Committee’s performance. The Committee was satisfied that the review had
concluded it continued to operate effectively. The Board was satisfied that the Committee composition
Overall, this led to a formulaic bonus out-turn for the Executive Directors at 80% of maximum for
was appropriate and there was the right balance of skills and experience among its members.
2023, taking into account all elements (financial, customer and personal), which the Committee
confirmed without the exercise of any discretion. This was an improvement on the achievements of
2022 (41% of maximum).
21. See definitions on pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
22. This included promotions and benchmarking adjustments.
139
Annual Report and Financial Statements 2023Corporate Governance Report Conclusion
I am grateful to my fellow Directors on the Committee, Mark
Wood, Michelle Cracknell and Lara Oyesanya, for their hard work
throughout 2023, and to the whole Executive Management Team
and our professional advisors for their support and input.
We look forward to engaging with our shareholders and other
stakeholders on an ongoing basis. I would welcome any feedback or
comments on the Directors’ Remuneration Report more generally,
and would be glad to meet to discuss any matters of concern.
I will of course also be available at the 2024 Annual General Meeting
to answer any questions about the work of the Remuneration
Committee for the year.
Mary Francis CBE
Chair of the Remuneration Committee
13 March 2024
140
Alex | Age 43
PensionBee customer since 2019
PensionBee Group plcCorporate Governance ReportPensionBeeYour Nest pension has transferred successfully. Directors’ Remuneration Policy
The Directors’ Remuneration Policy (‘Policy’) was approved at the 2023 Annual General Meeting (‘AGM’) and took binding effect from the close of that meeting. The Remuneration Committee intends that
this Policy will now operate for three years. Details of the policy are outlined below and are available for inspection on the PensionBee website, via this report.
Objectives of the Policy
The Directors’ Remuneration Policy is designed to meet the following objectives:
Clarity
Simplicity
Risk
•
•
•
The Policy
is designed to be simple
and to support long-term, sustainable
performance.
The Policy is in line with standard UK listed
company practice and is well understood
by participants and shareholders alike.
•
•
•
Our arrangements include a market standard annual
bonus and a single long-term incentive plan.
The details of each are clearly set out in our Policy.
There are no complex or artificial structures required to
deliver the Policy.
The Policy clearly sets out the limits in
terms of quantum, the performance
measures which can be used and
discretion which could be applied
if
appropriate.
•
•
•
•
•
Appropriate limits are set out in the Policy and within the respective plan
rules.
The Committee retains discretion to override formulaic out-turns.
When considering performance measures and target ranges, the
Committee will take account of the associated risks and liaise with the
Audit and Risk Committee as necessary.
The long-term nature of a large proportion of pay (through significant
annual bonus deferral, post-vesting holding periods and post-cessation
shareholding requirements) encourages a long-term, sustainable mindset.
The use of restricted shares rather than more geared forms of long-term
incentives also mitigates the risk of undue focus on those targets.
Clawback and malus provisions are in place across all incentive plans.
Predictability
Proportionality
Alignment to Culture
The Policy contains appropriate caps in
•
Incentive outcomes are contingent on successfully meeting
•
The Policy encourages high performance delivery which is aligned to the
place for each component of pay.
stretching performance targets which are aligned to the
culture within the business. However, this performance focus is always
•
•
The potential
reward outcomes are
easily quantifiable and are set out in the
illustrations provided in the Policy.
• Performance can be reviewed at regular
intervals to ensure there are no surprises in
outcomes at the end of the performance
delivery of the Company’s strategy.
considered within an acceptable risk profile.
• Performance will be assessed on a broad basis, including a
combination of financial and operational metrics. The use
of different measures ensures there is no undue focus on
a single metric which could be to the detriment of other
stakeholders.
• Overall pay levels are modest with base salaries below-market reflecting the
early emergence of profitability.
•
The measures used in the variable incentive plans reflect the KPIs of the
business.
period.
•
The Committee retains discretion to override formulaic out-
turns.
141
Annual Report and Financial Statements 2023Corporate Governance Report Remuneration Policy for Executive Directors
The following table summarises each element of the Remuneration Policy for the Executive Directors,
explaining how each element operates and links to the corporate strategy.
Base Salary
Purpose
•
To recruit and retain high-calibre Executive Directors.
Operation
• Recognise knowledge, skills and experience as well as reflect the scope
and size of the role.
• Normally reviewed annually (with any changes usually effective from
January or August). An out of cycle review may be conducted if the
Committee determines it is appropriate.
• When setting Base Salaries, the Committee takes into account a number
of factors including (but not limited to) skills and experience of the
individual, the size and scope of the role, salary increases across the
Group as well as salary levels for comparable roles in other similarly sized
companies.
• Currently, Base Salary levels are considerably below market levels
reflecting the emerging profitability of the Company. The current Base
Salaries for the Executive Directors are set out on page 146.
•
The Executive Directors’ Base Salaries increased to £200,000 in August
2023. The Committee will review salaries against benchmarks from 2024,
which may lead, at some stage, to a higher level of increase than would
normally be the case.
Maximum
•
The maximum Base Salary level is £500,000.
Potential Value
• Base Salary increases are normally considered in relation to the wider
salary increases across the Company, albeit recognising the unusually low
starting position in the current Policy.
• Above workforce increases may be necessary in certain circumstances
such as when there has been a change in role or responsibility or where
an Executive Director has been appointed on an initial salary which is
lower than the desired market positioning.
Pension
Purpose
Operation
•
•
To provide cost-effective retirement benefits.
The Executive Directors may participate in the Company’s pension scheme
or receive a cash allowance in lieu if HMRC caps apply.
• Pension contributions and allowances are normally paid monthly and are
not bonusable.
Maximum
Potential Value
•
•
The Company pension contributions to defined contribution retirement
arrangements or cash allowances are capped at those of the wider
workforce (currently 5% of qualifying salary).
This applies to current and any future Executive Directors.
Performance
• Not applicable.
Metrics
Benefits
Purpose
•
To provide competitive, cost-effective benefits which help to recruit and
retain Executive Directors.
Operation
• Benefits may include various insurances such as life, disability, medical and
other benefits provided more widely across the Company from time to
time.
• Other benefits, such as relocation expenses or expatriate arrangements
may be provided as necessary.
• Reasonable business-related expenses (including any tax thereon) will be
reimbursed.
Maximum
•
The value of benefits will vary based on the cost to the Company of
Potential Value
providing the benefits.
Performance
Metrics
•
Individual performance, as well as the performance of the Company, is
taken into consideration as part of the annual review process.
Performance
• Not applicable.
Metrics
142
PensionBee Group plcCorporate Governance Report Annual Bonus
Purpose
Operation
Maximum
Potential Value
Performance
Metrics
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Long-Term Incentives
•
•
•
•
•
•
•
•
To incentivise and reward for the delivery of long-term performance
and shareholder value creation.
To align with shareholders’ interests and to foster a long-term mindset.
An annual award of restricted shares under the Omnibus Plan (‘RSP
Award’) which normally vest after a period of not less than three
years (expected to be one-third on each of the third, fourth and fifth
anniversaries of grant for Executive Directors), subject to continued
employment and the achievement of a performance underpin.
Vested RSP Awards are subject to a further holding period applying
at least until the fifth anniversary of grant during which they may not
ordinarily be sold (other than to pay relevant tax liabilities due).
Dividend equivalents may accrue over the period from grant until the
later of vesting and the expiry of any holding period.
Malus and clawback provisions apply.
The maximum annual RSP Award is 125% of Base Salary and the
Committee expects to normally grant awards at this level to the
Executive Directors.
The nature of restricted shares under the RSP Award is that they are not
based primarily on performance conditions, although the Committee
will apply an underpin and may reduce vesting levels if overall
performance is not considered sufficient to warrant the full vesting
level (having regard to financial performance, the development of the
strategy and the management of risk and other ESG factors).
To incentivise and reward for the delivery of suitably stretching annual
Purpose
corporate targets to align with shareholders’ and wider stakeholders’
interests.
The Annual Bonus is subject to performance measures and objectives set
by the Committee for the financial year.
Operation
At the end of the performance period, the Committee assesses the extent
to which the performance targets have been achieved and approves the
final outcome.
At least 75% of any Annual Bonus earned will be deferred in shares
under the 2021 PensionBee Group plc Omnibus Plan (‘Omnibus Plan’)
(‘DSB Award’), normally for a total of three years, with a third vesting
and becoming exercisable in each of the first, second and third years
respectively.
Dividend equivalents may apply to the extent that such deferred awards
vest.
Malus and clawback provisions apply.
Annual Bonus awards are non-pensionable and are payable at the
Committee’s discretion.
The Annual Bonus policy maximum is 100% of Base Salary.
The target Annual Bonus opportunity is normally set at 50% of the
maximum.
The threshold Annual Bonus opportunity is up to 25% of the maximum.
The Committee will determine the relevant measures and targets each
year taking into account the key strategic objectives at that time.
Performance measures may include financial, strategic, operational, ESG,
and/or personal objectives.
At least 50% of the Annual Bonus will be linked to financial measures.
The Committee sets targets that are challenging, yet realistic in the
context of the business environment at the time and by reference to
internal business plans and external consensus. Targets are set to ensure
there is an appropriate level of ambition associated with achieving the
top end of the range, but without encouraging inappropriate risk taking.
The performance measures for FY23 are set out on page 149.
Maximum
Potential
Value
Performance
Metrics
143
Annual Report and Financial Statements 2023Corporate Governance Report All-Employee Share Plans
Purpose
Operation
Maximum
Potential Value
Performance Metrics
•
•
•
•
•
•
•
•
To encourage wider share ownership across all
employees, including the Executive Directors.
To align with shareholders’ interests and
to foster a long-term mindset.
The Company does not currently intend to deploy the
all-employee share plans. Disclosure around the plans
has been included for future flexibility as required.
Executive Directors may participate in all employee
schemes on the same basis as other eligible employees.
This includes the Share Incentive Plan (‘SIP’) and
the Save As You Earn (‘SAYE’) which have been
adopted but are not currently in operation.
Both plans have standard terms, which are HMRC approved and
allow participants to either purchase or be granted shares (SIP)
or enter into a savings contract (SAYE) in a tax-efficient manner.
Limits are in line with those set by HMRC (or at a lower level
if so determined by the Remuneration Committee).
Not applicable as per market standard.
Differences in Remuneration Policy for Executive Directors and Employees in General
All employees participate in the Annual Bonus scheme, which is operated on similar terms to those
for the Executive Directors, albeit with performance measures which are appropriate to their area
of responsibility. Bonus deferral in respect of the Company element is applied for all employees.
RSP Awards are granted to appropriately senior members of the team (approximately 30% of the
workforce in 2023) on similar terms to those applied to grants made to the Executive Directors. All
employees are able to participate in PensionBee’s equity ownership schemes, which further helps to
drive engagement and an ownership mentality.
Statement of Consideration of Employment Conditions Elsewhere in the Company
The Committee is kept informed of pay and employment conditions throughout the Company. This
will include information on base salary banding and increases, annual bonus outcomes and share
usage across the workforce. The Company conducts an annual benchmarking exercise that informs
the overall remuneration package at each level of employee seniority. The annual benchmarking
exercise pays due regard to job roles and seniority. The remuneration package for each level of
employee seniority is documented in the Company’s Policy, which is transparently shared with all
employees. The Policy documents the Company’s desire to take an industry-leading approach to
reducing and eliminating pay gaps, as well as excessive differences in remuneration between the
highest and lowest paid employees.
Input from the Director responsible for Employee Engagement is also considered as part of the
Committee’s deliberations. Findings from employee engagement surveys are also provided to the
Shareholding Requirements
Committee.
Purpose
Operation
Maximum Potential
Value
Performance Metrics
144
•
•
•
•
•
•
To align with shareholders’ interests and
to foster a long-term mindset.
Executive Directors will normally be expected to retain shares, net
of sales to settle tax, until they have met the required shareholding.
The Committee has not, to date, formally consulted with employees on matters of the Company’s
Policy, but Committee members remain apprised of employee engagement and attitudes to the
workplace through surveying and reports in the Nomination Committee. Committee members also
regularly attend Company facilitated town hall style meetings on a variety of cultural topics related
Progress towards the guidelines will be reviewed
to the Company’s employee value proposition.
by the Committee on an annual basis.
In addition, Executive Directors are expected to hold shares
after cessation of employment to the full value of the
shareholding requirement (or the existing shareholding
if lower at the time) for a period of two years.
The shareholding requirement for Executive
Directors is 200% of Base Salary.
Not relevant.
Service Contracts and Letters of Appointment
Romi Savova
Jonathan Lister Parsons
Christoph J. Martin
Date of Service
Contract
16 March 2021
16 March 2021
30 June 2022
Notice period
6 months
6 months
6 months
PensionBee Group plcCorporate Governance Report The Executive Directors’ service contracts are stored digitally and can be accessed at the Company’s
Executive Director's Remuneration
office or virtually. The Non-Executive Directors do not have service contracts with the Company but
instead have letters of appointment. The date of appointment for each Non-Executive Director is
(000's)
shown in the table that follows:
Mark Wood23
Mary Francis24
Michelle Cracknell25
Lara Oyesanya26
Date of Appointment
2 February 2021
2 February 2021
2 February 2021
21 April 2022
The Non-Executive Directors’ letters of appointment are stored digitally and can be accessed at
the Company’s office or virtually. Each appointment is for a fixed three-year term, but each Non-
Executive Director may be invited by the Company to serve for a further period. In any event, each
appointment is subject to annual re-election by the Company at each annual general meeting,
and each Non-Executive Director’s appointment may be terminated at any time with three months’
written notice.
Illustration of the Remuneration Policy
The chart that follows sets out the potential values of the remuneration package for FY24 under
various performance scenarios for the Executive Directors.
23. Director’s term runs until 20 April 2024
24. Director’s term runs until 20 April 2024
25. Director’s term runs until 20 April 2024
26. Director’s term runs until 18 May 2025
800
700
600
500
400
300
200
100
0
Notes:
502
50%
202
1.1%
10%
0.4%
552
45%
18%
777
48%
652
38%
31%
26%
0.4%
0.3%
0.3%
99%
40%
36%
31%
26%
Minimum
Threshold
On-target
Maximum
Maximum with growth
Base Salary
Pension
Annual Bonus
Long-term Incentives
a. Salary represents the £200,000 expected ending salary for 2024. Benefits have been included
based on 2023 figures.
b. Pension represents the value of the annual pension allowance for Executive Directors of 5% of
qualifying salary.
c. Minimum performance comprises salary, benefits and pension only with no bonus awarded and
no RSP Award vesting (i.e. assumes the RSP Award performance underpin is not met).
d. Threshold performance comprises annual bonus payouts at threshold level (25% of maximum)
with the RSP Awards vested in full (no share price appreciation).
e. Target performance comprises annual bonus payouts at target level (50% of maximum) and with
the RSP Awards vested in full (no share price appreciation).
f. Maximum performance comprises annual bonus awarded at maximum level (100% of maximum)
and with the RSP Awards vested in full (no share price appreciation).
g. Maximum + share price growth comprises e. above plus an assumed increase of 50% in the value
of the RSP Award to take account of potential share price appreciation.
h. For ease of understanding, the chart assumes an RSP Award grant at 125% of the 2024 salary.
In practice, grants are considered to relate to performance in the prior year so are based on the
salary as at the previous 31 December.
145
Annual Report and Financial Statements 2023Corporate Governance Report Annual Report on Remuneration
Implementation of Directors’ Remuneration Policy for FY24
Component of Pay
Implementation for FY24
Executive Directors’ Base Salaries
Salaries for each Executive Director will remain at £200,000 (as reported last year, implemented in August 2023).
Executive Directors’ Benefits and Pension
No changes to benefits.
Pension provision remains at 5% of qualifying salary (i.e up to the HMRC limit of, currently, £2,202).
Executive Directors’ Annual Bonus
Maximum Annual Bonus of 100% of salary, with at least 75% deferred into shares (‘DSB Award’), which will vest in equal instalments
across the first, second and third anniversary of grant, which is aligned to the treatment throughout the organisation.
In respect of 2024 bonuses, the Executive Directors’ DSB Awards will vest in three equal annual tranches as described.
The performance measures for 2024 bonuses are:
•
Financial measures, weighted at 50% of the total bonus, and consisting of two sub-metrics each accounting for 25% of the total bonus: Revenue (£),
Adjusted EBITDA Margin (%)27
• Customer composite metric, weighted at 25% of the total bonus, and consisting of five sub-metrics each accounting for 5% of the total bonus: Invested
Customers27, Trustpilot Score, App Store Ratings, Net Promoter Score and Complaints Ratio
• Personal performance, weighted at 25% of the total bonus
Consistent with market practice, the Committee considers the targets themselves for 2024 to be confidential and will disclose them in next year’s report.
Executive Directors’ Restricted
Share Plan Award
A restricted share award (‘RSP Award’) of 125% of salary which vests in equal instalments on the third,
fourth and fifth anniversary of grant and released following the fifth anniversary.
The RSP Awards are subject to a performance underpin whereby the Remuneration Committee will assess whether vesting is appropriate, taking into
consideration the Company’s share price, its financial performance over the vesting period and the participant’s adherence to the Company’s values
and its standards on risk and environmental, social and governance factors. On the basis that the RSP Awards are intended to provide greater certainty
of vesting in consideration of lower Base Salaries, the default will be for vesting to occur, unless the Remuneration Committee decides otherwise.
Non-Executive Directors’ Fees
Changes to Non-Executive Directors’ Fees will align with market benchmarking, which is the primary basis for determining Non-Executive Directors’ fees:
• Chair of the Board fee increased from £125,000 to £150,000 in January 2024
• Non-Executive Director (‘NED’) base fee increased from £45,000 to £50,000
•
Senior Independent Director fee £25,000
• Board Committee Chair fee £10,000
•
Employee engagement lead fee £10,000
NEDs are eligible to participate in the Company’s automatic enrolment pension plan.
There have been no instances of Directors electing to waive their fees.
27. See definitions on pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
146
PensionBee Group plcCorporate Governance Report Single Total Figure of Remuneration (Audited)
The figures included in the tables below represent remuneration relating to 2023 and 2022 respectively.
Executive Directors Non-Executive Directors
2023
Romi
Jonathan Lister
Fixed Pay
Base Salary/Fees
Benefits
Pension
Savova
£186,583
n/a
£2,018
Parsons
£186,583
n/a
£2,202
Christoph
J. Martin
Mark
Wood
£186,583
£125,000
n/a
£2,202
Variable Pay
Annual Bonus
£159,050
£159,050
£159,050
Long-Term Incentives
£0
£0
£0
n/a
n/a
n/a
n/a
Total
£347,651
£347,835
£347,835
£125,000
Total Fixed Remuneration
£188,601
£188,785
£188,785
£125,000
Total Variable Remuneration
£159,150
£159,050
£159,050
n/a
Mary
Francis
£90,000
n/a
n/a
n/a
n/a
£90,000
£90,000
n/a
Executive Directors Non-Executive Directors
2022
Romi
Jonathan Lister
Fixed Pay
Base Salary/Fees
Benefits
Pension
Variable Pay
Annual Bonus
Long-Term Incentives
Savova
£175,000
n/a
£2,202
£72,192
£0
Parsons
£175,137
n/a
£2,202
£72,192
£0
Christoph
J. Martin
Mark
Wood
£175,137
£125,000
n/a
£2,202
£72,192
£0
n/a
n/a
n/a
n/a
Total
£249,313
£249,531
£249,531
£125,000
Total Fixed Remuneration
£177,202
£177,339
£177,339
£125,000
Total Variable Remuneration
£72,192
£72,192
£72,192
n/a
Mary
Francis
£90,000
n/a
n/a
n/a
n/a
£90,000
£90,000
n/a
Michelle
Cracknell
£55,000
n/a
£2,202
n/a
n/a
£57,202
£57,202
n/a
Michelle
Cracknell
£55,000
n/a
£2,202
n/a
n/a
£57,202
£57,202
n/a
Lara
Oyesanya
£45,000
n/a
£1,938
n/a
n/a
£46,938
£46,938
n/a
Lara
Oyesanya
£45,000
n/a
£1,938
n/a
n/a
£46,938
£46,938
n/a
147
Annual Report and Financial Statements 2023Corporate Governance Report Notes to the Table
Base Salary
The 2022 table reflects the pro rata base salary for the relevant period of appointment for Christoph
Company’s culture and supporting its mission, vision and values. Specific measurable goals were set,
J. Martin (1 July 2022 to 31 December 2022) and Lara Oyesanya (21 April 2022 to 31 December 2022)
including maintaining the Cost per Invested Customer within the budgetary objectives, customer
i.e. what the annual figure would be for the relevant individual in order to enable a comparison with
growth, brand awareness and high satisfaction rates among employees.
the other Directors.
Benefits
The CTO’s personal objectives included building a world-class engineering function, with high levels
of engineer job satisfaction and productivity, maintaining and improving our Information Security
Management System, technology platform scalability to support projected volumes of customers
The Executive Directors did not receive benefits from the Company, but are eligible to participate in
and the data platform guiding decision making and budget allocation across departments,
Company-wide schemes from time to time.
Pension
The Executive Directors received pension benefits equivalent to 5% of qualifying earnings.
Annual Bonus for 2023: Targets and Outcomes
The Annual Bonus for FY23 was subject to performance measures which consisted of the equally
leadership in product innovation, development of an industry leading technology platform with
increased velocity and quality, and further extensions of the Company’s data platform, each of which
were fully met. Specific measurable goals were set, including engineer satisfaction rates, information
security KPIs, successful recertification to the ISO regime and technology platform health metrics.
The CFO’s personal objectives included managing our capital structure efficiently, business planning
and monitoring of the execution of the business plan and particularly the delivery of the Company’s
core financial objectives, including the delivery of Adjusted EBITDA profitability.29 The CFO was
evaluated on the quality and process relating to the preparation of the budget, monthly accounts
weighted measures of: Revenue (25% of Annual Bonus), Adjusted EBITDA Margin (25% of Annual
and departmental expenditure plans, as well as the overall integrity and delivery timeline of the
Bonus), a Customer Love Composite Score (25% of Annual Bonus), which included equally weighted
Company’s financial results. The CFO was particularly responsible for the timely and accurate delivery
targets in relation to Invested Customers, Trustpilot Score, App Store Ratings, the Net Promoter Score
and Complaints), and Personal Performance (25% of Annual Bonus).28
of the Company’s internal and external financial materials, including those contained within the
Annual Report and investor presentations.
The Personal Performance element is based on a competency matrix, comprising quantitative
and qualitative measures, that rewards each Executive Director for their achievements over the
course of the year in line with their accomplishments and embodies the Company’s values of
Love, Quality, Honesty, Innovation and Simplicity. The competency matrix refers to the Executive
Director’s achievements with respect to furthering the Company’s culture, the Company’s approach
to diversity and inclusion, the Company’s delivery of operational performance, strategic initiatives
and the approach to risk management controls, including the timely submission of policies and risk
assessments, the minimisation and effective resolution of risk incidents and adherence to budgetary
cost controls.
The CEO’s personal objectives included managing the Company to ongoing Adjusted EBITDA
profitability while maintaining the growth rate by deploying our marketing budget effectively. In
addition, the CEO was required to grow PensionBee as a trusted brand with increased presence
as a public data Company. In addition, the CEO focused on leadership through maintaining the
28. See definitions on pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
29. See definitions on pages 58 to 59 of the Measuring our Performance section of the Strategic Report.
148
PensionBee Group plcCorporate Governance Report The table below summarises the 2023 performance targets and outcomes:
Metric29
Revenue
Adjusted EBITDA Margin
Customer Composite Score
of which: Invested Customers
of which: Trustpilot Score
of which: App Store Rating
average
of which: NPS
of which: Complaints per
1,000 accounts
25%
25%
5%
5%
5%
5%
5%
Weighting Threshold
Target
Max
Actual Out-turn
Cash Bonus (£)
Deferred Bonus (£)
Total Bonus (£) Total Bonus (% Max)
£19.8m £23.4m £24.5m £23.8m
69%
(54)%
(50)%
(46)%
(35)%
100%
CEO
CTO
CFO
£30,000
£30,000
£30,000
£129,050
£129,050
£129,050
£159,050
£159,050
£159,050
79.52%
79.52%
79.52%
215,000
232,000
245,000
229,000
46%
50%
Awards Vesting in the Year
4.6
4.5
4.5
54
4.6
4.6
57
4.7
4.7
6 0
4.6
50%
53
0%
Under the regulations, long-term incentive awards are included when and to the extent that the
performance underpins are met. The next awards to be assessed against pre-vest performance
conditions will be the 2022 RSP Award grant reported below (granted in respect of 2021 performance)
at the end of this year. No RSP Awards were due to vest in 2023.
1.10
1.00
0.90
0.54
100%
Awards Granted in the Year
Personal Performance
25%
25%
50%
100%
100%
100%
The following awards with respect to the Financial Year ending 2022 were granted in March 2023:
Overall
80%
The Committee considered that the overall performance and the experience of stakeholders was
appropriately reflected in the overall bonus outcome and therefore no discretion was required to
amend the result.
CEO
CTO
CFO
Restricted Share Plan30
Deferred Share Bonus31
224,014
224,014
224,014
56,008
56,008
56,008
For FY23, 100% of any bonus linked to Company-wide performance and 40% of any bonus linked
to individual performance is deferred, resulting in 81% deferral for Executive Directors. The deferred
bonus vests in equal proportions over three years.
Consistent with the approach adopted for all equity awards, participants are required to bear any
employers’ NICs on those awards which means that the headline level of DSB Awards and RSP Awards
overstates their commercial value by approximately 14% compared with other listed companies
where the company itself bears this charge. This reflects the emerging profitability status of the
Company and will be kept under review for subsequent grants.
30. The RSP Awards represent 125% of their salaries as at 31 December 2022 (i.e. £218,750) using a share price of 97.65p (being the
average closing share price on the two dealing days immediately prior to grant. The RSP Awards are subject to a performance underpin
assessing performance to the third anniversary of grant but no pre-set percentage would vest for any given level of performance. They
will then be subject to an additional two year holding period.
31. The DSB Awards represent the proportion of the bonus awarded in shares contingent on employment to the third anniversary of
grant. They had a face value of £54,692 using a share price of 97.65p.
149
Annual Report and Financial Statements 2022Corporate Governance Report Shares Interests and
Incentives
Romi Savova
Jonathan Lister Parsons
Christoph J. Martin32
Mark Wood33
Mary Francis34
Michelle Cracknell
Lara Oyesanya
Shares Owned Outright
Subject to Performance
Subject to Performance
Subject to
Exercised Options
Awards Unvested and
Options Unvested and Not
Options Vested and Not
Conditions
Conditions
Performance Conditions
80,040,722
13,322,800
796,594
2,822,175
50,141
0
30,903
376,559
376,559
332,975
0
0
0
0
185,332
185,332
184,658
0
0
0
0
20,000
20,000
84,746
0
0
0
0
90,000
90,000
56,186
n/a
n/a
n/a
n/a
Shareholding Requirement
Met
Yes
Yes
Yes
n/a
n/a
n/a
n/a
Other Statutory Requirements35
Our middle market share price at the close of business on 31 December 2023 was 98p and the range of the middle market price during the year was 50.2p to 110p.
Since the year-end there have been no other changes in the shareholdings.
Total Shareholder’s Return
The chart that follows shows the value of £100 invested in the Company on Admission at the IPO price, compared with the value of £100 invested in the FTSE All Share Index at the same date and the
movement in value until 31 December 2023. The Company was included in the FTSE All Share Index in 2023.
t
i
n
u
0
0
1
a
f
o
e
u
a
V
-
R
S
T
l
n
o
i
s
s
i
m
d
A
t
a
e
d
a
m
t
n
e
m
t
s
e
v
n
i
120
100
80
60
40
20
0
23 Apr 2021
30 Dec 2023
32. Christoph J. Martin’s shareholding of 719,110 includes 90,000 shares held in his SIPP.
33. Mark Wood’s shareholding of 2,822,175 includes 18,500 Shares held in his SIPP and 65,000 Shares held in a SIPP belonging to his wife.
34. Mary Francis’s shareholding is held jointly with her husband.
35. All numbers are unaudited unless otherwise stated.
150
PensionBee
FTSE All Share Index
Source: Datastream
(a LSEG product)
PensionBee Group plcCorporate Governance Report
Change in CEO Total Remuneration
CEO Single Figure History
Total Remuneration36
Annual Bonus as % of Max
Long-Term Incentive Shares Vesting as % of Max
FY21
FY22
FY23
CEO Pay Ratio37
£513,384
£249,393
£347,651
75.00%
41.25%
79.52%
n/a
n/a
n/a
The table below shows the multiple of our CEO’s pay ratio to median, lower quartile and upper quartile pay at the Company. The calculations are based on methodology Option A as defined by the
regulations and calculating the pay and benefits of all UK employees on a full-time equivalent basis. The CEO pay ratio is based on comparing the CEO’s pay to that of PensionBee’s UK-based employee
population. For the CEO the FY23 figure is based on the single figure total of £347,651.
Methodology
Option A
Total Pay
Salary Component
The Committee will continue to monitor trends in the CEO pay ratio over the longer term.
Relative Importance of Spend on Pay
Total Employee Costs (Note 5 of the Financial Statements)
Distributions to Shareholders
36. The table ‘Single Total Figure of Remuneration (Audited)’ outlines detailed components of the CEO’s Total Remuneration.
37. All numbers are unaudited unless otherwise stated.
25th Percentile
50th Percentile
75th Percentile
10:1
£33,686
£28,861
2022
£9.6m
£0
9:1
£39,239
£32,833
2023
£12.5m
£0
6:1
£57,201
£55,000
YoY % Change
30%
n/a
151
Annual Report and Financial Statements 2023Corporate Governance Report Percentage Change in Director Pay
Year on Year Change38
Romi Savova
Jonathan Lister Parsons
Christoph J. Martin40
Mark Wood
Mary Francis
Michelle Cracknell
Lara Oyesanya41
Percentage Change in
Salary
Percentage Change in Pension Contributions
Percentage Change in Annual Bonus
Overall Percentage Change
7%
7%
7%
0%
0%
0%
0%
-8%39
0%
0%
n/a
n/a
0%
0%
120%
120%
120%
n/a
n/a
n/a
n/a
39%
39%
39%
0%
0%
0%
0%
Payments for Loss of Office and/or Payments to Former Directors
No payments for loss of office, nor payments to former Directors were made during the year under review.
Statement of Voting at the Annual General Meeting (Unaudited)
At the Company’s 2023 AGM, shareholders were asked to vote on the Directors’ Remuneration Report for the year ended 31 December 2021 and the Directors’ Remuneration Policy. The resolutions received
significant votes in favour by shareholders. The votes received were:
Resolution
To approve the Directors’ Remuneration Report (2023 AGM)
To approve the Directors’ Remuneration Policy (2023 AGM)
Votes For
142,932,937
142,882,040
% of Votes
Votes Against
% of Votes
Votes Withheld
99.28
99.28
1,032,769
1,032,769
0.72
0.72
2,762
53,659
This report was approved by the Board of Directors and signed on its behalf by:
Mary Francis CBE
Chair of the Remuneration Committee
13 March 2024
38. Annualised figures including compensation from 2022. These figures do not include Long Term Incentives. The figures are not comparable to the table ‘Single Total Figure of Remuneration (Audited)’.
39. As an unanticipated result of a correction made in the August payroll (correcting for an error in the May payroll in conjunction with an exercise of share options), there was no pension payment made for Romi in the August payroll. Her net pay in August was increased
accordingly to cover the shortfall.
40. The comparison in respect of Christoph J. Martin’s pay is based on actuals for 2022, not the pro rata salary shown in the table ‘Single Total Figure of Remuneration (Audited)’.
41. Since Lara joined the company in 2022, there is no comparable year-on-year change to disclose.
152
PensionBee Group plcCorporate Governance Report 8 Directors Report
The Directors’ Report for the year ended 31 December 2023 comprises pages 153 to 157 of this report, together with the sections of the Annual Report and Financial Statements 2023 incorporated by
reference. The Corporate Governance Report set out on pages 103 to 159 is incorporated by reference into this report and, accordingly, should be read as part of this report.
As permitted by legislation, some of the matters required to be included in the Directors’ Report have instead been included in the Strategic Report set out on pages 4 to 102, as the Board considers them
to be of strategic importance.
Taken together, the Strategic Report on pages 4 to 102 and this Directors’ Report fulfil the requirement of Disclosure, Guidance and Transparency Rule 4.1.5R to provide a management report.
Disclosure
Future Business Developments
Research and Development
Financial Instruments
Financial Risk Management Objectives and Policies
Exposure to Price, Credit and Liquidity Risk
Location
Our Strategy, pages 25-33
Note 2 of the Financial Statements, pages 173-178
Note 22 of the Financial Statements, pages 186-188
Note 22 of the Financial Statements, pages 186-188
Managing our Risks, pages 90-101
Note 22 of the Financial Statements, pages 186-188
Greenhouse Gas emissions (‘GHG’), contained within our Task Force on Climate-related Financial Disclosures (‘TCFD’) section
Climate-related Disclosures, pages 77-89
People, Values and Culture
Section 172 Statement
Stakeholder Engagement
Directors’ Interests
Statement of Directors’ Responsibilities
About Us, pages 14-24
Our People, pages 36-47
ESG Considerations (Stakeholder Engagement), pages 60-76
ESG Considerations (Section 172 Statement), pages 60-76
ESG Considerations (Stakeholder Engagement), pages 60-76
Directors’ Remuneration Report, pages 137-152
Statement of Directors’ Responsibilities, page 158
Applicable Disclosures required under Listing Rule 9.8.4R
Location
Details of Long-Term Incentive Schemes
Relationship with Major Shareholder Statement
Directors’ Remuneration Report, pages 137-152
Directors’ Report, pages 153-157
153
Annual Report and Financial Statements 2023Corporate Governance Report Principal Activity
Appointment and Replacement of Directors
PensionBee is a leading online pension provider in the UK, a direct-to-consumer financial technology
The rules governing the appointment and replacement of Directors are set out in the Company’s
company with a mission to make pensions simple, so that everyone can look forward to a happy
Articles and are governed by the Code, the Act and related legislation. Directors may be appointed
retirement. The Company is registered as a public limited company under the Companies Act 2006
by ordinary resolution at a general meeting, by a decision of the Directors or by the sole Director if
and is listed on the Premium Segment of the Main Market of the London Stock Exchange.
the Company has only one Director.
Results and Dividends
All Directors are subject to election by shareholders at the first Annual General Meeting (‘AGM’)
following their appointment and to annual re-election thereafter, in accordance with the UK
The results for the year are set out in the Consolidated Statement of Comprehensive Income on
Corporate Governance Code.
page 169 of the Financial Statements. The Directors are not proposing a final dividend for the year
ended 31 December 2023.
Directors and their Interests
Please also refer to the paragraph entitled Relationship with Major Shareholder set out below.
Articles of Association
The names and biographies of the Directors who were in office during the year ended 31 December
The Articles may be amended by a special resolution of the Company’s shareholders. They were
2023 are set out on pages 107 to 113 of the Board of Directors and Executive Management section of
last reviewed, updated and adopted at the Company’s AGM in May 2022. As well as setting
the Corporate Governance Report.
out the rules governing the appointment and replacement of Directors, the Articles also set
out, amongst other matters, the Directors’ general authority, rules on decision-making by the
Directors’ interests in the Ordinary shares of PensionBee Group plc as at 31 December 2023 are set
Directors, as well as in full the powers of the Directors in relation to issuing shares and buying back
out within pages 137 to 152 of the Directors’ Remuneration Report within the Corporate Governance
the Company’s own shares. A copy of the Company’s Articles can be found on the Company’s
Report. Details of Directors’ service contracts are set out within pages 114 to 121 of the Corporate
website at pensionbee.com/investor-relations/esg.
Governance Statement within the Corporate Governance Report.
During the period covered by this report, no Director had any material interest in a contract to which
Directors’ Insurance and Indemnities
the Company or any of its subsidiary undertakings was a party (other than their own service contract)
The Company’s Articles provide, subject to the provisions of UK legislation, an indemnity for Directors
that requires disclosure under the requirements of the Companies Act 2006.
and Officers of the Company and the Group in respect of liabilities they may incur in the discharge of
their duties or in the exercise of their powers.
Directors’ Powers
The powers of the Directors are set out in the Articles of Association and the Companies Act 2006
respect of all the Company’s Directors at the date of this Annual Report. The Company will review its
Directors’ and Officers’ liability insurance cover is maintained by the Company and is in place in
(the ‘Act’) and are subject to any directions given by special resolution. The Directors are responsible
level of cover on an annual basis.
for the management of the Company’s business, for which purpose they may exercise all the powers
of the Company whether relating to the management of the business or not. The Directors may also,
Compensation for Loss of Office
subject to the Articles, delegate any of their powers, authorities and discretions as they see fit.
The Articles give the Directors power to appoint and replace Directors. Unless otherwise determined
provide compensation for loss of office or employment resulting from a takeover except that
by the Company by ordinary resolution, the number of directors (other than alternate directors) must
provisions of the Company’s historic EMI Option Scheme and Non tax-qualifying Option Scheme
not be less than two and must not be more than thirteen.
may cause options and awards outstanding under such schemes to vest on a takeover.
The Company does not have any agreements with any Executive Director or employee that would
154
PensionBee Group plcCorporate Governance Report Restricted Share Plan Awards will vest subject to the measurement of the underpin at the time
Authority to Purchase Its Own Shares
of the event and, unless the Remuneration Committee determines otherwise, time pro-rated
Deferred Share Bonus Awards will vest in full.
Pursuant to the terms of its Articles, the Company is permitted to purchase its own shares subject
to shareholder approval. The necessary shareholder authority was not sought at the 2023 Annual
Further information is provided on pages 137 to 152 of the Directors’ Remuneration Report
General Meeting given that the Company is a pre-profit business with a significant opportunity for
within the Corporate Governance Report.
Share Capital
continued growth.
Significant Interests
Details of the Company’s authorised and issued share capital, together with movements
The interests in shares notified to the Company in accordance with the Disclosure Guidance and
during the year, are set out in Note 15 of the Financial Statements. As at 31 December 2023,
Transparency Rules as at 31 December 2023 are set out below.
the Company’s issued share capital consisted of 223,962,781 Ordinary shares with a nominal
value of £0.001 each. Since the financial period end the Company’s issued share capital has
increased to 224,040,619 due to the exercise of vested options granted under the historic EMI
Name of shareholder
Option Scheme and Non tax-qualifying Option Scheme, together with the exercise of vested
options under the Company’s current Omnibus Plan. Details of the employee share plans are
provided on pages 137 to 152 of the Directors’ Remuneration Report within the Corporate
Governance Report.
Romina Savova
Mudita Advisors LLP
Jonathan Lister Parsons
The Company has one class of Ordinary Share. There are no specific restrictions on the size of
the holding nor on the transfer of shares, which are both governed by the general provisions
State Street Global Advisors, Inc.
of the Articles and prevailing legislation. Ordinary shareholders are entitled to receive notice
Norges Bank
Number of Ordinary Shares of
£0.001 each Held
80,040,722
17,923,230
13,322,800
8,757,600
7,457,930
Percentage of Total Shares
Outstanding/Total Voting
Rights
35.74%
8.00%
5.95%
3.91%
3.33%
of, and to attend and speak at, any general meeting of the Company. On a show of hands,
every shareholder present in person or by proxy (or being a corporation represented by a
duly authorised representative) shall have one vote, and on a poll every shareholder who is
present in person or by proxy shall have one vote for every share of which they are the holder.
The Notice of Annual General Meeting specifies deadlines for exercising voting rights and
appointing a proxy or proxies.
Lock-Up Arrangements
As part of the Company’s initial public offering (‘IPO’), lock-up arrangements were put in
place in respect of the Company’s shares held by the pre-IPO investors. During 2023 the last
remaining lock-up of the shareholdings of the Executive Directors expired on 26 April 2023.42
Further details of the lock-up arrangements are set out in the Company’s Prospectus, a copy
of which is available on the Company’s website at pensionbee.com/investor-relations/ipo-
centre.
42. Includes the shareholding at the point of the Company’s IPO, together with any shares received subsequently
for the duration of the relevant lock-up period as a result of the exercise of any options granted pre-IPO.
Between 31 December 2023 and 13 March 2024 (the latest practicable date for inclusion in this
report), the Company had been notified of the following holdings of voting rights in the Ordinary
Share capital of the Company: Mudita Advisors LLP 20,494,883 Ordinary Shares (9.15%).
Romi Savova and Jonathan Lister Parsons are deemed to be acting in concert, together with certain
other shareholders who represent, in aggregate, approximately 1,022,600 shares or 0.5% of the
Company’s Total Shares Outstanding/Total Voting Rights.
Relationship with Major Shareholder
In April 2022, in light of the transfer of the entire share capital of the Company from the High Growth
Segment of the London Stock Exchange plc (‘LSE’) to the Premium Segment of the Official List
of the Financial Conduct Authority and to trading on the LSE’s Main Market for listed securities, a
relationship agreement was put in place between Romi Savova, Jonathan Lister Parsons (together,
the ‘Signing Controlling Shareholders’) and the Company (‘Relationship Agreement’). The principal
purpose of the Relationship Agreement is to ensure that the independence provisions as set out in
Chapter 6 of the Listing Rules (‘Independence Provisions’) are complied with.
155
Annual Report and Financial Statements 2023Corporate Governance Report Pursuant to the Independence Provisions, the Relationship Agreement contains undertakings from
Political and Charitable Contributions
the Signing Controlling Shareholders that they will each, and will ensure that each of their associates
will:
During the financial year ending 31 December 2023, the Company did not make any charitable
• Conduct all transactions and arrangements with the Company or any other member of the Group
donations, nor any political contributions.
on an arm’s length basis and on normal commercial terms;
• Not take any action that would have the effect of preventing the Company from complying with
Change of Control - Significant Agreements
its obligations under the Listing Rules; and
• Not propose or procure the proposal of a shareholder resolution which is intended or appears to
be intended to circumvent the proper application of the Listing Rules.
There are a number of agreements that may take effect after, or terminate upon, a change of control
of the Company, such as commercial contracts and property lease arrangements. None of these are
considered to be significant in terms of their likely impact on the business as a whole.
Romi Savova has also agreed to procure the compliance of certain other shareholders who, in
addition to Jonathan Lister Parsons, are deemed to be acting in concert with her, and who represent,
in aggregate, approximately 0.5% of the Company’s voting rights (the ‘Non-signing Controlling
Shareholders’ together with the Signing Controlling Shareholders, the ‘Controlling Shareholder
Group’) with the Independence Provisions. The Company considers, in light of its understanding
of the relationship between Romi Savova and each of the Non-signing Controlling Shareholders,
that Romi Savova can procure the compliance of the Non-signing Controlling Shareholders and their
respective associates with the Independence Provisions.
Under the terms of the Relationship Agreement, in the event Romi Savova is no longer an Executive
Director, she has a right to appoint two non-executive representative directors to the Board, provided
she holds 25% or more of the voting rights of the Company’s shares, and one director, provided she
holds 10% or more of the voting rights of the Company’s shares.
Environment
The Board considers environmental matters to be of strategic importance. Therefore, relevant
information contained within our Task Force on Climate-Related Financial Disclosures section within
pages 77 to 89 of the Climate-related Disclosures section of the Strategic Report, is incorporated into
the Directors’ Report by cross reference. The TCFD Disclosure includes our annual report on GHG
emissions.
Internal Control and Risk Management
The Board is ultimately responsible for establishing the risk appetite and the risk management
framework at PensionBee. The Audit and Risk Committee is responsible for monitoring and reviewing
the effectiveness of the Group’s internal control and risk management systems.
The Board confirms that the Company is in compliance with the undertakings in the Listing Rules
and the Relationship Agreement and so far as the Company is aware, the undertakings have been
complied with by each member of the Controlling Shareholder Group.
Further detail is set out on pages 90 to 101 of the Managing our Risks section of the Strategic Report and
on pages 129 to 136 of the Audit and Risk Committee Report within the Corporate Governance Report.
Capital Management
Market Abuse Regulation
PensionBee Limited, a subsidiary of PensionBee Group plc, is a FCA regulated business and subject to
holding a Liquid Capital requirement under IPRU (INV) 5.9. As of December 2023, the capital resources
stood at £12.6m (unaudited) as compared to a capital resource requirement of £1.6m (unaudited),
resulting in a coverage of 7.9x.
Research and Development
Details of the Company’s research and development is contained in Note 2 of the Financial Statements.
The Company has in place its own internal dealing policies and procedures which apply to all
employees and which encompass the requirements of the Market Abuse Regime.
Going Concern and Viability Statement
The Consolidated Financial Statements have been prepared on a going concern basis. After making
enquiries and considering the Group’s financial position, its business model, strategy, financial
forecasts and regulatory capital together with its principal risks and uncertainties, the Directors have
a reasonable expectation that the Group will be able to continue in operation and meet its liabilities
as they fall due for at least 12 months from the date of signing this report. The going concern basis of
preparation is discussed within Note 2 of the Financial Statements.
156
PensionBee Group plcCorporate Governance Report In accordance with provision 31 of the UK Corporate Governance Code, the Directors have assessed
Annual General Meeting
the prospects of the Group over a longer period than the 12 months required by the going concern
provision. Details of the assessment can be found on page 102 in the Viability Statement section of
The full details of the Company’s 2024 AGM, which will take place on 16 May 2024, are set out in the
the Strategic Report.
Post Balance Sheet Events
Notice of 2024 AGM. A copy of this can be found on the Company’s website at:
pensionbee.com/investor-relations/annual-general-meeting.
Approved by the Board on 13 March 2024 and signed on its behalf by:
On 4 March 2024, the Company announced its proposed expansion into the United States
of America (‘US’), having taken an important step by entering into an exclusive, non-binding
term sheet with a large, US-based global financial institution. Under the proposed strategic
relationship, we will deliver the US service through PensionBee Inc, a yet to be established
Romi Savova
Chief Executive Officer
wholly-owned subsidiary of the Company, with operational headquarters in New York.
13 March 2024
We will manage the operations of the US business, including the hiring of a local team,
making available its award-winning online retirement proposition and UK-based proprietary
technology to consumers in the US Defined Contribution market. The US-based partner
will provide its expertise and substantial marketing funding. Correspondingly, our financial
contribution will be financed from the Company’s existing resources. Entry into a final binding
agreement between the parties is subject to confirmatory due diligence, legal documentation
and regulatory approvals, with launch expected in late 2024.
Further details are set out on pages 10 to 13 of the Chief Executive Officer’s Review and in Note 24 of
the Financial Statements.
Disclosure of Information to Auditor
Each of the Directors at the date of the approval of this Annual Report confirms that:
•
So far as each of them is aware, there is no relevant audit information of which the Group’s auditor
is unaware; and
• each of them has taken all the reasonable steps that they ought to have taken as a Director to
make themself aware of any relevant audit information and to establish that the Group’s auditor
is aware of the information.
The confirmation is given and should be interpreted in accordance with the provisions of section 418
of the Companies Act 2006.
Auditor
Deloitte LLP has indicated their willingness to continue in office and resolutions to reappoint them as
auditor and to authorise the Audit and Risk Committee to determine the auditor’s remuneration will
be proposed at the forthcoming Annual General Meeting (‘AGM’) to be held on 16 May 2024.
157
Annual Report and Financial Statements 2022Corporate Governance Report 9 Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and Financial Statements in accordance
We confirm that to the best of our knowledge:
with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under
that law, they are required to prepare the Group Financial Statements in accordance with International
Financial Reporting Standards (‘IFRS’) as adopted by the UK in conformity with the requirements of
the Companies Act 2006 and have elected to prepare the Parent Company Financial Statements
in accordance with UK Accounting Standards, including FRS 102, the Financial Reporting Standard
applicable in the UK and Republic of Ireland. Under company law, the Directors must not approve the
Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs
of the Group and the Company and of their profit or loss for that period.
In preparing each of the Group and Parent Company Financial Statements, the Directors are required
to:
•
select suitable accounting policies and then apply them consistently;
•
•
The Financial Statements, prepared in accordance with the applicable set of accounting
standards, give a true and fair view of the assets, liabilities and financial position of the Group and
the Company and profit or loss of the Group and the undertakings included in the consolidation
taken as a whole; and
The Strategic Report includes a fair review of the development and performance of the business
and the position of the issuer and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties that it faces.
We consider that the Annual Report and Financial Statements 2023, taken as a whole, is fair, balanced
and understandable and provides the information necessary for shareholders to assess the Group’s
and the Company’s position and performance, business model and strategy.
Approved by the Board of Directors on 13 March 2024 and signed on its behalf by:
• make judgements and estimates that are reasonable, relevant, reliable and prudent;
•
state whether applicable UK Accounting Standards have been followed, subject to any material
departures disclosed and explained in the Financial Statements; and
• prepare the Financial Statements on a going concern basis unless it is inappropriate to presume
that the Group and the Company will continue in business.
Romi Savova
Chief Executive Officer
13 March 2024
The Directors are responsible for keeping adequate accounting records that are sufficient to show
and explain the Group’s and the Company’s operations and disclose with reasonable accuracy at any
time the financial position of the Group and the Company and that enable them to ensure that its
Financial Statements comply with the Companies Act 2006. They are responsible for such internal
control as they determine is necessary to enable the preparation of Financial Statements that are free
from material misstatement, whether due to fraud or error, and have general responsibility for taking
such steps as are reasonably open to them to safeguard the assets of the Group and the Company
and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic
Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Report that
complies with that law and those regulations. The Directors are responsible for the maintenance and
integrity of the corporate and financial information included on the Company’s website. Legislation
in the UK governing the preparation and dissemination of Financial Statements may differ from
legislation in other jurisdictions.
158
PensionBee Group plcCorporate Governance Report 159
Annual Report and Financial Statements 2022Corporate Governance Report Financial
Statements
1 Independent Auditor's Report to
the Members of PensionBee Group plc
Report on the Audit of the Financial Statements
1 Opinion
In our opinion:
• the financial statements of PensionBee Group plc (the ‘Parent Company’) and its subsidiary
(the ‘Group’) give a true and fair view of the state of the Group’s and of the Parent Company’s
affairs as at 31 December 2023 and of the Group’s loss for the year then ended;
The financial reporting framework that has been applied in the preparation
of the Group financial statements is applicable law and United Kingdom
adopted
international accounting standards. The financial reporting
framework that has been applied in the preparation of the Parent Company
financial statements is applicable law and United Kingdom Accounting
Standards, including FRS 102 “The Financial Reporting Standard applicable
• the Group financial statements have been properly prepared in accordance with United
in the UK and Republic of Ireland” (United Kingdom Generally Accepted
Kingdom adopted international accounting standards;
Accounting Practice).
• the Parent Company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice, including Financial Reporting
Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of
2 Basis for Opinion
Ireland”; and
• the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements which comprise:
the Consolidated Statement of Comprehensive Income;
the Consolidated and Parent Company Statements of Financial Position;
the Consolidated and Parent Company Statements of Changes in Equity;
the Consolidated Statement of Cash Flows;
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the auditor’s responsibilities for the audit of
the financial statements section of our report.
We are independent of the Group and the Parent Company in accordance
with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the Financial Reporting Council’s (the
‘FRC’s’) Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these
requirements. The non-audit services provided to the Group and Parent
Company for the year are disclosed in Note 9 to the financial statements. We
•
•
•
•
•
•
the related Notes 1 to 25 to the Consolidated Financial Statements; and
confirm that we have not provided any non-audit services prohibited by the
the related Notes 1 to 10 of the Parent Company Financial Statements.
FRC’s Ethical Standard to the Group or the Parent Company.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
161
Annual Report and Financial Statements 2023Financial Statements 3 Summary of our Audit Approach
Key audit
matters
The key audit matter that we identified in the current year was:
·
Revenue recognition
Within this report, key audit matters are identified as follows:
Similar level of risk
•
•
•
We obtained and inspected correspondence between the Group and its regulator, the FCA, to
identify any items of interest which could potentially indicate non-compliance with legislation or
potential litigation, or regulatory action held against the Group;
We have assessed the appropriateness of the disclosures made in relation to going concern in
Note 2 to the financial statements;
We have reviewed the Directors’ Report and the Corporate Governance Statement for material
consistency with regards to the appropriateness of adopting the going concern basis of
Materiality
The materiality that we used for the Group financial statements was £456,500
accounting and any material uncertainties in the financial statements.
which was determined on the basis of 2% of Group Revenue. This basis re-
mains unchanged from the previous period.
Scoping
Our audit scope focused on PensionBee Limited and PensionBee Group plc.
The Parent Company and the subsidiary account for 100% of the Group’s Loss
before Tax, 100% of the Group’s Revenue and 100% of the Group’s Net Assets.
Significant changes
There have not been any significant changes in our approach.
in our approach
4 Conclusions relating to Going Concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group’s and Parent Company’s ability to continue
to adopt the going concern basis of accounting included the following:
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the Group’s and
Parent Company’s ability to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we
have nothing material to add or draw attention to in relation to the directors’ statement in the financial
statements about whether the directors considered it appropriate to adopt the going concern basis
of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
5 Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current period and include the most significant assessed
We evaluated management’s going concern assessment in light of changes to the UK’s
risks of material misstatement (whether or not due to fraud) that we identified. These matters included
macroeconomic conditions; this included obtaining evidence such as underlying business plans
those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
and forecasts to support key assumptions;
audit; and directing the efforts of the engagement team.
We assessed management’s stress testing and the likelihood of the various scenarios that could
adversely impact upon the Group’s liquidity;
We assessed management’s ability to apply mitigative actions in response to a downturn
scenario. This included performing analysis of the Group’s cost base and identifying whether
there existed any significant committed expenditure;
We performed independent reverse stress testing which considered scenarios that could
adversely impact upon the Group’s liquidity. The stresses applied in our independent analysis
were more severe than those used by management in their stress tests;
These matters were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
•
•
•
•
162
PensionBee Group plcFinancial Statements 5.1 Revenue Recognition
6 Our Application of Materiality
Key audit matter
description
The sole material Revenue stream for the Group is fees from fund
6.1 Materiality
administration. These fees are earned for administering the customer
We define materiality as the magnitude of misstatement in the financial statements that makes it
pension schemes and are charged based on a fixed percentage of the value
probable that the economic decisions of a reasonably knowledgeable person would be changed or
of a customer’s assets held by the pension scheme. This fixed percentage
influenced. We use materiality both in planning the scope of our audit work and in evaluating the
is charged at a 50% discount for units above a set threshold The revenue
results of our work.
recognition key audit matter relates to both the accuracy of the fee
percentages applied by management when calculating the administration
fees, and the accuracy of the Assets under Administration (AUA) in the
pension scheme which the fees are applied to.
Based on our professional judgement, we determined materiality for the financial statements as a
whole as follows:
Group financial statements
Parent Company financial statements
A minor percentage change in either of the above may have a material impact
on the overall year-end result reported. Having considered the opportunities
Materiality
£456.5k (2022: £353.0k)
£456.5k (2022: £353.0k)
Basis for determining
2% of Revenue (2022: 2% of
1% of Net Assets capped at Group ma-
and incentives that may exist within the organisation for fraud, we identified
materiality
the greatest potential for fraud was within revenue recognition and the
revenue)
teriality (2022: 1% of Net Assets capped
at Group materiality)
accuracy of its calculation due to IT control findings. Revenue recognised in
Rationale for the
Revenue has been determined
The Parent Company exists primarily
the period ended 31 December 2023 was £23,817k (2022: £17,662k); further
benchmark applied
details are included within Note 2 and Note 4 to the financial statements.
How the scope of our
audit responded to
We obtained an understanding and tested the relevant controls relating to
the percentages and AUA value used in the calculation of the administration
the key audit
fees.
matter
as the most appropriate
as the holding company which carries
benchmark due to the fact
investments in Group subsidiaries and
that it is a key balance used
is the issuer of listed securities. We
for determining future
consider Net Assets to be the critical
profitability and stability
benchmark for this company.
of the Group, and is a key
metric used by stakeholders
in assessing the financial
performance of the Group.
We tested the appropriateness of the fee percentage applied by management
on customer pension schemes in the period and the accuracy of the
thresholds applied to use the 50% discount for units. With the involvement
of our analytics specialists, we performed a 100% recalculation of the 2023
administration fee Revenue based on customer transactional data.
We tested the completeness and accuracy of the underlying transactional
data which makes up the AUA in the pension scheme, through procedures
performed by the core audit team with the involvement of analytics
specialists. The engagement team agreed transactions made by customers in
the period to bank statements and money manager data, and has reconciled
the opening balance of customer data to prior year amounts.
Working with our analytics specialists we performed data quality checks to
assess whether that customer data was consistent with customer transactions
during the year.
Key
observations
Based on the work performed we have determined that the Revenue
recognised is appropriate.
Revenue
£23,817k
Group
materiality
£456.5k
Audit and Risk Committee
reporting Threshold
£22.8k
Revenue
Group materiality
Audit and Risk Committee reporting Threshold
163
Annual Report and Financial Statements 2023Financial Statements 6.2 Performance materiality
7.2 Our consideration of the control environment
We set performance materiality at a level lower than materiality to reduce the probability that, in
aggregate, uncorrected and undetected misstatements exceed the materiality for the financial
We obtained an understanding of the relevant controls over the financial reporting, payroll, expenses,
and cash cycles. We also tested the operating effectiveness of controls over the revenue cycle.
statements as a whole.
Performance
materiality
Group financial statements
Parent Company financial statements
65% (2022: 65%) of Group
65% (2022: 65%) of Parent Company
materiality
materiality
Basis and rationale
In determining performance materiality, we
for determining
considered the following factors:
performance
materiality
With the involvement of our IT specialists, we identified the relevant financial reporting IT systems, and
obtained an understanding of the relevant general IT controls (GITCs) and automated controls related
to those systems. Our GITC testing covered in scope applications, and their supporting infrastructure
(database and operating system) and included obtaining an understanding of controls around access
security and change management.
We reported findings from our controls work to the Audit and Risk Committee. Across all areas, we
adopted a non-controls reliance approach in response to these findings and we therefore performed
a. the quality of the control environment and whether we were able to
fully substantive procedures.
rely on controls;
b. the nature, volume and size of misstatements (corrected and/or
uncorrected) in the previous and current audits; and
c. the growth experienced by the Group compared to the prior year.
7.3 Our consideration of climate-related risks
In planning our audit, we have considered the potential impact of climate change on the Group’s
business and its financial statements.
The Group continues to develop its assessment of the potential impacts of environmental, social and
governance (ESG) related risks, including climate change, as outlined in ESG Considerations on pages
6.3 Error reporting threshold
60-76.
We agreed with the Audit and Risk Committee that we would report to the Committee all audit
We have performed our own qualitative risk assessment of the potential impact of climate change on
differences in excess of £22.8k (2022: £17.1k), as well as differences below that threshold that, in our
the Group’s account balances and classes of transactions. Our work involved:
view, warranted reporting on qualitative grounds. We also report to the Audit and Risk Committee on
disclosure matters that we identified when assessing the overall presentation of the financial statements.
• evaluating climate as a factor in risk assessments for potentially affected balances;
7 An Overview of the Scope of our Audit
7.1 Identification and scoping of components
Our audit was scoped by obtaining an understanding of the Group and its environment, including
•
assessing the risks identified and considered in the Group’s climate risk
assessment and the conclusion that there continues to be no material
impact of climate change risk on financial reporting; and
• Assessing the critical accounting judgements and key sources of estimation uncertainty
disclosure in Note 3 to the financial statements through consideration of the climate risks.
controls over revenue, and assessing the risks of material misstatement at the Group level.
As part of our audit procedures, we read and considered these disclosures to assess whether they are
The two financially significant entities of the Group are PensionBee Limited and the PensionBee Group
plc. We have considered both entities in the Group to be one business unit and have recognised them
as a single component.
Our full scope of audit accounts for 100% of the Group’s Profit before Tax, 100% of the Group’s Revenue
and 100% of the Group’s Net Assets. Audit work to respond to the risks of material misstatement was
performed directly by the Group audit engagement team.
164
materially inconsistent with the financial statements and knowledge obtained in the audit and we did
not identify any material inconsistencies as a result of these procedures.
PensionBee Group plcStrategic Report 8 Other Information
The other information comprises the information included in the Annual Report, other than the
financial statements and our Auditor’s Report thereon. The directors are responsible for the other
information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon.
10 Auditor’s Responsibilities for the Audit
of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements, or our knowledge obtained in the
the basis of these financial statements.
course of the audit, or otherwise appears to be materially misstated.
A further description of our responsibilities for the audit of the financial statements is located on
the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves.
auditor’s report.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
9 Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities on page 158, the directors
are responsible for the preparation of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the
Parent Company’s ability to continue as a going concern, disclosing as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but
to do so.
11 Extent to which the Audit was Considered Capable of Detecting
Irregularities, including Fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in
respect of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
11.1 Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud
and non-compliance with laws and regulations, we considered the following:
•
•
•
the nature of the industry and sector, control environment and business performance including
the design of the Group’s remuneration policies, key drivers for directors’ remuneration, bonus
levels and performance targets;
the Group’s own assessment of the risks that irregularities may occur either as a result of fraud or
error that was approved by the Audit and Risk Committee;
results of our enquiries of management, the directors and the Audit and Risk Committee about
their own identification and assessment of the risks of irregularities, including those that are
specific to the Group’s sector;
165
Annual Report and Financial Statements 2023Strategic Report •
any matters we identified having obtained and reviewed the Group’s documentation of their
• performing analytical procedures to identify any unusual or unexpected relationships that may
policies and procedures relating to:
indicate risks of material misstatement due to fraud;
•
•
•
identifying, evaluating and complying with laws and regulations and whether they were
aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any
actual, suspected or alleged fraud;
•
•
reading minutes of meetings of those charged with governance, reviewing internal audit reports
and reviewing correspondence with the FCA and HMRC; and
in addressing the risk of fraud through management override of controls, testing the
appropriateness of journal entries and other adjustments; assessing whether the judgements
made in making accounting estimates are indicative of a potential bias; and evaluating the
the internal controls established to mitigate risks of fraud or non-compliance with laws and
business rationale of any significant transactions that are unusual or outside the normal course
regulations;
of business.
•
the matters discussed among the audit engagement team and relevant internal specialists,
including IT, analytics and industry specialists regarding how and where fraud might occur in the
financial statements and any potential indicators of fraud.
We also communicated relevant identified laws and regulations and potential fraud risks to all
engagement team members including internal specialists, and remained alert to any indications of
fraud or non-compliance with laws and regulations throughout the audit.
As a result of these procedures, we considered the opportunities and incentives that may exist within
the organisation for fraud and identified the greatest potential for fraud within revenue recognition.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to
respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the Group operates
in, focusing on provisions of those laws and regulations that had a direct effect on the determination
of material amounts and disclosures in the financial statements. The key laws and regulations we
considered in this context included the UK Companies Act, the Listing Rules, and relevant tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect
on the financial statements but compliance with which may be fundamental to the Group’s ability
to operate or to avoid a material penalty. These included the Group’s operating licence, regulatory
solvency requirements and the regulations imposed by the Financial Conduct Authority (the ‘FCA’).
11.2 Audit response to risks identified
As a result of performing the above, we identified revenue recognition as a key audit matter related
to the potential risk of fraud. The key audit matters section of our report explains the matter in more
detail and also describes the specific procedures we performed in response to that key audit matter.
In addition to the above, procedures to respond to risks identified included the following:
•
reviewing the financial statement disclosures and testing the supporting documentation to
assess compliance with provisions of relevant laws and regulations described as having a direct
effect on the financial statements;
• making enquiries of management, the Audit and Risk Committee and in-house legal counsel
concerning actual and potential litigation and claims;
166
PensionBee Group plcStrategic Report Report on other Legal and Regulatory Requirements
12 Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been
properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the financial
year for which the financial statements are prepared is consistent with the financial
statements; and
• the Strategic Report and the Directors’ Report have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and
their environment obtained in the course of the audit, we have not identified any material
misstatements in the Strategic Report or the Directors’ Report.
13 Corporate Governance Statement
The Listing Rules require us to review the Director’s Report in relation to going concern, longer-
term viability and that part of the Corporate Governance Statement relating to the Group’s
compliance with the provisions of the UK Corporate Governance Code specified for our review.
•
•
•
•
the directors’ statement on fair, balanced and understandable as set out on page 153;
the board’s confirmation that it has carried out a robust assessment of the emerging
and principal risks as set out on page 153;
the section of the Annual Report that describes the review of effectiveness of risk
management and internal control systems as set out on pages 90 to 101; and
the section describing the work of the Audit and Risk Committee as set out on pages
129 to 136.
14 Matters on which we are Required to Report by Exception
14.1 Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
•
•
•
we have not received all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the Parent Company, or returns adequate
for our audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and
returns.
Based on the work undertaken as part of our audit, we have concluded that each of the
We have nothing to report in respect of these matters.
following elements of the Corporate Governance Statement is materially consistent with the
financial statements and our knowledge obtained during the audit:
•
•
the statement in the Directors’ Report with regards to the appropriateness of adopting
the going concern basis of accounting and any material uncertainties identified as set
out on page 153;
the directors’ explanation as to its assessment of the Group’s prospects, the period this
assessment covers and why the period is appropriate as set out on page 153;
14.2 Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of
directors’ remuneration have not been made or the part of the Director’s Remuneration Report to be
audited is not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
167
Annual Report and Financial Statements 2023Strategic Report 15 Other Matters which we are Required to Address
15.1 Auditor tenure
Following the recommendation of the Audit and Risk committee, we were appointed by the
Board of Directors on 23 June 2021 to audit the financial statements for the year ended 31
December 2021 and subsequent financial periods. Subsequent financial periods are subject to
approval at the 2024 Annual General Meeting. The period of total uninterrupted engagement
including previous renewals and reappointments of the firm is three years, covering the years
ended 31 December 2021 to 31 December 2023.
15.2 Consistency of the audit report with the additional report to the Audit and Risk Com-
mittee
Our audit opinion is consistent with the additional report to the Audit and Risk Committee we
are required to provide in accordance with ISAs (UK).
16 Use of our Report
This report is made solely to the Parent Company’s members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that
we might state to the Parent Company’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Parent Company and its
members as a body, for our audit work, for this report, or for the opinions we have formed.
As required by the FCA Disclosure Guidance and Transparency Rule (DTR) 4.1.15R – DTR
4.1.18R, these financial statements will form part of the Electronic Format Annual Financial
Report filed on the National Storage Mechanism of the FCA in accordance with DTR 4.1.15R –
DTR 4.1.18R. This auditor’s report provides no assurance over whether the Electronic Format
Annual Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R.
Kieren Cooper FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Birmingham, United Kingdom 13 March 2024
168
PensionBee Group plcStrategic Report
2 Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
Revenue
Employee Benefits Expense (excluding Share-based Payment)
Share-based Payment
Depreciation Expense
Advertising and Marketing
Other Expenses
Listing Costs
Operating Profit/(Loss)
Finance Income
Finance Costs
Profit/(Loss) before Tax
Taxation
Profit/(Loss) for the Year
Note
4
5
5, 21
12, 13
7
25
8
8
10
2023
£ 000
23,817
(12,301)
(2,182)
(288)
(9,718)
(10,017)
-
(10,689)
6
(36)
2022
£ 000
17,662
(9,554)
(1,898)
(276)
(16,554)
(11,067)
(687)
(22,374)
-
(46)
(10,719)
(22,420)
150
(10,569)
274
(22,146)
Total Comprehensive Profit/(Loss) for the Year wholly attributable to Equity Holders of the Parent Company
(10,569)
(22,146)
Earnings per Share (pence per Share)
Basic and Diluted
The above results were derived from continuing operations.
The notes on pages 173-188 form an integral part of these financial statements.
11
(4.73)
(9.97)
169
Annual Report and Financial Statements 2023Financial Statements
3 Consolidated Statement of Financial Position
As at 31 December 2023
Note
12
13
14
15
16
16, 21
16
17
18
17
19
Assets
Non-current Assets
Property, Plant and Equipment
Right of Use Assets
Financial Assets (Deposits)
Current Assets
Trade and Other Receivables
Cash and Cash Equivalents
Total Assets
Equity and Liabilities
Equity
Share Capital
Share Premium
Share-based Payment Reserve
Retained Earnings
Total Equity
Non-current Liabilities
Lease Liability
Provisions
Current Liabilities
Lease Liability
Trade and Other Payables
Total Liabilities
Total Equity and Liabilities
The notes on pages 173-188 form an integral part of these financial statements.
Approved by the Board on 13 March 2024 and signed on its behalf by:
Christoph J. Martin
Chief Financial Officer
170
2023
£ 000
305
412
147
864
4,347
12,214
16,561
17,425
224
53,218
12,397
(50,694)
15,145
292
49
341
106
1,833
1,939
2,280
17,425
2022
£ 000
358
553
-
911
3,412
21,321
24,733
25,644
223
53,218
10,215
(40,124)
23,532
397
46
443
154
1,515
1,669
2,112
25,644
PensionBee Group plcFinancial Statements 4 Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
At 1 January 2022
Profit/(Loss) for the Year
Total Comprehensive Profit/(Loss)
Share-based Payment Transactions
Exercise of Share Options
At 31 December 2022
At 1 January 2023
Profit/(Loss) for the Year
Total Comprehensive Profit/(Loss)
Share-based Payment Transactions
Exercise of Share Options
At 31 December 2023
Note
15
15
Share
Capital
£ 000
221
-
-
-
2
223
223
-
-
-
1
Share
Share-based
Premium
Payment Reserve
£ 000
53,218
-
-
-
-
53,218
£ 000
8,317
-
-
1,898
-
10,215
53,218
10,215
-
-
-
-
-
-
2,182
-
12,397
224
53,218
The notes on pages 173-188 form an integral part of these consolidated financial statements.
Retained
Earnings
£ 000
(17,976)
(22,146)
(22,146)
-
(2)
(40,124)
(40,124)
(10,569)
(10,569)
-
(1)
(50,694)
Total
£ 000
43,780
(22,146)
(22,146)
1,898
-
23,532
23,532
(10,569)
(10,569)
2,182
-
15,145
171
Annual Report and Financial Statements 2023Financial Statements 5 Consolidated Statement of Cash Flows
For the year ended 31 December 2023
Note
8
10
14
19
10
12
17
17
Cash Flows used in Operating Activities
Profit/(Loss) for the Year
Adjustments to Cash Flows from Non-cash Items
Depreciation
Finance Costs
Share-based Payment Transactions
Taxation
Operating Cash Flows before movements in Working Capital
Working Capital Adjustments
Increase in Trade and Other Receivables
Increase in Trade and Other Payables
Cash used in Operations
Income Taxes Received
Net Cash Flow used in Operating Activities
Cash Flows used in Investing Activities
Acquisition of Equipment
Net Cash Flow used in Investing Activities
Cash Flows from Financing Activities
Payment of Principal of Lease Liabilities
Payment of Interest of Lease Liabilities
Net Cash Flows from Financing Activities
Net (Decrease) / Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at 1 January
Cash and Cash Equivalents at 31 December
2023
£ 000
(10,569)
288
36
2,182
(150)
(8,213)
(1,553)
318
(9,448)
623
(8,825)
(96)
(96)
(153)
(33)
(186)
(9,107)
21,321
12,214
2022
£ 000
(22,146)
276
46
1,898
(274)
(20,200)
(162)
(1,511)
(21,873)
194
(21,679)
(367)
(367)
(105)
(46)
(151)
(22,197)
43,518
21,321
Changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes have been disclosed in Note 17 to the financial statements.
The notes on pages 173-188 form an integral part of these consolidated financial statements.
172
PensionBee Group plcFinancial Statements
6 Notes to the Financial Statements
For the year ended 31 December 2023
1 General Information
PensionBee Group plc (‘Company’) is the parent company of PensionBee Limited (‘Subsidiary’)
(together the ‘Group’). The Company is a public company, whose shares are traded on the Premium
Segment of the Main Market of the London Stock Exchange (‘LSE’), and is incorporated and domiciled
in England and Wales.
The address of its registered office is:
209 Blackfriars Road
London
SE1 8NL
United Kingdom
Principal Activity
The principal activity of the Group is that of a direct-to-consumer online pension provider. The Group
seeks to make its UK customers ‘Pension Confident’ by giving them complete control and clarity over
their retirement savings. The Group helps its customers to combine their pensions into one new online
plan where they can contribute, forecast outcomes, invest effectively, and withdraw their pensions
(from the age of 55), all from the palm of their hand.
2 Accounting Policies
Basis of Preparation
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (‘IFRS’) as adopted by the UK in conformity with the requirements of the
Companies Act 2006. The financial statements are prepared on the historical cost basis and on a going
concern basis.
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of
applying the Group’s accounting policies.
Basis of Consolidation
The consolidated financial statements consolidate the financial statements of the Company and its
subsidiary undertakings drawn up to 31 December 2023.
On 24 March 2021, PensionBee Group plc acquired all the issued shares of PensionBee Limited through
a share for share transaction (‘Group Reorganisation’). From the acquisition date, PensionBee Limited
became a subsidiary of PensionBee Group plc.
A subsidiary is an entity controlled by the Company. Control is achieved where the Company has
the power to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. The Company reassesses whether it controls an entity if facts and circumstances indicate
there are changes to one or more elements of control.
Inter-company transactions, balances and unrealised gains on transactions between the Company
and its subsidiary, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the
consolidated financial statements.
Summary of Accounting Policies and Key Accounting Estimates
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise
stated.
Going Concern
The Directors have a reasonable expectation that the Group has adequate financial resources to
continue in operational existence for the foreseeable future and are satisfied that the Group can
continue to pay its liabilities as they fall due for a period of at least 12 months from the date of approval
of these financial statements. The Group has good cash reserves and forecasts growth that should see
the financial results improve in the future years.
The financial statements are presented in GBP and all values are rounded to the nearest thousand
(£’000), except when otherwise indicated. The functional currency of the Company is GBP because it is
the primary currency in the economic environment in which the Company operates.
The Group has been operationally resilient as proven by consistent operational efficiencies that have
been maintained during the financial year. Stress testing was done by considering severe and unlikely
but possible scenarios including a sharp decline in equity markets, the worsening of conversion and
173
Annual Report and Financial Statements 2023Financial Statements lower transferred-in pension pot sizes, all of which could potentially be caused by the macroeconomic
Revenue Recognition
and geopolitical environment, increased cost of living in the UK and interest rate rises.
The Group has adequate resources to survive macroeconomic downturns and the Directors concluded
administration of our customers’ retirement savings and the provision of one-off ancillary services
that the Group has sufficient financial resources to remain in operational existence. For these reasons,
to customers. The Group operates a service to combine and transfer customers’ old pensions into
the Directors adopt the going concern basis of preparation for these financial statements.
new online plans, which are subsequently managed by third party money managers. The Group has
Revenue represents amounts receivable for services net of VAT. Revenue is derived from the
applied the 5-step model outlined in IFRS 15 'Revenue from contracts with customers' as is set out
Changes in Accounting Policy
below:
The following amendments are effective for the period beginning 1 January 2023:
Identification of the contract with a customer
Standard
Amendments to IAS 1 - Classification
Amendments to IAS 1 and IFRS Practice Statement 2 -
Deciding which Accounting Policies to Disclose
Amendments to IAS 8 – Distinction between changes in
Accounting Policies and Accounting Estimates
Effective Date, Annual Period
During account opening, the customer is made aware of the promises the Group is making. Rights
beginning on or after
and obligations of each party are outlined. The point at which the customer agrees to the terms and
1 January 2023
1 January 2023
conditions is the point at which both the Group and the customer have signed or agreed the contract.
Identification of the performance obligations in the contract
1 January 2023
savings, including through investments with its third party money managers. The Group performs
The Group makes one promise to its customers, the careful administration of the customers’ retirement
administrative tasks during the process of on boarding its customers to its technology platform which
Amendments to IAS 12 - Deferred Tax related to Assets
1 January 2023
are necessary for the fulfilment of administration of the customers’ retirement savings. The Group
All the changes were adopted by the Group. None of the standards, interpretations and amendments,
effective for the first time from 1 January 2023 have had a material effect on the financial statements.
New Standards, Interpretations and Amendments not yet Effective
The new standards which are not yet effective will not have a material impact on the financial
statements.
Standard
Amendments to IAS 1 – Classification of
Liabilities as Current or Non-current
Effective Date, Annual Period
beginning on or after
1 January 2024
does not consider these administrative tasks to be a separate performance obligation. As a result, it
is considered that the Group has a single performance obligation, which is the administration of the
customers’ retirement savings.
Determination of the transaction price
The money managers invest customers’ retirement savings in funds (‘Group Plans’) that match each
customer’s selection. The Group charges an annual management fee that is charged daily against the
units held by each customer. The annual management fee is based on a fixed percentage (%) which
varies for each of the Group Plans; the fees range from 0.50% to 0.95%. There is a further fixed discount
of 50% provided to customers who have over £100,000 in their pension pots. The discount is applied
to the incremental amount over and above £100,000.
Allocation of the transaction price
Amendments to IAS 1 – Noncurrent Liabilities with Covenants
1 January 2024
As there is only one performance obligation, the whole transaction price is allocated to this
Amendments to IFRS 16 – Lease Liability
in a Sale and Leaseback
Amendments to IAS 7 and IFRS 7 –
Supplier Finance Arrangements
174
1 January 2024
performance obligation.
1 January 2024
PensionBee Group plcFinancial Statements
Recognition of revenue when a performance obligation is satisfied
Foreign Currency Transactions and Balances
The administration of customers’ retirement savings is continuous until the customer fully withdraws
In preparing the financial statements of the Group entities, transactions in currencies other than the
their pension pot or transfers it to another UK registered pension provider. Revenue is recognised over
entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing
time as the customer simultaneously receives and consumes the benefits provided by the Group’s
on the dates of the transactions. At each reporting date, monetary assets and liabilities that are
performance as the Group performs them. The performance obligation is satisfied when the customer
denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary
receives the service. Revenue is calculated daily as a percentage (basis points) of the value of Assets
items carried at fair value that are denominated in foreign currencies are translated at the rates
under Administration (‘AUA’) as agreed by the customer. Payment is due on a daily basis but settled
prevailing at the date when the fair value was determined. Non-monetary items that are measured in
on a monthly basis.
Consideration Payable to Customers
terms of historical cost in a foreign currency are not retranslated. Exchange differences are recognised
in the Statement of Comprehensive Income in the period in which they arise.
For the purpose of presenting consolidated financial statements, transactions in foreign currencies are
The Group runs a number of incentive-linked marketing campaigns. Under these campaigns, a
translated to the Group’s presentation currency at the foreign exchange rate recorded at the date of
customer becomes entitled to either a pension contribution once they make their first live pension
the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet
transfer. This consideration payable to the customer is not in exchange for a distinct good or service
date are retranslated to the presentation currency at the foreign exchange rate recorded at that date.
that the customer transfers to the Group. Therefore, it is accounted for as a reduction to the transaction
Foreign exchange differences arising on translation are recognised in the Statement of Comprehensive
price. The full consideration is accounted for as a revenue reduction in the year it is payable because
Income. There are no material foreign exchange transactions in the financial statements.
the difference between spreading it over the contract life and recognising it in full in the year it is
incurred is not material. A materiality assessment is done annually.
Tax
Recurring Revenue
Tax on the loss for the year comprises research and development credit. There was no current or
deferred tax charge for the year (2022: £nil). Tax is recognised in the Statement of Comprehensive
The Group’s revenue is recurring in nature as the annual charges are calculated daily as a percentage
Income except to the extent that it relates to items recognised directly in equity or other comprehensive
(basis points) of the value of AUA and will continue to be earned on an ongoing basis whilst the Group
income, in which case it is recognised directly in equity or other comprehensive income.
administers those assets. Recurring Revenue is derived from management fees and is recognised
based on daily accruals of customers’ pension balances as the performance obligation, being the
Current income tax assets and liabilities are measured at the amount expected to be recovered from
provision of pension scheme administration services to customers, is met. These management fees
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
are charged daily and collected by the Group on a monthly basis.
that are enacted or substantively enacted at the reporting date in the United Kingdom where the
Group operates and generates taxable income.
Other Revenue
Other Revenue relates to commission earned from referring individuals to purchase life insurance
in which applicable tax regulations are subject to interpretation and establishes liabilities where
Management periodically evaluates positions taken in the tax returns with respect to situations
products and to a one-off charge for full draw-down within one year of becoming an Invested
appropriate.
Customer. For this revenue stream, the performance obligation is the execution of the requested
task. There are fee structures in place which are used to determine the transaction price. Revenue is
Deferred tax is provided using the liability method on temporary differences between the tax bases of
recognised at a point in time when the requested task is executed (when the service is provided to
assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
the customer).
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of
unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is
probable that taxable profit will be available against which the deductible temporary differences, and
the carry forward of unused tax credits and unused tax losses can be utilised.
175
Annual Report and Financial Statements 2023Financial Statements The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of
the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting
date and are recognised to the extent that it has become probable that future taxable profits will allow
the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date.
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable
right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred
tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities which intend either to settle current tax liabilities and assets on a
net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which
significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Property, Plant and Equipment
Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment
losses. The Group assesses at each reporting date whether there are impairment indicators for tangible
fixed assets.
Depreciation
Depreciation is charged to the Statement of Comprehensive Income on a straight-line basis over the
estimated useful lives of each part of an item of tangible fixed assets. The estimated useful lives are
The residual values, useful lives, and methods of depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted prospectively, if appropriate.
Impairment of Non-Financial Assets
The Group assesses at each reporting date, whether there is an indication that an asset may be
impaired. If any such indication exists, the recoverable amount of the asset is estimated based on
future cashflows with a suitable range of discount rates and the expectations of future performance.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. Impairment loss is recognised in the Statement of Comprehensive Income.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and short term highly liquid deposits with a
maturity of less than 3 months.
Trade Receivables
Trade and other receivables are recognised initially at the transaction price less attributable transaction
costs. Subsequent to initial recognition they are measured at amortised cost using the effective
interest method, less any impairment losses in the case of trade receivables and other receivables.
Trade Payables
Trade and other payables are recognised initially at transaction price plus attributable transaction
costs. Subsequently they are measured at amortised cost using the effective interest method. Trade
and other payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Trade payables are classified as current liabilities if payment is due
within one year or less (or in the normal operating cycle of the business if longer). If not, they are
presented as non-current liabilities.
Depreciation Method and Rate
three years straight line
four years straight line
Provisions
straight line over life of the lease
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result
straight line over life of the lease
of a past event, it is probable that the Group will be required to settle that obligation and a reliable
as follows:
Asset Class
Computer Equipment
Furniture and Fittings
Leasehold Improvements
Right of Use Assets
An item of property, plant and equipment and any significant part initially recognised is derecognised
upon disposal (i.e. at the date the recipient obtains control) or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as
the difference between the net disposal proceeds and the carrying amount of the asset) is included in
the Statement of Comprehensive Income when the asset is derecognised.
176
estimate can be made of the amount of the obligation. Provisions are measured at the Directors’ best
estimate of the expenditure required to settle the obligation at the reporting date and are discounted
to present value where the effect is material.
PensionBee Group plcFinancial Statements Leases
Initial Recognition and Measurement
Lease payments on short term and low value leases are accounted for on a straight-line bases over
the term of the lease or other systematic basis if considered more appropriate. Short term and low
value lease payments are included in operating expenses in the Statement of Comprehensive Income.
The Group initially recognises a lease liability for the obligation to make lease payments and a right-of-
use asset for the right to use the underlying asset for the lease term.
Share Capital
The lease liability is measured at the present value of the lease payments to be made over the lease
term. The lease payments include fixed payments, purchase options at exercise price (where payment
is reasonably certain), expected amount of residual value guarantees, termination option penalties
(where payment is considered reasonably certain) and variable lease payments that depend on an
index or rate.
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash
or other resources received or receivable, net of the direct costs of issuing the equity instruments. If
payment is deferred and the time value of money is material, the initial measurement is on a present
value basis.
Defined Contribution Pension Obligation
The right-of-use asset is initially measured at the amount of the lease liability, adjusted for lease
prepayments, lease incentives received, the group’s initial direct costs (e.g. commissions) and an
estimate of restoration, removal, and dismantling costs.
The Group operates a defined contribution plan for its employees, under which the Group pays fixed
contributions into the PensionBee Personal Pension. Once the contributions have been paid the
Group has no further payment obligations.
Subsequent Measurement
After the commencement date, the Group measures the lease liability by:
a. Increasing the carrying amount to reflect interest on the lease liability;
b. Reducing the carrying amount to reflect the lease payments made; and
c. Re-measuring the carrying amount to reflect any reassessment or lease modifications or to reflect
revised in substance fixed lease payments or on the occurrence of other specific events.
Interest on the lease liability in each period during the lease term is the amount that produces a
constant periodic rate of interest on the remaining balance of the lease liability. Interest charges are
included in finance cost in the Statement of Comprehensive Income, unless the costs are included in
the carrying amount of another asset applying other applicable standards. Variable lease payments
not included in the measurement of the lease liability, are included in operating expenses in the
period in which the event or condition that triggers them arises. Repayment of lease liabilities within
financing activities in the Statement of Cash Flows include both the principal and interest.
Short Term and Low Value Leases
The Group has made an accounting policy election, by class of underlying asset, not to recognise
lease assets and lease liabilities for leases with a lease term of 12 months or less (i.e. short-term leases).
The Group has made an accounting policy election on a lease-by-lease basis, not to recognise lease
assets and lease liabilities on leases for which the underlying asset is worth £5,000 or less (i.e. low
value leases).
The contributions are recognised as an expense in the Statement of Comprehensive Income when
they fall due. Amounts not paid are shown in creditors as a liability in the Statement of Financial
Position. The assets of the plan are held separately from the Group.
Share-based Payment
The cost of equity-settled transactions with employees is measured by reference to the fair value
of the equity instruments granted at the date at which they are granted and is recognised as an
expense over the vesting period, which ends on the date on which the relevant employees become
fully entitled to the award. Fair value is determined by using the market price of the shares at a point
in time adjacent to the issue of the award. In valuing equity-settled transactions, no account is taken
of any vesting conditions, other than conditions linked to the price of the shares of the Group (market
conditions) and non-vesting conditions. No expense is recognised for awards that do not ultimately
vest, except for awards where vesting is conditional upon a market or non-vesting condition, which
are treated as vesting irrespective of whether the market or non-vesting condition is satisfied,
provided that all other vesting conditions are satisfied. At each balance sheet date before vesting, the
cumulative expense is calculated, representing the extent to which the vesting period has expired
and management’s best estimate of the achievement or otherwise of non-market conditions and of
the number of equity instruments that will ultimately vest or in the case of an instrument subject to
a market condition, be treated as vesting as described above. The movement in cumulative expense
since the previous balance sheet date is recognised in the Statement of Comprehensive Income, with
a corresponding entry in equity under the Share-based Payment Reserve.
177
Annual Report and Financial Statements 2023Financial Statements Where the terms of an equity-settled award are modified, or a new award is designated as replacing
Impairment of Financial Assets
a cancelled or settled award, the cost based on the original award terms continues to be recognised
over the original vesting period. In addition, an expense is recognised over the remainder of the new
Measurement of Expected Credit Losses
vesting period for the incremental fair value of any modification, based on the difference between
the fair value of the original award and the fair value of the modified award, both as measured on the
Expected credit losses (‘ECLs’) are based on the difference between the contractual cash flows due in
date of the modification. No reduction is recognised if this difference is negative. Where an equity-
accordance with the contract and all the cash flows that the Group expects to receive, discounted at
settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any cost not
an approximation of the original effective interest rate.
yet recognised in the Statement of Comprehensive Income for the award is expensed immediately.
Any compensation paid up to the fair value of the award at the cancellation or settlement date is
For trade and other receivables, the Group applies a simplified approach in calculating the ECLs.
deducted from equity (Share-based Payment Reserve), with any excess over fair value expensed in the
Therefore, the Group recognises a loss allowance based on lifetime ECLs at each reporting date.
Statement of Comprehensive Income.
The Company has established a Share-based Payment Reserve but does not transfer any amounts
from this reserve on the exercise or lapse of options. On exercise, shares issued are recognised in share
capital at their nominal value. Share premium is recognised to the extent the exercise price is above
the nominal value. Where the Company is settling part of the exercise price, a transfer is made from
retained earnings to share capital.
Research and Development
Research and development expenditure is recognised as an expense as incurred, except that
development expenditure incurred on an individual project is capitalised as an intangible asset when
the Group can demonstrate the technical feasibility of completing the intangible asset so that it will
be available for use or sale, how the asset will generate future economic benefits, the availability of
resources to complete development of the asset and the ability to measure reliably the expenditure
during development. Capitalised development costs are recorded as intangible assets and amortised
from the point at which the asset is ready for use. The Group’s research and development costs relate
to costs incurred on projects carried out to advance technology used to serve its customers. No
development expenditure has been capitalised during the years 2022 and 2023, on the basis that
the specified criteria for capitalisation has not been met, as costs spent on the development phase of
projects cannot be reliably estimated. All research and development costs are therefore recognised
as an expense as incurred.
178
3 Critical Accounting Judgements and Key Sources of Estimation
Uncertainty
In the application of the Group’s accounting policies, the Directors are required to make judgements,
estimates and assumptions about the carrying amount of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results may differ from these
estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised where the revision
affects only that period, or in the period of the revision and future periods where the revision affects
both current and future periods.
The Group does not have any critical accounting judgements or key estimation uncertainties.
4 Revenue
The analysis of the Group’s Revenue for the year from continuing operations is as follows
Recurring Revenue
Other Revenue
2023
£ 000
23,660
157
23,817
2022
£ 000
17,527
135
17,662
Recurring Revenue relates to revenue from the annual management fee charged to customers.
There are no individual revenues from customers which exceed 10% of the Group’s total Revenue
for the year.
PensionBee Group plcFinancial Statements Segment Information
Operating segments and reporting segments are reported in a manner consistent with the internal
reporting provided to the Chief Operating Decision Maker (‘CODM’). The Group considers that the role
of CODM is performed by the Board of Directors. The CODM regularly reviews the Group’s operating
results to assess performance and to allocate resources. All earnings, balance sheet and cash flow
information received and reviewed by the Board of Directors is prepared at a company level. The
CODM considers that it has a single business unit comprising the provision of direct-to-consumer
online pension consolidation and, therefore, recognises one operating and reporting segment with all
revenue, losses before tax and net assets being attributable to this single reportable business segment.
Further, the Group operates in a single geographical location only, being the United Kingdom.
6 Directors’ Remuneration
The Directors’ remuneration for the year was as follows:
Remuneration
Group Contributions paid to Defined
Contribution Pension Schemes
2023
£ 000
963
11
974
2022
£ 000
853
10
863
During the year the number of Directors who were receiving benefits and share incentives was as
5 Employee Benefits Expense
follows:
The aggregate payroll costs (including Directors’ remuneration) were as follows:
Wages and Salaries
Social Security Costs
Pension Costs, Defined Contribution Scheme
Share-based Payment Expense
2023
£ 000
10,801
1,200
300
12,301
2,182
14,483
2022
£ 000
8,373
946
235
9,554
1,898
Members of Defined Contribution Pension Schemes
In respect of the highest paid Director:
Remuneration
11,452
Group Contributions to Defined
Contribution Pension Schemes
The average number of persons employed by the Group (including Directors) during the year,
analysed by category, was as follows:
Exercise of Share Options:
Executive Management
Technology and Product
Marketing
Customer Service
Legal, Compliance and Risk
Administration and Other
2023
No.
10
47
17
92
12
24
2022
No.
9
38
15
90
11
22
202
185
Amount of Gains made on the Exercise of Share Options
2023
No.
5
2023
£ 000
219
2
2023
£ 000
164
2022
No.
5
2022
£ 000
193
2
2022
£ 000
225
179
Annual Report and Financial Statements 2023Financial Statements
7 Other Expenses
Arrived at after charging:
Auditor’s Remuneration
Money Manager Costs
Other Expenses
9 Auditor’s Remuneration
2023
£ 000
215
3,245
6,557
2022
£ 000
196
2,825
8,047
10,017
11,067
Audit of the Company’s Financial Statements
Audit of the Company’s Subsidiary Financial Statements
Total Audit Fees
Audit Related Assurance Services
Total Non-Audit Fees
2023
£ 000
56
112
168
47
47
2022
£ 000
44
94
138
58
58
Included in Other Expenses are technology and platform costs, professional services fees, irrecoverable
VAT and general and administrative costs.
8 Finance (Income) and Costs
Auditor’s remuneration has been shown net of VAT. Audit Related Assurance Fees relate to the half
year review of the Group’s financial statements and CASS audit services received by the Subsidiary. No
services were provided pursuant to contingent fee arrangements.
Finance (Income)
Interest (Income)
Finance Costs
Interest Expense on Lease Liabilities
Interest Expense on Dilapidations Provision
Total Finance Costs
180
2023
£ 000
(6)
(6)
2023
£ 000
33
3
36
2022
£ 000
-
-
2022
£ 000
43
3
46
10 Tax
Tax charged/(credited) in the Statement of Comprehensive Income:
Current Taxation
UK Corporation Tax
Deferred Taxation
Arising from Origination and Reversal of Temporary Differences
Arising from Tax Rate Changes
Total Deferred Taxation
2023
£ 000
2022
£ 000
(150)
(274)
-
-
-
-
-
-
Tax Credit in the Statement of Comprehensive Income
(150)
(274)
The tax on the loss for the year was computed at the blended rate of corporation tax of 23.5% (2022:
19%). From 1 April 2022, the standard rate of corporation tax in the UK was 19%. From 1 April 2023, the
corporation tax rate of 25% was effective for companies with profits of £250,000 and over. PensionBee
will likely utilise its carried forward losses while making profits exceeding £250,000 and incurring
corporation tax at the rate of 25% therefore, the blended rate is deemed appropriate.
PensionBee Group plcFinancial Statements The differences are reconciled below:
11 Earnings per Share
2023
£ 000
2022
Basic Earnings per Share is calculated by dividing the Loss Attributable to Equity Holders of the
£ 000
Company by the Weighted Average Number of ordinary Shares Outstanding during the year.
Diluted Earnings per Share is calculated by dividing the Loss Attributable to Equity Holders of the
Company adjusted for the effect that would result from the weighted average number of ordinary
shares plus the weighted average number of shares that would be issued on the conversion of all
the dilutive potential shares under option. At each balance sheet date reported below, the following
potential ordinary shares under option are anti-dilutive and are therefore excluded from the weighted
average number of ordinary shares for the purpose of Diluted Earnings per Share.
2023
2022
Number of Potential Ordinary Shares
6,757,781
4,619,220
Profit/(Loss) Attributable to Equity Holders
of PensionBee Group plc (£)
(10,569,000)
(22,146,000)
Weighted Average Number of Shares Outstanding during the Year
223,559,764
222,223,650
Basic and Diluted Earnings per Share (pence per Share)
(4.73)
(9.97)
Basic Earnings per Share was (4.73)p for 2023 (2022: (9.97)p).
Profit/(Loss) before Tax
(10,719)
(22,420)
Corporation Tax at Standard Rate
(2,521)
(4,260)
Increase from effect of different UK Tax Rates on some Earnings
Increase from effect of expenses not deductable
in determining Taxable Profit (Tax Loss)
Capital Allowances
Share-based Payment
Deferred Tax Expense (Credit) from
unrecognised Tax Loss or Credit
Decrease from effect of adjustments in
Research Development Tax Credit
Total Tax Credit
Fixed Assets
Temporary Difference Trading
Total Deferred Tax Liability
Losses available for offsetting against Future Taxable Income
Total Deferred Tax Asset
Net Deferred Tax
-
172
(1)
318
2,032
(150)
(150)
2023
£ 000
(36)
-
(36)
36
36
-
-
288
(11)
83
3,900
(274)
(274)
2022
£ 000
(43)
-
(43)
43
43
-
The Group has £81,394,000 of non-expiring carried forward tax losses at 31 December 2023 (2022:
£72,755,000) against which no deferred tax asset has been recognised. A deferred tax asset has not
been recognised on the basis that there is insufficient certainty over the recovery of these tax losses
in the near future.
181
Annual Report and Financial Statements 2023Financial Statements 12 Property, Plant and Equipment
13 Right of Use Asset
Fixtures and
Leasehold
Computer
Fittings
Improvements
Equipment
£ 000
£ 000
£ 000
Total
£ 000
Cost
60
1
-
61
61
2
-
63
51
7
-
58
58
2
-
60
3
3
9
126
251
-
377
377
41
-
418
126
50
-
176
176
56
-
232
186
201
-
265
115
(17)
363
363
52
-
415
147
77
(15)
209
209
90
-
299
116
154
118
At 1 January 2022
Additions
Disposals
At 31 December 2022
At 1 January 2023
Additions
Disposals
At 31 December 2023
Accumulated Depreciation
At 1 January 2022
Charge for the year
Eliminated on Disposal
At 31 December 2022
At 1 January 2023
Charge for the year
Eliminated on Disposal
At 31 December 2023
Carrying Amount
At 31 December 2023
At 31 December 2022
At 1 January 2022
451
367
(17)
801
801
95
-
896
324
134
(15)
443
443
148
-
591
305
358
127
Cost
At 1 January 2022
Additions
Disposals
At 31 December 2022
At 1 January 2023
Additions
Disposals
At 31 December 2023
Accumulated Depreciation
At 1 January 2022
Charge for the year
Eliminated on Disposal
At 31 December 2022
At 1 January 2023
Charge for the year
Eliminated on Disposal
At 31 December 2023
Carrying Amount
At 31 December 2023
At 31 December 2022
At 1 January 2022
182
£ 000
703
3
-
706
706
-
-
706
11
141
-
152
152
141
-
293
413
553
692
PensionBee Group plcFinancial Statements 14 Trade and Other Receivables
Share-based Payment Reserve
Trade Receivables
Prepayments
Other Receivables
2023
£ 000
2,240
1,901
2022
£ 000
1,565
903
206
944
4,347
3,412
The Share-based Payment Reserve is used to recognise the value of equity-settled share-based
payments provided to employees, including key management personnel, as part of their remuneration.
Retained Earnings
The balance in the Retained Earnings account represents the distributable reserves of the Group.
17 Leases
Trade and Other Receivables are measured at amortised cost and management assessed that the
carrying value is approximately their fair value due to the short-term maturities of these balances.
15 Share Capital
Allotted, Called Up and Fully Paid Shares
At 1 January
Shares issued
As at 31 December
2023
2022
No. 000
222,862
1,101
223,963
£ 000
223
1
224
No. 000
221,526
1,336
222,862
£ 000
221
2
223
During the year, PensionBee Group plc issued ordinary shares, to satisfy the exercise of share options
totalling 1,100,706 ordinary shares (2022: 1,336,148) of £0.001 each. The exercise price for each
exercised share option was £0.001 (2022: £0.001).
the year.
As at 1 January
Accretion of interest
In December 2021, the Group entered into a new property lease with a 5-year lease term ending
in December 2026 with an option to terminate the lease after three years. The Group is reasonably
certain that this option will not be exercised therefore the lease term was determined to be five
years. At inception, the lease liability was determined using a discount rate linked to London office
rental yields, adjusted for the risk premium for certain company specific factors as well as taking into
consideration the interest rate associated with the revolving credit facility entered into in March 2021
and subsequently cancelled in September 2021. The discount rate applied was 7%. The lease terms
have not been amended since inception.
The carrying amounts of right-of-use assets recognised and the movements during each year are set
out in Note 13. Set out below are the carrying amounts of lease liabilities and the movements during
Each ordinary share carries one vote per share and ranks pari passu with respect to dividends and
Cash Flow Timing Adjustment
capital.
16 Reserves
Share Premium
Payments
As at 31 December
Lease Liabilities included in the Statement of Financial Position:
The Share Premium account represents the excess of the issue price over the par value on shares
issued, less transaction costs arising on the issue.
Non-current
Current
2023
£ 000
551
33
-
(186)
398
2023
£ 000
292
106
398
2022
£ 000
657
43
2
(151)
551
2022
£ 000
397
154
551
183
Annual Report and Financial Statements 2023Financial Statements The following are the amounts recognised in the Statement of Comprehensive Income:
20 Pension and Other Schemes
Depreciation on Right of Use Asset
Interest on Lease Liability
18 Provisions
Dilapidations
At 1 January
Interest
At 31 December
Non-current Liabilities
2023
£ 000
141
33
174
2022
£ 000
141
43
184
The Group operates a defined contribution pension scheme. The pension cost charge for the year
represents contributions payable by the Group to the scheme and amounted to £301,000 (2022:
£235,000).
21 Share-based Payment
PensionBee EMI and Non-EMI Share Option Scheme
2023
£ 000
2022
£ 000
Scheme Details and Movements
46
3
49
49
43
3
46
46
Under the PensionBee EMI and Non-EMI Share Option Scheme share options were granted to eligible
employees who have passed their probation period at the Group. The exercise price of all share
options is £0.001 per share.
The share options normally vest on the later of the following tranches, 25% of the shares vest on the
first anniversary of the vesting commencement date with the remaining 75% of the shares vesting
quarterly in equal instalments over the following three years.
The Group is required to restore the leased premises of its offices to their original condition at the end
of the lease term. The lease term ends on 2 December 2026. A provision has been recognised at the
present value of the estimated expenditure required to remove any leasehold improvements. These
costs have been capitalised as part of the Right of Use Asset and are amortised over the useful life of
The fair value of the share options granted is estimated on the date of grant by reference to the
prevailing share price. Before the Company was listed in 2021, the fair value was determined by
reference to the price paid by external investors as part of periodic funding rounds.
the asset.
19 Trade and Other Payables
Trade Payables
Accrued Expenses
Other Payables
The weighted average fair value of share options granted during the year of grant was £nil (2022: £ nil).
During the year ended 31 December 2021, share options could be exercised upon the occurrence of
an exit event, a takeover, reconstruction, liquidation and sale of the business, to the extent they had
vested. In the event that there had been no exit event before the tenth anniversary of the date of
grant, the Directors were able to determine that an option holder could exercise their option in the 30
day period before such anniversary.
Following the listing of the Company in 2021, share options can be exercised upon satisfying the
service condition.
2023
£ 000
269
1,496
68
1,833
2022
£ 000
132
1,301
83
1,515
Trade and Other Payables are measured at amortised cost and management assessed that the carrying
value is approximately their fair value due to the short-term maturities of these balances.
184
PensionBee Group plcFinancial Statements The movements in the number of share options during the year were as follows:
The movements in the number of DSB Awards during the year were as follows:
Outstanding, start of the year
Exercised during the year
Expired during the year
Outstanding, end of the year
2023
Number
2,444,403
(910,283)
(16,350)
2022
Number
3,911,235
(1,297,359)
(169,472)
1,517,770
2,444,404
Outstanding, start of the year
Granted during the year
Exercised during the year
Lapsed during the year
Outstanding, end of the year
2023
Number
889,551
626,223
(190,423)
2022
Number
-
944,508
-
(44,589)
(54,957)
1,280,762
889,551
The weighted average share price on the dates the share options were exercised during the year was
£0.74 (2022: £1.05) and the weighted average remaining contractual life is eight months (2022: one
The weighted average share price on the dates the share options were exercised during the year was
year and six months).
Deferred Share Bonus Plan
Scheme Details and Movements
£0.80. No share options were exercised in 2022. The weighted average remaining contractual life is
one year (2022: one year and five months).
Long Term Incentives Plan
Scheme Details and Movements
Under the PensionBee Deferred Share Bonus Plan, awards (‘DSB Awards’) are granted to eligible
employees who are or were an employee (including an Executive Director) of the Group who have
Under the PensionBee Long Term Incentives Plan, restricted share plan awards (‘RSP Awards’) are
been granted a bonus. DSB Awards are granted in the subsequent financial year once the annual
granted to eligible employees who are or were employees (including an Executive Director) of the
bonus outturn has been determined. The DSB Awards are granted by way of share options, with an
Group, at mid-level management or higher, who have been granted a bonus. RSP Awards are granted
exercise price of £0.001 per share.
in the subsequent financial year following a bonus grant. The RSP Awards are granted by way of share
options, with an exercise price of £0.001 per share.
For the two Executive Directors that were in office as of 31 December 2021, their 2022 granted DSB
Awards cliff vest on the third anniversary of the date of grant. For the rest of the employees and the
The RSP Awards vest in tranches, a third of the RSP Awards vest on the third anniversary, a third on the
subsequent grants, DSB Awards vest in three equal instalments over a service period of three years
fourth anniversary and the last third on the fifth anniversary of the grant date.
from grant date. DSB Awards vest upon satisfying the service condition.
The fair value of the DSB Awards is the share price on the grant date. DSB Awards can be exercised to
selling period. RSP Awards can be exercised to the extent they have vested and after a five year
the extent they have vested.
holding period.
The fair value of the RSP Awards is the share price on the grant date discounted for the restricted
The weighted average fair value of DSB Awards granted during 2023 was £0.98 (2022: £1.44).
The weighted average fair value of RSP Awards granted during 2023 was £0.94 (2022: £1.38).
185
Annual Report and Financial Statements 2023Financial Statements The movements in the number of RSP Awards during the year were as follows:
Market Risk
Outstanding, start of the year
Granted during the year
Exercised during the year
Lapsed during the year
Outstanding, end of the year
2023
Number
1,285,266
2,791,756
-
2022
Number
Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate
because of changes in market prices. Market risk comprises risks including interest rate risk, currency
-
risk and price risk.
1,311,681
-
Interest Rate Risk
(117,773)
(26,415)
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
3,959,249
1,285,266
because of changes in market interest rates. The Group considers interest rate risk to be insignificant
There were no exercises during the year (2022: nil) and the weighted average remaining contractual
life is two years and five months (2022: three years and three months).
due to no debt.
Price Risk
Charge/Credit arising from Share-based Payment
The total charge for the year for the Share-based Payment was £2,182,000 (2022: £1,898,000), all of
which related to equity-settled share-based payment transactions.
22 Financial Risks Review
This note presents information about the Group’s exposure to financial risks and the Group’s
management of capital. Financial risk exposure results from the operations of the Subsidiary. The
Company is not trading and therefore is structured to avoid, in so far as possible, all forms of financial
risk.
Financial Risk Management Objectives
The Group has identified the financial risks arising from its activities and has established policies and
procedures to manage these risks in accordance with its risk appetite. These risks included market
risk, credit risk and liquidity risk. The Group does not enter or trade financial instruments, including
derivative financial instruments. Assisted by the Audit and Risk Committee, the Board of Directors has
overall responsibility for establishing and overseeing the Group’s risk management framework and
risk appetite.
The Group’s financial risk management policies are intended to ensure that risks, including emerging
risks are identified, evaluated and subject to ongoing close monitoring and mitigation where
appropriate. The Board of Directors regularly reviews financial risk management policies, procedures
and systems to reflect changes in the business, risk horizon, markets and financial instruments used by
the Group. The Group’s senior management is responsible for the day-to-day management of these
risks in accordance with the Group’s risk management framework.
186
The main source of revenue is based on the value of Assets under Administration (‘AUA’), a measure
of the total assets for which a financial institution provides administrative services. The Group has an
indirect exposure to price risk on investments held on behalf of customers. These assets are not on
the Group’s Statement of Financial Position. The risk of lower revenues is partially mitigated by asset
class diversification. The Group does not hedge its revenue exposure to movements in the value of
customers assets arising from these risks, and so the interests of the Group are aligned to those of its
customers.
A 10% change in equity markets would have an approximate 7.5% impact on revenue. The 10%
change in equity markets is a reasonable approximation of possible change. The key assumption in
this assessment is the percentage change of market volatility over the next 12 months from the year
ended 2023.
Credit Risk
Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. The Group’s
exposure to credit risk arises principally from its cash balances held with banks and trade receivables.
The Group’s trade receivables are the contractual cash flow obligations that the payors must meet.
The payors are BlackRock, Legal & General, and State Street which are high credit rated financial
institutions. Assets they hold on behalf of the Group are a small percentage of their net assets and
on this basis, credit risk is considered to be low. The Group utilises the simplified approach to provide
for expected credit losses allowing the use of lifetime loss allowances to be made. In determining
expected credit losses, financial assets have been grouped based on shared credit risk characteristics,
such as number of days past due and the counterparty.
At the end of the reporting period no assets were determined to be impaired and there was no
balance past due.
PensionBee Group plcFinancial Statements In certain cases, the Group will also consider a financial asset to be in default when internal or external
assigned by international credit-rating agencies. The Group’s principal Banks are Barclays Bank and
information indicates that the Group is unlikely to receive the outstanding contractual amounts in full.
HSBC Innovation Banking. The Group only uses banks with a credit rating of at least BBB+ (Standard
A financial asset is written off when there is no reasonable expectation of recovering the contractual
& Poor’s). The Group’s liquid funds are concentrated in Barclays, which holds 72% of the total balance
cash flows.
as at year end (2022: 94%) and HSBC, which holds 27% of the total balance as at year end (2022: 0%).
Due to the Group’s financial assets primarily being trade receivables which all have an expected
Liquidity Risk
lifetime of less than 12 months, the Group has elected to measure the expected credit losses at 12
months only. The Group’s expected credit loss is £nil (2022: £nil).
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations to settle its
Set out below is the information about the credit risk exposure on the Group’s trade receivables:
Days Past Due
Current < 30 days 30-60 days 61-90 days
>91 days
£ 000
£ 000
£ 000
£ 000
£ 000
31-Dec-23
Gross Trade Receivables
Other Receivables
2,240
179
-
-
-
-
-
-
-
27
Days Past Due
Current < 30 days 30-60 days 61-90 days
>91 days
£ 000
£ 000
£ 000
£ 000
£ 000
31-Dec-23
Gross Trade Receivables
Other Receivables
1,565
540
-
-
-
-
-
-
-
404
Total
£ 000
2,240
206
Total
£ 000
1,565
944
liabilities. This is managed through cash flow forecasting.
Undiscounted Maturity Analysis
The following table sets out the remaining contractual maturities of the group’s financial liabilities by type:
Within 1 year
Between 1
and 5 years
After more
than 5 years
Total
£ 000
£ 000
£ 000
£ 000
2023
Trade and Other Payables
Lease Liabilities
1,833
129
-
309
-
-
Within 1 year
Between 1
and 5 years
After more
than 5 years
1,833
438
Total
2022
Trade and Other Payables
£ 000
£ 000
£ 000
£ 000
1,515
186
-
438
-
-
1,515
624
The Group’s Trade Receivables are concentrated in the three money managers
Lease Liabilities
BlackRock
State Street
Legal & General
Total
2023
%
75%
15%
10%
100%
2022
%
73%
16%
11%
100%
Other Receivables mainly comprise of the R&D tax credit due from HMRC and the office rental
deposit. The probability of default by these parties is deemed low. The credit risk on liquid funds
financial instruments is limited because the counterparties are banks with high credit-ratings
Capital Risk Management
For the purpose of the Group’s capital management, capital includes issued share capital, share
premium and all other equity reserves attributable to the equity holders of the Company.
The Group manages its capital to ensure that it will be able to continue as a going concern by
ensuring compliance with regulatory capital requirements set by the FCA and maximising returns to
shareholders through optimal capital deployment. Regulatory capital is determined in accordance
with the requirements prescribed by the FCA. The Group performs capital assessments and maintains
a surplus over the regulatory capital requirement at all times.
187
Annual Report and Financial Statements 2023Financial Statements The Group met its regulatory capital requirement throughout the years 2022 and 2023.
Transactions with Directors
The Group manages its capital structure and makes adjustments considering changes in economic
During the year ended 31 December 2023, there were no transactions with Directors. During the year
conditions. To maintain or adjust the capital structure, the Group may return capital to shareholders
ended 31 December 2022, Mark Wood repaid £105,279 to the Subsidiary in respect of a payment to
or issue new shares.
HMRC made by the Group on his behalf in 2021. As at the year ended 31 December 2023, there was
Externally Imposed Capital Requirements
no outstanding balance (2022: £nil).
Some Directors use the Group’s services on commercial terms which are consistent with the standard
The capital adequacy of the business is monitored on a quarterly basis as part of general business
terms and condition as available on the website.
planning by the Finance Team. The Group conducts a capital adequacy assessment process, as
required by the Financial Conduct Authority (‘FCA’) to assess and maintain the appropriate levels.
24 Events After the Reporting Period
On 4 March 2024, the Group announced its proposed expansion into the United States of America
(‘US’), having taken an important step by entering into an exclusive, non-binding term sheet with
a large, US-based global financial institution. Under the proposed strategic relationship, the US
service will be delivered through PensionBee Inc, a yet to be established wholly-owned subsidiary of
PensionBee Group plc. PensionBee Inc will be established in Delaware, with operational headquarters
in New York. The financial effect of the proposed expansion cannot yet be estimated.
23 Related Party Transactions
Key Management Compensation
Salaries and Other Short-term Employee Benefits
Other Long-term Benefits
Share-based Payment
2023
£ 000
2,034
25
1,463
3,522
2022
£ 000
1,752
24
1,222
2,998
Some Key Management Personnel use the Group’s services on commercial terms which are consistent
with the standard terms and condition as available on the website.
Related Party – PensionBee Trustees
The following related party transactions occurred between the Company and PensionBee Trustees
Limited:
(i) Payment of the PensionBee Trustees Limited bank fees on a quarterly basis. During the year bank
fees amounted to £104,000 (2022: £52,000). There was no outstanding balance at year end (2022:
£nil).
(ii) Payment of the PensionBee Trustees Limited’s Data Protection fee on an annual basis. During
the year, payments amounted to £35 (2022: £35). There was no outstanding balance at year end
(2022: £nil).
188
PensionBee Group plcFinancial Statements 25 Alternative Performance Measures
The Group uses an alternative performance measure (‘APM’) which is not defined or specified by IFRS.
The APM is Adjusted EBITDA, which is the loss for the year before taxation, finance costs, depreciation,
share-based compensation and listing costs. The Directors use this APM and a combination of IFRS
measures when reviewing the performance and position of the Group and believe that these measures
provide useful information with respect to the Group’s business and operations. The Directors consider
that this APM illustrates the underlying performance of the business by excluding items considered by
management not to be reflective of the underlying trading operations of the Group.
The APM used by the Group is defined below and reconciled to the related IFRS financial measures:
Adjusted EBITDA
Adjusted EBITDA represents loss for the year before taxation, finance costs, depreciation, share-based
compensation and listing costs.
Operating Profit/(Loss)
Depreciation Expense
Share-based Payment (1)
Listing Costs (2)
Adjusted EBITDA
2023
£ 000
2022
£ 000
(10,689)
(22,374)
288
2,182
-
276
1,898
687
(8,219)
(19,513)
(1) Relates to total annual charge in relation to Share-based Payment expense as detailed in Note 21.
(2) 2022 Listing Costs relate to expenses incurred in relation to the preparation for the transfer from the High Growth Segment to the
Premium Segment of the Main Market of the London Stock Exchange.
In the prior year, the Group utilised Adjusted EBITDAM as an APM which represented the loss for the
year before taxation, finance costs, depreciation, advertising and marketing, share based compensation
and listing costs. In the year ended 31 December 2023, the Group successfully achieved Adjusted
EBITDAM profitability therefore, Adjusted EBITDAM is no longer presented as an APM.
189
Annual Report and Financial Statements 2023Financial Statements 7 Company Financial Statements
Statement of Financial Position
As at 31 December 2023
Assets
Non-current Assets
Investment in Subsidiaries
Current Assets
Other Receivables
Cash and Cash Equivalents
Total Assets
Equity and Liabilities
Equity
Share Capital
Share Premium
Share-based Payment Reserve
Retained Earnings
Total Equity
Current Liabilities
Trade and Other Payables
Total Equity and Liabilities
The Company Loss for the period is £885,000
The notes on pages 192-195 form an integral part of these financial statements.
Approved by the Board on 13 March 2024 and signed on its behalf by:
Christoph J. Martin
Chief Financial Officer
190
Note
2023
£ 000
2022
£ 000
3
4
8
9
9
5
359,253
357,071
9
2,556
2,565
289
3,036
3,325
361,818
360,396
224
53,218
7,404
300,719
361,565
223
53,218
5,222
301,605
360,268
253
128
361,818
360,396
PensionBee Group plcFinancial Statements
Statement of Changes in Equity
For the year ended 31 December 2023
Share Capital
Share Premium
Payment Reserve
Retained Earnings
Share-based
As at 1 January 2022
Total Comprehensive Profit/(Loss)
Share-based Payment Transactions
Prior year Adjustment
Exercise of Share Options
At 31 December 2022
As at 1 January 2023
Total Comprehensive Profit/(Loss)
Share-based Payment Transactions
Exercise of Share Options
At 31 December 2023
The notes on pages 192-195 form an integral part of these financial statements.
8
8
Note
£ 000
221
£ 000
53,218
-
-
-
2
-
-
-
-
£ 000
3,324
-
1,898
-
-
£ 000
303,302
(1,648)
-
(47)
(2)
Total
360,065
(1,648)
1,898
(47)
-
223
53,218
5,222
301,605
360,268
223
53,218
5,222
301,605
360,268
-
-
1
-
-
-
224
53,218
-
2,182
-
7,404
(885)
-
(1)
(885)
2,182
-
300,719
361,565
191
Annual Report and Financial Statements 2023Financial Statements 8 Notes to the Company's Financial Statements
For the year ended 31 December 2023
1 Accounting Policies
Statement of Compliance
The Directors have considered the following key sources of estimation uncertainty at the Statement
of Financial Position date which have a significant effect on the amounts recognised in the financial
statements.
These financial statements were prepared in accordance with Financial Reporting Standard 102 ‘The
Assessment as to whether the investment in subsidiary is impaired
Financial Reporting Standard applicable in the UK and Republic of Ireland’.
Summary of Significant Accounting Policies and Key Accounting Estimates
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise
stated.
Basis of Preparation
These financial statements have been prepared using the historical cost convention.
The financial statements are presented in GBP and all values are rounded to the nearest thousand
(£’000), except when otherwise indicated. The functional currency of the Company is GBP because it is
the primary currency in the economic environment in which the Company operates.
The recoverable amount is the subsidiary’s discounted cash flow value. The determination of the
recoverable amount of the investment in subsidiary depends on certain assumptions, which include
selection of the discount rate, projection period and projection of future cash flows. The discount rate
is the Company’s Weighted Average Cost of Capital (‘WACC’). This was set by reference to comparable
companies’ WACC and adjusting it for the Company’s risk profile. Significant assumptions are required
to be made when selecting comparable companies and determining the Company’s risk profile
adjustment.
Future cash flow projections significantly rely on revenue projections which are inherently uncertain
due to their sensitivity to changes in market conditions and revenue growth rate. Significant
assumptions are required to be made when setting the revenue growth rate which takes into
consideration perceived changes in market conditions and customer behaviour. Further information
on the investment in subsidiary’s recoverable amount and the sensitivity of the recoverable amount
to changes in unobservable inputs are provided in Note 3.
The Company has taken advantage of the exemption in section 408 of the Companies Act from
Summary of Disclosure Exemptions
presenting its individual profit and loss account.
Judgements and Key Sources of Estimation Uncertainty
In applying the Company’s accounting policies, the Directors are required to make judgements that
have a significant impact on the amounts recognised and to make estimates and assumptions about
the carrying amounts of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period, or in the period of
the revision and future periods if the revision affects both current and future periods.
The Company has taken advantage of the following disclosure exemptions in preparing these financial
statements, as permitted by FRS 102:
•
•
•
•
•
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 33 Related Party Disclosures paragraph 33.7;
the requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f),
11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a),
12.29(b) and 12.29A.
192
PensionBee Group plcFinancial Statements Going Concern
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of
unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is
The Directors have a reasonable expectation that the Company has adequate financial resources
probable that taxable profit will be available against which the deductible temporary differences, and
to continue in operational existence for the foreseeable future and are satisfied that the Company
the carry forward of unused tax credits and unused tax losses can be utilised.
can continue to pay its liabilities as they fall due for a period of at least 12 months from the date of
approval of these financial statements. The Company has strong cash reserves and forecasts growth
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
in the subsidiary that should see the financial results improve in the future years. The Company’s only
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of
investment is in the subsidiary. Therefore, the subsidiary’s ability to remain in operational existence
the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting
was considered.
date and are recognised to the extent that it has become probable that future taxable profits will allow
the deferred tax asset to be recovered.
The subsidiary has been operationally resilient as proven by consistent operational efficiencies that
have been maintained during the financial year. Stress testing was done by considering severe
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in
and unlikely but possible scenarios including a sharp decline in equity markets, the worsening of
the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that
conversion and lower transferred-in pension pot sizes, all of which could potentially be caused by
have been enacted or substantively enacted at the reporting date. The Group offsets deferred
the geopolitical and macroeconomic environment, increased cost of living in the UK and interest rate
tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off
rises.
current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities
relate to income taxes levied by the same taxation authority on either the same taxable entity or
The Company has adequate resources to survive macroeconomic downturns and the Directors
different taxable entities which intend either to settle current tax liabilities and assets on a net
concluded that the Company has sufficient financial resources to remain in operational existence.
basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which
For these reasons, the Directors adopt the going concern basis of preparation for these financial
significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
statements.
Tax
Investments
Investment in subsidiary is recognised at cost and an annual impairment review is undertaken.
There was no current or deferred tax charge for the year (2022: £nil). Tax is recognised in the Statement
of Comprehensive Income except to the extent that it relates to items recognised directly in equity or
Cash and Cash Equivalents
other comprehensive income, in which case it is recognised directly in equity or other comprehensive
income.
Cash and cash equivalents comprise cash on hand and short term highly liquid deposits with a
Current income tax assets and liabilities are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
Trade Receivables
that are enacted or substantively enacted at the reporting date in the United Kingdom where the
maturity of less than three months.
Company operates and generates taxable income.
Trade and other receivables are recognised initially at the transaction price less attributable transaction
costs. Subsequent to initial recognition they are measured at amortised cost using the effective
Management periodically evaluates positions taken in the tax returns with respect to situations
interest method, less any impairment losses in the case of trade receivables.
in which applicable tax regulations are subject to interpretation and establishes liabilities where
appropriate.
Deferred tax is provided using the liability method on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
193
Annual Report and Financial Statements 2023Financial Statements Trade Payables
3 Investments
Trade and other payables are recognised initially at transaction price plus attributable transaction
costs. Subsequently they are measured at amortised cost using the effective interest method.
Summary of the Company Investments
Trade and other payables are obligations to pay for goods or services that have been acquired in
the ordinary course of business from suppliers. Trade payables are classified as current liabilities if
payment is due within one year or less (or in the normal operating cycle of the business if longer). If
not, they are presented as non-current liabilities.
Impairment of Non-Financial Assets
The Group assesses at each reporting date, whether there is an indication that an asset may be
impaired. If any such indication exists, the recoverable amount of the asset is estimated based on
As at 1 January
Additions
As at 31 December
Subsidiary undertakings
2023
£ 000
357,071
2,182
359,253
2022
£ 000
348,089
8,982
357,071
Proportion of ownership
future cashflows with a suitable range of discount rates and the expectations of future performance.
Name of Subsidiary
Principal activity
Registered office
interest and voting
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. Impairment loss is recognised in the Statement of Comprehensive Income.
PensionBee Limited
Pension provider
209 Blackfriars Road
SE1 8NL
rights held (2021)
100%
Share Capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or
other resources received or receivable, net of the direct costs of issuing the equity instruments. Refer
to Note 8 for the basis of accounting for the share for share transaction that was recorded during the
year. If payment is deferred and the time value of money is material, the initial measurement is on a
present value basis.
proposeds
The financial effect of awards by the Company of equity-settled awards (principally, options over its
equity shares) to the employees of the subsidiary undertaking are recognised by the Company in its
individual financial statements. In particular, the Company records an increase in its investment in
subsidiaries with a credit to equity equivalent to the expense for the equity-settled award recognised
in the group for such awards. There are no recharges to the subsidiary undertaking for such awards.
2 Staff Numbers
The Company does not have employees.
194
PensionBee Limited has been included in the Group consolidated financial statements.
Impairment of Investment in Subsidiary
At each reporting period, the investment in the subsidiary is assessed for impairment. Management
has determined the recoverable amount of the investment in the subsidiary by reference to the
subsidiary’s discounted forecast cash flows. Key assumptions in this assessment include consideration
of growth rates which drive revenue and costs, expected changes to future costs and the discount
rate. The period considered was thirteen years. A projection period of fifteen years was considered
appropriate due to the high growth phase of the subsidiary. The projection period was split into
medium term (year 2-5) and long term (year 6-13) growth phase whereby the growth trajectory
declines over that forecasting period. PensionBee’s short term projections are based on the most
recent Board approved financial information. PensionBee’s medium to long term projections are
supported by its high customer retention rate, young customer base in pension accumulating assets,
strong brand awareness and effective marketing acquisition capabilities as well as the scalability
of the cost base. The long term growth rate used was 1.8%. The Weighted Average Cost of Capital
(‘WACC’) used for discounting the forecast cash flows was 14%, which was benchmarked against
comparable companies. The recoverable amount is higher than the carrying amount therefore no
impairment was identified. A 5% decrease in the cumulative annual growth rate would decrease the
recoverable amount by 10% and a 5% increase in the cumulative annual growth rate would increase
the recoverable amount by 13%. A 11% decrease in the cumulative annual growth rate would result
in a recoverable amount that is lower than the carrying amount of the investment. Sensitivity factors
were consistently applied throughout the long term.
PensionBee Group plcFinancial Statements 4 Other Receivables
Amounts due from Subsidiary
Prepayments
5 Trade and Other Payables
Trade Payables
Accrued Expenses
Amounts due to Subsidiary
6 Deferred Taxation
2023
£ 000
-
9
9
2023
£ 000
69
83
101
253
2022
£ 000
279
10
289
2022
£ 000
6
122
-
128
Deferred tax assets have not been recognised in respect of tax losses as there is insufficient evidence
of recoverability in the near future. The Company has tax losses of £2,234,000 (2022: £1,389,000) that
are indefinitely available against future taxable profits of the Company for which no deferred tax has
been provided.
7 Share-based Payment
Full disclosure of PensionBee's share option scheme is given in Note 21. The disclosures required in
relation to Directors’ emoluments and share option plans are given in Note 6.
8 Share Capital
Ordinary of £0.001 each
2023
2022
No. 000
223,963
223,963
£ 000
224
224
No. 000
222,862
222,862
£ 000
223
223
During the year, PensionBee Group plc issued ordinary shares from share options exercised totalling
1,100,706 ordinary shares (2022: 1,336,148) of £0.001 each. The exercise price for each exercised share
option was £0.001 (2022: £0.001).
Each ordinary share carries one vote per share and ranks pari passu with respect to dividends and
capital.
9 Reserves
Share Premium
The share premium account represents the excess of the issue price over the par value on shares
issued, less transaction costs arising on the issue.
Share-based Payment Reserve
The Share-based Payment Reserve represents the cumulative expense in relation to share options
granted to subsidiary employees.
Retained Earnings
The balance in the retained earnings account represents the distributable reserves of the standalone
company, PensionBee Group plc.
10 Events After the Reporting Period
On 4 March 2024, the Group announced its proposed expansion into the United States of America
(‘US’), having taken an important step by entering into an exclusive, non-binding term sheet with
a large, US-based global financial institution. Under the proposed strategic relationship, the US
service will be delivered through PensionBee Inc, a yet to be established wholly-owned subsidiary of
PensionBee Group plc. PensionBee Inc will be established in Delaware, with operational headquarters
in New York. The financial effect of the proposed expansion cannot yet be estimated.
195
Annual Report and Financial Statements 2023Financial Statements
Other
Information
196
PensionBee Group plcStrategic Report Other
Information
1 Glossary of Terms
Commonly Used Terms
Adjusted EBITDA is the operating profit or loss for
Adjusted EBITDA
the year before taxation, finance costs, depreciation,
share based compensation and listing costs.
Adjusted EBITDA Margin
Adjusted EBITDA Margin means Adjusted EBITDA as
a percentage of revenue for the relevant year.
AGM
AI
APM
AUA
Annual General Meeting
Artificial Intelligence
Alternative Performance Measures
Assets under Administration. This is the total invested value of
pension assets within PensionBee’s Invested Customers’ pensions
Assets under Administration Retention Rate. Measures
AUA Retention Rate
the percentage of retained PensionBee AUA from
transfers out over the average of the year.
BeeKeeper
A PensionBee dedicated customer account manager
Board, Directors
The Board of Directors of PensionBee Group plc
bps
CASS
CEO
CFO
CODM
Company
Basis points
Client Assets Sourcebook
Chief Executive Officer
Chief Financial Officer
Chief Operating Decision Maker
PensionBee Group plc
Consumer Duty
FCA’s Consumer Duty
CPIC
CTO
Cost per Invested Customer. This means the cumulative advertising
and marketing costs incurred since PensionBee commenced
operations up until the relevant point in time divided by the
cumulative number of Invested Customers at that point in time.
Chief Technology Officer
Customer Retention Rate
Customer Retention Rate measures the percentage of retained
PensionBee Invested Customers over the average of the year.
DB
DC
Defined Benefit
Defined Contribution
DSB Award
Deferred Share Bonus Award (part of the Omnibus Plan)
DTR
DWP
EBITDA
EPS
ESG
FCA
FRC
FTSE
FTE
GAA
GHG
Group
HMRC
IAS
IC
ICO
IFRS
IPO
ISC
ISMS
Disclosure Guidance and Transparency Rules
Department of Work and Pensions
Earnings before Interest, Taxation, Depreciation and Amortisation
Earnings per Share
Environmental, Social and Governance
Financial Conduct Authority
Financial Reporting Council
Financial Times Stock Exchange
Full Time Equivalent
Governance Advisory Arrangement
Greenhouse Gas
PensionBee Group plc and its subsidiary entity PensionBee Limited
His Majesty’s Revenue and Customs
International Accounting Standards
Invested Customers. Means those customers who
have transferred pension assets or made contributions
into one of PensionBee’s investment plans.
Information Commissioner’s Office
International Financial Reporting Standards
Initial Public Offering
Information Security Committee
Information Security Management System
197
Annual Report and Financial Statements 2023Other Information Realised Revenue Margin. Expresses the recurring
Revenue Margin
Revenue over the average quarterly AUA held in
PensionBee’s investment plans over the period.
RSG
RSP Award
Risk Stakeholder Group
Restricted Share Plan Award (part of the Omnibus Plan)
S&P
SASB
SID
SIPP
SECR
TCFD
TPR
UK
Standard & Poor’s
Sustainability Accounting Standards Board
Senior Independent Director
Self-Invested Personal Pension
Streamlined Energy and Carbon Reporting
Task Force on Climate-related Financial Disclosures
The Pensions Regulator
United Kingdom
UN Global Compact
United Nations Global Compact
US
WACI
WDI
United States of America
Weighted Average Carbon Intensity
Workforce Disclosure Initiative
Other Information
Commonly Used Terms
IT
KPI
LSE
NAS
Information Technology
Key Performance Indicator
London Stock Exchange
Non-Audit Services Policy
Net Flows measures the cumulative inflow of PensionBee AUA
Net Flows
from consolidation and contribution, less the outflows from
withdrawals and transfers out over the relevant period
NPS
Net Promoter Score
Omnibus Plan
2021 PensionBee Group plc Omnibus Plan
Office for National Statistics
Profit/(Loss) before Tax. This is a measure that looks at PensionBee’s
profit or losses for the year before it has paid corporate income tax.
Public Interest Entity
Public Limited Company
Renewable Energy Guarantees of Origin
Revenue means the income generated from the asset
base of PensionBee’s customers, essentially annual
management fees charged on the AUA, together with a
minor revenue contribution from other services.
ONS
PBT
PIE
plc
REGO
Revenue
198
PensionBee Group plc 2 Directors, Company Secretary and Shareholder
Information
PensionBee Executive Directors
PensionBee Non-Executive Directors
Romi Savova (Chief Executive Officer)
Jonathan Lister Parsons (Chief Technology Officer)
Christoph J. Martin (Chief Financial Officer
Mark Wood CBE (Non-Executive Chair)
Mary Francis CBE (Senior Independent Director)
Michelle Cracknell CBE (Independent Non-Executive Director)
Lara Oyesanya FRSA (Independent Non-Executive Director)
Company Secretary
Registered Number
Registered Office
Auditor
Website
Michael Tavener
13172844
209 Blackfriars Road
London
SE1 8NL
United Kingdom
Deloitte LLP
4 Brindley Place
Birmingham
B1 2HZ
United Kingdom
pensionbee.com
199
Annual Report and Financial Statements 2023Other Information 200
Copyright 2024. PensionBee Limited. Company Registration Number: 09354862. FCA Reference Number: 744931. Information Commissioner’s Office Registration: ZA131262
PensionBee Group plcStrategic Report