PensionBee wins! It’s easy to use, and has simple, easy to understand investment options, managed by experts. It’s also low cost, you can start with £1, and you’ll also get a dedicated account manager. Vanguard is great too, and very low cost – good for those who want to make their own investments.
PensionBee and Vanguard are two great options for retirement saving, they’re great in different ways, but which one is best for you? Let’s find out.
By the way, PensionBee and Vanguard both make up our top list of the best pension providers – and we’re going to compare their personal pension options (a pension you set up yourself). Vanguard also offers a Stocks and Shares ISA (to invest tax-free).
PensionBee is a modern, easy to use pension provider (pension company), who handles everything for you, all you really need to do is add money. It’s called an expert-managed pension provider. Here’s our PensionBee review to learn lots more about them (spoiler, they’re 5 star rated).
Vanguard is great too, but a more traditional pension provider, and more complicated to use – they offer a self-invested personal pension (SIPP), which is where you make your own investment decisions – although the only investment options are Vanguard’s own investments (meaning you have a limited choice to choose from). It’s super low cost too.
PensionBee vs Vanguard: ease of use
PensionBee comes out top for this one, it’s much easier to get started and use.
With PensionBee, it’s all handled on your mobile, on both Apple and Android (although you can use their website if you want to).
The phone app is very highly rated too – 4.7 out of 5 on the Apple App store, and a perfect 5 stars on the Google Play store.
All you need to do is fill out your personal details, and pick a plan from their easy to understand options (there’s only a few to choose from). You’ll also get a dedicated account manager to help you (if you’d like help).
After that, they’ll handle everything for you, and when you want to check your balance, simply log back into the app. You can even transfer any old pensions over too (called consolidating your pensions). It's simple to do, in fact they do it all for you. Just let them know who your pension is with.
You can set up a regular payment easily, and make on-off contributions whenever you like. There’s also a pretty cool tool to show you much you’ll need to save to retire with the retirement income you’d like too.
With Vanguard, it’s mostly website based, and it’s best to get started there – there is an app, but it’s very hard to use, and doesn’t show much information. It gets a lot of negative reviews, particularly more recently when a major update made it much worse.
On Google Play, it’s rated 3 stars out of 5, but still 4.7 on Apple, however falling since the update.
Once you’ve got an account, it’s all down to you which investments you want to make, and there’s a good range – 85 investments, which are all investments managed by Vanguard.
Nuts About Money tip: if you’re looking for a SIPP with a wider range of investment options – check out AJ Bell¹, the investment range is huge, and it’s low cost too.
Once you’re set up and have decided on your investments, you can set up a regular payment (£100 per month minimum), and make one-off payments.
Overall, Vanguard is more suited to those who have some experience investing, and can be complicated for those looking for a simple, easy to use pension.
PensionBee is far simpler to get started and use, with a few easy to understand pension plans. It works great on your phone, so you keep track of your pension whenever you like. You’ll also get a dedicated account manager to help you if you need it.
It’s easy to use, and a great track record of growing money. Get £50 added to your pension for free too.
PensionBee will contribute £50 to your pension when you open a PensionBee account. Capital at risk.
PensionBee vs Vanguard: minimum investment
With pensions, there can be some limitations when it comes to actually starting one, and a key one is the minimum investment you need to get started.
With PensionBee, you can start with just £1, and you don’t need to set up any regular payments if you don’t want to.
With Vanguard, you’ll need to either start a lump sum of £500, or set up a regular payment of £100 per month.
PensionBee vs Vanguard: fees
With pensions, fees can be very important, and unfortunately fairly complicated. High fees can eat away at your pension pot over time, and could mean your money grows slower than it could otherwise be, and over the years, this could add up to a lot.
With PensionBee, you’ll pay one simple fee, with everything included. This starts at 0.50% of your pension pot, and can go up to 0.95% per year. It depends which plan you choose (the fee is clearly stated), for instance, the popular ethical investment option is 0.75% per year. Overall for pensions, this is low cost.
If you’re lucky enough to have over £100,000 saved, the costs are halved for anything over that, so if you had a total pension pot of £250,000, and chose the 0.50% plan, you could end up paying 0.35% each year (which would work out as cheaper than Vanguard).
Vanguard is known for its low cost, although it’s a bit more complicated. You’ll first pay an account management fee, which is 0.15% per year of your pension pot. And this is capped at a maximum of £375 per year (so you’ll need over £250,000 to hit the cap).
Nuts About Money tip: if you have got a larger pension (over £50,000), check out Interactive Investor¹ – they offer a fixed fee (£12.99 per month), rather than an annual fee based on your total pension pot, so it can work out even cheaper than Vanguard, and there’s a huge range of investment options.
You’ll then pay a fee as part of the investments you choose, and these are typically 0.24%, but can range from 0.06% to 0.80% per year. These are called ongoing fees.
And if you’re buying exchange-traded funds (ETFs), which are investments that can be bought and sold on a stock exchange (a place to buy and sell investments), you may also have to pay a fee of £7.50 each time, and a one-off fee of 0.02% to 0.46% (depending on the investment). This is alongside the ongoing fees.
Overall, Vanguard comes in at a lower cost for most people – typically you could set up a pension for around 0.39% per year (0.15% management fee + 0.24% investment fund fee). And if you’ve got lots of money saved, the management fee is capped at £375.
With PensionBee, you’ll likely be paying 0.50% to 0.75% per year, if you opt for a popular investment plan choice (more on those below).
PensionBee vs Vanguard: investment options
When it comes to investment options, there’s a big difference…
PensionBee is suited to people who simply want experts to handle their pension, with the aim to grow it sensibly over time.
Whereas Vanguard is suited to people who want a range of different investment options, with the ability to buy, sell and change as many investments as they like. Although only from the Vanguard range (85 investments).
If you are looking for a SIPP with a big range of investment options, check out AJ Bell¹ and Interactive Investor¹ (both low cost too).
PensionBee has 7 simple options, although 95% of their customers choose from just 3 options:
Tracker: investments that tend to follow the economy (lower cost)
Tailored: experts manage the investments day-to-day
Fossil Fuel Free: experts manage the investments, and exclude any investments that might harm the environment (such as energy companies)
As mentioned, with Vanguard, there’s a much wider range, there’s 85 different investment options you can choose from. They’re all managed by Vanguard themselves, meaning they’re not a stock broker, where you can buy and sell any investments from different providers.
The range includes ‘ready made’ options, which are great for those who aren’t as confident, and you can simply pick one of these suited to your goals. Or, pick from the whole Vanguard range – we only recommend this if you’re familiar with investing.
Having a wider range of options is typically a better thing, as you’ve got more options to suit your savings goals, however it does make things more complicated, particularly for those new to saving and investing. Sometimes too much choice is a bad thing!
So overall, we’re calling Vanguard the winner for this round, but PensionBee is likely suited to more people, thanks to the easy to understand options, managed by experts.
PensionBee vs Vanguard: customer reviews
We like to look at customer reviews to get a good idea of the level of customer service and customer satisfaction. And Trustpilot, the popular reviews website, is a great way to look at real reviews from customers.
PensionBee has a rating of 4.6 out of 5, from over 9,000 reviews – that's impressive. Most of the reviews mention how simple and easy it is to get started and use, alongside the great customer service (dedicated account manager).
Vanguard is rated 4.1 out of 5, from over 2,500 reviews – that’s great too. A lot of the reviews mention the low fees for managing their own investments and great customer service.
Overall, we’ve got to give this one to PensionBee, it’s got an excellent rating from a lot more reviews. The customer service is great too.
PensionBee vs Vanguard: the winner
We’re calling PensionBee the overall winner.
Although depending on what you’re looking for, you may find Vanguard great for you (making your own investments).
PensionBee is easier to get started and use overall, it really couldn’t be simpler, and you can manage everything on your phone (if you want to). There’s simple, easy to understand options to save your money, making it easy for most people who aren’t sure about investing, and to top it off, it’s low cost.
They’ll also handle any pension transfers if you want to move any old pensions across, and the customer service is excellent. There’s also no minimum deposit amount to get started (well, £1).
Vanguard has great service too, and they can handle your pension transfers – it’s lower cost overall (although depending on what you invest in, and how often you change investments, it can be more expensive). You will need to start with either £500, or set up a monthly payment of £100.
The range of investment options is good, but you’ll need to know what you’re doing when it comes to investing to really make the most of it.
They also only offer their own Vanguard investments, so if you do want to manage your own investments within a pension, check out the best SIPP providers, where you can find low cost investment platforms with a much wider range of investment options, not limited to Vanguard, for example, AJ Bell¹.
So there we have it, for a simple, easy to use option for your pension, PensionBee¹ comes out top.
If you are interested in using PensionBee, get £50 for free¹ when you sign up with Nuts About Money.
It’s easy to use, and a great track record of growing money. Get £50 added to your pension for free too.
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