Moneybox pension review

Moneybox is a mobile finance app that lets you save and invest money. As well as investing and savings accounts, it offers a personal pension product that allows you to make ad hoc and regular contributions. Find out how the Moneybox pension works, the fees, and whether the Moneybox pension could be right for you.

What is Moneybox?

Moneybox first launched in 2016 as a “round up” app. This meant it connected to your bank account and collected spare change from your spending to invest in a stocks and shares ISA. Since then, Moneybox has expanded to include savings accounts, investment accounts, mortgage services and pensions. You can check out our full review of Moneybox, but here we’re just talking about the Moneybox pension.

How does the Moneybox pension work?

There are a few ways in which you can pay money into a Moneybox pension. There’s no minimum contribution level, and you can use as many (or few) of these payment options as you like:

• Setting up a regular weekly or monthly direct debit payment. Payment amounts can be easily tweaked in your account whenever you want.
• Making one-off deposits via bank transfer.
• Transferring in existing pensions.
• Using Moneybox’s “round up” function.

It’s the last of these that makes Moneybox a bit different from most pension providers. You connect your bank account, and for every transaction you make, you can opt to round it up to the nearest pound. Moneybox tots up these round ups and collects the total from your bank account once a week.

It’s a nice feature that lets you drip feed small amounts into a pension without really noticing. Ideal for anyone who knows that they need to start saving a bit extra for retirement, but can’t quite bring themselves to sacrifice a chunk of their pay for an event that seems so far in the future.

For its pensions service, Moneybox also gives you the option to consolidate all of your pension pots in one plan, making it easy for you to view and manage your money. As with all UK pensions, you get tax relief on the new contributions you make via round up, direct debit, or one-off payment, based on the amount of income tax you usually pay.

Once you reach retirement age, you can withdraw a lump sum from your Moneybox pension. However, Moneybox doesn’t offer a pension drawdown service. If you want to access your pension using drawdown, you’ll need to transfer your pot to another provider.

Fees and costs for the Moneybox pension

Moneybox charges an annual fee of 0.45% for pension pots up to £100,000. Anything above that is charged a lower fee of 0.15%. Your fee is calculated on a daily basis and is taken at the end of each month from the value of your investments.

As with all pension pots that are invested in funds, you will also be charged a fee by the fund provider. This varies depending on the specific fund you choose to invest in. Fund fees for Moneybox’s pension starting funds range from 0.12% to 0.65% (as of June 2024).

Investment options with the Moneybox pension

Once you’ve set up your account, you’ll need to select the fund you want your money to be invested into. The 5 main funds it suggests for pension savers are:

• The LifePath Retirement Starter Fund. This is a form of “target date” fund, which adjusts your pension over time. When you’re younger, money is invested into higher growth, higher risk assets. As you approach retirement, it’s moved into safer assets that have less chance of big losses at a point when there’s less opportunity for your investments to recover.
• BlackRock LifePath Fund. As with the LifePath Retirement Starter Fund, this is a “lifestyle” fund that changes the balance of your investments as you near retirement age.
• The Fidelity World Index Fund. A global tracker fund with shares in more than 1,500 companies across 23 countries.
• The HSBC Islamic Global Equity Index Fund. A plan designed for people who only want to invest in Shariah-compliant companies. It excludes industries such as alcohol, gambling, tobacco, military equipment or weapons and any products containing pork.
• The Old Mutual World ESG Index Fund. A social responsibility choice, this fund considers environmental, social and governance issues in its selection of assets.

If none of these appeal, you can also opt for one of several tracker funds that focus on specific market sectors. These include emerging markets, technology, healthcare, global property, corporate bonds and government bonds.

You can change which fund you want your pension invested in at any time from within the app. You can opt to move all existing funds into your newly selected pot, or to keep your existing funds where they are and only put future transfers or deposits into the new fund.

How can you manage the Moneybox pension?

As with all of its products, the Moneybox pension can only be opened and managed via its app – there’s no option to log in via a desktop platform on your computer.

Once your account is up and running, you can view your pension performance, tweak contribution levels, change your pension fund, and update personal details from within the app.

Transferring a pension to Moneybox

After you download the app, just input a few details about your old pension pots and the Moneybox staff will track them down for you.

In most cases, this can be done electronically, but if any of your old providers need your signature to approve the pension transfer, Moneybox will get a form out to you.

If you’ve lost the details of your old pension pots then Moneybox can try and find them for you; you just need to open a chat up with the staff and tell them your old employers.

If Moneybox is still unable to track down your pensions, it recommends getting in touch with your old employers to find out and gives you a template email to send to your employer. If all else fails, call the team and they’ll see what they can do.

Some types of pension (including those with valuable features, such as guaranteed annuity rates or defined benefit incomes) cannot be transferred to Moneybox, and it also can’t accept the pension from your current employer – only old ones.

Is Moneybox safe?

Moneybox has been around since 2016, and is authorised and regulated by the Financial Conduct Authority (FCA) and so must abide by its requirements.

The money you hold in a Moneybox pension is protected by the Financial Services Compensation Scheme (FSCS) protection. What this means in practice is that, if Moneybox was to go bust, you would be eligible to claim up to £85,000.

Bear in mind that no investments – including pensions – are completely risk-free. Investments can experience market fluctuations, and can go down as well as up in value. However, the longer you leave your money invested, the better the chance that your investments will ride out any short-term market volatility. And a pension is arguably the longest-term investment you’re ever likely to make.

Moneybox customer service and reviews

Moneybox’s support team is available via live chat in the Moneybox app between 9am and 5.30pm, seven days a week. You can also email them on support@moneyboxapp.com. It does also have a phone number you can contact it on (0330 808 1866), though it doesn’t promote this as prominently as its digital communication options.

On customer review site Trustpilot, Moneybox gets an “excellent” 4.4 out of 5 rating (as of June 2024), suggesting its customers are pretty keen on Moneybox’s offering. Though it’s worth bearing in mind that the reviews are for Moneybox as a whole, rather than specifically for its pension.

Positive reviewers highlight its easy-to-use app and helpful, responsive support team. Some reviewers, however, highlighted issues with transferring or withdrawing money, often in relation to ISAs. On the plus side, Moneybox takes the time to respond to 100% of negative reviews.

According to other reviews, its existing customers rate it pretty highly, highlighting its easy-to-use app and responsive support service.

Who is the Moneybox pension suited to?

If you’re a bit of a digital dynamo, who loves the ability to manage all your finances from your smartphone, then Moneybox is worth a look. There’s no option to access your account from a computer though, which might put off any technophobes.

While it does have a phone number, Moneybox does seem to steer you towards its app chat function for most communication. The management fees are competitive, so if you’re happy with these management restrictions, and like the idea of being able to “micro-save” bank account round-ups into your pension, the Moneybox pension is worth a look.

As always, we’d recommend comparing your options, so head over to our pension comparison table to review alternatives.

Frequently asked questions

• Who can open a Moneybox pension?

  You must be over 18 years old and a UK tax resident to open any type of account with Moneybox, including its pension. To claim tax relief on pension contributions, you must be under 75.

• What are the contribution limits for a Moneybox pension?

  Moneybox allows you to contribute up to £60,000 a year into your pension. However, you won’t qualify for tax relief on any contributions, across all your pensions, that exceed 100% of your annual earnings.

• How do you open a Moneybox pension?

  To open a Moneybox pension, download the app from the App Store or Google Play and follow the on-screen instructions. You’ll need to provide your national insurance number and some basic personal details.