‘Pension Essentials’ launched by interactive investor

• ii’s Pension Essentials is best value for those with more than £15,000 to invest for their retirement

interactive investor, the number one flat-fee investment platform, is leading a pension pricing shake-up in the UK. 

Pension Essentials, which is set to launch imminently, is a new entry-level subscription plan for pots under £50,000, expanding ii’s award-winning SIPP to the mass market.

With a transparent, low-cost monthly fee of just £5.99, it is the best value pension available in the UK on pots over £15,000.  It shines an uncomfortable spotlight on the wider market, as ii looks to bring better value and choice to consumers. 

Pension Essentials comes with the same full fat range of choice that customers expect from ii, together with free monthly investing, and ultra-low trading fees of £3.99 for funds, ETFs, investment trusts and UK/US trades.

The launch comes when the cost-of-living crisis continues to challenge the nation’s ability to save for a comfortable retirement, and when three-quarters (76%) of the self-employed are paying nothing into a pension, according to ii’s upcoming Great British Retirement Survey 2023*.

Richard Wilson, CEO, interactive investor, says: “Investment platforms can be a powerful force for good when they put customer interests at the heart of their pricing. This new launch is a clear statement of our purpose and means tens of thousands more people could now benefit from our great value pension.

“Our Pension Builder price plan, launched last year, broke the mould on value for pension pots over £50,000 and won a string of accolades within months. Pension Essentials shatters the mould, bringing our pension to the mass market as we innovate at pace.” 

Cost comparison

Source: the lang cat. The yearly costs in the table assume portfolios of 50% funds and 50% equities with 2 fund trades and 2 equity trades per year, as well as 12 regular equity trades and 12 regular fund trades. 

Pension Essentials key facts: what you get

• Low, flat subscription of £5.99 a month 
• Free regular investing for funds, investment trusts, and popular UK shares
• Best value among top platforms for those with more than £15,000
• Ability to invest and access ii research and insights on the go, through the ii app
• Only for those who hold a SIPP with ii
• Does not include ISA or GIA accounts
• No free equity trades
• Just £3.99 per UK and US trades, funds, investment trusts and ETFs.
• Hold up to £50,000, above which you move on to Pension Builder.
• Customers need a direct debit set up & elect for email operational communications 
• Access to one of widest ranges of investments on the market – both UK and overseas
• Invest in the world’s best-known brands
• Educational content and independent editorial to help you develop your investing skills
• Easy to use select lists, and independent research to help you choose
• Research tools on sustainable investments
• Quick-start fund range for beginner investors
• Option to vote your UK shares through our award-winning notification service

Great value at every stage of the pension journey

Once customers exceed the £50,000 threshold, they’ll be moved into ii’s award-winning Pension Builder price plan, which is just £12.99 per month. That’s regardless of whether they have over £50,000 or over £1 million in their pension – the fixed fee then stays the same.

The impact of ii’s incredible value flat fee can be meaningful over the long-term, and add up to tens of thousands of pounds. It be the difference between a modest or a comfortable retirement, or even an earlier one. 

Helping customers get value for their money

The beauty of ii’s flat-fee pricing means the more people save and grow their investments, the more they get to keep. The ii flat-fee method of charging sits in stark contrast to the wider market, which is dominated by percentage fees, which sees customers paying more and more as their investment portfolios grow.

The launch of Pension Essentials means some existing customers of interactive investor will get better value for money by moving to the new service. interactive investor will notify these customers and look to transfer them to a Pension Essentials account so they can make the most of the new low-cost offering.

Alice Guy, Head of Pensions and Savings, interactive investor, says: “Our Pension Essentials subscription plan is designed to help people who are nearer the start of their pension journey. At just £5.99 per month, I’m proud to say we’ve delivered one of the best value pension plans available in the UK today, with incredible choice, tools and insights to help people on their way.

“With the introduction of this ultra low-cost service, our flat-fee platform is now cost-effective for many different types of investors. Whether people are just beginning their retirement saving journey or well on their way, we have a service that will suit them at a cost that is much cheaper than our main competitors.”

Jeremy Fawcett, Head of Platforum, says: “interactive investor’s Pension Essentials is cost-effective for people with smaller pension pots and adds an extra rung at the bottom of the ladder to help people get started on their retirement savings journey.”

Bella Caridade-Ferreira, founder of Compare + Invest, says: “This is a great move! interactive investor was always the most competitively priced platform in the market. With the Pension Builder Account and now the Pension Essential Account, ii has made sure that it is also competitively priced at the more modest end of the market — especially for younger people who are starting to build their pension savings. They now have every price point (or portfolio size) covered, which is disruptive.”

Holly Mackay, Founder and CEO, Boring Money, says: “Pensions remain a source of great confusion and anxiety for millions, and the industry has a lot to do to earn consumers’ trust. Less than half of all pension holders** understand what charges they are paying, and providers need to work harder to get this message across. Having a flat monthly fee and a low single cost for trades makes it much easier for people to understand, removing one key barrier to greater pension adoption by an under-saved nation.”

Notes to editors:

*Self-employed data from upcoming ii Great British Retirement Survey. In all, we have surveyed 10,000 people, using the award-winning, strategic insight consultancy Opinium Research between 18 May 2023 - 17 July 2023. Half of our responses came from Opinium’s nationally representative sample: 4,801 UK adults. The research was weighted to be nationally representative, on age, gender and education status, region, employment status and ethnicity. The other 5,000 responses came from our own interactive investor community, and we have reported the findings separately, with some interesting comparisons.

**Stat: 47% of pension holders agreed that they understand what the charges were on their pension; Source : Boring Money Pensions Report 2023; Nat rep UK adults, 4007, Sep 2023.