UK’s online pension provider PensionBee to expand into the US market

PensionBee, an online pension provider located in the UK, recently decided to expand into the massive $22.5 trillion Defined Contribution pension market of the United States. The company entered an exclusive, non-binding term sheet with a large global financial institution located in the US.

The deal will provide both expertise and substantial marketing funding in order for the firm to enter the US arena and establish a foothold once it is in.

PensionBee’s expansion into the US

Commenting on the company’s new move, PensionBee’s CEO, Romi Savova, stated that in the year when PensionBee celebrates its 10th anniversary, it has entered discussions with a view to deploy its award-winning customer proposition in the US. During its decade of operation, the company had demonstrated underlying profitability. Meanwhile, its design, innovative technology platform, and its marketing approach stand to give it an edge in the new market.

Savova concluded by saying that this will be a transformative step, both for PensionBee and its stakeholders.

Given the proposed strategic relationship, the company intends to deliver the US service using PensionBee Inc., which is to be established in Delaware. As such, it will be a wholly-owned subsidiary of PensionBee Group plc, with headquarters in New York.

PensionBee will manage all of the operations of its US business, which includes hiring local employees to form a team and making its online retirement proposition and UK-based proprietary tech available for customers in the United States. The firm will also allow US consumers to easily consolidate and roll over their 401(k) plans into new Individual Retirement Accounts — IRAs.

For now, the entry into the final binding agreement between the involved parties is still waiting for due diligence, but once this is confirmed, and regulatory approvals and legal documentation are in order, the firm will be ready to launch. PensionBee expects to open its doors to US customers in late 2024.

PensionBee hopes to see UK figures in the US within a decade

Back in late 2023, PensionBee recorded 4.4 billion GBP in Assets Under Administration, totaling nearly a quarter of a million customers who invested with its service. The company also achieved ongoing adjusted EBITDA profitability late last year, and it expects to be profitable in the UK on the adjusted EBITDA basis throughout the financial year of 2024.

Savova also sees great potential for the company’s US business to see a rapid expansion, and reach at least the size of its UK branch over the course of the next decade.

She said that by entering the world’s largest Defined Contribution pension market, where many still struggle to adequately prepare for retirement in the middle of an array of confusing investment options that are difficult to understand and use, PensionBee offers a very straightforward approach. The simplicity of its online retirement savings will help millions of Americans start preparation for a happy retirement, which is why the firm expects its customer count to skyrocket post-launch.