Fintech Pensionbee buzzes towards profit after reporting rise in savers

London-listed fintech Pensionbee is set to deliver its first profit as Britons turn to pension savings to protect their cash against the worst effects of inflation in 2022.

In a fourth-quarter trading update, the retirement savings platform said it was on track to reach profitability for the first time after a 56 per cent jump in invested customers and a 38 per cent increase in revenue to £18m last year.

Assets under administration also rose above £3 billion during 2022 on the back of strong inflows and a customer retention rate of 97 per cent.

PensionBee, which allows customers to transfer their old pensions onto its digital platform and reinvest them, has sought to tap into a wave of demand from Britons who have tried to take more control of their pension pots over the past decade.

PensionBee’s boss Romi Savova told me that By AM. that a squeeze on consumer spending power over the past 12 months had spurred a wave of savers to join the firm.

Savova said: “In a cost of living crisis money matters come to the fore and while people’s first focus will be on mortgages and energy costs, pensions are not far down the list.”

“And so when you reassess your overall financial position and budgeting, your long-term savings definitely comes up as one of the areas you want to be increasingly focused on.”

The average size of savers’ pension pots in the firm fell in the year as a result of a wider downturn in the market, which destroyed savers’ holdings. However, Savova argued that the twin threats of inflation and a long recession in the UK have conversely given PensionBee a boon in the race to grow.

“I believe these […] challenging environments are actually very good in the medium to long term. Because they enable early adopters like us to really cement our advantage in the market,” she said.

“From our perspective, we accept that there are business cycles that we continue to focus on on our own strategy and our own execution, and we accept that as a big medium-term opportunity.”

PensionBee, which was founded in 2014, moved to London’s main market last year after floating on the high-growth section of the market in 2021. However, the firm has struggled as a listed company, with shares down around 57 percent from their flotation price.

However, analysts at Bank of America said today’s update from Pensionbee marked a “good result from a difficult year” for financial firms.

It said: “2022 was a challenging year for retail firms. PensionBee’s 2022 trading update shows the company has achieved significant financial and strategic success despite this,” Bank of America analysts said.