London-listed fintech Pensionbee is set to post its first profit as Brits turned to pension saving to shield their cash from the worst impacts 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 posting a 56 per cent jump in invested customers and a 38 per cent surge in revenues to £18m last year.
Assets under administration also rose beyond £3bn 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 pension plans to its digital platform and reinvest them, has looked to tap into a wave of demand from Brits trying to take greater control of their pension pots over the past decade.
PensionBee’s boss Romi Savova told City A.M. that a squeeze on consumers’ spending power in 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 forefront, and while the initial focus of people will be on mortgages and energy costs, pensions are not far down the list.”
“And so when you are rethinking about your overall financial position and budgeting, your long term savings definitely comes up as one of the areas that you want to be increasingly focused on.”
The average size of savers’ pension pots at the firm fell in the year as a wider slump in the market dented savers’ holdings. However, Savova claimed the dual threats of inflation and a long recession in the UK have conversely provided a boon to PensionBee in its race to grow.
“I think these […] challenging environments are actually very good for the medium to long term. Because they enable first movers like us to really cement our advantage in the market,” she said.
“From our perspective, we accept that there are business cycles we remain focused on on our own strategy and our own execution and we accept that as a huge opportunity over the medium term.”
PensionBee, which was founded in 2014, shifted onto London’s main market last year after floating on the high growth section of the market in 2021. The firm has faced a difficult time as a listed firm however, with shares trading down around 57 per cent from their flotation price.
However, analysts at Bank of America said the update from Pensionbee today marked a “good outcome from a difficult year” for financial firms.
It said: “2022 was a challenging year for retail financial service firms. PensionBee’s 2022 trading update shows that the company has achieved considerable financial and strategic success despite this,” analysts at Bank of America said.