PensionBee vs Nest - which is best?

Looking to compare PensionBee vs Nest? You’re in the right place.

Perhaps you’re self-employed and looking for a great pension provider, or maybe you’ve got a Nest pension and are thinking about transferring it to a new pension provider, or maybe you’ve got another pension elsewhere and are thinking of transferring it to Nest.

Whatever your reason, we’ve got you covered – we’ve compared both to figure out what the best move could be.

As a quick overview, PensionBee is a pension provider that offers personal pensions, which are pensions you set up yourself, and get a massive 25% bonus from the Government on all of your contributions.

Nest is primarily a workplace pension provider, that's a pension you get from your employer, who will typically handle everything for you, and deduct money from your salary each month. 

You’re likely more familiar with Nest, and that’s because it’s run by the Government, and they make it easy for companies to register to provide their employees with a workplace pension – and by law companies have to do this, so many just opt for the easy, Government option, rather than shopping around for the best deal for their employees.

You can’t set up a personal pension with Nest, you’ll only be able to use Nest if your employer chooses them as their provider (unfortunately you don’t get any say in the matter when it comes to workplace pensions).

However, having said that, if you’re self-employed, you can set up a Nest pension, and if you already have a Nest pension, you can transfer an old pension over to them if you want to…

We don’t typically recommend Nest as a good option for either of these though. As a spoiler, PensionBee¹ comes out on top for pretty much all circumstances – it’s easy to use, low cost and has a great track record of performance. As a bonus, you’ll also get £50 added to your account too, if you sign up with Nuts About Money.

With this comparison, we’ll look at the options you might be interested in, which is probably transferring an old pension to Nest, transferring your pension away from Nest if you move to a new job, and setting up a pension if you’re self-employed.

Note: if you are with Nest now (with your current job), you won’t be able to move your pension away until you change jobs. But any old pensions (through old jobs) can be transferred to a new provider.

PensionBee vs Nest: ease of use

When it comes to ease of use and personal pensions, you can’t really beat PensionBee. It’s all handled on your phone, on both Apple and Android, and very highly rated – 4.7 on the Apple store and 5 stars on the Google Play store. You can also use their website if you want to.

It’s easy to get started, and can take just a few minutes to be up and running. You simply need to register, and then pick which pension plan you’d like (where your money is invested), add some money and you’re away. You’ll be able to set up monthly payments too.

You’ll then be able to view your pension balance (your portfolio) whenever you like on the app.

When it comes to transferring an existing pension, it’s super easy too. All you need to do is let them know where your old pension is (which provider), which you can do within the app, and then they’ll handle everything else.

Your ‘BeeKeeper’, which is your dedicated customer service person, will keep you updated and let you know if there’s any issues. You can ask them any questions whenever you like through the app.

With Nest, you can’t set up your own pension, that should all be done for you by your employer, and if you are an employer, it’s easy to set up a Nest pension for your employees.

As a Nest customer, you’ll be given an online account, where you can log in on their website, and then view information about your pension, such as how much it’s worth.

Unfortunately there’s no mobile app, and the online site is a bit confusing – it’s quite outdated, but you’ll be able to do everything you need to do. You’ll also be able to switch your pension plan if you want to – we’ll cover what a pension plan is and your options below.

‍Winner: PensionBee

PensionBee vs Nest: self-employed

Let’s take a look at which provider is better if you’re self-employed. If you’d like to learn more about this topic, we’ve got a guide to the best pensions for self-employed people.

With PensionBee, you can set up your pension in a few minutes, all on their website, or phone app, and then make pension contributions from your own bank account, or from your business account too – if you run a limited company, you’ll be able to make payments from your company, which has some tax benefits. Learn more about this with our guide to the best pensions for limited company directors.

With Nest, you can set up a pension if you’re self-employed and work for yourself, such as if you’re a freelancer, or if you run a limited company, but only if you are the only director, and only if you don’t have any employees (so basically a freelancer with a limited company).

That’s a bit different to PensionBee, where you can have multiple directors and employees within your limited company – although you can only make payments into your own pension, not your employee’s pensions.

With Nest, you can set up a pension on the Nest website (there’s no app to use), and then pick which pension plan you’d like. You can then add money, and set up a regular payment if you want to. So pretty much the same process as PensionBee, although not as easy to do.

With both Nest and PensionBee, if you make contributions from your own personal bank account, you’ll automatically get a 25% bonus from the Government (which is refunding the tax you’ve paid on your salary). If you pay in from a limited company, you won’t get this, but you wouldn’t have paid tax on the money yet anyway, so it’s the same.

We’re giving this one to PensionBee, it’s much easier to get started and set up a pension, you can do it all on your phone (if you want to), and there’s far more options for limited company directors with more than one person working in the business.

Winner: PensionBee

PensionBee vs Nest: fees

If you’re going to continually add to your pension (which you should!), PensionBee comes out cheaper overall.

PensionBee charges one simple fee per year, which is a percentage of your pension. This starts at 0.50% of your pension pot per year, and can go up to 0.95% depending on which pension plan you choose.

For the popular ethical investment option (no fossil fuels) it’s 0.75%. (We’re big fans of ethical investing here at Nuts About Money.) 

And, if your pension pot goes above £100,000, the fees halve for however much you save above that. So, for the ethical investment option, you’ll pay 0.375% on everything above £100,000.

Overall for a pension, that’s low cost.

With Nest, it’s more complicated. With every contribution, you’ll pay 1.8% once, everytime you add money. You’ll then also pay 0.30% per year of your total pension pot.

Confusing right? What’s also confusing is that Nest is run by the Government, yet the Government has said having multiple fees is bad and confusing and should be banned, yet continue to do so…

That means you need to use a bit of maths to work out how much you’ll actually pay vs PensionBee.

Let's assume you’ll be saving regularly each month, and have a pension pot already – and let’s break it down into saving £50, £100, £250 and £500 per month, with a pension pot to match.

Note: if you don’t have a pension pot already then PensionBee is cheaper as you won’t be paying a fee to build your pension up like you would with Nest (the 1.8% per deposit).

Overall then, PensionBee comes in cheaper, although it does depend on which pension plan you pick with PensionBee, as some are 0.95% – we used one of the most common options, which is also the cheapest (0.50% per year).

Although there’s not much in it. If you weren't contributing regularly, Nest would be cheaper as you’d just pay the annual fee of 0.30%.

Fees are important, but they’re not everything – so don’t make decisions based on fees alone, also factor in the pension plans available and how easy it is to use. Which could be either PensionBee or Nest, depending on your preferences.

Winner: PensionBee (if you contribute regularly), Nest if you don't.

PensionBee vs Nest: pension plans

With both PensionBee and Nest, you’ll need to pick your own pension plan – this is where your money will be invested, and hopefully grow over time. There’s lots of different ways your money could be invested, but typically with pensions, you’ll likely want investments that will grow and grow long into the future – and that’s what they both offer.

With PensionBee, there’s 7 different options to pick from, although the majority of their customers pick from just 3, which are:

Tracker: investments that tend to follow the economy (lower cost)

Tailored: experts manage the investments day-to-day

Fossil Fuel Free: experts manage the investments, and exclude any investments that might harm the environment (such as energy companies)

PensionBee also has an ‘impact’ plan – that’s where your money is only invested in investments that are helping to build a better planet, and must meet strict guidelines. This could be companies helping to provide education, sustainable food and water, and green energy.

With Nest, you’ve got:

Retirement date: the standard option suited to everyone, investments change depending on the year you retire.

Ethical: investments that have a positive impact on the environment and society.

Higher risk: where your investments could grow larger over time but have volatility (bigger ups and downs).

Lower risk: smaller ups and downs over time, but likely not to grow as much over time.

Both providers also have a Sharia investment option (where your money is invested inline with Islamic law).

We won’t go into the details about how the investments have actually performed, however generally PensionBee funds have performed better over the years – the investments are actually managed by large investment banks, such as HSBC, BlackRock and Legal & General, whereas with Nest, they manage their own investments.

Overall, it’s close, but PensionBee has better performance over time, has a few more options to choose from than Nest, and importantly for us and hopefully our readers, PensionBee has an impact plan, so your pension can help build a better future for the world.

Winner: PensionBee

PensionBee vs Nest: customer reviews

To get a gauge of how companies treat their customers, we like to look at customer reviews. And to do that, we use Trustpilot, a popular reviews website.

PensionBee has a rating of 4.6 out of 5 - that’s impressive. Most reviews mention how easy it is to use, and how great the customer service is (as you get your own dedicated customer service person).

With Nest, it’s 4.1 out of 5. Most of the reviews mention how easy it is to transfer an old work pension to Nest when having Nest as their new workplace pension…

It’s simple to do, but we don’t recommend moving your old pension to your current workplace pension – you can't move it again until you move jobs, and you might not be getting the best investment performance, and could be paying higher fees.

It’s often better to move it to a personal pension (such as PensionBee¹ or Moneyfarm¹ (here’s our Moneyfarm review to learn more)), where you have complete control over it, and can move it to another provider at any time. Check out our guide to what happens to your pension when you change jobs to learn more. Here’s where to find all the best personal pension providers too.

Some of the reviews mention that transferring out of Nest can be a pain, and that there’s typically lots of admin errors, with lots of paperwork (not digital). Their customer service is also based in a foreign call centre, rather than the UK, like PensionBee.

Winner: PensionBee

PensionBee vs Nest: the winner

Overall then, with a bit of a landslide victory, the winner is PensionBee!

PensionBee is much easier to set up a pension yourself, you can do it on their website or great phone app, and there’s simple investment options to choose from, with great performance over the last few years. And if you do want to transfer any old pensions, they’ll handle it all for you too.

If you’re self-employed, and want to set up your own pension, PensionBee is a great option. 

The customer service is far better too – you’ll get your own dedicated UK customer service person, who will answer any questions you have, either over phone or email, and keep you updated with your pension transfers if you have any.

When it comes to the fees, they’re fairly similar, although Nest is a lot more complicated. If you’re saving regularly, PensionBee comes in cheaper overall.

And when it comes to the investment options, they’re again similar, with simple pension plans to pick from – although we prefer the plans by PensionBee, which are managed by large investment companies who know what they’re doing – and there’s an impact plan so your money can have a positive impact on the world and society.

And that’s it! Overall, PensionBee wins. If you want to learn more, check out our PensionBee review, or head to the PensionBee website¹ to get started (get £50 added to your pension for free too).