PensionBee, the online pension provider, has entered into an exclusive, non-binding term sheet with a large, US-based global financial institution to expand into the United States in late 2024.
Under the proposed strategic relationship, PensionBee will deliver the US service through PensionBee Inc, to be established in Delaware as a wholly-owned subsidiary of PensionBee Group plc, with operational headquarters in New York.
Recognising the opportunity in the US market, presented by the world’s largest defined contribution pension market, which represents around 80 per cent of the global total, the pension provider hopes to enable US consumers to consolidate and roll their 401(k) plans into a new individual retired account (IRA).
PensionBee will manage all operations of the new US business, including hiring a local team, making its online retirement proposition available and UK-based proprietary technology to consumers in the US defined contribution market.
Romi Savova, founder and CEO of PensionBee, commented: “In the year of our 10th anniversary, having demonstrated underlying profitability, we have entered discussions with a view to deploying our award-winning customer proposition, supported by our innovative technology platform and marketing approach, in the United States of America. This is a transformative step for PensionBee and for our stakeholders.
“By entering the world’s largest defined contribution pension market, where many consumers still struggle to prepare adequately for retirement amidst an array of confusing and difficult-to-use investment options, our straightforward approach to online retirement savings will help millions of consumers look forward to a happy retirement.”
Planning for growth
In the UK, following close to a decade of operations, PensionBee will continue to grow its market share in the £1trillion defined contribution pension market following current guidance on revenue growth and profitability, operating the UK business as financially separate from the new US undertaking.
At the end of 2023, PensionBee had £4.4billion of Assets Under Administration on behalf of approximately one-quarter of a million invested customers. The firm also achieved ongoing Adjusted EBITDA profitability at the end of 2023 and expects to be profitable in the UK on an Adjusted EBITDA basis for the full 2024 financial year.
Given the context of the enormous US market opportunity, PensionBee sees the potential for its US business to grow rapidly, becoming at least the size of its UK business over the next decade.
