A product claiming to be the UK’s first app-based hybrid auto-enrolment and personal pension has been launched by a team operating through Oxford University’s start-up incubator.
Called Collegia Pension, the product is designed to give choice to employees and the self-employed over where they invest.
The product uses ESG-only target date funds from Alliance Bernstein, with its default option being the Collegia Sustainable Target Date Fund Range, which invests in companies aligned with the United Nations Sustainable Development Goals.
As well as operating as an auto-enrolment scheme, Collegia has made it simple for employees that are unhappy with their current workplace pension provider to request their employer pay their contributions into its plan. It anticipates that some employers will be happy to support employee requests for diversion of contributions into a separate plan, functionality that is available in Australia’s more developed defined contribution market.
The app-based pension is both FCA- and HMRC-approved. Collegia says the new pension is unique as it can be used by multiple employers simultaneously for an individual employee’s AE requirement. It is also transportable between employers and can be used simultaneously by workers who are both employed and self-employed, such as gig employees, it says.
Collegia was founded by Eduardo Chazan and Riccardo Gasparini who met during their MBAs at Oxford Said Business School. It is backed by private funding and investment from the Oxford University Incubator.
Collegia will only use dedicated ESG fund providers. Mobius provides the investment infrastructure for the target date funds.Members pension plans are structured as a long-term unit-linked insurance policy provided by AB under an insurance contract, unitised and administered by Mobius.
Eduardo Chazan, founder and CEO, Collegia, says: “Worth almost £100 billion invested annually, the auto-enrolment market serves over 10 million employees and 1.6 million businesses. However, the products on offer to employees and employers alike are no longer fit for purpose, with an almost complete lack of innovation. Millions of employees have no real-time access to their pension, often resulting in retirement planning apathy.
“Employees and the self-employed should have access to a single pension that can stay with them for life. It has to be welcoming, stress free, and critically, must offer real ESG investments and not greenwashed funds.”
There are no employer charges and members pay a 1.7 per cent contribution charge, 0.1 per cent AMC plus a further 0.29 per cent for the Collegia Sustainable Target Date Fund range, the scheme default fund, giving an OCF of 0.39 per cent per year.
Other investment options are charged at 0.29 per cent for the Collegia Target Date Fund range, , or 0.35 per cent for the HSBC Islamic Global Equity Fund, both subject to the added 0.1 per cent AMC.