Moneybox’s Shares-for-Pensions Transfer Offer

What’s Happening? Moneybox, a financial technology company, is trialling an interesting idea with a select group of its users. The company wants to encourage these users to move their older pensions (often called “legacy pensions”) to Moneybox. Instead of a typical cash incentive, they’re offering shares in the Moneybox company itself.

How Popular is the Idea? Very! Even though it’s just in the testing phase and not yet available to everyone, this offer has struck a chord. Moneybox has already given out shares worth over £300,000 during this trial phase.

What’s Moneybox’s Background? Moneybox began as a service that let users invest spare change (the concept of “round-ups”). You’d spend a certain amount, and Moneybox would “round up” that amount to the nearest pound and invest the difference for you. They started with general investment accounts and ISAs (Individual Savings Accounts – a type of tax-free savings account in the UK). But in 2019, they decided to dive into the pension world, putting them in competition with other companies, like PensionBee.

What’s Moneybox Saying About This? In an email to the trial participants, Moneybox expressed their ambition to build the best possible pension service. They likened their shares offer to crowdfunding – a way of raising capital through many small contributions from a large number of people. However, unlike traditional crowdfunding, users don’t have to buy these shares. They receive them as a ‘thank you’ for transferring their pensions to Moneybox.

Are There Any Conditions? Yes, there are a few:

  1. Minimum Transfer Amount: To qualify for these shares, you must transfer pensions worth at least £500 in total. This can be from a single pension or from multiple pensions combined.
  2. Share Value: Each share that Moneybox is offering has a value of £25. However, they haven’t specified how many shares there are in total.
  3. If You Leave: If, at some point, you decide to move your pension out of Moneybox to another provider, you’ll need to give those shares back.

In Layman’s Terms: Think of it as a loyalty program at a coffee shop. Instead of getting a free coffee after buying ten, Moneybox is saying, “Transfer your old pensions to us, and as a thank-you, we’ll give you a piece of our company. If you leave us later, just give that piece back.”

In essence, Moneybox is trying a unique way to attract users to their pension service by offering them a direct stake in the company’s success. It’s an approach that’s getting a positive response in the trial phase, and it will be interesting to see how it evolves in the broader market.