Digital bank Monzo has launched a new product aimed at simplifying pension consolidation by bringing old pensions together into one fund within its app.

Monzo customers will be able to share their details and names of former employers for Monzo to track down and combine their pensions into a BlackRock-managed retirement fund.

The product, Monzo Pension, will be gradually rolled out to customers over the coming months, with consumers able to register their interest within the Monzo app from today (24 July).

It will also provide ‘jargon-free’ guidance to support users in their retirement journey.

The investment funds the pensions will be consolidating into will use the age at which customers aim to retire to balance risk, shifting from higher to lower risk investments over time.

Customers using the product will pay a 0.45 per cent platform fee, while Monzo Perks and Max subscribers will pay a 0.35 per cent fee, and a 0.18 per cent fund fee.

Research from Monzo found that more than three-quarters of UK adults (77 per cent) felt anxious, overwhelmed or scared when thinking about their pension, while 30 per cent said they found the process of consolidation too complicated.

When asked what would enable them to prioritise their pension, 38 per cent of respondents cited a process that “felt more accessible to manage alongside their everyday finances”.

Commenting on the announcement, Monzo general manager of savings, investments and pensions, Andy Smart, said: “We know from speaking with our customers that visibility and knowledge of their pension is low and anxiety is high - so we’ve designed Monzo Pension to solve exactly these pain points.

“Managing multiple pensions and planning for retirement is unnecessarily complex, which means people default to avoiding it and end up on the back foot.

“Now our customers can get on the front foot and keep tabs on their future financial goals alongside the rest of their finances in the Monzo app - planning not just for today or next month, but for years to come.”

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