Guiide, set up by Glasgow-based actuary Kevin Hollister, has raised the investment from a number of industry backers to further develop the site and at least double the number of users.
The tool provides free retirement guidance by creating tax-efficient, tailored retirement plans based on information supplied by individuals who don’t have their own financial advisor.
It aims to help people to get the most value from their pension pots and savings as well as reduce the risk of running out of money in retirement.
Mr Hollister, who has advised trustees and scheme employers on their pension funding and risks for more than 15 years, has spent three years building the tool with programmers and designers.
The initial development and testing stage was supported by family and friends but the company has now secured backing from a small-cap investment fund looking to support innovation in the pensions market.
The company also recently secured support from a provider in the sector and a former commercial director at a software company.
Mr Hollister said the funding, which totals around £120,000, would help the business capitalise on growing demand.
“The user rate has steadily grown to around 8,000 people a month and we are confident we can get that up to 15-20,000 a month,” said Mr Hollister, who pointed out that some 600,000 people in the UK start to take income from pensions each year.
The introduction of the 2015 Pensions Freedoms Act saw people over the age of 55 given much more control over their pensions but has also led to what is seen in the industry as an advice gap given the costs of dealing with a financial advisor.
Mr Hollister said the site will always remain free to use to consumers and will generate income from various partners in the financial services sector.
“Pensions often involve the largest financial decisions that people will ever have to make. Yet many are left on their own to seek advice and may not fully understand the practicalities, risks or implications before seeking advice, or even where to find the advice necessary, and the ever-expanding advice gap is exactly what Guiide aims to fill with this funding,” he said.
Mr Hollister said the backing provides the firm with the “runway we need for the next year to continue helping as many people as possible who want a free retirement plan”.
He added: “It also provides us with the scope to look at new opportunities and help members in the trust-based market, for both defined contribution and defined benefit members.”
Hollister said most Guiide users tend to be aged 45-plus, as that is when many people start to look closely at their pension options.
“They might want to know what their income could be at say 58 if they wanted to start accessing their pensions, and the tool helps them do that," he said.
The tool also suggests a number of pension providers along with the total expected fees a user would pay compared to their current provider, helps users switch provider, buy an annuity or access professional financial advice.