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What is a Penfold Pension and what does it offer the employed, self employed, company directors and businesses? Let’s find out in this Penfold Pension review.

Recent research estimates that retiring britons will need at least £260,000 in pension savings to retire without any money worries. For those still renting and who don’t own their own home, the figure is nearly double that! Yet, many Brits are still saving little (if anything) towards retirement.

This is why many people are turning to new age pension providers like Penfold.

Who are Penfold Pension?

Penfold Pension launched their platform back in June of 2019 and have been growing in popularity ever since. They aim to take the hassle and jargon out of pension savings while at the same time reducing fees. The digital element of a Penfold Pension allows users to set up a pension in just 5 minutes. They can then manage and track their pension online via the Penfold Pension app. 

What does a Penfold Pension Offer?

When you set up a pension with Penfold the company will help you to understand just how much you’ll need to be saving in order to enjoy a comfortable retirement. You can choose how and where your money gets invested. This includes how much risk you are willing to take in order to maximise the returns in your pension pot. 

You will still enjoy any tax relief that you would usually be entitled to on your pension contributions. You can easily change the amount you contribute or pause your payments if you need to take a break. If you receive a financial windfall and would like to top up your pension, that is also possible with Penfold. 

If you already have a pension elsewhere then you can easily transfer it to Penfold. You can also combine multiple pensions into one account. The Penfold team are on hand to help you find your old pensions and transfer them. This can make tracking your overall pension pot much simpler. 

If you have an active workplace pension then it might not be worth transferring it. This is because you may lose out on added employer contributions. If you are in any doubt then you can find a local financial adviser here*.

Setting Up Your Penfold Pension

Setting up a pension with Penfold is incredibly easy. You may also want to find old pensions and transfer those too, which may take a little longer. You don’t need to invest a massive amount either, as the minimum investment amount is just £1 a month!

Penfold Pension Plans

At this point in our Penfold Pension review we’ll look at the different plans available.

Penfold currently have 4 pension plans that you can choose from. These are the Lifetime, Standard, Sustainable and Sharia plans.

Lifetime Plan

The Lifetime plan has been designed to manage itself, no matter what stage of life you are in. It does this by making every effort to grow your savings in the early years. The plan then gradually shifts to more protected and less risky investments as you get older. This will help to protect the value of your pension pot as you get closer to retirement age.

The fees on all Penfold Pension plans are simple and easy to understand. There are also no hidden fees.

On the Lifetime plan you’ll pay an annual fee of 0.75% for pots under £100,000 or 0.4% for those over.

The world’s largest asset manager BlackRock manages the Lifetime Plan. BlackRock use advanced technology to invest in thousands of companies to spread risk, while at the same time creating growth.

Standard Plan

Now we come to the Penfold Pension Standard Plan.

The Standard Plan will likely meet the investment goals of investors with a standard attitude to risk. This plan will help to shield your savings from volatility. The technology used by this plan will also help to balance your risk as world or market conditions change.

Industry giant BlackRock is again managing this plan. It’s encouraging to know that BlackRock’s Standard Plan performed extremely well during the pandemic, outperforming stock markets in general.

The fee on the Standard Plan is 0.75% annually for savings under £100,000 or 0.4% for any amount over £100,000.

The Standard Plan will not automatically shift investments to a lower level of risk as you approach retirement age. The option to do this yourself does still exist within your account, though. If you’re young, you may want to select a level 4 investment level. This provides higher growth potential but with higher risk. This could be suitable if you have over 15 years before you retire. If you have less than 5 years then you may want to move to a Level 1 investment. Level one has a lower potential for growth but also carries far less risk.

Sustainable Plan

The Penfold Sustainable Plan allows you to save for retirement in a way that fits with your ethics. This is possible because this particular fund invests in socially responsible companies with the highest ESG ratings within each sector. These companies make environmental issues like climate change, pollution and waste a priority.

BlackRock manage the sustainable plan. The good news is that you don’t pay more in fees on the Sustainable Plan. The fee on the Sustainable plan is 0.75% under £100,000 or 0.4% for any amount over £100,000.

Use the ‘Explore your pension’ section of the app to see which companies your money is invested in.

Sharia Plan

The Sharia Plan allows you to invest in a fund made up of Halal investments.

Investments in alcohol, tobacco, pork, finance sector, weapons and adult entertainment companies are strictly excluded. The plan doesn’t allow for the earning of interest and only invests in listed company stock. This removes any uncertainty and ensures that business dealings are open to scrutiny.

HSBC manages the Sharia Plan fund. The fund invests in a Sharia-compliant way and is set up to adhere to Islamic Financial principles. An elected Sharia board oversees the fund. Again, you can ensure your investments are Sharia compliant by using the ‘Explore Your Pension’ section of the Penfold app.

The Fees charged on the Penfold Sharia Plan is 0.88% for pots under £100,000 or 0.53% for pots over £100,000. 

Penfold Pension Fees 

At this point in our Penfold Pension review let’s just list the Penfold fees again for a simple look.

The higher fee listed below is for investments under £100,000 and the lower fee is for investments over £100,000. All fees are annual and there are no extra or hidden fees.

Lifetime Plan – 0.4% – 0.75% (BlackRock)

Standard Plan – 0.4% – 0.75% (BlackRock)    

Sustainable Plan – 0.4% – 0.75% (BlackRock)

Sharia Plan – 0.53% – 0.88% (HSBC)

What are the Tax Benefits?

You can also take advantage of government tax benefits through your Penfold Pension.

A 25% government top-up bonus is available to private pension savers. Penfold will automatically claim and apply this on your behalf if you are eligible.

You can also claim business pension contributions as an expense, so savings into a Penfold account can be made tax-free.

There are pension contribution tax benefits for limited company directors too. This is because contributions are deductible from corporation tax. This means that £1000 saved into a pension could reduce a tax bill by £190.

Many contributions and tax benefits have limits that apply or are capped in some way. You might want to do a little more research in this area when you have time.

Is My Pension Safe With Penfold?

A big question you might have from a Penfold Pension review is whether your money is safe?

Penfold only facilitate your pension set up, they don’t actually hold or manage any of your funds.

When you pay money into your Penfold pension this money goes into a secure account with a highly regulated custodian bank. Some of the world’s largest fund managers then put your funds into action after around 1 business day.

Penfold does not own your savings or your pension, you do! Penfold do not have access to your pension pot. If Penfold Pension did go bust, your pension pot would be transferred to another pension provider.

Money you pay into your pension is invested into the stock market and bonds in various ways. This means there are no guarantees that your money will grow. It’s possible you could get back less than you pay in. This is the same with all investments. It is important that you choose a risk level that you are comfortable with. You should also choose a plan best suited to your stage of life.

The Financial Conduct Authority regulate Penfold Pension. Penfold therefore have to abide by the rules they lay out. They are also a member of the Financial Services Compensation Scheme.

Penfold Pension Reviews 

Penfold currently have a rating of ‘Excellent’ on TrustPilot scoring 4.6 out of 5 based on 391 reviews.

There are a couple of bad or negative Penfold Pension reviews but they are few and far between. These are often from people who haven’t quite understood the withdrawal process. We’ll keep and eye on these reviews going forward, of course, and update this page should the situation change.

Summary

We hope you’ve found this Penfold Pension Review helpful in making your decision. I have to say that from the information available to date, Penfold do seem to have a lot to offer.

Capital at risk. Investments can go up and down in value, and you may not get back what you put in. This blog does not constitute financial advice. If you’re unsure, seek independent financial advice.