In this review, we are going to take an honest look at Penfold, a modern pension platform in the UK. We’re going to take a look at their fees, investment options and customer reviews for the platform.
Most people have a workplace pension in place but don’t really know where their money is invested. Penfold allows you to find any old pensions you have had in the past and bring them all into a single platform, so you can track all of your pension investments in one place.
Penfold is one of the UK's innovative digital pension platforms, specifically designed for the self-employed, freelancers, and limited company directors. You can easily transfer any old pensions to Penfold and manage your pension from a single platform. They have multiple investment plans to choose from based on your risk tolerance.
- Easily find and add old pensions to your account
- Good range of investment plans
- 25% government bonus
- A great for self employed people
- Fees more expensive than Pensionbee
- Low control over investments
Who Are Penfold?
Penfold is one of the UK’s innovative digital pension platforms, specifically designed for the self-employed, freelancers, and limited company directors. Recognizing the unique challenges faced by this demographic in securing and managing retirement funds, the firm offers a streamlined, flexible pension scheme that fits the unpredictable nature of freelance and self-employed work.
Founded in 2017 by Chris Eastwood, Pete Hykin, and Stuart Robinson, Penfold set out to address the pension gap faced by a growing freelance workforce in the UK. From its humble beginnings as a visionary fintech solution, Penfold has steadily expanded its reach, earning commendation for its user-friendly interface and commitment to making pensions straightforward.
While it might not have the longstanding history of some industry giants, Penfold’s tailored approach to the modern work landscape makes it a noteworthy contender in the pension sector.
How Penfold Works
To get started, you will need to sign up for Penfold. You can sign up on the mobile app or online. You’ll need to have your name, current address, date of birth and national insurance number ready to create an account.
To start the signup process you will need to give some basic information such as your Name, Email and address. When you complete this you’re ready to start setting up your pension.
Penfold has a range of different pension calculators and tools available but one allows you to calculate how much you need to put in your pension each month to reach your goals. You simply input your age and how much you plan to invest.
It will then calculate what your pension pot will be worth at retirement. It will also show you how close this is to an “ideal” pot (2/3 of your working income during retirement). You can adjust your contributions to see how much you will need to invest to hit your desired pension pot.
Once you have decided how much to invest you can choose one of Penfold’s 4 different investment plans. In the Standard plan, you can choose from 4 different levels of risk. The further you are away from retirement, the more risk you can take as your money has longer to grow and has time to rebound from market corrections. If you’re retiring in the next 10 years you may want to take a lower level of risk to protect your money in the event of market downturns.
We will take a more detailed look at each of these plans later in the review.
Once you decide on your plan, you will be asked to confirm you accept the risk of investing. It’s important to note that Penfold is not a financial advisor and is not giving you regulated financial advice. You are making the decision to invest on your own.
When the conditions have been accepted, your pension is officially set up and you can start contributing to your retirement. You may have to provide some extra verification information at this point.
If this is your first private pension and you have no other old workplace pensions you can simply continue to contribute every month and grow your retirement. If you have old pensions you can add them to your Penfold account.
Penfold allows you to pull all of your old pensions into a single platform, making it much easier to manage your retirement pot. If you have the details of your old pensions, you can instantly start a pension transfer into Penfold.
Alternatively, if you don’t know the details you can use Penfolds “Find My Pension” tool to track down any existing workplace pension pots you have. All you need is the name of your old employer.
You now have a Penfold account set up and are preparing for your retirement. Congratulations!
Penfold Investment Plans
Penfold has a range of 4 different investing plans available. Each plan offers a different focus for your portfolio. The plan you choose will depend on your current life situation and potential beliefs. Let’s take a deeper look at each plan.
Standard
The standard plan from Penfold has 4 different options to choose from based on risk level. Each level offers broad diversification across a wide range of investments. The 4 plans are made using Blackrock MyMap funds. These funds invest in a wide range of different iShares ETFs to make up a balanced portfolio.
Here’s what Penfold says about each plan:
Level 4: Highest growth potential and risk – More than 15 years from retirement. The only objective is long-term growth. Not worried by short-term drops.
Level 3: Medium to high growth potential and risk – More than 10 years from retiring. Mostly looking for long-term growth. OK with larger dips to get larger gains.
Level 2: Low to medium growth potential and risk – Around 5 to 10 years from retiring. Aiming for a little more growth. OK with moderate dips in value.
Level 1: Lowest growth potential and risk – Retiring in the next 5 years. Low and stable growth. Most protection from dips in value
Choosing one of these standard plans is the easiest way to start growing your pension with Penfold.
Lifetime
The lifetime plan is perfect for those who want to take a completely passive approach to their retirement plan. This is essentially a target retirement fund that adjusts automatically as you approach retirement age.
The lifetime fund goes through three different phases as you approach retirement.
Initially, the portfolio will focus on growth, investing in Stocks and Shares for maximum growth. This stage will have more volatility but over the long term should produce good returns.
As you approach retirement your portfolio will start to adjust, swapping out stocks and shares for less risky investments like bonds and gilts. This starts to focus on preserving the wealth you have created over the past few decades.
Stage three focuses on protecting the wealth you have created during retirement. Most people won’t take a full lump sum at retirement so you will have a portion of your pension still invested while being retired. In this final stage, the main focus is to preserve pension value by investing in less volatile assets.
If you are in the early stages of life, this can be a great way to save for retirement without having to think about adjusting your portfolio.
This portfolio also utilises Blackrock’s MyMap investment funds. The investments are spread across a wide range of iShares passive tracker funds.
Sustainable
The Sustainable pension plan focuses on funds that have a positive impact in the world. The plan uses a mix of ESG screening and enhancing as well as a focus on socially responsible investing.
This plan also comes with 3 different risk levels to choose from, depending on where you are in relation to retirement.
Sharia
Penfold has a Sharia-compliant plan so Muslims can also invest in their financial future through the platform.
Your pension contributions will be invested in a wide range of funds and companies that operate in a Sharia-compliant manner. You can read more about the full details here.
Penfold has this fund in collaboration with HSBC. This plan sits at a level 5 of 7 on the risk and potential reward scale. It’s targeted at those who are a long way from retirement.
Penfold Investment Plan Performance
Penfold does not showcase its portfolio’s historical results on their site. However, as these funds are just wrappers for Blackrock funds we can find their historical performance. Some have more historical data than others. Below you can see the cumulative performance of the standard and sustainable funds over the past 1 Year, 3 Years and since inception.
| Plan | 1 Year | 3 Years | Since Inception |
|---|---|---|---|
| Standard Level 1 | -0.89% | -4.08% | 5.34% (May 2019) |
| Standard Level 2 | 1.00% | 2.87% | 15.92% (May 2019) |
| Standard Level 3 | 2.42% | 9.93% | 25.36% (May 2019) |
| Standard Level 4 | 3.30% | 15.93% | 32.93% (May 2019) |
| Sustainable Level 1 | -1.28% | – | -6.47% (Mar 2022) |
| Sustainable Level 2 | 2.15% | 10.01% | 13.96% (Jun 2020) |
| Sustainable Level 3 | 4.73% | – | 3.83% (Mar 2022) |
The lifetime funds are harder to show performance for as it would depend on your target retirement date. You can view more information on the lifetime funds here.
To see how these plans have performed, we can compare them to Pensionbee plans as well as some index funds I like to invest in.
Below we have compared the Level 4 standard plan with a similar plan from Pensionbee as well as the Fidelity Index World Fund and Vanguard Lifestrategy 80% Equity.
| Fund | 1 Year Returns | 3 Year Total Returns | 5 Year Total Returns |
|---|---|---|---|
| Penfold Standard Level 4 | 3.3% | 15.93% | – |
| Pensionbee Tracker | 6% | 16.5% | 20.1% |
| Fidelity Index World Fund P Accumulation | 5.6% | 35.5% | 56.8% |
| Vanguard Lifestrategy 80% Equity | 2.8% | 20.2% | 30.7% |
Over the past year, the Pensionbee plan has outperformed the Penfold plan significantly however both have similar results over a 3-year period. The Fidelity World Index has massively outperformed all others over the past 3-years, while the Vanguard fund performed slightly better than the Pensionbee and Penfold plans.
If you want to invest in the Fidelity or Vanguard funds through your pension, you would need to set up a self-managed account with a broker such as Hargreaves Lansdown.
Penfold Fees
Penfold has a simple fee structure charging you one single fee, unlike some other brokers who have multiple different fees. The fees will differ depending on the plan you choose.
For the Sustainable, Standard and Lifetime plans you will be charged 0.75% yearly up to £100k and 0.4% for pots over £100k. For the Sharia plan, you will be charged 0.88% yearly up to £100k and 0.53% per year for pots over £100k.
| Plan | Fee | Fee For Pots Over £100k |
|---|---|---|
| Standard | 0.75% | 0.4% |
| Sustainable | 0.75% | 0.4% |
| Lifetime | 0.75% | 0.4% |
| Sharia | 0.88% | 0.53% |
These fees are quite expensive compared to Pensionbee’s 0.5% fee on their Tracker plan which outperformed Penfold’s standard plan. The Pensionbee fee also gets reduced to 0.25% for any balance over £100k.
Transferring Old Pensions To Penfold
One of the best things about Penfold is its ability to track down your old pensions and bring them all into one platform. Using their tool you can track down pensions from old jobs. Simply provide them with as much information as you can and they will get to work to transfer the pension into your account.
During the transfer process, they will keep you updated on how things are progressing. It can take a couple of months to get your pension transferred over.
Withdrawing Your Pension
Penfold has two ways to take your pension. You can either take it monthly through drawdown or you can purchase an annuity. If you want you can also take your whole pension in one go but this may not be the most tax-efficient strategy.
Drawdown
A pension drawdown is a flexible way to take cash from your pension. You are able to take up to 25% of your pension pot tax-free and leave the rest invested to withdraw when you need it, rather than taking your whole pension as a lump sum. You will have to pay income tax on anything you withdraw over the 25%.
At Penfold withdrawals are 100% free and can be taken whenever you want them without any penalties.
Annuity
An annuity allows you to get a guaranteed regular income for your retirement. The amount you receive is determined by your annuity rate.
You can still choose to take your 25% tax-free lump sum and take the remaining as an annuity. The amount you get from the annuity will depend on your personal circumstances such as age, health and where you live. The older you are the higher the annuity rates you will be offered.
The main reason to take an annuity is the guaranteed income aspect. This gives people a lot of people peace of mind that they will have enough money to live in retirement, no matter how long they live. With a pension drawdown, your money can run out.
Government Bonus
When making personal contributions to your pension, you are eligible for a 25% bonus from the government. When you make a contribution through Penfold, they will automatically claim this 25% top-up from HMRC and add it to your account if you are eligible for pension tax relief.
When your work makes contributions for you, it comes out of your salary pre-tax. When contributing money after you have been paid you are contributing post-tax. Therefore the government will give you tax relief on any of your contributions to your personal pension as pensions are intended to be tax-free savingas.
This is essentially “free money” added to your pension for you.
It’s important to note you will only get the bonus on contributions you make and not on old pensions you transfer into your account.
Also, if you are a higher rate (40%) or an additional rate (45%), you can claim back tax at these higher rates. However, you will have to do this yourself via your self-assessment tax return which can be completed online.
Penfold For The Self-Employed
As someone who is self-employed, I know a pension is the last thing on your mind. Most of us are so busy being focused on our business that we forget to invest for our retirement in the future.
Penfold makes investing for the self-employed easy. Whether you are a sole trader or a director of a Limited Company you can open a Penfold account with a small cash deposit initially, and then consistently contribute more over time.
It’s a good idea to set up an automatic direct debit ensuring you consistently invest towards your retirement without having to think about it.
As a sole trader, you will get a 25% government bonus when you make deposits. For every £100 you contribute, the government adds £25. This happens automatically in Penfold.
For Directors of Limited Companies, company contributions may be considered an allowable business expense and could be offset against your company’s corporation tax.
Is Penfold Safe?
Yes, Penfold is a safe Pension platform. They are regulated by the Financial Conduct Authority (FCA). The FCA ensures that Penfold is following strict regulatory guidelines to keep your money and pension secure. In the unlikely event that something were to happen to Penfold, your pension account would be transferred to another provider for no charge.
Penfold is also part of the Financial Services Compensation Scheme (FSCS). If Penfold or one of their partners (Blackrock, HSBC and Lloyds bank) ever went out of business, you would be protected up to £85,000.
Penfold Customer Support
When it comes to managing money, having great customer support is key. If I want questions answered, I want to be able to get on the phone and chat with a real human.
Penfold offers 3 ways to get in touch with them:
Live Chat – Contact a Penfold team member from 9 a.m. to 6 p.m. on weekdays.
Phone – 020 80035908
Contact Form – Contact them through the contact form on their website and they will get back to you ASAP.
It’s important to note that Penfold will not give you financial advice.
Penfold Customer Reviews
Penfold has a rating of 4.3 stars on Trustpilot with over 800 reviews which is great for a financial app. 85% of reviews are 5-star with only 7% coming in at a 1-star rating.
Most of the positive reviews are delighted about how easy the app is to use as well as how simple it was to find existing pensions and have them added to their Penfold account. Lots of Self-employed people are leaving great reviews as Penfold has helped them start saving for their future as business owners.
The main complaints are around the customer service team being extremely slow to respond especially when asking questions about moving old pensions in as well as withdrawing money from the pension.
Customer support seems to be better over at Pensionbee.
Penfold Pros & Cons
Pros
- Easily identify and add old pensions to your account
- Good range of plans for a range of investors
- Automatic 25% government bonus on contributions
- Can withdraw your pension via drawdown or annuity
- A great solution for self-employed investors
Cons
- Plan performance is not as good as Pensionbee
- No financial advice
- Low control over investments
Who Should Use Penfold?
Penfold is a great platform for a wide range of people. It’s simple and easy to use and allows people to set up a private pension with ease. If you have multiple old pension plans, you can consolidate them in Penfold making it much easier to manage your pension investment strategy.
If you’re self-employed and have no pension set up, Penfold is a great choice however my preferred platform is Pensionbee due to their amazing customer support, better performing plans and cheaper fees.
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