In this Penfold pension review, I look at whether this provider offer the self-employed the best possible pension options when it comes to saving for their retirement and how its services compare to some of the other digital pension providers available.
Penfold offers to set the self-employed up with a pension in five minutes with underlying funds run by HSBC and the BlackRock MyMap fund.
Penfold is not the only provider to specialise in consolidating existing pensions in one place and providing a pension scheme, but what sets them apart is that they appear to be the only provider who specifically target self-employed people.
What does that mean?
Well, Penfold promise the five million self-employed people in the UK that they won’t have to waste any of their precious time sorting out their pension, with Penfold’s seamless registration process taking 5 minutes to complete.
They claim they can also help you decide how much capital to save and which plan suits your individual needs, as well as providing other features that are designed to meet the unique requirements of the self-employed.
The ease and speed of the provision is one thing that might appeal to self-employed people who have multiple demands on their time.
They also provide a flexible solution that can adapt to changes in your income, allowing you to choose how much you save and perhaps one of the most appealing features is that you can earn up to £1,000 in bonus money when you transfer your existing pension pots into Penfold using their consolidation provision.
What’s interesting about this pension provision is that you don’t actually have to be self-employed to use their solution.
Anyone looking to consolidate their existing pension and get them working hard towards providing for their retirement would benefit from this kind of provision.
- Superfast set up
- Can help consolidate all your existing pensions
- No minimum pension contributions
- Sparse on research and tools offering
- No options available for experienced investors
- The ability to pause may lead to a lack of retirement savings
Who Is Penfold?
Penfold is a digital pension provider aimed specifically at self-employed people. The service puts the saver in complete control with a streamlined interface that allows users to set up, consolidate, save, invest, gain tax relief back, track, and top up a pension all from one app. The pension offered at Penfold is a Self Invested Personal Pension (SIPP), allowing for flexible investing.
Who owns Penfold?
Penfold has three founders including Pete Hykin, ex Deloitte employee who is now responsible for looking after Penfold’s users, Chris Eastwood, who is responsible for designing the features at Penfold as well as working with partners and regulators and lastly Stuart Robinson who leads the team building the website and mobile app.
Product Range Overview
Penfold offers a solution that is specifically for self-employed people interested in saving into a pension. Therefore, if you are after an ISA or a general investment account then you may be better to turn your attention to another provider like Nutmeg who can offer all these options.
However, that’s not to say Penfold isn’t a good option for people looking to consolidate their pensions, instead of offering multiple options, they have chosen to focus on one thing, and do it well.
The consolidation service at this pension provider isn’t just free, they actually offer healthy bonus money of up to £1,000 for any existing pensions you transfer in, depending on the value of those pensions. Their team will help you locate your old pension and do all the leg work for you as part of their transfer service. This is a really well-run provision, quick, easy to use, and highly personable. The consolidation team were quick to keep us up to date and a pleasure to deal with.
Penfold offers a fully flexible option, allowing you to choose how much capital you save into your Penfold pension pot, perfect for self-employed workers who might experience fluctuations in their income. They automatically claim the 25% government tax relief bonus for you which you get on your contributions.
Penfold can also help you with the option of paying from your limited company account in order to save a further 19% on corporation tax and provide you with tools to help you calculate how much to save as well as tools to help you track your investments and project what they will be worth in the future. For self-employed workers who were struggling with the gap in the pensions market, Penfold pensions could be the answer they have been looking for.
Penfold have partnered with HSBC and BlackRock, the largest money managers in the world, and offer their users four investment plans to choose from as well as a Shariah option and a sustainable pension fund.
The Shariah investment plan provides retirement savers with the option to invest their capital in line with their faith with a risk appetite of 5 out of 7. This fund is invested 100% in stocks, which can often result in more volatility, but also more potential growth for investments when left over a long time period. The Shariah pension is managed by HSBC and no interest is earned on the account, in line with Islamic finance. Penfold are fully transparent about how your capital is invested within this fund, with the majority of the fund leaning heavily towards information technology, however, despite the fund being in operation since 2014, there is little data on the past performance published on their website.
The other standout offering when it comes to investment funds is the Sustainable pension, allowing you to save for your retirement whilst making a positive impact on the world. This plan is managed by BlackRock and also sits at a risk level of 5 out of 7. However, only 60% of this fund is invested in stocks with the remaining 40% being invested in bonds, potentially providing more stability.
It is important that anyone considering one of these plans is aware that as always when investing, your capital is at risk and there is no guarantee that you will get back your original investment. Investing should be considered a long term activity in order to ride out any volatility in the marketplace.
Investment Platform Review
The Penfold Investment Platform has a clean, minimal, modern appearance and its advantage lies in its simplicity. Penfold appears to have made every effort to keep their platform as user friendly as possible, catering to the needs of novice pension savers and investors who are self-employed.
Penfold Mobile App
Penfold have made everything to do with pension plans really easy to manage with their innovative app. A quick look at their app store rating will reveal a score of 4.7 out of 5 which is a very respectable rating from happy customers.
TrustPilot have an even better score of 4.9 out of 5. Like the web platform, Penfold have succeeded in keeping their app very user friendly, with a clean modern design and simplistic layout. The app is very much designed towards saving you time and Penfold have left off a lot of the complex tools that can clutter some of the alternative provider apps that are available.
Research Service and Tools Review
This is where things get a little sparse in the Penfold offering. It really feels like their offering is geared more towards busy, self-employed people who just want to set up their pension quickly and leave their pot to grow. They do have a blog section on their website which is up to date with useful articles, but nothing too in-depth. Their pension calculator is a handy little feature to help you decide how much to save for your retirement, however beyond this, I didn’t come across anything too ground-breaking.
Fees and Charges Review
In line with their quick and easy offering, the fees at Penfold are completely transparent and involve only one, low-cost annual management fee of 0.75% for their standard plans or sustainable plan. However, for pension pots that are over £100,000, this annual fee is reduced to 0.4%.
If you want to take up their Shariah plan then this annual fee will increase to 0.88% or 0.53% for any amount over £100,000.
This is fairly comparable to providers like PensionBee whose low-cost charges range from 0.5% to 0.95% depending on the plan you choose. Penfold are also parallel to some of the big, low cost providers available, with platforms like AJ Bell charging 0.25% (maximum of £10 per month) for their management fee and 0.25% funds custody charge, and Hargreaves Lansdown with an annual funds charge of 0.45% on the first £250,000 and only 0.25% on anything after that plus 0.45% shares charge. The difference is the ease with which you can manage your pension with Penfold.
Guide to Opening an Account
Penfold state that opening an account takes about five minutes and I was pleased that this wasn’t just hot air. Their onboarding process really was slick and quick and once I had provided them with details such as National Insurance Number, citizenship, and employment status I was ready to make contributions and pick the investment plan to match my risk profile. There is no minimum investment amount and you can stop, or pause your contributions at any time in line with the changing circumstances of your self-employed status
Guide to Transferring Your Pensions to Penfold
The pension consolidation provision offered at Penfold is very similar to that offered at PensionBee. They do all the paperwork for you once you provide them with details of your old pension pots, dates and employer name. The more details you provide, the quicker the results and similar to PensionBee all this is provided completely free of charge. Not only this, Penfold offer a top-up bonus of up to £1,000 depending on the amount of money you transfer in. For people who are unsure of their pensions or who have the added complication of multiple pensions spanning back decades, Penfold offer assistance in the form of their team of experts who will help you find and consolidate your pensions into one, easy to navigate retirement pot. This level of provision can be invaluable for self-employed people who have serious constraints on their time.
Penfold Customer Service Review
Penfold really seem to excel at customer support, which is vital for any new company you are trusting with your money. They offer support via email, phone or live chat, and when I tested the chat I found them to be quick, polite and informative with the questions I asked.
This being said, I did detect a few broken links on their website whilst trying to research the times that customer support was available which is less impressive and hopefully something Penfold will rectify quickly.
Who is Penfold Suitable For?
Penfold market themselves as the only online pension provision specifically designed for the self-employed and limited company directors. However, during my research, I couldn’t find a reason why anybody couldn’t take advantage of their quick and efficient pension plan. It’s a perfect option for people who don’t have the time or knowledge to research the many options available and make investment decisions for their future. The free consolidation service also makes it an ideal option for people with multiple pension pots which may not be performing as well as they could.
If you’re self-employed and looking at saving into a pension plan that is quick and easy to manage, where the fees won’t eat into your potential gains, then this is a good option.
One of the main advantages of Penfold over a provider like PensionBee is the ability to start a brand new pension pot to start saving into, whereas PensionBee only allow you to transfer over an existing pension.
Penfold is also a suitable option for company directors seeking an option for making employer contributions into their pension. Employer contributions count as a company expense and can therefore help to mitigate your corporation tax bill.
Anyone considering investing their pension should remember that when investing, your capital is at risk and there is no guarantee you will get back your original investment.
Penfold vs PensionBee
These are two very similar offerings however, I have attempted to distinguish them where possible.
Perhaps the most obvious distinction is that PensionBee offer a total of seven investment plans to choose from compared to the six on offer at Penfold. So if you are looking for more choice, PensionBee would be the way forward.
In terms of price, this very much depends on the plan you choose and either of these two options could work out cheaper, however, PensionBee pulls slightly ahead in terms of cost.
Important and useful information for Penfold UK pension savers.
How to contact Penfold?
Penfold can be contacted via live chat, phone or email. The live chat function can be accessed through their website, or directly through the app. If you need to speak to a human adviser, then your best bet would be to select ‘Help Setting Up Your Pension’ at which point you will be connected to a customer service rep. The email address for Penfold is firstname.lastname@example.org and their phone number is 0208 003 5908.
How to withdraw from Penfold
Withdrawing your pension pot can only be done when you reach the age of 55, regardless of what provider you have chosen and Penfold is no exception to this rule. The first 25% of your pension money can be withdrawn as a tax-free sum, however, the remainder of your pension money will be subject to income tax at your marginal rate. Therefore, if you are a basic rate taxpayer, you will be charged 20% on your withdrawals, and 40% and 45% if you are a high or top-rate taxpayer.
There are different ways to withdraw your pension money including withdrawing an adequate amount each year from which to cover your living expenses, or alternatively purchasing a product known as an annuity. An annuity pays you a salary for the rest of your life. This is a personal choice, however many people turn to a financial adviser in order to ascertain which of these pension options may be best suited to their circumstances.
How to change your bank account details
In order to change your bank account details, you will need to log into your account and click on the ‘Payment details’ button, from where you can delete the details that are stored and replace them with your new details.
How to close an account
Because you are unable to access a pension before the age of 55, in order to close your account with Penfold you would be required to transfer your pension out to a new provider if you were under the age of 55. It’s important that you have withdrawn or transferred your pension before you attempt to close your account.
Once your Penfold account is empty I would advise that you get in touch with a customer service representative and request to have your account terminated.
Penfold is about as safe as it gets when it comes to an online pension solution in the UK. They are of course authorised and regulated by the Financial Conduct Authority which is important for any provider you are considering to look after your money and can provide you with peace of mind that the provider managing your pension is acting in your best interest, whilst also taking the precaution of keeping your money separate. All client money is held at Lloyds Bank before being invested with BlackRock and both these entities are also regulated by the Financial Conduct Authority.
Gaudi Regulated Services Limited also operate and administer the pension and in the unlikely event that Penfold would cease to operate, Gaudi would get in touch with you to advise you on your retirement pot which would continue to exist.
You also have the added protection of knowing that should anything happen to either Penfold, Gaudi, or BlackRock, your money would be protected by the Financial Services Compensation Scheme and you would be entitled to receive compensation up to the value of £85,000.
Penfold Pension FAQs
Does Penfold charge exit fees?
No, Penfold have just one transparent fee that includes all charges. Outside of this, there are no hidden surprises or exit fees for pension savers to worry about.
Is Penfold any good?
Yes. 99% of their TrustPilot reviews seem to think so, so they must be doing something right. There are a number of features that make Penfold a great option to start saving for retirement including bonus money of up to £1,000 on pension transfers.
Can Penfold go bust?
Whilst unlikely, it is of course possible for any company to go bust. That being said, there are a number of entities in place to ensure that your money is safe regardless of what happens to Penfold as an online portal.
Is Penfold good for beginners?
Yes, Penfold is a great option for beginners or people with little to no knowledge of the investment market or pensions as a product. They have successfully brought to the market a seamless, simple and easy to understand product that does all the hard work for you, leaving the self-employed free to concentrate on running their business.