Penfold Pension Review: How Does It Compare To Traditional Pension Providers?

Penfold Pension Expert Review

In this review we:

• Give our ratings based on their nearest peers
• Tell you what we think of Penfold after testing them with real money 
• Highlight the key costs, facts and figures of the Penfold accounts

Penfold Pension Review

Name: Penfold

Description: Penfold is an online provider of pensions. A digital alternative to traditional pension companies, it enables users to quickly set up a pension, and manage it online or with its app. A relatively new player in the UK pensions space, Penfold was set up in May 2018, and became regulated by the Financial Conduct Authority (FCA) in May 2019. The company was founded by three technology experts who previously worked at Deloitte and Funding Circle an since then Penfold has grown significantly since then, now serving over 100,000 users.

• Visit Penfold

Is Penfold a good pension?

Yes, Penfold, is one of the new breed of pension providers that combines tech with personal service. Via the app you can start a pension in less than 10 minutes and also talk to an expert advisor on the phone if you need help.

• Investments: Managed funds
• Minimum investment: £1
• Pension charges: 0.4% to 0.88%

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Fees: Penfold charge a single fee for their service which includes account and investment management fees. The fee is 0.75% for savings up to £100k, and 0.4% on any amount over £100k. The Sharia plan fee is 0.88% for savings up to £100k, and 0.53% on any amount over £100k

Pros

• Easy-to-use app and web interface
• Projected retirement income
• Ability to set savings goal
• Detailed insights into investments

Cons

• Relatively new company
• Slightly more expensive than robo-advisors

• Pricing
  (4)
• Market Access
  (4)
• Online Platform
  (4)
• Customer Service
  (5)
• Research & Analysis
  (3.5)

Overall

4.1

Penfold is a UK pension provider that offers a flexible, easy-to-use pension designed for private savers and those who run limited companies. It allows customers to set up a pension online with zero paperwork. Penfold also offer a modern auto enrolment workplace pension for businesses.

• Related guide: Our picks of the best SIPP providers in the UK

Penfold’s goal is to make pensions easy, so it has designed a product that can be set up in less than 10 minutes. To open an account, you simply enter your personal details, verify your identity, and make a contribution. You can open a Penfold pension from as little as a £1 one off deposit or by transferring an existing pension.

The Penfold pension is like any other UK pension scheme in that your contributions are eligible for tax relief. Tax relief can be thought of as a reward from the government for saving for retirement – when you make a contribution into your pension, the government adds money for you too. Basic-rate taxpayers are entitled to tax relief of 20% on their contributions while higher-rate and additional rate-taxpayers can potentially reclaim another 20% and 25% respectively.

What Can You Invest In With Penfold?

 With Penfold, there are five main investment options:

1. Lifetime. The Lifetime Penfold plan spreads your money across many different assets and automatically adjusts your investment risk levels as you approach retirement. The aim is to grow your savings more early on, before gradually shifting your money into safer investments as you get older
2. Standard. With Penfold’s Standard plan, your money is invested across a wide range of investments and industries. There are four different risk levels you can choose here, depending on your risk tolerance
3. Sustainable. The Penfold Sustainable plan is designed for those who want to invest on a socially responsible basis. This fund invests in companies with the highest ESG ratings relative to their peers within each sector
4. Sharia. Penfolds Sharia plan is designed for those seeking Sharia-compliant investments. This plan excludes investments in industries such as alcohol, tobacco, pork, weapons, and adult entertainment
5. Sustainable Lifetime. The Sustainable Lifetime plan from Penfold is designed for those who want to invest on a socially responsible basis and have their investment risk level change automatically to safer investments when approaching retirement.

It’s worth pointing out that the Lifetime, Standard, and Sustainable plans are all managed by BlackRock – the largest asset manager in the world – which uses advanced technology to spread capital over a wide range of investments. The Sharia plan is managed by HSBC Global Asset Management, which invests users’ savings across a wide range of different companies that operate in a Sharia-compliant way.

• Related guide: How to start a private pension

Penfold Pension Fees & Costs

Penfold charges one transparent annual fee for managing your pension that covers everything within its pension service. This annual fee is between 0.75% and 0.88%, depending on the plan you choose. Penfold automatically deducts a portion of your annual fee from your pension in 12 monthly instalments.

If your pension is larger than £100,000, the annual fee is reduced to either 0.40% or 0.53% (depending on the plan you choose) on the portion of your savings over this amount.

Advantages of Penfold:

• It’s easy to set up. You can set up a pension in just five to 10 minutes
• Several investment options. There’s a range of investment options to choose from, depending on your requirements and risk tolerance
• You can adjust and pause your contributions if you need to
• Investment and saving insights. The ‘Explore Your Pension’ feature gives you visibility into your investments, including a breakdown of the companies you have a stake in. You can also track how much you have saved, and the projected future value of your Penfold pension
• Pension consolidation options. You can transfer and combine multiple old pensions into your Penfold account
• Tax relief. As with other UK pension products, contributions come with tax relief.

Disadvantages of Penfold:

• Limited investment options. Compared to a SIPP (Self-Invested Personal Pension), Penfold does not offer many investment options
• High fees. Fees may be higher than those of competitors’ products, depending on the size of your account and the investments you select.