Everything you need to know about Penfold

We are trying to build the best pension in the world, and often get asked questions about what that actually means.

So, alongside our FAQ on Pensions and our Glossary of Pension related words, we’ve written this to explain everything you might want to know about Penfold. If you have questions we haven’t answered, feel free leave a comment or message us at hello@getpenfold.com

Why Penfold?

We make everything to do with pensions easy to understand and simple to do, and it’s all digital.

We don’t want the Penfold Pension to just be better than the current, paper-based alternatives, we want to work with the Penfold community to build the future of pensions.

What about setting up or paying into a pension for your kids? What about investing your pension in an ethical way, so it’s doing good around the world? What about earning rewards like airmiles for paying into your pension? This is the future of Pensions that we’re building.

With Penfold you can:

  • Set your pension up in just 5 minutes
  • Figure out how much you need to be saving
  • Get tax relief on your pension contributions
  • Choose where the money in your pension is kept or invested
  • Track how much you have saved and what that will mean when you’re older
  • Top up your savings with extra cash in a good month
  • Pause your contributions when you need too
  • Pull multiple different pensions into one place
  • Invest your money with the worlds largest money managers
  • Pay low fees

We want to make pensions better for everybody, so we spend a lot of time talking to people about their pensions. When we talk to freelancers or people who are self-employed, they often tell us that they know they should be saving into a pension, but just don’t know where to start. So the first product Penfold is launching is a pension built especially for freelancers and the self-employed

Is my money safe with Penfold?

Once your money is sent to us, it is part of your pension. Your money is held in your name in a special client money account, so it is separate to any of Penfold’s money. To be extra safe, we use a third party to manage these accounts, who are also regulated by the FCA. Their job is to hold your money and invest it in the plan you have chosen. Those plans are managed by some of the world’s largest money managers.

The Penfold Pension is operated and administered by Gaudi Regulated Services Limited, who are authorised and regulated by the Financial Conduct Authority. If something happened to Penfold, your pension would still exist, and Gaudi would get in touch to explain how you manage it in the future, if somehow there was no Penfold online portal. You could move your money to a different pension provider for no charge.

Penfold is also FSCS protected, so if something happened to Penfold, Gaudi and BlackRock, your money is guaranteed by the government up to £85,000.

With pensions, as with all investments, your money is at risk and the value of this investment might go up as well as down. You might get back less than you put in. You can read more about what we mean by investments and risk, in our glossary and pensions FAQ

What does a Penfold Pension cost? Are there any hidden fees?

We hate hidden fees and you probably do too.

The only fee you may be charged while you are saving for retirement with Penfold is the Annual Fee, which is calculated as a small, fixed percentage of the amount you have saved up in your Penfold Pension. This is the same way most pension companies will charge you

The annual fee for the first Penfold Pension product in our beta, is set to be 0.75% of your total balance.

The Annual Fee is made up of two parts (i) an Administration Fee which pays for Penfold’s service (and our Partners), and (ii) an Annual Management Charge (AMC) from the money manager. If you sign up to a Penfold Pension, we’ll share a full, plain English charges document, which explains any other fees you might have to pay.

Who regulates Penfold?

Penfold and our partner, Gaudi, are regulated by the FCA.

The Penfold Pension is operated and administered by Gaudi Regulated Services Limited, who are authorised and regulated by the Financial Conduct Authority (FCA Register No. 488015). Penfold is a trading name of Penfold Savings Limited (company no. 11668244) We are authorised and regulated by the Financial Conduct Authority, registraton number 826097.

Who looks after my money?

Once your money is sent to us, it is part of your pension. Your money is held in your name in a special client money account, so it is separate to any of Penfolds money. To be extra safe, we use a third party to manage these accounts (and they are also regulated by the FCA). Their job is to hold and invest your money in the plan you have chosen. Those plans are managed by some of the world’s largest money managers.

Can I add lump sums to Penfold?

Yes – just let us know via online chat and we’ll walk you through how to do this. You can make a transfer into your Penfold Pension at any time, but we just need to know in advance that it is coming!

Can I transfer my existing pensions to Penfold?

Yes. Once you’re logged in and have set up your account, just contact us via online chat and we’ll walk you through the process for this. We’ll take a few details about the pensions you want to transfer and handle this for you. While we try to do this for free there may be a small fee depending on the size of the pension you are transferring.

Can I start & stop contributions into Penfold without a penalty?

Yes. You can change this any time, just let us know. 

Who are Penfold? Where did you come from?

Penfold is a new, simple, easy and digital kind of Pension launching in 2019. We’re a digital alternative to traditional pension companies, and we allow our users to set up, manage and track their pensions online or on a smartphone. We’re specifically built with freelancers and the self-employed in mind, although anybody can use Penfold. You can read more about our story and vision here and the team behind Penfold here. 

What tax benefits are there to the Penfold Pension?

The Penfold Pension is like any other pension scheme, in that your contributions are eligible for tax relief.

Tax relief is the money the government (HMRC) will put into your pension to incentivise you to contribute more. It’s called tax relief as it is not really the government’s money they are handing out, they are just giving you some of your tax back.

For example, if you are a ‘basic rate tax payer’ (earn less than £50,000), you’ll already be paying 20% of your earnings straight to the taxman.

Say that one month you earn £1,000 and you pay your 20% tax (£200), so are left with £800. If you put that £800 into a pension, you’d get the £200 back as tax relief from the government (straight into your pension pot).

But there are some limits:

There is a minimum amount everyone is entitled to, no matter what they earn. If you earn less than £12,500, you can pay in £2,880 into a pension and get £720 added by the government.

Beyond that though, you can’t get more tax relief back than you actually paid in tax that year. So if you won £8,000 on a scratch card and put it all in a pension, you wouldn’t get £2,000 in tax relief unless that year you had actually paid £2,000 in tax.

Also, if you managed to put £40,000 into a pension in one year, you’d not get any tax relief on further contributions beyond that £40,000. (If this does apply to you, it can get a bit more complicated than that – get in touch and we’re happy to explain!).

How long has Penfold been around?

Penfold was set up in May 2018, and became regulated by the Financial Conduct Authority in May 2019. The Penfold Pension is launching in June 2019.

What happens if I have a problem with my Penfold Pension?

We are available on online chat every weekday from 9am to 6pm to help with any problems you have. You can also email us anytime at hello@getpenfold.com

Can I pay into Penfold from my limited company?

We’re still working on this but it should be available in the next few weeks. If this is important to you, please let us know via online chat and we’ll see if we can help.

Can my employer make contributions to my Penfold Pension?

Not yet – but we hope to allow this very soon. If you a freelancer with a limited company, you should be able to make contributions from your limited company very soon, but please let us know first via online chat.

Is there a minimum amount I need to pay into my pension to set it up?

We think pensions are inaccessible enough as it is, and high minimum contributions only put people off saving. You can open a Penfold pension with as little as £10 a month. 

Should I use Penfold if I already have a workplace pension?

Unfortunately, without knowing lots more about your personal circumstances, we can’t answer this definitively.

At the moment, Penfold is mostly trying to help people who are self-employed and don’t have access to a workplace pension which their employer is currently paying into, but over time we want Penfold to be the best pension for everybody, no matter their employment situation.

If you have a workplace pension at your current job, your employer will likely contribute to your pension as well, and if you stop paying in, they might stop contributing as well – so you would lose that free money.

Some workplace providers charge high fees for making extra contributions beyond the minimum required under auto-enrolment legislation. If you want to pay more than the minimum, you should check the fees to understand if it might be better to pay into a separate, personal pension, like Penfold.

If you have old pension pots from old jobs, but your employer is no longer paying into them, Penfold is absolutely for you. You can have a Penfold Pension and still keep these old pension pots, or you can ask us to combine them into one place.

What do I need to get setup with Penfold? How long does it take?

We wanted to make pensions incredibly easy and simple to set up, so sorting out your pension with Penfold should take less than 10 minutes and can be done in one go, online. We will need to verify your identify, so you’ll need a national insurance number and UK bank account as well as (for now), a UK address. 

Does Penfold give advice?

No, we don’t provide advice. We want to make pensions accessible and easy to understand, and empower our users to make the best financial decisions for themselves. If you want pensions or any type of financial advice, you should look for an independent financial advisor.

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