Default Plan Summary

The ‘Default Plan’ is an investment plan offered by Penfold to its customers. This plan automatically invests customer pension savings in a portfolio with a particular risk level depending on the number of years until their retirement. As the customer approaches retirement, the customer pension savings are automatically switched to a lower risk level.

This type of plan is known as a ‘Lifestyle Strategy’ and is very common in the investment industry. It is suitable for those who would prefer not to make their own decisions as to which level of risk is appropriate for them throughout their lifetime. The Default Plan is offered as the default investment option for all auto enrolment members of the Penfold Pension. It is also available as an investment option for individual customers.

Investment Strategy

The Default Plan uses the same underlying funds as our Standard Plan, which consists of three options that ascend in risk from Level 2 to Level 4. Customers are allocated to one of these options depending on the number of years to their retirement. As customers grow older they are automatically moved to lower risk levels in order to better protect their savings, as shown in the chart and information below:

9+ years until planned retirement

• Risk Level: Level 4
• Risk Level Overview: Highest growth potential and highest risk, not worried by short term value drops.

Between 8 and 4 years until planned retirement

• Risk Level: Level 3
• Risk Level Overview: Medium to high growth potential, OK with larger dips to get larger gains.

3 or less years until planned retirement

• Risk Level: Level 2
• Risk Level Overview: Low to medium growth potential, expected smaller dips in value.

When the customer reaches each designated number of years to retirement, their savings are reinvested in the corresponding risk level. No further input is required from customers. Penfold has assumed a consistent retirement age of 68 unless otherwise advised. If a customer does not retire at age 68 they will remain invested in the Level 2 investment fund.

Underlying Investment Funds

The underlying investment funds are the BlackRock MyMap fund range. BlackRock is currently the world’s largest money manager. These funds are specifically designed for long term retirement savings, they are broadly diversified across asset classes, including stocks and shares from across the globe as well as government and corporate bonds and other alternative assets like commodities. They are built to dynamically react to the market, which provides investors with an extra layer of protection in times of market volatility. You can read more about Penfold’s partnership with BlackRock here: https://getpenfold.com/news/how-your-savings-are-invested. More information from BlackRock on the MyMap range can be found here: https://www.blackrock.com/uk/solutions/mymap

Charges

Penfold’s Default Plan has an all-in fee of 0.75% of the total value of your pension savings up to £100,000 and 0.4% on amounts over £100,000. You can read more in our Charges Guide.

At any point customers can still select from Penfold’s full range of investment options including our Sustainable Plan, Sharia Plan and our Standard Plan. More details can be found here: http://getpenfold.com/pension-funds

Disclaimer

Penfold has taken independent investment advice to ensure the Default Plan is suitable for the majority of customers, and ensures good value, however it may not be the most appropriate option for everyone. If a customer believes that the Default Plan is not suitable for them they are still able to self select an alternative option from the Penfold range.

In particular, the self-select range includes Standard Level 1, which aims to reduce the risk and volatility further for customers who wish to increase protection for their savings further than the Default Plan. Changing investments may incur a small transaction charge as part of the process of trading.

As with all investments, value can go down as well as up and your capital is at risk. However the Default Plan has diversified sources of risk and return and we would therefore expect to see a positive return over the long term.