Introducing the Penfold Plan

We’ve made significant improvements to our default plan to help grow and protect your pension more over the long term – here’s what you need to know.

8 January 2025

10 min read

Summary

We’re launching an evolution of our default plan, developed in collaboration with BlackRock.
Our new Penfold Plan uses many of the same building blocks as our Standard and Sustainable Plans but with several added benefits.
We’ve added in some brand new investment types, including private markets, to help boost the growth of your pot and protect your money more over the long term.
The new plan also offers 100% FSCS protection and pursues sustainability goals, all for the same cost.
Customers in our Standard and Sustainable Plans will automatically move to our new plan on 25th February, unless you choose to stay in your current plan.
We’ve made changes to our terms and conditions to enable us to offer the new Penfold Plan and switch customers over to it. Read our updated T&Cs here or in the “Documents” page in your Penfold app.

The Penfold Plan

We’re excited to announce some big improvements to our investment range, designed to give your pension savings an extra boost over the long term.

Introducing the Penfold Plan – our new default investment plan. Exclusive to Penfold, we’ve developed our new plan with your financial future in mind and in collaboration with BlackRock, the world’s largest money manager.

In this article, we’ll walk you through everything you need to know about the Penfold Plan, its benefits, and what you need to do to get it (spoilers: nothing!)

The plan you know, but with even more investment types

We’re building on the success of our existing Standard and Sustainable Plans, powered by BlackRock’s MyMap investment funds, which have been a core part of our offering since 2019.

To create the Penfold Plan, we’ve taken our existing plans and added in some new investment types. We’ve done this to increase their growth potential while adding an extra layer of protection from market ups and downs.

Our new plan now invests in private markets through listed real assets.

Hold up, what are listed real assets?

Real assets are things like buildings, private companies or big infrastructure projects (like roads, dams, or green energy) which are typically only available on private investment markets (i.e can’t be invested in by the public) and so are not included in many pension plans.

Investing in real assets can provide higher growth, while also adding diversification to your pension, which means a bit more protection from the short term ups and downs.

But investing directly in real assets often means tying up your savings in ongoing projects. Waiting for roads and bridges to be built…

Listed real assets means investing in publicly traded companies that buy or hold these real assets (like building companies or contractors), rather than investing in the buildings or roads directly. This means you get the benefits of growth and diversification, without the risk of tying up your money for a long time.

The Penfold Plan also includes what are known as liquid alternatives.

Slow down! Liquid alternatives?!

Liquid alternatives are easy-to-trade investments that don’t tend to go in the same direction as the main stock markets, so provide even more protection from stock market dips as you approach retirement.

Both listed real assets and liquid alternatives are usually reserved for wealthy investors like high-net-worth individuals or large financial companies, and can be quite costly. But we're proud to be able to bring these benefits to you for no additional cost.

How does the Penfold Plan work?

The Penfold Plan is designed to take the complexity out of your pension savings.

Like our existing Lifetime Plans, it automatically adjusts your risk level over your lifetime, keeping it higher early on to achieve as much growth as possible, then reducing as you get closer to retirement to protect your pot.

There are three risk levels you move through on your way to retirement. This chart shows the split of investment types through these stages:

A chart titled ‘Penfold Plan: Asset split by stage’ visualises the distribution of assets across three stages of retirement planning: Growth, Balance, and Protect. The Growth stage (8+ years until retirement) shows a majority in equities (red) and some in fixed income (blue). The Balance stage (8 to 3 years until retirement) has a mix of equities (red), fixed income (blue), listed real assets (green), and liquid alternatives (yellow). The Protect stage (3 years or less until retirement) primarily consists of fixed income (blue) with smaller allocations to liquid alternatives (yellow) and equities (red). A legend at the bottom labels the colors for asset types.

Learn more about the different investment types, including fixed income and equities, in our pension glossary.

Like our existing Lifetime Plans, you can also select your own risk level at any time in our app.

How has the new plan performed?

The Penfold Plan will launch on 25th February 2025, but the underlying building blocks of the portfolio have existed separately for several years.

So, BlackRock has provided a simulation of how the portfolio might have performed had these building blocks existed together over the last five years – which have together outperformed our Standard Lifetime over a five-year comparison period.

Take a look for yourself at how our Penfold Plan has performed ⬇️

A bar chart titled "Penfold Lifetime Plan Returns: Three risk levels through to retirement." It compares the average returns of three plans: Penfold Plan (8.6% avg. return), Standard Plan (7.6% avg. return), and Sustainable Plan (8.7% avg. return). Each plan has three bars representing different risk levels, numbered 1 to 3. The Penfold Plan and Sustainable Plan show the highest average returns, while the Standard Plan has the lowest.

The returns of the Penfold Plan have been higher than the Standard Plan. They have been similar to our Sustainable Lifetime Plan over 5 years, albeit with higher returns in the protection phase due to the greater diversification.

Further details on the Penfold Plan can be found in our Default Plan summary. And you can read more about how the plans compare in our deep dive comparison.

It’s important to note:

• It cannot be definitively said exactly how this plan would have performed in the past.
• The charts and tables below use simulated past performance.
• Simulations should not be taken as a guarantee of expected past or future performance, but are designed to be illustrative only.
• Past performance, actual or simulated, is also not a reliable indicator of future returns.
• All investments carry risk and your investment value can go up or down.
• Returns may increase or decrease as a result of currency fluctuations.

A full list of the assumptions made to generate the simulations is available and should be carefully considered.

"Got it! This sounds good. But what else do I get with the new plan?", you might be asking...

Better protection. Increased sustainability. Greater flexibility.

We’ve made some big improvements to our existing range to give you even more confidence in your pension savings. Our new Penfold Plan is:

100% FSCS protected: If the very unlikely circumstance that BlackRock ever failed and we weren't able to move your money elsewhere, any savings in our Penfold Plan are fully protected – no matter how much you’ve got saved. With our other existing plans, protection is capped at £85,000.
Better for the planet: Our new plan aims to balance positive impact with potential returns, aligning your savings with your values. The BlackRock MyMap Select ESG funds used by the Penfold Plan aim to invest at least 80% of their government bonds* with sovereigns with improved ESG credentials** and reduce carbon emission intensity by 30% compared to similar portfolios – meaning they generate less carbon for the value they create. These aims do not apply to the liquid alternative and listed real assets.
Exclusive to Penfold: We can continue to fine-tune our plan with BlackRock based on your interests and feedback. This means you have a say in how your pension aligns with your values and goals.

Sounds pretty good, right? Even better, you don’t need to do anything to make the most of our improved plan...

Need to know #1: We’ll move you to our Penfold Plan

To make sure everyone can get access to these new benefits, we’ll move all our customers to the Penfold Plan on 25th February 2025 – unless you’re invested in our Sharia plan or choose to stick with your current plan.

Take a look at how this will work depending on your current plan:

Wait! What plan am I invested in?

If you want to check which plan you’re currently invested in, simply head to the “Your Plan” page in our app. If you’ve never selected a specific one, you’re likely invested in our Standard Lifetime Plan.

If you’re invested in our Standard Lifetime or Sustainable Lifetime Plans…

We’ll move your pension pot to the Penfold Plan. Depending on how far away you are from your planned retirement, we’ll automatically map your current risk level to the equivalent level in the Penfold Plan and continue to adjust your risk for you over your lifetime. No action is needed from you to make this switch.

If you joined Penfold before 30th September 2021...

you were here before we offered a lifetime plan! Because of this, we'll move your pension pot to the Penfold Plan.

Depending on how far away you are from your planned retirement, we’ll automatically map your current risk level to the equivalent level in the Penfold Plan and continue to adjust your risk for you over your lifetime. No action is needed from you to make this switch.

If you’ve chosen a specific risk level of our Standard or Sustainable Plans…

We’ll move your pension pot to an equivalent risk level in the Penfold Plan, so you can continue to choose your risk level yourself. We won't automatically map your risk level unless you ask us to. No action is needed from you to make this switch.

Here’s how each existing risk level maps to the equivalent risk level in the Penfold Plan:

The image shows a table comparing investment options by risk levels. Each table lists: Standard Risk Level 4: 93% Equity, Growth Fund, 100% Equity, Risk Level 5. Standard Risk Level 3: 73% Equity, Balance Fund, 67% Equity, Risk Level 3. Standard Risk Level 2: 54% Equity, Balance Fund, 67% Equity, Risk Level 3. Standard Risk Level 1: 25% Equity, Protect Fund, 34% Equity, Risk Level 2. Sustainable Risk Level 5: 100% Equity, Growth Fund, 100% Equity, Risk Level 5. Sustainable Risk Level 3: 73% Equity, Balance Fund, 67% Equity, Risk Level 3. Sustainable Risk Level 1: 25% Equity, Protect Fund, 34% Equity, Risk Level 2.

If you’re invested in our Sharia Plan…

We won’t move your money. Your investments will stay in the Sharia Plan. But if you want to switch over to our new Penfold Plan, you can at any time in our app.

If you’d prefer not to move to the Penfold Plan…

Before switching your plan, we’ll email you. We'll give you one month to opt out of moving to our new plan and stay in your existing one.

As always, you’re free to choose a new plan whenever you like in our app.

Need to know #2: Your fees won’t go up

We’re thrilled to offer the Penfold Plan at the same cost as our Standard and Sustainable ones, so there will be no increase in your overall pension fee.

For the same cost, you get access to new investment types, your savings are 100% FSCS protected, better for the planet – and you get to have a say in the future of the plan.

Need to know #3: Your fee will be more transparent

With our existing plans, your fee is split in two. One part goes to Penfold and the other goes to BlackRock (or HSBC, if you’re invested in our Sharia Plan).

We deduct our fee directly from your pot. This is what currently appears on your app homepage. And until now, BlackRock (or HSBC) has taken its fee from the fund itself which hasn’t been visible in the Penfold app.

We're now combining these two parts into one so you can clearly see the total cost of your pension in one place.

If you’re invested in our Penfold Plan, we’ll deduct your full pension fee directly from your pot. (Then we'll pay BlackRock its part separately.) This means the fee displayed in the app will look a bit higher – but don’t worry, it hasn’t actually increased at all!

For our other existing plans, only your Penfold fee will continue to appear in the app. And BlackRock (or HSBC for the Sharia Plan) will continue to take its fee from the fund itself.