Introducing our Lifetime Plan

This week, we're thrilled to announce the launch of a brand new pension plan for our savers - the Lifetime plan. Here's everything you need to know.

What is the Lifetime plan?

Our new plan makes it simple to manage your pension at every stage of life. The Lifetime plan follows the popular ‘lifestyle’ strategy of investing common with many modern pensions. It aims to match the investments inside your pension fund to your age - helping you maximise growth while you're younger, before switching to safer investments as you approach retirement, protecting the value of your pot as you prepare to withdraw.

If you don't want to manage and adjust your pension as you grow older, or if you'd simply like Penfold to give you a helping hand - the Lifetime plan is a great way to save. We designed it to be 'set and forget', so you can sort it, and get back to enjoying life without worrying about the future.

How does it work?

The great thing about the Lifetime plan is its simplicity. Rather than sticking with one investment plan throughout your life, the Lifetime plan moves the money inside your pension around as you age.

Your pension will gradually shift from high-growth investments like stocks and shares to safer ones that help safeguard your savings when it comes to time to cash your pot in. Over time, you can expect to see less ups and downs as the value of your pot takes shape.

The best part is Penfold takes care of everything. We'll manage your pension for you, automatically moving your investments around when the time comes. Don't worry, we'll always let you know before moving your money.

To help you get the most from your pension, we break things down into 3 different stages.

1. Focus on growth
2. Prepare for retirement
3. Protect your pot

Stage 1: Focus on growth

The first part of this plan is all about growing your money. Your pension contributions will be invested in a fund with a higher proportion of 'riskier' investments, such as equities (a stake in a company), to maximise your return on investment.

This helps your money work harder - boosting the impact of compound interest and meaning more of the value of your pot comes from interest, rather than your pocket.

When you're a long way from retirement, you have a long time for your money to grow - this also means there's more time to 'correct' any drops in the finance markets.

Inevitably, this stage involves more volatility - meaning the value of your pot will rise and fall by significant amounts more frequently. Again, in the long-term, the end result should be that you gain far more than you lose. This stage usually lasts until you reach 60.

Stage 2: Prepare for retirement

Next, we'll adjust your investments to get you ready for retirement. From age 60, the Lifetime plan switches to a less risky approach. Your pot is still growing, but your money will start to move away from things like stocks and shares to more stable investments like bonds and government gilts.

It’s a slight change in approach that starts to think about preserving the value of your savings. You’ll see far fewer ups and downs in the value of your pension than before.

Stage 3: Protect your pot

Finally, stage 3 - protecting your pot. It normally isn't wise to immediately withdraw your entire pot for tax reasons - this means some of your money will stay invested in your pension fund, even after you retire.

With that in mind, the final stage of our Lifetime plan tries to preserve the value of your pot with safe, less volatile investments. You can normally expect to see even fewer ups and downs in the value of your pension at this time.

Of course, part of your pot will remain invested in to make sure you’re still seeing some growth. This also helps protect you from losing value as the cost of living rises with inflation.

Can I change my pension plan?

With Penfold, you can switch plans at any time. All you need to do is sign in online or in our app and head to 'Your Plan'. You'll be able to get a complete overview of each option and switch between any of our 7 plans in a few taps.

Pick from our Sustainable plan that targets environmentally conscious investments, our Shariah-complaint fund, or simply pick a level of risk you’re comfortable with. You can also take a peek at the investments inside your pension at any time using our Explore My Pension feature.

Whichever fund you choose, you always have complete visibility into where your money is, and how your pension is performing.