How to choose a pension fund

Choosing a pension fund based on fund breakdown, performance, fees, risk and ethics.

Once you know how pension funds work, next up is deciding which fund you'd like to use for your savings. In this article, we'll look at what you need to consider before you choose a pension fund.

How do I choose the best pension fund for me?

Choosing the best pension fund comes down to your unique personal circumstances.

Before deciding, it's a good idea to think about your age, desired level of involvement, attitude to risk and personal ethics.

Choosing a pension fund depends on your age, attitude to risk, ethics and how much you'd like to be involved

Are you willing to risk losing money by chasing high growth, or do you want to play it safe with less volatile investments? Would you like to have a say in where your money is invested, or would you rather leave it to the experts? Do you have any personal or religious beliefs that influence which investments you are comfortable with?

Here are some general guidelines to keep in mind.

Fund Breakdown

Start by taking a look at where the fund is invested. What kind of assets does the fund invest in (shares, fixed interest deposits, property)? What industries does it prefer? What is the ratio of risky investments to safer ones? Where in the world does the fund invest?

Answering these questions will help you hone in on what the fund is trying to do and if this matches your goals.

Fund Performance

It's also worth noting how the pension fund has performed in the past. Most fund factsheets will give you details on the fund performance, or you can look it up online if you have the fund name and code.

Remember, past performance does not always give a fair indication of how the fund will perform in the future. As with all investments, your pot value can go down as well as up.


Next, look at how much the pension fund will cost. In addition to the annual management charge from your pension provider, the fund manager may charge an additional amount for the day-to-day running of your chosen pension fund.

Penfold uses an all-in, single fee for each of our pension funds - so you know exactly how much it'll cost before you start saving.


A big factor in picking your pension fund is how comfortable you are with risk. While this will be personal to each of us, something that can be useful is to think about your age.

Generally, the younger you are, the longer you have to recover any short-term losses. This means a more risky portfolio may provide you with greater growth opportunities over decades of investing. If you’re older, you may want to invest in a low-risk option to reduce the chance of your pension decreasing in value just before you retire.

This is also why it’s important to check how many risk options your pension provider offers. As you age, you may want to switch your fund to a less risky option.

When choosing a pension fund, remember to check where the fund is invested. What kind of assets does the fund invest in (shares, fixed interest deposits, and property)? What proportion of the fund is allocated to each asset type? Is it spread across these assets to minimise risk?


You can also choose to align your investments with your ethical principles. Many pension providers offer fund options where the objective is to seek growth as well as a positive impact on the environment and society. Your pension provider should be able to provide details on where your pension is invested.

At Penfold, we offer a sustainable pension option that invests your savings in companies with a sustainable impact, and a Sharia pension that invests only in companies that are compliant with Sharia law. You can also see exactly which companies your money is invested in at any time from your Penfold dashboard.

Choosing a pension fund

Now you know how to weigh up each fund, you're ready to look at your options. Your pension provider should be able to send you information about the fund options available to you.

Detailed information about each fund should be provided before you choose the fund or combination of funds you want to invest in.

Remember to look out for information on:

  • the fund’s investment objectives
  • management charges
  • where the fund invests (normally broken down into country and type of asset or sector)

What pension funds does Penfold offer?

Penfold partners with BlackRock and HSBC to protect and grow your savings over the long term through a range of low-cost investments around the world. Here's a quick overview of the pension plans we offer.

Lifetime Plan

The Lifetime plan aims to grow your savings early on, before gradually shifting to protect the value of your pot for retirement.

Managed by BlackRock, one of the biggest money managers on the planet, this plan automatically adjusts the investments inside your pension as you approach retirement. Your find will become less risky over time, helping you get ready for life after work.

If you're new to investing, or just want a 'set-and-forget' approach to saving, the Lifetime Plan is a fantastic way to sort your future.

Standard Plan

Our standard pension fund comes in 4 different risk levels.

Level 1 is least risky, containing a low proportion of investment equities (stocks & shares) and level 4 is our highest risk level - with more of your money invested into equities.

  • Level 1 This may be preferable to those closer to retirement within the next 10 years because it is the lowest risk level. Less of your pension is invested in equity (stocks and shares) which means it aims to keep your fund value steadier as you approach retirement. 
  • Level 2 This may be preferable to those midways to retiring (10-15 years), as this is a low-middle risk level, where there is some more growth potential and risk as slightly more is invested in the stock market. 
  • Level 3 This may be preferable to those who have longer until retirement (over 15 years) and is a middle-high risk level where the growth potential and risk are higher as a slightly larger per cent of your money is invested in the stock market. This may be more acceptable for someone younger because they have more time to take advantage of any market ups and downs in their pension before they retire.
  • Level 4 This may be preferable to those who are over 20 years away from retiring as it is a high-risk level, where there could be significant high growth but also large market ups and downs along the way, where the majority of your pension is invested in the stock market. This level may be preferable to younger people typically because they have a longer until they retire, so any dramatic market drops can be overcome over many years, allowing a more gradual upward trajectory.

Of course, you can choose which risk option you are most comfortable with and can change it at any time.

Sustainable Plan

Similar to our Standard MyMap fund range, the Sustainable MyMap fund invests across thousands of companies and other investment assets. But through its advanced technology, it aims to invest only in companies that meet high sustainability standards and scores.

It's important to note that, unlike our Standard range, there is only one risk level available. The sustainable plan has the same risk level as our Standard Level 3 fund.

Sharia Plan

Our Sharia-compliant fund is managed by HSBC, and also matches our four fundamental principles of investing: passive investing, broad diversification, low cost and managed risk.

It invests only in companies that are compliant with Sharia law. As a 100% equity investment, meaning that the entire fund is invested in stocks and shares, it carries the highest level of risk and potential returns, compared to our other Standard and Sustainable funds.

This plan is a great option for those looking for a socially responsible way to invest their money under Sharia law, without compromising growth.

A note on investments

At Penfold, our fund manager BlackRock invests your money in line with their MyMap strategy, which is specifically designed for long-term retirement savings. It's low cost, broadly diversified, and built to react to the market - so many ups and downs should fit into a level of risk that is comfortable for you.

This should give you the peace of mind to leave your investments in place for many years and not have to check them from day to day.

Get started in 5 minutes

1. Get a Penfold account by registering your details online or with our app.

2. Transfer an existing pension, or make a one-off or recurring payment (pause or adjust any time).

Done! Check savings progress, change investment plan and more with our app or online dashboard.

Get started now