For business owners, freelancers and contractors, fluctuating monthly income means that an immediate safety net of savings is often prioritised over their pension. Penfold, a pension provider for the self-employed, is designed with that challenge in mind. And as the latest addition to the Starling Marketplace, where you can browse third-party providers and services, it’s even simpler to start saving for your future.
Why pensions matter
Pensions not only allow you to set money aside for retirement, they also exist as an efficient, long-term investment. Paying into a pension is very tax efficient. You either receive the government’s tax relief top-up of at least 25% of your contribution, or potentially a reduction to your limited company’s annual tax bill. Of the five million people who are self-employed, just 15% pay into a pension, meaning that thousands are missing out on those tax benefits and the opportunity to increase their financial security.
What Penfold offers
Penfold has been designed for people who are self-employed and want to save for retirement, even when their monthly income fluctuates. Their pension plans can be paused or altered at any time from the Penfold app or from the online portal - there’s no need to speak to anyone or wait for changes to be approved. There are no extra fees to make changes, just a flat fee of 0.75% per year based on the average value of your pension. Tax relief is organised for you and automatically added to your pension pot and you can start withdrawing funds at 55.
Like Starling, Penfold avoids complicated terms and jargon where possible. And by setting up the integration through the Marketplace, you can see the total amount in your pension pot, your monthly contribution and any growth, right in the Starling app. All this information is pulled directly from Penfold.
“I love what Starling does for business owners,” says entrepreneur Alice Benham. Through her business, she offers digital marketing coaching and retreats, primarily for fellow young, female business owners. She also hosts the business podcast Starting the Conversation.
She signed up to Penfold in January when she saw a post on Twitter and set up her Starling business account in March. “I chose Starling because it was a female-founded bank and I picked Penfold because it focused on small business owners and acknowledged that being self-employed is very different to being employed. I liked that it spoke in a language that made sense. Their tone of voice is down to earth but not patronising,” she says.
“I didn’t have a pension at that point, but once I signed up I couldn’t understand why getting a pension wasn’t something business owners spoke about more. I use the Starling app all the time so the integration will get my pension in front of me and encourage me to add to it - I need savings to be out of reach but still in sight.”