Penfold: The Pension for the Self Employed

As a self-employed freelancer income varies and there are times of boom and bust. Some months I am smiling as the jobs roll in and yet other months see me making less money but still having the same expenses – teenagers anyone! However, this post will explain why I have a Penfold Pension which is ideal for the self-employed. I also have a lovely Penfold referral code which will give you £25 when you sign up.

I am also more aware of my financial future because I need to take responsibility for myself and ensure I have savings for my old age. I paid into a company pension for a few years when I was teaching but I will have nowhere near the income I need in my later years as I worked part-time. However, I am thankful that I did have the foresight to opt-in when I didn’t have too.

As a self-employed blogger I am in the same boat as other freelancers. We are responsible for paying our tax bill, keeping records and we also should be saving for our future. One way to save for the future is with a private pension however there are unique barriers to this when you are self-employed. Did you know there are 4.8m self-employed in UK – 15% of the workforce yet only 14% of them were saving regularly into a pension in 2016/17 source. That is a pretty worrying statistic that led me to think about the barriers to building a pension pot.

Barriers to Building a Strong Pension

• Many freelancers accrue debts as they build their business and therefore paying off any debts that you may have is often a priority. This will free you both mentally and emotionally. Paying off debt should be your first response but then you can get creative with building a pension pot
• Put the next chunk of money away as an emergency fund. This could be used for real emergencies like a boiler or car breaking down. Knowing you have this money secure will give you peace of mind. It is suggested that we aim to have three to six months worth of living costs set aside for emergencies and dry spells.
• If you have a mortgage many self-employed entrepreneurs want to pay this off. Paying this off early will save you so much on the interest you pay on a mortgage.
• Another barrier is education. Many of us have a fear of tied into a fixed cost but Penfold is different and caters to this fear. We also worry about not understanding the jargon or how pensions work. Penfold addresses this as they are different from other SIPP providers. They offer a lot of information and content to help people feel confident in their understanding of how pensions work and how valuable they can be, they don’t load lots of financial jargon and detailed decision making on our customers, instead they educate and support.
• Finally, time is a barrier, sorting out our pension seems to stay at the bottom of the to-do list. I get it! Life is very busy and you are juggling your business, your family and your friends. Life admin sometimes takes a back seat but nobody takes care of things for us so we need to prioritise taking control of our pension because without one we are risking an uncertain future.

As I have explained there are a few valid reasons why the self-employed are not building up a pension pot. However, this can cause poverty in the future as a pension is what will secure our standard of living. Being proactive and starting a pension young offers the best results. Compound interest is the key, subject to prevailing interest rates, and I wish I had understood this much earlier! For example, save £1 a day from age 21 and you could retire with £230k

Penfold has developed a pension for the self-employed that promises to be as flexible as you need. You can increase, decrease and even pause your contributions at any time — no pressure. Penfold adapts to you, not the other way around. This will suit those of us who have that boom and bust cycle during the year. We can pay more in on the good months and halt our contributions when we are feeling the pinch.

A further advantage to a pension is that you will receive tax relief which helps to build your pension pot (though of course, tax depends on the individual circumstances and may be subject to change) but Penfold even organise all that for their customers with the HMRC to save any hassle! There is no excuse really and you are unlikely to end up with less than you’ve put into a pension – although it is a risk with any investment!

Penfold referral code

I have a great incentive for those opening a Penfold Account, you will receive £25 when using this link to open your account. All new customers will also receive their own referral code and will also be gifted £25 for everyone they know that uses their code.

Disclosure: This is a sponsored post all opinions are my own. With pensions, as with all investments, your capital is at risk and the value of your pension with Penfold may go up as well as down. You may get back less than you put in.