A digital-based pension scheme aimed at self-employed workers in the UK has been launched by new provider Penfold.
Penfold is the first pension scheme designed specifically with self-employed workers in mind, although anyone is able to sign up to it.
The pension scheme is entirely digital, meaning it can be activated in "five minutes".
Members of the scheme are able to set up, manage and track their pensions online or on their phone, with an app expected to be introduced in the first quarter of 2020.
The digital scheme also gives individuals the functionality to pause and top up their pension contributions.
Penfold has incorporated a dashboard so that users are able to see how much they have saved and how far off they are from reaching their ultimate end-goal.
There is an annual fee which is calculated as a fixed percentage of the amount an individual has saved in their pension. This is charged at 0.8 per cent for the basic plan and 0.75 per cent for the advanced plan.
There is also an administrative fee when an individual accesses their pension pot. These differ depending on how the funds are taken.
A £125 plus VAT fee is charged for flexi-access drawdown while an annuity purchase incurs a fee of £75 plus VAT.
With less than a fifth of the UK self-employed market saving into a pension, Pete Hykin, co-founder of Penfold, said his pension product sought to begin to solve this issue by giving those working for themselves a savings option.
Mr Hykin said: “It’s almost like the self-employed, who we know are the backbone of the economy, are being ignored by the government and UK industry. There are absolutely no pension options out there which adequately serves those working for themselves.
“We’re aiming to make pensions not just easier, but more attractive for self-employed people to start planning for later in life.
“Often people put off setting up a pension due to the amount of understanding needed, the volume of paperwork and even just the fact that it can involve calling multiple providers to find the best option.
“Our research has shown the scheme needed to be flexible and adapt to the end-user, not the other way round.”
Penfold received authorisation from the Financial Conduct Authority in May and raised £2.4m from investors to get it off the ground.
Chris Eastwood, co-founder of Penfold, said offering pensions to the self-employed was just one part of the provider’s long term plan.
Mr Eastwood said: “The great thing about the pension industry is that there’s so much room for improvement – whether it’s the option of setting up or paying into a pension for your children, giving people more visibility and control over the environmental or social impact of their pension investments, or even earning rewards like air miles for every contribution.