Guide to pension charges

Do you know if you’d save money if you transferred your pensions to us? Our pension experts answer some of the questions we often get asked.

How can I check my pension charges?

You can often find out about charges by checking your pension plan documents.

If not, you may find these details online. You can also speak to your other providers about their charges.

As this is personal information, we can’t check this for you. But if you’d like to talk about our charges, call us or visit your scheme infosite.

What charges might I pay for other pensions?

When you compare charges, you’ll see that there are different types. Here, we explain the main ones you’ll see:

  • Annual management charge

This is also known as an annual fund charge. It covers the cost of managing your investments. It’s usually worked out as a percentage of the value of your pension.

  • Policy fee

This is a charge you’ll find with some pensions. You pay this charge every month or year. It's usually set at a fixed amount, but this can increase to cover things like inflation.

  • Fund-based charge

This charge is based on the value of each of the funds your pension is invested in.

  • Specific transaction charges

These charges can cover services like the cost of switching into another fund. You may also pay this charge if, for instance, you change the amount you’re paying into your pension.

  • Adviser charges

When you speak to an independent financial adviser, they’ll make recommendations about what you should do. They'll also tell you if and how much you’ll be charged.

You may choose to pay this charge yourself, or it may be taken from your plan.

Other ways providers charge for pensions can include:

  • A bid-offer spread. This is where there’s a difference between how much a unit of your pension funds can be bought for and how much it could be sold for, at a point in time. This is usually about 5% and, as it reduces the value of your pension, it acts as a charge.
  • Allocation rate: This tells you how much of what you pay into your pension is added to its value. For example: if this rate is 98%, you’re effectively paying a 2% charge on each payment you make into the pension.