Most people know the balance in their pension, and few know what it costs to keep it there. The reason is simple: management fees never arrive as an invoice. They quietly come out of your money, month after month, which is why they are easy to miss. This article explains how they work, why a small percentage is not small at all, and what you can do about it.
Two ways you get charged
Fee on deposits
- A percentage of every new deposit that goes into the savings.
- Only charged when you deposit: no deposit, no charge.
- Each product has a legal cap that can change. Check the current cap on the Capital Market Authority site.
- Matters mostly for people who are still saving and depositing regularly.
Fee on accumulated balance
- An annual percentage of what you have already saved.
- Charged even when you stop depositing, and it grows with the balance.
- Also capped by law, and the cap is also updated from time to time.
- The heaviest piece over long horizons, since the balance grows and so does the amount charged.
See the gap for yourself
The tool below lets you enter a starting amount, a monthly deposit, an assumed return and two fee levels, and watch the gap develop over the years. The numbers are illustrative only: not a forecast and not a promise of any return.
What to do about it
- 1
Gather every product
Pension, study fund, provident funds, old managers' insurance. Many people find a forgotten product at a previous employer. Shavve gathers all your accounts in one place and shows them together.
- 2
Find both fee rates
Your annual or quarterly statement shows the fee on deposits and the fee on balance. Write down both for every product.
- 3
Compare
Against similar products on the market and against the cheapest product you hold. Compare similar investment tracks, so you don't compare apples to oranges.
- 4
Contact your fund
Fees are not carved in stone. A clear request often gets a discount. If it doesn't, consider moving to another provider.
- 5
Check before you move
Moving between providers can affect insurance cover and conditions you built up. Check before you decide.
Questions to ask your fund
0 of 7 checked
Your ticks are saved on this device only.
Frequently asked questions
Yes. They appear in each fund's quarterly and annual statements, and on the product page on the provider's site. Shavve shows them together for all the products you connect, so you don't have to hunt in different places.
On deposits: a percentage of every amount you deposit. On balance: an annual percentage of what you have already saved. Both are charged, and it is worth checking both.
Absolutely. You can contact your fund or your insurance or pension agent and ask them to lower the fees. The answer isn't always yes, but asking costs nothing.
Moving between providers within the same type of product usually carries no fee, but confirm the terms with the provider, especially the effect on your insurance cover.
Return matters a lot, but you can't know it in advance, while fees are known. So compare net returns, after fees, rather than looking at each number separately.
