What are Aegon's fees and charges?
Understanding the fees and charges in your pension plan is essential. These costs can impact how much money you’ll have for retirement, so it’s crucial to know what you’re paying and why. Here, we’ll look at what we know about Aegon’s fees and how they might affect your pension savings.
What Are Pension Fees?
Pension fees cover the costs of administering your pension, investing your money, and providing member services. Every pension provider has a slightly different fee structure, so understanding these charges can help you make an informed choice.
Aegon’s Fees Explained
Aegon provides multiple workplace pension products, each with its own specific scheme and charges. Within any given product, charges can vary depending on the arrangement your employer has negotiated and the investment fund(s) you choose. Because of this, it can be challenging to pin down exactly what you’ll pay without going through your scheme documents or talking with Aegon directly. Broadly speaking, Aegon’s total charge is made up of:
Aegon Charges
This usually includes a Platform charge, an Annual management charge, and Transaction costs.
Fund Charges
Different funds carry different fees. The costs you pay will depend on the specific fund your pension pot is invested in.
Aegon Retirement Choices (ARC) Example
Aegon publishes an anonymised list of more than 9,000 pension schemes within its Aegon Retirement Choices (ARC) product, each with its own scheme price. Across these schemes, the median price is 0.61% per year. This suggests that:
If you’re in a scheme whose total charge is around this median, you’d pay roughly 0.61% annually on all the money in your pension pot.
However, your actual charge could be higher or lower depending on your employer’s agreement with Aegon and the fund(s) you’ve chosen.
Impact on Your Pension Savings
Although fees reduce the amount you have in your pension, they also pay for administration and professional fund management, which can help grow your retirement savings over time.
Let’s take an example:
Suppose you have £10,000 in your Aegon pension pot.
If your scheme’s total charge is around 0.61% annually, you’d pay about £61 per year.
If you contribute more money during the year, or if your fund grows, you’d pay 0.61% on the new total amount.
Keep in mind that this 0.61% figure is merely a median from Aegon’s ARC product—your actual charges may differ based on the specific scheme and funds selected.
Are These Fees Right for You?
When choosing a pension scheme, consider how the fee structure fits with your retirement goals. If you have a large pension pot or plan to contribute significantly, even small differences in annual charges can make a big impact over time.
Things to Consider
Before you decide whether your Aegon scheme is the right option, it’s worth comparing its fees, benefits, and additional services against those of other providers. A little research can go a long way toward ensuring you get the best value for money.
Check the flexibility of your scheme (e.g., transferring in or out).
Look at the fund choices and investment performance.
Consider your personal situation and retirement timeline.
Ask your employer or HR department for details on charges specific to your Aegon scheme.
Where to Find Out More
For free, impartial information about pensions, including fees, visit MoneyHelper. If you need more tailored guidance, you could consult an independent financial adviser, though be aware there may be a cost for their services.
Historically, the pensions industry has been known for complex, hidden fees. Unfortunately, many providers still make it very difficult to find out exactly what you’re being charged. At Penny, we’re on a mission to make it super-easy to understand and manage your pensions. We bring all your retirement savings into one place and give you clear insights into fees and charges so you can make confident decisions.
