What are NOW:Pensions' 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 the fees NOW:Pensions charges and how they 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.

NOW:Pensions’ Fees Explained

NOW:Pensions’ fees are made up of three separate charges:

1. Monthly Administration

   You’ll pay £1.75 each month to cover the running of the Scheme (that’s £21 per year).

   
   

2. Investment Management (0.3%)

   Each year, 0.3% of your pension savings goes toward managing your investments. For example, if your pension pot is worth £10,000, this would cost £30 per year.

   
   

3. Transaction Costs

   These are the costs involved in buying and selling investments. NOW:Pensions doesn’t charge these separately; they’re factored into the returns of the Scheme’s investments.

Impact on Your Pension Savings

Although fees reduce the amount you have in your pension, they also pay for professional fund management and administration, which can help grow your retirement savings over time.

Let’s take an example:

• Suppose you have £10,000 in your NOW:Pensions pot.

• You’ll pay £1.75 each month (totalling £21 per year) as the monthly administration fee.

• You’ll also pay 0.3% of your pot’s value annually, which is £30 on a £10,000 pot.

• Transaction costs are included in the overall returns, so there isn’t a separate deduction for them.

This means your total annual fees would be around £51 on a £10,000 pot, plus any impact from transaction costs.

Are These Fees Right for You?

When choosing a pension scheme, consider how the fee structure fits with your retirement goals. If your pension pot is large or growing quickly, paying a flat monthly charge plus an ongoing percentage might affect you differently than a scheme that charges in other ways. On the other hand, a transparent, predictable fee structure can help you plan your savings more accurately.

Things to Consider

Before you decide whether NOW:Pensions is the right option, it’s worth comparing fees, benefits, and any additional services against other providers. Small differences in charges can add up significantly over the years, influencing how much you’ll have for retirement.

• Check the flexibility of the scheme (e.g., transferring in or out).

• Look at the fund choices and investment performance.

• Consider your personal situation and retirement timeline.

• Check whether the features of NOW:Pensions’ platform, website, and app give you sufficient access to, and control of, your pension savings.

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.