What are Royal London'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 Royal London’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.
Royal London’s Fees Explained
Royal London has three main workplace pension products (Group Personal Pension, Company Pension Plan, and Group Stakeholder Pension). Each has multiple different schemes within it, and even within the same product, charges can vary from scheme to scheme (depending on the arrangement your employer has negotiated). Broadly, Royal London’s charges include:
Administration Charges
Decided by Royal London and taken from members’ pension plans to pay for administering and investing their retirement savings.
Transaction Costs
The costs involved in buying, selling, and holding assets. These aren’t directly set by Royal London but rather depend on the investment activities of the pension funds.
Royal London Group Personal Pension Example
For the Group Personal Pension workplace product, Royal London publishes an anonymised list of over 29,000 schemes. If you’re in the default fund selection, the median charges are:
0.70% per year for administration
0.04% per year for transaction costs
That adds up to a median total annual charge of 0.74% on your pension pot. However, your actual charges may be higher or lower depending on your specific product, scheme, and choice of funds.
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 Royal London pension pot.
If your total annual charges are around the median of 0.74%, you’d pay about £74 per year.
If you contribute more money during the year, or if your fund grows, you’d pay 0.74% on the new total.
Remember, this figure is just a median from one of Royal London’s products—your actual costs may differ significantly based on your employer’s agreement and the fund(s) you’ve selected.
Are These Fees Right for You?
When choosing a pension scheme, consider how the fee structure fits with your retirement goals. Even small differences in annual charges can add up significantly over the long term, especially if you have a large or growing pension pot.
Things to Consider
Before you decide whether your Royal London scheme is right for you, it’s worth comparing its fees, benefits, and additional services against those of other providers. Small differences in fees can have a big impact over time.
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 Royal London 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.
