The charges you pay matter because, while the performance of your investments can go up and down, you’ll have to pay the charges regardless.
Over time, charges can make a huge difference to your returns. Even relatively small differences in ongoing costs can add up over time.
While price isn’t the whole story, it is an important part. You need to weigh up what you’ll pay against what you get for what you pay. This should involve:
- being clear on what you’re paying
- understanding what you get for that
- weighing these up and seeing whether you’re satisfied that the first is fair in light of the second.
Charges on pension schemes and plans have been reducing. If you’ve got an older scheme or plan, it’s worth reviewing the level of charges you’re paying.
If you’re in your workplace pension scheme, you might pay a lower charge than if you take out a personal pension.
Charges on group personal pensions also are likely to be lower than on self-invested personal pensions This is because the funds tend to be less specialised, but this isn’t always the case and it’s best to check.
It’s worth remembering that the charges on pensions are often lower than on other savings products, such as individual savings accounts (ISAs).