Pension charges over time - how we worked it out
We partnered with independent research experts at Lang Cat to develop the value comparisons. We used the following criteria to find out how investing in a SIPP with ii's fair flat fees compares with other personal pensions.
Analysis of charges and impact on portfolio values
Our example uses typical SIPPs and Personal Pensions, comparing the charges faced over a 30 year investment horizon.
Total portfolio value after 30 years
Total charges after 30 years
Typical investor pensions
For all example comparisons, our analysis assumes:
- A typical investor aged 35 with an accumulated pension pot of £100,000
- Over a 30 year investment lifecycle, annual gross contributions of £10,000 have been added to the pension
- One buy and one sell trade in each year, with associated dealing charges included.
The investment returns reflect the following charges:
- Administration fees
- Dealing costs (assuming online transactions only)
- Fund manager charges, known as the Ongoing Charges Figure.
All competitor charges were taken from their published fees and were correct as at 29 September 2020. In the summary tables above, charges and portfolio values have been rounded to the nearest £100 for illustration purposes.
Ongoing Charges Figure (OCF)
- The analysis assumes a typical portfolio of active funds, with an average OCF of 0.66%.
- This OCF is taken from the investment each year, not from your pension cash.
- The typical OCF used is the average fee charged by the active funds (not investment trusts) making up the ii Super 60 range, as published in their Key Investor Information Documents in October 2020. Each provider shown may offer a different range of investments.
For all comparisons shown, the Lang Cat assumed:
- Future investment growth will be at 5%. This is for illustration only and is not guaranteed. Investment returns can go down as well as up.
- An inflation rate of 2.00% throughout the period. Inflation is applied to regular contributions and to instances of fixed fees, but not used to adjust final projected values.