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Pension costs comparison - Lena's case study

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-Boost your returns

Lena could potentially add £12,933 to the value of her pension over nine years by switching to our self-invested personal pension (SIPP).

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Before switching

£1,620 annual charges in year one.

  • Based on 0.81% annual product & investment charges.

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After switching to the ii SIPP

£680 annual charges in year one.

  • Based on a flat fee of £239.88 (£19.99 x 12) + 0.22% fund charges.

Lena's story

Lena has two older workplace plans with previous employers: one worth £120,000 and another worth £80,000. She is in a new workplace plan now and benefiting from the employer contributions.

But she is frustrated by the limited investment choice in her older workplace plans. With her investment experience, she is keen to have access to a wider investment range for her money so she has greater opportunity to boost her returns.

Lena has plans for a change of lifestyle and in nine years, at age 57, is aiming to start taking money from her pension plans. She decides to upgrade both of her older workplace plans to an ii SIPP.

Her total monthly charge with ii is £19.99, which includes £9.99 for the Investor Service Plan plus a £10 SIPP fee. She has chosen to take control and save costs by splitting her money across six passively managed funds, with an aggregate annual investment charge between them of 0.22%.

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Statistics for older pensions like Lena's:
By 2012, there were over 4 million non-stakeholder workplace personal pension contracts in force (source: ABI). This is when new rules on ‘auto enrolment’ into workplace pensions came into effect. Pensions used for this now have their charges capped at 0.75%.

The benefit of fair flat fees with ii

  • A £940 saving in fees in year one, without allowing for investment returns.
  • Allowing for investment growth of 5% each year Lena could potentially save more than £10,000 in total fees and add an extra £12,933 to the value of her plan over nine years.

This case study is for illustration only, based on independent charge comparison research from financial services consultancy, the lang cat. Find out more

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Open a SIPP

Open a SIPP or add one to your existing account.

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Act now and save an extra £60

Open a SIPP by 30 September 2020 and pay no SIPP fee until April 2021. This means your service plan fee covers you for all of your investment accounts. Following the offer period, the ii SIPP fee is only £10 a month more.  Terms apply

The ii SIPP is aimed at clients who have sufficient knowledge and experience of investing to make their own investment decisions and want to actively manage their investments. A SIPP is not suitable for every investor. Other types of pensions may be more appropriate. The value of investments made within a SIPP can fall as well as rise and you may end up with a fund at retirement that’s worth less than you invested. You can normally only access the money from age 55 (age 57 from 2028). Prior to making any decision about the suitability of a SIPP, or transferring any existing pension plan(s) into a SIPP we recommend that you seek the advice of a suitably qualified financial adviser. Please note the tax treatment of these products depends on the individual circumstances of each customer and may be subject to change in future.

£0 SIPP fee promotion terms and conditions¹

  1. No SIPP fee shall be charged to all new ii SIPP accounts until April 2021 (the “Offer”) that are opened from and including 3 March 2020 to and including 30 September 2020¹ (the “Offer Period”). This shall include instances where a participant has submitted a full and complete application for a new ii SIPP account during the Offer Period but the account is not yet opened, where such delay is not attributable to the acts or omissions of the participant.
  2. The Offer is open to new and existing customers.
  3. These terms and conditions should be read in conjunction with the ii SIPP Terms. In the event of a conflict between these terms and conditions and the ii SIPP Terms, these terms shall prevail.
  4. After the Offer has ended, the SIPP fee you will be required to pay will be as set out in our Rates and Charges.
  5. All other fees, for example a drawdown fee which is applied once you start to take retirement benefits, are not subject to this Offer and shall continue to apply notwithstanding.
  6. We reserve the right to alter, withdraw or amend this Offer and/or these terms and conditions at any time without prior notice.
  7. All participants to this Offer agree to be bound by these terms and conditions.
  8. Interactive Investor Services Limited (“IISL”) is the promoter of this offer. The registered office for IISL is Exchange Court, Duncombe Street, Leeds LS1 4AX.

¹ Updated 28 August 2020