Pension fees on a £10,000 pot — the silent compounding tax.
How much do fees cost on a £10,000 pension pot? Compare current charges against a low-cost SIPP and see the cumulative impact over 25 years.
A £10,000 pot is the typical balance of someone four or five years into a workplace pension on average UK earnings. ONS pension wealth data puts this around the 25th percentile for adults aged 35-44. At £10,000, even a 0.75% fee — the FCA cap on default auto-enrolment funds — quietly skims £75 a year off the pot. Move to a 0.15% provider like Vanguard and you'd save £60 a year, which compounded over 30 years at 5% growth is roughly £4,000 of extra value. Switching is usually free; the catch is exit fees on older policies and the loss of guaranteed annuity rates on legacy schemes. Always check before you transfer.