Great news – this summer, we’re going to be making a change to the way we calculate how much you’re charged for looking after your pension savings.
We’re changing our charging structure
B&CE, provider of The People’s Pension, are not-for-profit and exist for the benefit of our members – we don’t have shareholders.
And this means we can make changes like reducing our charges so that you, as a member of The People’s Pension, end up saving more for your retirement.
When will the change take place?
We’ll introduce this new charging structure from the summer of 2019.
You can find out about our current charges on our costs and charges webpage.
Why are we lowering our annual management charge?
All pension providers have charges – often called an annual management charge (AMC).
Even though our AMC rate is already excellent value at 0.5%, well below the industry charge cap of 0.75%, we want to do more to help people save for later life.
How much is it coming down by?
As your savings grow, you’ll pay a reducing AMC as your savings move through our banded structure.
- The first £3,000 of a member’s savings will be charged at 0.5%
- Savings above £3,000 and up to £10,000 will be charged at 0.4%
- From £10,000 and up to £25,000 will be charged at 0.3%
- Above £25,000 and up to £50,000 will be charged at 0.25%
- Any remaining savings above £50,000 will be charged at 0.2%
We believe this new banded structure is fairer as everyone will have access to the same great rates.
How the charge is calculated
The highest band of AMC we’ll charge (0.5%) is the same as it’s always been. Below is an example of how the new AMC will be calculated along with a comparison of how much you would’ve paid under the old charging structure.
|Money in your pension savings||How the AMC is calculated||New cost (£)||Overall AMC for comparison purposes||Previous cost (£)||Annual saving (£)|
|£1,000||£1,000 @ 0.5%||£5||0.5%||£5||–|
|£4,000||£3,000 @ 0.5%+ £1,000 @ 0.4%||£19||0.48%||£20||£1|
|£40,000||£3,000 @ 0.5%+ £7,000 @ 0.4%+ £15,000 @ 0.3%+ £15,000 @ 0.25%||£125.50||0.31%||£200||£74.50|
|£80,000||£3,000 @ 0.5%+ £7,000 @ 0.4%+ £15,000 @ 0.3%+ £25,000 @ 0.25%+ £30,000 @ 0.2%||£210.50||0.26%||£400||£189.50|
Helping everyone to understand charges
We’re also taking this opportunity to change the way we show our charges. From this summer, you’ll see a pounds and pence deduction figure in your annual statement and in your Online Account. This’ll give you a clearer idea of how much we’re charging you for looking after your pension savings.
If you haven’t already done so, set up your Online Account today.
You don’t need to do anything
You don’t need to do anything to benefit from this change. We’ll automatically calculate the ongoing cost for managing your pension savings.
Looking for more information?
The Pensions Advisory Service has more information in their ‘Top tips for your pension: Pension scheme charges’.