How is your annual management charge calculated?

How is your annual management charge calculated?

The annual management charge is made up of 3 elements: an annual charge, a management charge and a potential rebate on the management charge.

How the annual charge is calculated
Members pay an annual charge of £2.50 usually deducted in October, if you have investments with us on 1 April of that year. This is not taken from pots below £102.50 when the charge is calculated.

If a member has a flexi-access drawdown account in addition to their pension pot, the annual charge will only be taken once from their main pension pot – it won’t be deducted from their flexi-access drawdown account. If a member only has savings in their flexi-access drawdown account, no annual charge will be deducted.

How your management charge is calculated
The calculation for your management charge is:

  • the value of your fund
  • multiplied by our management charge of 0.5%
  • then divided by the (number of days in the year)

(0.5/365)=0.00137%

So, each day our fund managers (State Street Global Advisors/HSBC Global Asset Management) take 0.00137% of the value of assets as a charge. This is taken into account when calculating the daily unit price.

How the rebate on your management charge is calculated
You’ll also typically receive a rebate on your management charge once you have over £3,000 in your pot.

The rebate is calculated at the end of each rebate period. The amount given will vary depending on how much is in your pot(s) when the rebate is calculated, your activity during the rebate period, and the number of days in each rebate period.

For the part of your savings:

  • up to £3,000, no rebate is given
  • over £3,000 and up to £10,000, we give back 0.1%
  • over £10,000 and up to £25,000, we give back 0.2%
  • over £25,000 and up to £50,000, we give back 0.25%
  • over £50,000, we give back 0.3%.

For more details about our annual management charge, including full terms and conditions and worked examples, see our annual management charge webpage.

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