Member annual management charge

Our charging structure is made up of 3 elements: a management charge based on the value of the member's pension pot each year and applied on a daily basis, a potential rebate on some of the management charge (depending on how much is in the member's pot) and an annual charge

Pension management charges

Every workplace pension scheme charges members for looking after their money.

You might hear this called an ‘annual management charge’, ‘management charge’ or ‘AMC’ for short.

Find out more about what the charge covers in our video.

Our annual management charge

Members of The People’s Pension will be subject to an annual management charge made up of:

Management charge

A management charge of 0.5% of the value of the member’s pension pot each year. To put it another way, that’s just 50 pence a year for every £100 of the value of their pot. 

Management charge rebate

A potential rebate on some of the management charge, depending on how much is in the member’s pot – to help members save more for retirement as their pension savings grow.

Annual charge

An annual charge of £2.50, deducted during the scheme year (which runs from 1 April to 31 March), if a member has investments with us as of 1 April.

How our rebate works

As part of a not-for-profit organisation, we exist for the benefit of our members and use the money we make to help them save more.

Our charging structure means that typically members will receive a rebate on their management charge of between 0.1% and 0.3% depending on how much is in their pot when the rebate is calculated.

For the part of their savings:

  • up to £6,000, no rebate is given
  • over £6,000 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%.

This all happens automatically and members will be able to see the rebate in their Online Account and annual statement.

Please note:

The minimum we can give back as a rebate is 1 pence.

The first rebate will be calculated over a 6-month rebate period from 17 February 2020 to 16 August 2020 and will be applied in August 2020, thereafter it will be calculated monthly.

Good news – at around the time when we take the annual charge, we’ll reduce the initial level of savings that members need to have to qualify for a rebate on the management charge, from £6,000 to £3,000.

If the member takes their money out, future rebates will be worked out on the value of any remaining savings.

If a member receives more than one annual statement from us a year, it could mean they have ended up with two different customer numbers. This means they may pay the annual charge twice, and may not receive their full rebate entitlement. If this has happened, find out how to correct the issue.

What this means for you as a member

See how much your management charge and rebate will typically be, depending on how much is in your pension pot.

Log into your Online Account to see how much is in your pot.

If you had
in your pension pot…

…your estimated charge and rebate in a typical month would be…

Management charge:
Estimated management charge: Estimated rebate:
£0.00 £0.00
Up to £6kOver £6k and up to £10kOver £10k and up to £25kOver £25k and up to £50kOver £50k Total
The part of your savings in each band: £0@ 0.0% rebate£0@ 0.1% rebate£0@ 0.2% rebate£0@ 0.25% rebate£0@ 0.3% rebate £0.00
Estimated rebate for each band: £0.00£0.00£0.00£0.00£0.00 £0.00
Savings in each band: Rebate in each band:
Up to £6k£0@ 0.0% rebate£0.00
>£6k to £10k£0@ 0.1% rebate£0.00
>£10k to £25k£0@ 0.2% rebate£0.00
>£25k to £50k£0@ 0.25% rebate£0.00
Over 50k£0@ 0.3% rebate£0.00
Total £0.00 £0.00

Here are some examples…

Neil has saved £3,000 so far

So in a 30-day month, the management charge of 0.5% meant that he paid £1.231.

What will happen as his pot grows
£120 is paid into Neil’s pot each month in contributions. So his pension savings will continue to grow over time.

And once he has over £6,000 is his pot, he’ll effectively receive a reduction on his management charge by way of a rebate, when we next calculate the rebate

Michaela has £14,000 saved so far

So in a 30-day month, the management charge of 0.5% meant that she paid £5.751. Then, at the end of that month, she received a rebate of £0.99. Therefore the charge paid less the rebate was £4.76 for that month.

How her charge rebate is calculated
On the £4,000 between £6,000 and £10,000, we gave back a rebate of 0.1% (£0.33 for that month). And on the £4,000 above £10,000, we gave back a rebate of 0.2% (£0.66 for that month). So this gave her a rebate of £0.99 in total.

As set out above, the first rebate will be calculated over a 6-month rebate period from 17 February 2020 to 16 August 2020 and will be applied in August 2020. During this initial 6-month rebate period, Michaela’s management charge would have been £34.901, and her rebate would have been £5.98 – so the management charge paid less the rebate would have been £28.92 for that 6-month rebate period.

1 Pounds and pence figures are for illustrative purposes only, members may pay slightly more or less than the figures quoted. The management charge examples shown do not incorporate projected unit price or inflation increases during the rebate period. Examples do not include the £2.50 annual charge.

What a member’s charge pays for

Among other things, the annual management charge pays for:

  • Expert decision making on where members’ money is invested – so their money can grow for their future.
  • Access to our UK-based telephone support team – on hand to answer any questions they have.
  • Strong scheme governance through independent trustees who ensure the scheme operates in the members’ interests.
  • Online Account and calculators which can help members to manage their pension savings.
  • Day-to-day running costs – such as maintaining a member’s Online Account and producing annual statements.

You might be wondering…

Looking for more information?

The Pensions Advisory Service has more information in their ‘Top tips for your pension: Pension scheme charges’.

You don’t need to do anything

Neither employers nor members who use The People’s Pension as their workplace pension scheme need to do anything to benefit from the rebate on the management charge. If members’ savings qualify, the rebate will be calculated automatically and added to their pension pots.

Members can log into their Online Account to see their pension pot and transactions.