Field notes
Workplace pension charges, decoded
Annual management charges, transaction costs, and exit fees — what to ask your scheme administrator before you transfer.
Workplace pensions often look similar until you dig into the charge schedule. An annual management charge of 0.3% versus 0.75% compounds into a meaningful difference over two decades, yet many deferred members never request the details.
Ask your administrator for the total expense ratio on your default fund, any active member discounts that lapse after you leave the employer, and whether exit or transfer fees apply. Some older schemes still carry protected rights or guaranteed annuity rates that outweigh a cheaper modern SIPP.
Transaction costs inside the fund are harder to see but still real. For most long-term holders they matter less than the headline AMC, but if you are comparing consolidation options we include them in the side-by-side table.
Exit fees deserve special attention if you are within a few years of needing income. Paying a transfer charge to move for lower ongoing fees only makes sense if you stay invested long enough to recover the cost. We calculate that break-even point before recommending a move.
Bring scheme booklets and recent annual statements to a Pension Consolidation Advice meeting. Photocopies are fine; we are more interested in accurate numbers than tidy presentation.