Fee impact
The long-term difference between low and high annual charges on the same pot. It's bigger than most people think.
Charges come straight out of the growth rate: a pot growing at 5% with a 1.5% annual charge compounds at 3.5%.
Charges come straight out of the growth rate: a pot growing at 5% with a 1.5% annual charge compounds at 3.5%. The difference between two charge levels looks small in any single year and compounds into a large gap over decades, because the money a charge removes can no longer grow.
None of this says cheap is always right — it says the charge is a real number that belongs in the comparison, converted into pounds over the years you expect to stay.
Formula
FV at (r − fee) — the charge is subtracted from the growth rate
Both pots share the same contributions and gross growth; only the annual charge differs.
- 01The whole charge is taken from the growth rate annually.
- 02Returns are smooth; real returns are not.
- 03Both charge levels buy identical gross performance — in reality performance differs and is unknowable in advance.
- 04No tax or inflation; figures are nominal pounds.
Holding everything else at your inputs
Each row changes one variable and shows the result. It illustrates which assumptions the answer is most sensitive to — it does not suggest which to choose.
| Variable | Changed to | Cost of the higher charge | vs your result |
|---|
Reminder: general education only — not advice, and not a suggestion that any particular product or fee level is right for you. For personal recommendations, consult an FCA-authorised adviser via our toolkit.