The difference that charges make

The old personal pension plans were very often expensive, with hidden charges and investment restricted to just a few in-house funds – many of which have performed very poorly indeed. As you could not see what was going on inside your plan you had almost no control of investment or idea of costs incurred.

For example, a 50-year-old investor, aiming to retire at age 65,transferring £100,000 to a new plan, assuming a 7 per cent growth rate from all plans, would get a final fund value of:
Best costed plan	Most expensive plan
£250,277	£197,042
A whopping £53,235difference – from a transfer of £100,000

Source: O&M Systems comparisons using Base Growth7 per cent using the standard Balanced Fund. Assumed Policy Fee increases: Average Earnings Index linked to 4per cent, RPI linked to 2.5 per cent, others match company practice. For comparison purposes only, s ingle commission basis of standard initial without fund based.

This example is for illustrative purposes only and you may get back more or less than the figures shown. It only takes into account the impact of charges, it is just as important to consider the underlying investment performance.