Pension charges come in two flavours - administration charges levied by the pension provider and the underlying investment fund charges. These will usually include the following:

Administration charge Investment Fund Charge

1. Initial or set-up charge

Annual Management Charge (AMC) which is either a fixed amount or percentage of the pension value.

Initial charge when buying funds. 

4. Annual fund charges, typically ranging from 0.1% to 3.0%.

Note: Stakeholder pension providers are not allowed to charge 1 or 3 and usually combine charges 2 & 4 so you'll just pay a single annual charge.

Reduced charges when using Cavendish Online

Discount brokers can reduce charges by not taking some or all sales commissions. Using Cavendish Online allows you to benefit from full commission rebates in return for a one-off £35 fee, which can help reduce charges as follows:

3. Where initial fund charges apply these will usually be reduced to (or near) zero.

2 & 4. Annual charges are normally reduced by the amount of annual commission paid. Visit the relevant product pages for more details.

Examples of Cavendish Online savings

As one of the cheapest discount brokers, Cavendish Online can offer very worthwhile savings when buying a pension.

The following examples show the potential savings for a Scottish Widows stakeholder pension assuming a £200 gross monthly contribution and 7% annual return before charges. Values show total fund value at retirement.


Years until retirement


Via Cavendish Online