Great news for those managing their own pension, after the successful launch of their pension (self-invested personal pension) this year, InvestEngine have now reduced the fees to zero, bringing it in line with their other accounts (such as a Stocks and Shares ISA). This is both for new customers and existing customers.
Previously fees were 0.15% and capped at £200 per year.
You’ll still pay fees within the investments themselves, and depends on which investments you make within your InvestEngine account – InvestEngine offer a great range of exchange-traded funds (ETFs).
InvestEngine can also manage the investments for you for a low fee of 0.25% per year (plus investment fund fees), and have recently launched a great range of managed investment options called LifePlans.
The move to reduce fees came after research from InvestEngine found that over half (55%) of investors ranked low fees as their top priority when selecting an investment provider.
Fees can have a significant impact on your pension pot in retirement. For example (from InvestEngine’s calculations as an illustration), if you were to contribute £400 per month to your pension pot, and it grew by 7% per year over 40 years, your pension pot would be worth £1.5 million with no fees, £1.1 million if the fee was 1% per year, and £870,000 if the fee was 2% per year. That’s an enormous saving.
Nuts About Money tip: you can get an estimate of your own pension pot and how much you might earn in retirement with our pension calculator.
Speaking to Nuts About Money, Andrew Prosser, Head of Investments at InvestEngine, said “We’re able to do this for new and existing customers partly because of our exceptional growth this year” and “with current AUM standing at £900 million. We’re extremely proud of this achievement and being able to offer a zero-fee SIPP reflects our success.”
Interesting data provided by InvestEngine also highlighted the need for a focus on retirement savings in the UK, with 37% of 35-54s not engaging with their pension, and half (49%) of all UK adults worry their pension isn’t on track for a comfortable retirement.
That’s something we hear from our readers here at Nuts About Money too, and found the average pension pot far too low – if you haven’t started planning your retirement yet, however young you are, get started today!
InvestEngine¹ is a great option for retirement saving, especially now the fees are zero. You can learn more about them with our InvestEngine review, and compare all your options with our best pension providers table.
