The latest from our Scottish consultancy team, based in The Capital Building on Edinburgh's St Andrew Square


Most of us are guilty of occasionally making purchases without checking the price. This can be a dangerous habit if the items are luxury goods, but less of an issue when you’re grabbing bread and milk from the local supermarket.

I’m pretty loyal to Kingsmill 50/50 (other brands are available…), through nothing more than routine. I had to check how much it costs me each week – 85p in case you were wondering.

I could have a look and see what bread is on offer, or try the store’s own brand, but the saving of a few pence doesn’t seem worth the thought, time or effort – a 15p a week saving, over 35 years, would reward me with a grand total of £273 back in my pocket.

What does this have to do with pensions?

We speak to many businesses, and their employees, who take a similar stance when it comes to the cost of their pension scheme. The charges can sound so minor, almost inconsequential, because they are stated as a fraction of a percent – whether you are paying 0.30% or 0.50% annually on your pension pot can’t make that much of a difference surely?

Actually, even a seemingly minor reduction in charges can make a major difference over the long-term.

Here’s an illustration, showing the potential increase in pot size a charge reduction can deliver for an average pension saver over the same 35-year period:

chartThe above chart assumes a 30 year-old individual with a starting salary of £30,000, total contributions of 10%, salary growth of 2% p.a. investment growth of 7% p.a. gross and a retirement age of 65. All figures are adjusted for inflation.

Speaks for itself really…a 4.5% increase in the total value, or in this example, more than £10,000 in today’s terms – that’s a lot of bread!

If you haven’t reviewed your scheme recently you may be missing out on the hugely attractive terms that are now available in a very competitive market for company pension schemes.

Not sure how much you are paying? Speak to your provider, or better yet, speak to us!

We are more than happy to tell you how your charge stacks up, and if you would like our help to improve the retirement outcomes of your employees, well that’s bread and butter stuff to us!

If you would like to speak with one of our advisors, please get in touch:

Posted by Andy Roddie

Topics: Workplace Savings, Pensions, Edinburgh

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