What fees should I expect from a UK workplace pension?
Short answer: most UK workplace pensions charge between 0.50% and 0.75% a year of the pot value, plus a small additional fund charge that varies by the funds you choose. The total annual cost on a £50,000 pot works out to around £250 to £375 a year. This page explains how the fees work and what to look for in the small print.
How UK workplace pension fees are structured
A typical UK workplace pension charges two layers of fee: an annual management charge (AMC) that goes to the provider for running the scheme, and a fund charge that goes to the fund manager for managing the underlying investments. Both are taken as a percentage of the pot value, every year, and compound away quietly in the background.
| Charge layer | Typical range (UK workplace pensions, 2026) | Who takes it |
|---|---|---|
| Annual management charge | 0.20% to 0.50% | Scheme provider |
| Fund management charge | 0.10% to 0.30% | Underlying fund manager |
| Total annual cost | 0.30% to 0.80% | Combined |
Verify against your own scheme's key features document and the latest annual statement from your provider. NEEDS VERIFICATION: the precise range varies by provider; NEST sits towards the low end and some older schemes can be higher.
What 0.50% to 0.75% actually costs on a real pot
Worked example on a £50,000 workplace pension pot held for 20 years at an average growth rate of 5% above inflation. The fee difference between a 0.50% scheme and a 0.75% scheme is the difference between roughly £132,000 and £128,000 at the end of the period. The headline difference looks small, the real difference over a working life is meaningful.
On a £100,000 pot held for the same 20 years, the fee difference widens further. The bigger the pot and the longer it stays invested, the more the fee matters. NEEDS VERIFICATION: the precise numbers depend on the assumed growth rate; confirm the maths before quoting.
Where to find your own workplace pension fees
Your scheme is required to publish a "key features" document and an annual statement showing the actual charges you paid in the last year. The annual statement usually shows the AMC and the fund charge separately. If the numbers look higher than the ranges above, raise it with HR or the scheme administrator and ask whether a cheaper default fund or a self-select fund range is available.
Many larger employers run their scheme with NEST, The People's Pension, Smart Pension, or Aviva. The default fund is usually a target-date or lifestyle fund that gradually de-risks as you approach retirement. The fee on the default fund is the one you are most likely to be paying today, even if you have not actively chosen it.
Can you move your workplace pension?
You can transfer your workplace pension into a SIPP (self-invested personal pension) or another employer's scheme, but you usually cannot move it to a different provider's workplace scheme while still in the same job. The transfer process is initiated by the destination scheme, takes 15 to 30 business days, and uses in-specie transfer where possible so you do not have to sell and rebuy.
Check the exit and entry fees on both sides before starting a transfer. A transfer out of a scheme with a guaranteed annuity rate or safeguarded benefits is normally irreversible, so get regulated advice before doing that. For straightforward defined contribution pots, a SIPP at PensionBee, AJ Bell, Hargreaves Lansdown or Fidelity is the usual destination.
Where does this leave you? Check your annual statement for the actual AMC and fund charge, then compare the total against the 0.50% to 0.75% range above. If your fee is meaningfully higher, ask HR about cheaper default options or consider a SIPP for any old pots you want to consolidate. See your overall position
Educational use only. Not financial, investment, tax or legal advice.
Workplace pension charges FAQ
What is a typical workplace pension fee?
Most UK workplace pensions charge a combined annual fee of 0.50% to 0.75% a year on the pot value, made up of an annual management charge for the scheme and a fund charge for the underlying investments. NEST and similar modern default schemes sit at the low end; older schemes can be higher. Verify the exact figure in your annual statement.
Can my employer choose a more expensive scheme?
Yes. The scheme is chosen by the employer. Auto-enrolment requires the employer to enrol eligible workers, but does not specify a particular scheme. Some employers choose a default scheme with higher fees than they need to; if yours has done this, you can sometimes opt down to a cheaper fund within the same scheme.
Are workplace pension fees capped?
The default charge cap on workplace pensions used by auto-enrolment is 0.75% a year for the first 12 months (the charge cap), then the cap lifts. In practice most schemes sit between 0.50% and 0.75% a year overall. If you are in a scheme that charges more than 0.75% after the first 12 months, ask HR or the scheme administrator why.
Does the fee include fund charges?
The annual management charge usually does not include the underlying fund charge, which is taken separately. The total cost is the AMC plus the fund charge. Your annual statement should show both, with the AMC as a percentage and the fund charge split out by the funds you are actually in.
Should I move to a SIPP for cheaper fees?
Only if the fees on your scheme are clearly higher than the SIPP alternative AND you would otherwise invest the difference, AND the transfer does not trigger exit fees or loss of safeguarded benefits. For a typical workplace scheme at 0.50% to 0.75%, the SIPP fee advantage is rarely large enough on its own to justify a transfer.
Educational use only. Not financial, investment, tax or legal advice.