Pension fees on a £500,000 pot — half a million — and the fee bill that comes with it.
How much do pension fees cost on a £500,000 pot? See the lifetime impact of percentage fees on a half-million pension and compare flat-fee alternatives.
A £500,000 pension pot is in the top 10% of UK retirement provision and would produce around £20,000/year of income at a 4% withdrawal rate. At this scale, percentage-based fees become the largest single line item in your retirement costs. A 1% fee on £500,000 is £5,000 a year — more than a typical car insurance premium, every year. Over 25 years that compounds to around £180,000 of lost growth versus a 0.3% provider. At this pot size, flat-fee platforms aren't just slightly better, they're transformative. A £200/year flat fee works out to 0.04% — a 25x reduction. Most people with £500k+ pots are paying tens of thousands of pounds in unnecessary fees over a lifetime simply because they never reviewed their platform.