Pension fees on a £5,000 pot — what does it really cost?

A £5,000 pension is what you might have a couple of years into your first workplace scheme. At this scale fees feel trivial — a 1% charge on £5,000 is just £50 a year — but the maths is unforgiving over decades. £50 a year compounded for 35 years at 5% growth becomes around £4,500 of lost potential value. That's not a rounding error: it's almost the original pot. The good news is small pots are easy to consolidate or move into a low-cost SIPP. The bad news is most people don't bother because the absolute pound figure looks small. Run the numbers below and decide for yourself.