8 July 2019
Build UK Partner The People’s Pension Lowers Their Members’ Charges
Since 2012, The People’s Pension has grown to serve more than 4 million members from more than 85,000 UK employers of all sizes, becoming one of the largest workplace pension schemes.
Provided by not-for-profit organisation B&CE, The People’s Pension uses any profit it makes to improve products and services for its members – all driven by B&CE’s core values:
- Keeping our promises
- Creating simplicity
- Showing compassion
From summer 2019, The People’s Pension will switch from a low-cost management charge of 0.5% per year, already below the qualifying workplace pensions charge cap of 0.75%, to a banded pricing structure.
The percentage charge will now fall as a member’s pension pot grows, potentially saving them thousands of pounds over their lifetime:
- The first £3,000 of a member’s savings will be charged at 0.5%
- Savings above £3,000 and up to £10,000 will be charged at 0.4%
- From £10,000 and up to £25,000 will be charged at 0.3%
- Above £25,000 and up to £50,000 will be charged at 0.25%
- Any remaining savings above £50,000 will be charged at 0.2%
Everyone will have access to the same rates, providing a long-term incentive to stick with saving and consolidate multiple pots. By saving over their working life with The People’s Pension, average earners could see their lifetime Annual Management Charges (AMC) fall by more than half to just 0.23% (i) , potentially increasing their pension pot at retirement by:
- Almost £55,000 when compared to a lifetime AMC fee set at the charge cap of 0.75% (ii)
- Almost £30,000 when compared to a lifetime AMC fee set at the already low 0.50% which members of The People’s Pension currently pay (iii).
B&CE believe in creating simple financial products that meet people’s needs. Their roots are in construction, and they set up a Charitable Trust in 1991 to help give back to construction workers in need – so far paying out over £3m.
Perfect for employers of all sizes, their scheme meets all the legal needs of auto-enrolment and provides a secure workplace pension solution supported by award-winning customer service.
Find out how The People’s Pension can help your business here.
i. All modelling assumes: earnings £30,000 per annum (UK media fulltime annualised wage £29,588, ONS 2018), timeframe 45 years, contributions at 8% of qualifying earnings, investment returns 5% per annum, inflation 2.5% per annum.
ii. An extra £54,535.60 added to a pension pot when compared to flat-rate AMC of 0.75%. Assumptions: average earner requires 2/3rds of salary as a retirement income and receives full state pension of £8,767.20 a year (2019/20 prices).
iii. An extra £28,398.14 added to a pension pot when compared to flat-rate AMC of 0.5%. Assumptions: average earner requires 2/3rds of salary as a retirement income and receives full state pension of £8,767.20 a year (2019/20 prices).