What charges are you paying on your workplace pension?
Charges on the default fund of an auto-enrolment scheme are capped at 0.75% a year of the value of the pot. That cap covers a lot of people and it does not cover everything: self-selected funds, deferred pots and older arrangements can charge considerably more, and transaction costs sit outside it entirely.
- The cap: 0.75% a year on the default fund of a qualifying auto-enrolment scheme.
- Outside the default: self-selected funds are not capped and frequently cost more.
- Deferred members: can be charged differently once contributions stop.
- Transaction costs: sit outside the cap and are disclosed separately.
01 What the cap covers
The charge cap applies to the default arrangement of a qualifying scheme used for auto-enrolment, and it limits ongoing charges to 0.75% a year of funds under management or an equivalent combination charge. Most members are in the default and are therefore covered.
It does not apply to funds you have chosen yourself. A member who moved out of the default into a specialist or actively managed fund is outside the cap, and those funds routinely charge more than double it.
It also does not cover transaction costs — the dealing costs incurred inside the fund. Those are disclosed separately in the scheme's cost disclosures and are real, though usually small relative to the annual management charge.
02 Where the charges are hiding
Charges appear in more than one place. A platform or administration charge, a fund annual management charge, and any adviser charge can each be levied, and the combination is what matters rather than any single figure.
The scheme's annual statement gives a costs and charges disclosure, and workplace schemes have to publish a chair's statement covering value for members. Those documents are dull and specific and they are where the actual number is.
For deferred members the position can differ from active ones, which is worth checking on leaving a job. Employers sometimes subsidise the charge for current employees, and that subsidy stops when you do.
03 What a difference actually costs
Charges compound in the same way returns do, so a difference that looks trivial annually is substantial over a career. Half a percentage point a year on a pot growing for thirty years reduces the final value by something in the region of a seventh.
That makes charges one of the few controllable inputs in a pension, alongside contributions. Returns are not yours to set and the tax rules are not either, but the fund you are in and the platform it sits on both are.
The counterweight is that the employer contribution dwarfs the charge difference for an active member. Nobody should leave a workplace scheme over charges while an employer match is on the table — the match comes first, and the charge question applies to what happens after you leave.
Shows: the effect of a charge difference on a pot contributed to over a working life. Ignores: transaction costs, contribution increases, inflation, and any employer match.
On the defaults above, the worked example shows £29,529. A 0.5 point difference costs £29,529 across 30 years of contributions.
Source: Workplace pensions
The 0.75% cap reassures people more than it should, because it applies to the default fund of a qualifying scheme and nothing else. Move into a fund you picked yourself and you are outside it. Leave the employer and the charge can change. Two things to do: find the costs and charges disclosure on your annual statement — it is a specific number, not a range — and check what happens to the charge when you become a deferred member. And do not leave a scheme with an employer match over a charge difference; the match is worth far more than the fee.
FAQ
Is my pension charge capped at 0.75%?
Only if you are in the default fund of a qualifying auto-enrolment scheme. Funds you have selected yourself are outside the cap, as are transaction costs incurred inside the fund, which are disclosed separately.
Where do I find what I actually pay?
The costs and charges disclosure on your annual statement, and the scheme's chair's statement on value for members. Both give specific figures rather than the ranges quoted in general guidance.
Should I move my pension to a cheaper provider?
Not while an employer match is on the table — the match is worth far more than any charge difference. The question applies to deferred pots and to money you have already left behind, where nothing is being contributed.
Sources
Regulator references
- Automatic enrolment detailed guidance · The Pensions Regulator · 2025The regulator's detailed guidance behind the summary rules.Last verified: 2026-09-07
- The Pensions Regulator: employers · The Pensions Regulator · 2025The duties an employer owes, which set the floor on any negotiation.Last verified: 2026-09-07
- Workplace pensions · GOV.UK · 2025The statutory auto-enrolment framework and who it covers.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.