Costs and charges

All pension plans come with costs and charges. It's important to be aware of all the costs and charges that can impact your plan

Please choose the type of pension policy you have

To make sure we give you the right information please choose the type of pension policy you have.

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Fund transaction costs

Transaction costs occur when a fund's manager buys or sells underlying assets in the fund. They do this to try and meet the fund's objective. Transaction costs aren't charges - they're the inevitable costs that happen when buying or selling assets, such as:

broker commissions
foreign exchange costs
stamp duty

It can also include "opportunity costs" based on the timing of a trade in the market. Opportunity costs can be either positive (cost to the fund) or negative (gain to the fund) depending on market movement and timing.

: What are fund transaction costs?

Fund transaction costs can be a quite tricky concept to get your head around so another way of thinking about them is to consider a comparison with something we can all relate to, like going out to eat.

When you go to a restaurant, the price you pay for your meal covers the cost of running the building plus buying ingredients and paying the chefs and waiting staff. In pension terms, this is like the Total Annual Fund Charge we explained above.

But when you go out to eat there are also other incidental costs that are separate to your bill at the end of the night. For example, is it best to eat early when you've got more chance of a good table and getting your food quickly, or go later on when it will probably be busier? Do you jump in the car costing fuel and perhaps parking charges, or do you accept a slower but cheaper option by taking the bus or walking? These can be thought of as the "transaction costs" involved in your meal out and the same kind of thing applies to investing.

Although you don’t usually include these costs when you think about what it costs to eat out, they are important to be aware of because they do have a financial impact.

Why we’re telling you about transaction costs

We want to make you aware of fund transaction costs associated with investment in pension funds, so you’re fully informed of all costs and charges that impact your plan. Although we don’t profit from fund transaction costs as these are paid to external parties, it’s important to be aware of them because they ultimately reduce what you get back from your pension savings.

To make it easier to compare charges between providers, we don’t include fund transaction costs in our charges. After all, when you go out to eat, the restaurant doesn’t include the cost of getting there in the price of your meal.

Do all funds have transaction costs?

Fund transaction costs will apply wherever you invest your money, whether it’s in a Pension, ISA or other Investment Product. Our pension plans are no different which is why transaction costs will sometimes be incurred by the fund(s) you invest in.

Transaction costs are already allowed for by the fund manager in the unit price of the fund before our Fund management charge is deducted. Standard Life does not make any money from Fund transaction costs as these are not a charge we take.

How much will my transaction costs be?

We can’t say in advance what Fund transaction costs will be because they depend on how often and when the fund manager decides to buy or sell assets. This in turn depends on market conditions and how the outlook changes for different assets.

However, in order to be as transparent as possible we will start to show you what the amount of Fund transaction costs has been over the last year in your annual statement.

What next?

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If you're an existing Standard Life customer you can login to see up to date information on the charges associated with your plan.

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If you're new to Standard Life we can help you set up a pension plan online. All charges will be clearly explained upfront.

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