UK DIY investment platform Interactive Investor is rolling out a self-invested personal pension (Sipp).
The Pension Builder will have a flat fee of £12.99 ($17.61, €15.40) a month with free monthly investing across the full range the company offers.
The charge will be the same for everyone regardless of the “size or composition of their investments”, Interactive Investor said.
The move follows research from Opinium which found that eight million adults in the UK are not aware pension administration costs exist, and that they can add up to thousands of pounds in the long term.
Break the mould
Richard Wilson, chief executive of Interactive Investor, said: “Our pension price was amazing before. Now, at only £12.99 a month to run your pension, it breaks the mould completely.
“We are proud to launch this low-cost, flat-fee Pension Builder. What you see is what you get – a transparent charge in pounds and pence that stays the same as your wealth grows.
“We’ve designed this product to make building your pension pot simple, straightforward, and ultimately – satisfying. You can take true ownership of your pension and help shape the retirement life you aspire to.”
Becky O’Connor, head of pensions and savings at Interactive Investor, added: “We know millions of people would like to boost their retirement pots because they are not currently on track to be able to give up work and have a good standard of living when they do. We also know more people are becoming more confident about managing their pension investments for themselves.
“The low flat fee on the Pension Builder means that cost savings you make compared to other platforms can contribute to your future instead. Over the years, the amount saved could add thousands of pounds to your retirement income. Many people in the UK do not get close to using up their annual allowance of £40,000 a year or up to their maximum level of earnings, so have plenty of room to go for it on pension contributions if they are prioritising retirement.”
Clients will be able to invest in funds, investment trusts, ETFs, and direct equities – UK, US and international shares across 17 global exchanges.
Trading costs for UK shares, ETFs, funds, investment truss and US share are of £7.99; with £19.99 for other international shares, and £0.99 for dividend reinvestment. For an extra £7 a month, clients can upgrade to have an Isa or trading account as well.
Before Pension Builder, customers would pay a monthly £10 Sipp fee and a £9.99 monthly subscription fee.
New clients will be able to have the first sic months subscriptions to Pension Builder for free, Interactive Investor said.
O’Connor added: “Pensions are probably the most important long-term saving you will make in your life – and paradoxically, they are often the most overlooked and misunderstood.
“Although it is great to see more people getting excited about investing – the biggest buzz usually surrounds the latest ‘hype.’ More conversations need to be had about meaningful, long-term savings, which the future ‘you’ will thank ‘you’ for.
“Many people are still unaware that a self-invested personal pension plan could be a great option for them. Sipps offer the same tax advantages as a standard pension, but you have added control over the investments made.”