Vanguard set to launch the UK’s cheapest-ever pension fund

Good news for pension savers worried about charges – as all pension savers should be. Vanguard, the giant US asset management company, is set to launch the UK’s cheapest-ever pension fund.

Vanguard has been promising a new pension product for more than two years. But the long wait appears to have been worth it. The group’s self-invested personal pension (Sipp) will carry an annual fee of just 0.15%, with charges capped at £375. That’s less than half the cost of similar Sipps elsewhere.

Savers opening a Vanguard pension will have to pay additional charges on the underlying funds in which they invest, as well as transaction costs when buying and selling investments. But that’s true of other Sipps too and independent analysis suggests that for the typical saver, Vanguard’s new product will be the cheapest deal going.

Start your trial of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

Pension advisers expect the new plan to be popular, which should prompt rival providers to review their own charges. In which case, fees could drop across the board in 2020 – and if you already have a Sipp, it’s worth reviewing the market to see if you’re getting the best deal.