Workplace pension charges on an auto-enrolment default fund are capped by law at 0.75% a year when the only charge is a percentage of your pot.
That cap is narrower than it sounds. It covers one fund, one kind of charge and a defined list of costs, and the rule behind it depends on whether your employer's scheme is run by trustees or is a contract with a provider. Wondering how your own scheme's charges measure up? Fill the form on this page in, and on a free call an FCA-authorised adviser sets your fees against the cap.
What does a workplace pension charge for?
On the default fund, the law permits only two ways of charging you. One is a single charge worked out solely from the value of your pot. The other is a combination: a charge on the pot plus either a percentage of each contribution or a flat fee set by time rather than by contributions or pot size (SI 2015/879, regulation 5). The FCA's rules for workplace personal pensions use the same two shapes. Buying, selling, lending or borrowing investments has its own cost, which the regulations call transaction costs. The everyday names for charges, and how providers differ, are in pension charges and fees; this page is about the legal limits.
Is there a cap on workplace pension charges?
Yes, on the default fund. For a scheme run by trustees, SI 2015/879, the Occupational Pension Schemes (Charges and Governance) Regulations 2015, sets the ceiling at 0.75% of the value of your rights in the default arrangement for each charges year, where the only charge is a single, pot-based one.
The default arrangement is where contributions go for workers who "have not expressed a choice" about where they are invested. Regulation 3 can also catch a fund members chose: one that, on the date the rules began to apply to the employer, took the contributions of 80% or more of contributing members after they were required to make a choice (with an exception where those workers were offered, and given, a move to a new default); and a newer arrangement that reaches the same 80% level. Regulation 4 applies the limits only to the value of your rights in a default arrangement, so a fund you picked yourself is generally outside them. The scheme can confirm which yours is, and choosing where your pension is invested explains the choice.
The cap limits charges, not what goes in. Minimum contribution rates, and whether an employer's payments are limited, are on the workplace pension minimum.
Trust-based or contract-based: which rule applies to your scheme?
The 0.75% figure appears in two separate places, and which one binds your scheme depends on its legal form.
- A trust-based scheme (an occupational scheme with trustees or managers) is bound by regulation 6 of SI 2015/879.
- A contract-based scheme is bound by the FCA's rulebook. The FCA calls it a qualifying scheme: a personal pension or stakeholder pension providing money purchase benefits that an employer uses to meet its automatic enrolment duties under the Pensions Act 2008. COBS 19.6.1R applies the charge rules to whoever operates one, and COBS 19.6.6R holds a scheme that charges only on the value of the pot to 0.75% of that value.
Your scheme documents should show which kind you are in. How a stakeholder plan differs from other personal pensions is on stakeholder pension vs personal pension, and the separate, older stakeholder limits are on stakeholder pension charges.
Mixed charges: a contribution charge or a flat fee
A scheme may pair a yearly percentage of the pot with one other charge, and the limit on the pot-based part then drops. The trust-based and FCA tables carry identical figures. Regulation 5 adds that neither the structure, nor the type of combination, "may be changed during a charges year".
| If the scheme also charges | That extra charge is limited to | The charge on the pot is then limited to |
|---|---|---|
| A percentage of each contribution, of 1% or lower | 2.5% of contributions a year at most | 0.6% a year |
| A percentage of each contribution, above 1% up to 2% | as above | 0.5% a year |
| A percentage of each contribution, above 2% up to 2.5% | as above | 0.4% a year |
| A flat fee of £10 or less a year | £25 a year at most | 0.6% a year |
| A flat fee of more than £10 up to £20 | as above | 0.5% a year |
| A flat fee of more than £20 up to £25 | as above | 0.4% a year |
The figures are in regulation 6(3) and (4) for trust-based schemes and in COBS 19.6.6R and 19.6.7R for contract-based ones. For a trust-based scheme, a flat fee may be taken only where the member's rights in the default arrangement are worth more than £100, and only so far as it does not take them below £100 (regulation 6(5) and (6)). For contract-based schemes, COBS 19.6.8E, which is FCA guidance on complying (an evidential provision, not a rule in its own right), says total administration charges should not exceed the limit when measured over a 12-month period.
What the cap does not cover
Four things sit outside the headline limit, and each is worth asking about.
- Transaction costs. SI 2015/879 leaves the costs of buying, selling, lending or borrowing investments out of the charges it limits, along with winding-up costs, costs solely associated with death benefits and some others. The FCA's glossary does the same for its cap, leaving out of an administration charge any costs "incurred directly as a result of buying, selling, lending or borrowing investments". So a default fund can be inside the cap and still carry dealing costs.
- Funds you chose. The limits follow the default arrangement, as above.
- Guaranteed benefits. COBS 19.6.2R lifts the FCA's restrictions from a default arrangement whose benefits involve, or involve an option to have, a promise from a third party about their rate or amount. For trust-based schemes, regulation 3 says an arrangement providing for such a promise about the level of benefit is not a default arrangement at all, and nor is one providing only benefits from additional voluntary contributions.
- Services you agree to. A trust-based scheme may charge above the limits for advice or a service you have agreed to, if the agreement is in writing, made before the charges, and states that agreeing is not a condition of joining or staying in the scheme or of your money going into the default arrangement, and that the charges, at a stated rate or amount, may be higher than the rules otherwise allow (regulation 9). The FCA route needs your express agreement, including an acknowledgement that the charge is likely to exceed the limits, and agreeing must not be a condition of membership (COBS 19.6.4R). Neither route covers a service the provider must supply by law, or a core service such as investing contributions.
Paying advisers out of your pot
Where a trust-based scheme is used by at least one employer for automatic enrolment, and you work or worked for such an employer, regulation 11A of SI 2015/879 bars a charge on you that is used "directly or indirectly, to pay an adviser", or to reimburse the service provider for paying one. An adviser here means someone giving advice or a service to your employer or to you. Two services are exempt: "a service relating to the administration of employee remuneration including tax deductions", and technology that lets the provider's and the employer's computer systems work together.
The FCA's rule for contract-based schemes is wider. COBS 19.6.9R stops a firm making any administration charge or payment, or giving any non-monetary benefit, for a third party's service connected with the scheme where that would reduce the value of a member's pot, unless that member has given express agreement. The FCA's definition of an administration charge also covers a charge levied "to pay commission", so a charge used that way is one of the charges the cap limits.
How to find your scheme's charges
Trust-based. Regulation 23 of the Occupational Pension Schemes (Scheme Administration) Regulations 1996 requires the trustees or managers to prepare an annual statement regarding governance within seven months of the end of each scheme year, signed by the chair. It must state the level of charges and transaction costs for each default arrangement and for each fund that members can or could select and that holds members' money, and give an illustrative example of the cumulative effect of those charges and costs on a member's pot. Any transaction cost information the trustees cannot obtain must be flagged, with the steps being taken to get it.
Contract-based. Where a provider runs a scheme with at least two relevant policyholders, COBS 19.5.13R requires its charges and transaction cost information to be published by 30 September each year for the previous calendar year, "available for free on a publicly accessible website", covering each default arrangement and each alternative fund a member can select, with an illustration of the compounding effect of charges and costs. Transaction cost figures are required only so far as the information is available, and the published information should warn about anything missing (COBS 19.5.14R). The annual communication to members must briefly describe the latest published figures and give a link to that website (COBS 19.5.17R).
Then set the figure beside the limits above. A percentage-only charge on the default fund above 0.75%, or a mix outside the table, is a question to put to the scheme. Charges are only part of the picture: the value of investments can fall as well as rise, so you may get back less than was paid in. If you hold several pots and would like their charges weighed against each other, give this page's form a minute: an FCA-authorised adviser can line the fees up for you on a free call.
Workplace pension charges in brief
Is the 0.75% charge cap on my whole pension?
No. It applies to the part of your pot in a default arrangement, and only to the charges the rules define. Transaction costs, and funds you chose yourself, sit outside it.
Can my workplace pension charge more than 0.75%?
Only within the rules above: a mixed structure inside the table, a charge for a service you have agreed to on the stated conditions, or an arrangement carrying a third-party promise about benefits. Otherwise a percentage-only charge on the default fund is held to 0.75% a year.
Can charges go up once I stop paying in?
For an FCA-regulated workplace scheme, COBS 19.6.11R bars higher administration charges for a member whose workplace contributions stopped on or after 6 April 2016 than for one still contributing. What happens to the pot itself when you leave a job is on leaving a workplace pension.
What does Nest or The People's Pension charge?
Their own charges are set out in Nest pension charges and The People's Pension fees and charges.
What are average workplace pension charges?
The rules set a ceiling rather than an average, so the useful comparison is your own scheme's figure against the limits on this page. Trust-based schemes state theirs in the annual governance statement, and contract-based schemes covered by COBS 19.5 publish theirs online each year.
Is a workplace pension worth having at these charges?
That wider question is answered at is a workplace pension worth it, which sets charges beside the scheme's other features.
Your scheme's charge figures, set beside any other pensions you hold, are a natural first topic for an FCA-authorised adviser to cover, on a free call booked by the form on this page.
Sources, accessed 22 October 2026: legislation.gov.uk, SI 2015/879 regulations 2, 3, 4, 5, 6, 9 and 11A, and SI 1996/1715 regulation 23; FCA Handbook, COBS 19.5 and 19.6, and the Glossary entries "administration charge" and "qualifying scheme".