If you haven’t looked at your pension statement in a while, there’s a good chance you’re paying more in charges than you realise. I see it almost every week — a new client sits down with me here in the Algarve, we pull up their old UK pension, and somewhere between the fund charges, platform fees, and adviser costs they didn’t know they were still paying, thousands of pounds have quietly disappeared over the years.

The thing about pension charges is that they don’t arrive as a bill. Nobody sends you an invoice. They’re taken silently from your fund value, month after month, year after year — and because your pension might still be growing (thanks to the market), you never notice what you’ve lost. For UK expats in Portugal, this problem often runs deeper because old UK pensions can sit forgotten with providers charging fees that made sense in 2005 but look absurd in 2026.

This guide breaks down exactly where those hidden pension charges lurk, how much they could actually be costing you over time, and — most importantly — what you can do about it.

The Real Cost of “Just 1%” in Pension Charges

Let’s start with the maths, because this is where it gets genuinely eye-opening. Pension charges are usually expressed as a percentage — 0.5% here, 1.5% there. They sound tiny. But over 20 or 30 years of retirement, they compound dramatically.

Take a pension pot worth £300,000. If it grows at an average of 5% per year with total charges of 0.5%, after 20 years you’d have roughly £714,000. Now run the same scenario with total charges of 1.5% instead. After 20 years, you’d have around £572,000. That’s a difference of £142,000 — gone in charges alone. Not lost to bad investments or a market crash. Just fees.

The Financial Conduct Authority (FCA) has been banging this drum for years, and with good reason. Their research consistently shows that many pension holders have no clear idea what they’re actually paying. And if you’ve moved abroad and your pension is still sitting with a UK provider you haven’t spoken to in years, there’s a very real chance you’re on an old charging structure that’s well above what you’d pay if you set things up today.

I’m not saying this to scare anyone. I’m saying it because once you understand what you’re paying, you’re in a much better position to decide whether it’s worth it — and whether there are better options available to you.

Where the Hidden Charges Actually Hide

Pension charges aren’t one single fee. They’re typically made up of several layers, and that’s exactly why they’re so easy to miss. Here are the main ones to look out for.

Annual Management Charges (AMCs). This is the fee charged by the fund manager for actually managing your investments. It typically ranges from 0.1% for a basic index tracker fund to 1.5% or more for an actively managed fund. If you’re in several funds, each one will have its own AMC — and they can add up quickly. Some older funds carry AMCs of 1.5% to 2%, which is significantly higher than modern equivalents.

Platform or provider charges. This is the fee charged by the company that holds your pension — the “wrapper” that your investments sit inside. Providers like AJ Bell, Transact, Novia Global, and others all charge for this. Typical platform fees range from 0.15% to 0.45%, but older providers or legacy products can charge much more, sometimes with additional fixed fees on top.

Adviser charges. If you have a financial adviser (like me), there will usually be an ongoing advice fee. This should be transparent and agreed with you upfront. The issue isn’t adviser fees themselves — it’s when you’re paying an ongoing fee to an adviser who isn’t actually doing anything for you. I’ve seen clients still being charged 0.5% to 1% per year by an old UK adviser they haven’t heard from in five years. That’s not advice. That’s a subscription to nothing.

Transaction charges. Every time a fund buys or sells investments within your portfolio, there are dealing costs. These don’t always show up in the headline fee figure. The FCA now requires funds to disclose these separately, but they’re still easy to overlook. They can add another 0.1% to 0.5% per year depending on how actively the fund trades.

Exit and transfer penalties. Some older pension schemes charge you for leaving. These are less common with modern pensions, but if your pension dates back to the 1990s or early 2000s, there may be exit charges, market value reductions (MVRs) on with-profits funds, or penalties for transferring out before a certain date. Always check before making any moves.

The Expat Pension Problem: Out of Sight, Out of Mind

Here’s what makes this particularly relevant for UK expats in Portugal. When you move abroad, your UK pension doesn’t follow you — it stays with whatever provider you left it with. And unless you’ve actively reviewed it since moving, it’s probably still set up exactly as it was the day you left the UK.

That means you could be sitting on a pension with a provider that no longer matches your needs, invested in funds that were chosen years ago, paying charges that were competitive in 2010 but are now well above the market average.

I regularly meet expats in the Algarve who have two or three old UK workplace pensions scattered across different providers — a Prudential scheme from one job, an Aviva one from another, maybe a Scottish Widows policy from the early 2000s. Each one is quietly charging its own set of fees. None of them are being actively managed or reviewed. And because the statements (if they even arrive) get filed away or lost in the move abroad, nobody’s paying attention.

The combined drag of charges across multiple old pensions can be substantial. Consolidating them into a modern, cost-effective platform — whether that’s a SIPP with AJ Bell or an international arrangement through Novia Global — can dramatically reduce what you’re paying. But it’s not always straightforward, and there are important factors to weigh up (more on that below).

How to Find Out What You’re Actually Paying

This is the practical bit. If you want to know exactly what your pension is costing you, here’s where to look.

Step 1: Get your annual statement. Every UK pension provider is required to send you an annual statement. If you haven’t received one, contact them directly. If you’ve moved to Portugal and haven’t updated your address, your statements might be going to an old UK address. Your provider’s website should let you access them online or request a copy.

Step 2: Look for the “charges” or “costs and charges” section. Since the FCA introduced its costs and charges disclosure requirements, providers must give you a clear breakdown. Look for the total annual charge, which should combine the fund charges and platform fees. If you can’t find a clear number, that’s a red flag in itself.

Step 3: Check the fund factsheets. For each fund you’re invested in, there should be a factsheet available on the provider’s website. This will show the Ongoing Charges Figure (OCF), which includes the annual management charge plus any additional ongoing costs within the fund. The OCF is the number you want to compare.

Step 4: Ask about transaction costs. These sit outside the OCF and can be harder to find. Ask your provider directly or look for a separate “transaction costs” disclosure, which they’re now required to publish.

Step 5: Total it all up. Add your fund charges (OCF) + platform fee + any adviser fee + estimated transaction costs. That’s your real total annual cost. As a rough benchmark, if your total cost is above 1.5%, you’re almost certainly paying more than you need to. Many well-structured pension arrangements today come in at 0.7% to 1.2% all-in, including advice.

What You Can Do About It

Once you know what you’re paying, you’ve got options. Here are the main ones for UK expats in Portugal.

Switch to lower-cost funds. If your platform offers a range of funds, you may be able to switch from expensive actively managed funds to lower-cost index trackers or passive funds without leaving your current provider. This alone can save 0.5% to 1% per year. It’s often the simplest and quickest win.

Consolidate multiple pensions. If you’ve got pensions scattered across several old providers, bringing them together onto one modern platform can reduce your total charges and make everything easier to manage. Platforms like AJ Bell and Novia Global are commonly used for expats in Portugal because they’re designed to work with international clients and advisers.

Review your adviser arrangement. If you’re paying an ongoing advice fee, make sure you’re actually getting ongoing advice. A good adviser should be reviewing your portfolio regularly, keeping you updated on any changes that affect you (especially living abroad), and being available when you need them. If you’re paying but not receiving, it’s time to have that conversation.

Consider the tax implications. For expats in Portugal, any pension changes should be considered alongside your tax position. The UK-Portugal Double Taxation Agreement affects how your pension income is taxed, and depending on your residency status and whether you’re under the NHR regime, the most cost-effective structure might look different than it would for someone still in the UK. This is where professional advice really earns its fee.

Don’t rush into a transfer. While consolidating can save money, pension transfers need careful consideration. Some older pensions carry valuable guarantees — guaranteed annuity rates, protected tax-free cash above 25%, or defined benefit entitlements — that you’d lose by transferring. Always get proper advice before moving any pension. The FCA’s guidance on pension transfers is a useful starting point.

Frequently Asked Questions

What is a good total charge for a pension in 2026?

A well-structured pension arrangement in 2026 should cost between 0.7% and 1.2% per year in total, including fund charges, platform fees, and ongoing advice. If you’re paying more than 1.5% all-in, it’s worth investigating whether you could reduce costs without losing any valuable benefits.

Can I reduce my pension charges without transferring to a new provider?

Yes, often you can. Many providers offer a range of funds at different price points. Switching from actively managed funds to lower-cost index tracker funds within your existing pension can significantly reduce your annual charges without the complexity of a full transfer.

Are hidden pension charges the same as pension scams?

No. Hidden charges are legitimate fees that are disclosed somewhere in your documentation — they’re “hidden” in the sense that most people don’t notice them, not that they’re illegal. Pension scams, by contrast, involve fraudulent schemes designed to steal your money. If you’re contacted out of the blue about a pension opportunity, always check the FCA ScamSmart register before engaging.

Do UK pension charges apply differently if I live in Portugal?

The charges themselves are the same regardless of where you live. However, as an expat in Portugal, you may face additional considerations such as currency conversion costs if taking income in euros, and you might benefit from structures specifically designed for international clients that aren’t available to UK residents.

Should I consolidate all my old UK pensions into one?

It often makes sense, but not always. Consolidating reduces admin, usually lowers charges, and makes your retirement planning much simpler. However, some older pensions carry valuable guarantees or benefits that you’d lose by transferring. Every pension should be assessed individually before any decision is made.

What to Do Next

The first step is simply finding out what you’re paying. Pull up your pension statements, check the charges, and tot up the total. If the number surprises you — and in my experience, it usually does — that’s a sign it’s worth exploring your options.

If you’d like help reviewing your pension charges or understanding whether consolidation could work for you, get in touch with our team. We specialise in helping UK expats in Portugal make the most of their pensions and investments — and making sure you’re not paying more than you need to.

Matthew Renier is a Chartered Financial Adviser at Arthur Browns Wealth Management, based in the Algarve, Portugal. He has over 20 years of experience helping British expats manage their pensions and financial planning across borders.

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