What do Independent Financial Advisors (IFAs) charge for pension advice?
IFAs can charge for pension advice in several different ways. With some, the way they charge can change how much you pay over time.
Percentage-based annual fees
Many advisors take a percentage of your pension each year as a fee. This is often between 0.50% and 1.50% per year. For example, if your pension is £100,000 and the fee is 1.00%, you’d pay £1,000 a year. These fees can add up, especially as your pension grows.
Fixed annual fees
Some advisors charge the same amount every year no matter how big your pension is. This could be between £500 and £3,000 per year, depending on the type of pension(s) you have and the service you need.
One-off project fees
For certain advice, like transferring your pension or planning for retirement, IFAs might charge a one-time fee. This can be from £1,000 to £5,000 or more if it’s complex. You pay once for this advice and that’s it.
Hourly rates
Some IFAs charge by the hour. Rates usually range from £150 to £500 per hour, based on their experience and where they work. This can be a good option if you only need advice now and again.
Understanding ongoing advice costs
If you pay ongoing fees, you usually get:
- regular reviews of your pension plan (or fund);
- updates when pension rules change;
- help with planning your contributions;
- advice on how to take income in retirement; and
- access to your advisor throughout the year.
Ongoing advice can be useful if you have:
- a large pension pot (usually over £100,000);
- complicated pension arrangements, for example multiple different types;
- several pensions to keep track of; and
- life changes that affect your retirement plans.
The main question is whether the help you get is worth the yearly cost.
When one-off advice might be better
Pension transfer advice
If you want to transfer a defined benefit pension (also known as a ‘final salary’ pension), you’ll usually need professional advice from a qualified IFA. This is often charged as a one-time fee because it’s a big, complex decision. The advice can be costly but may be legally required if your pension is worth over £30,000.
Retirement planning
When you get close to retiring, you might want help deciding how to take out your pension money. A one-time advice session can explain your choices without needing ongoing fees.
Pension consolidation
If you want to combine several pension pots, an IFA can help you understand the pros and cons. This might be worth paying for just once instead of paying fees yearly.
What to watch out for with advisor fees
Commission-based advice
Some IFAs earn money from the products they recommend. This isn’t necessarily bad, but it might be worth asking how they get paid and if this might affect their advice. In particular, you might want to ask directly about any money they receive from specific providers for recommending their products.
Hidden charges
Ask for a clear list of costs. Some IFAs might charge extra for:
- setting up new pension arrangements;
- changing your investments;
- yearly admin fees; or
- leaving the plan early.
Percentage fees on large pensions
If you have a big pension pot, percentage fees can get very expensive. For example, a 1.00% fee on a £500,000 pension is £5,000 a year, which can seriously reduce your savings over time.
What are the alternatives to paying for independent financial advice?
Free pension guidance with Pension Wise
Before paying for advice, you might want to utilise any free resources available to you, such as Pension Wise. This government-backed service gives honest, impartial help if you’re over 50. They don’t recommend products or give financial advice. Instead, they explain your options and the tax implications when it comes to accessing your pension.
It’s completely free and unbiased and you can book an appointment through MoneyHelper.
Digital advice services
Some online platforms offer automated pension advice using computer tools for lower fees, usually 0.20% to 0.70% per year. These can be good if your pension situation is straightforward and you don’t need detailed planning advice.
Fee-only advisors
Some advisors charge just for their time and don’t get paid commissions from product sales. This can sometimes mean clearer advice since they don’t earn extra from recommending particular products.
Questions to ask potential IFAs
Before picking an IFA, here are a few things to consider asking.
1. About their fees:
- how do you charge for pension advice;
- what’s included in your ongoing fee;
- are there any extra costs I should know about; and
- how often will you review my pension?
2. About their qualifications:
- are you qualified to give pension advice;
- do you have special training in retirement planning; and
- are you regulated by the Financial Conduct Authority (FCA)?
3. About their approach:
- how will you figure out what’s best for my situation;
- what happens if I want to stop using your service; and
- can you give references from other clients?
Is pension advice worth the cost?
Getting professional pension advice can be helpful if:
- you’re making big decisions like transferring complex pensions or planning retirement income;
- you have lots of different pension plans to manage;
- you’re unsure about investment choices;
- you want ongoing support and peace of mind; or
- your pension pot is large and small improvements make a big difference.
You might not need ongoing advice if:
- your pension set-up is simple;
- you’re comfortable making investment choices;
- you like doing your own research; or
- you’re happy using online tools and resources.
Making the right choice for you
The key is finding a balance between cost and value. Think about how big your pension is, how complex your situation is, and how confident you feel about making financial decisions.
Remember, you’re never stuck with one person forever. You can change advisors or switch from ongoing advice to one-off help as your needs change. It might be worth starting with free guidance from Pension Wise to understand your options before paying for professional advice.
Support and guidance with PensionBee
At PensionBee, we provide educational resources and online tools to help you with your pension management. You can use our Pension Calculator to see how much your current savings could generate in retirement. If you’re approaching retirement, our Retirement hub has a wealth of resources to help you plan. Already in retirement? Use our Drawdown Calculator to help you plan your withdrawals.
If you’re a customer, you’ll have access to further resources in your online account (also known as your ‘BeeHive’). Plus a UK-based personal account manager (your ‘BeeKeeper’) to support you through sign up, transferring pensions and beyond.
Risk warning
When investing, your capital is at risk. Investments can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
Last edited: 23-09-2025
