Bureau of Wealth

Investment Fees Calculator

By the Bureau of Wealth team Updated

This calculator is general information, not financial advice. Check your own figures with the provider or a qualified adviser before acting on them.

Enter what you invest, a return before charges and two yearly charge levels to see how far apart the balances end up, and what each costs you in lost growth.

The ongoing charge plus any platform fee.

Check the highlighted fields to see your results.

What this calculator assumes

  • Each charge is a percentage of your balance taken every year, such as a fund's ongoing charges figure plus a platform fee. Fixed pound fees, dealing charges and advice paid as a one-off sum are not modelled.
  • The return before charges is the same every year. Actual returns vary and can be negative, so the balances show the gap charges create, not a forecast.
  • The charge is taken from the grown balance, so a 6% return with a 1% charge grows the pot by 4.94% a year, not 5%. Growth and charges are spread evenly across the months.
  • You pay in the same amount at the end of each month and make no withdrawals.
  • Tax is not included. Investments in an ISA or pension grow free of tax, while dividends and gains in a general investment account may be taxed.

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How the cost of a charge is worked out

A yearly charge does two kinds of damage. It removes money from your pot, and that money can no longer earn a return for the rest of the time you are invested. MoneyHelper warns that fees and charges can reduce your investment earnings, especially over longer periods.

The calculator runs three versions of your pot side by side: one with fee A, one with fee B and one with no charges at all. Each month, every version grows by its return after charges and then receives your payment. "Fee A costs you" is the gap between the no-charge balance and the fee A balance at the end, including the growth those charges would have earned. The headline figure is the gap between fee A and fee B.

A worked example

Say you start with £10,000, pay in £300 a month, earn 6% a year before charges and stay invested for 30 years. If your fund and platform charges add up to 1.2% a year, you end with £273,193. At 0.4% a year you end with £321,856, a difference of £48,662. You paid in £118,000 either way.

Compared with no charges at all, the 1.2% version costs you £76,596 and the 0.4% version £27,933. For a single lump sum of £100,000 growing at 4% for 20 years, a 1% charge leaves £179,213 and a 0.25% charge leaves £208,413.

Why the gap widens over time

Over 10 years, the first example shows a gap of £3,356 between the two charge levels. Over 30 years it is £48,662. The charge is taken from a pot that keeps growing, and every pound removed early would have compounded for decades. A difference that looks small on one year's statement matters a great deal for a pension or a long-term ISA.

Finding what you actually pay

For funds, MoneyHelper says the figure to look for is the ongoing charges figure, or OCF, shown in documents such as the Key Investor Information Document. The OCF includes the annual management charge and the other expenses of running the fund. MoneyHelper also notes that fees vary by fund, product and provider and are not always easy to spot.

If you use an investment platform, add its yearly fee to the OCF. Some providers charge a fixed amount instead of a percentage, which this calculator does not model, so convert it to a percentage of your pot as a rough guide. The FCA expects platforms to show total costs as both a cash amount and a percentage, with a breakdown, before you invest. If you pay a financial adviser an ongoing fee, include that too, and check it against the value of the service.

Related calculators

To see growth without charges in more detail, with a year-by-year table, use the compound interest calculator. To measure what an investment you already hold has returned after costs, try the ROI calculator.

Frequently asked questions

What is the ongoing charges figure?

The OCF is the yearly cost of running a fund, shown as a percentage. It includes the annual management charge and other fund expenses, and it is taken from the fund rather than billed to you.

Do I pay platform fees on top of the OCF?

Usually, yes. The OCF covers the fund, while the platform charges separately for holding your investments in an ISA, pension or general account. Add the two together for a fair comparison.

Why is the cost bigger than the charges I actually paid?

The calculator also counts the growth that money would have earned if it had stayed invested. Over long periods that lost growth is usually the larger part of the cost.

Does this include dealing charges?

No. It only models ongoing charges taken as a yearly percentage of your pot. Charges each time you buy or sell reduce your balance too, so check your platform's charges page.

Is a cheaper fund always better?

Not always. Two funds can invest in quite different ways, so compare what each one holds and the risk it takes. For similar funds, though, a lower charge leaves more of the return with you.

Sources

Figures come from institutions millions of people rely on. How we keep calculators accurate.