Compare the total cost for your likely behaviour, using consistent assumptions.
Separate the layers
A fund may deduct an ongoing charge. A platform may add its own fee. Buying or selling can add commission, a bid–ask spread and currency conversion. Advice or optional research subscriptions can create further costs.
A claim of zero commission does not answer every cost question. Read the current fee schedule, the fund documents and the order details. Some costs are taken inside an investment rather than shown as a separate bill.
Translate percentages into money
One per cent of £10,000 is £100 over a year before changes in the balance. A fixed fee has a different impact on a small account than a large one. Trading frequently can make per-order and currency costs more important.
Use the same assumed balance, contribution pattern, number of orders and currency mix when comparing providers. Include any relevant exit, transfer or inactivity charge in the scenario.
Keep the projection honest
Costs reduce the amount left invested. Their effect can compound, but a fixed return assumption is only a scenario: real returns vary and can be negative. Tax treatment depends on the account and your circumstances.
A lower fee does not remove investment risk or settle questions about service, custody, available assets and permissions. Compare those features separately from a promotional headline.
Put the numbers to work
Illustrative GBP calculations with visible assumptions. These calculators run on this page and do not save your inputs.
The cost of annual fees
Compare two constant annual fee rates under the same hypothetical gross return.
- Balance after fee A
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- Balance after fee B
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- Difference (A − B)
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- Balance before either fee
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Formula & assumptions
Final balance = starting amount × [(1 + gross return ÷ 100) × (1 − annual fee ÷ 100)] raised to the number of years. Each fee is applied to the balance after that year’s assumed growth.
One starting payment, no contributions or withdrawals. Returns and fees stay constant. Taxes, inflation, spreads, transaction charges and platform charges are excluded. Actual returns vary and can be negative; this is an illustration, not a forecast or product comparison.
Test two fee scenarios
Start with a hypothetical £10,000 and the same assumed 5% gross annual return for 20 years. Compare a simplified 0.2% annual fee with 1%. Record what the model excludes: changing returns, taxes, dealing, contributions and withdrawals. Do not treat either result as a forecast.
Terms in this guide
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Educational notes, not personalised financial advice. Hypothetical examples and chart shapes are not performance claims or trading signals.