What are the costs of pension investing?

Pension investing offers tax advantages, but what does it actually cost? The costs differ enormously between providers: from a few tenths of a per cent to more than one per cent per year, plus often hidden closing and deposit costs. For entrepreneurs and employees who want to build up a pension in a fiscally advantageous way, these costs make the difference between a comfortable pension and disappointing results. An apparently small difference in annual costs can amount to tens of thousands of euros over thirty years. We explain which costs pension investing entails and why Vive deliberately chooses transparent, low costs.

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Pension investing costs often opaque

The pension investing market has large differences in cost structures. Traditional insurers often charge management costs of between approximately 0.6% and 1% per year, plus additional costs that are only found in the small print. Some providers also charge closing costs and deposit costs per contribution on top of management costs. Online brokers seem cheaper but often charge transaction costs that increase with frequent trading. Banks present low percentages but add account costs, service costs, high fund costs, and exit costs. The lack of transparency makes comparison difficult and costs consumers millions annually in unnecessary costs.

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Why low costs make the difference

The effect of costs on your pension is systematically underestimated. Pension investing involves periods of decades in which small differences grow into large amounts. With an average return, the difference between, for example, 0.35% and 0.8% in costs can amount to tens of thousands of euros less pension over thirty years. That is money that you have invested but that goes to the provider instead of to your pension. For entrepreneurs who make maximum use of their annual allowance of €35,798 per year, this difference becomes even greater. Every tenth of a per cent in costs that you save is pure profit for your final capital.

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Hidden costs that hollow out your pension

Many providers work with hidden costs that obscure the real cost picture. Deposit costs seem small, but with a monthly deposit of €500, 0.50% deposit costs will cost you an extra €30 per year. Closing costs are presented as a one-off, but €45 to €100 is money that is not added to your pension. Transaction costs per investment order can increase if your portfolio is rebalanced. Exit costs make switching to a cheaper provider unattractive. Fund costs are often not mentioned but do affect your return. All these costs together can make the difference between a successful pension and a disappointing result.

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Vive chooses transparent, low costs

At Vive, we do things differently. For pension investing via our Solo package, we charge €7.50 per month plus a 0.35% management fee per year. In addition, there are fund costs of 0.13% to 0.19% that go directly to the funds. No closing costs, no deposit costs, no transaction costs, no exit costs. The total costs therefore amount to approximately 0.48% to 0.54% plus €7.50 per month, fully transparent in advance. With this cost structure, we are well below many traditional providers, while you still benefit from professional asset management. Everything is digital and transparent in our app, where you can follow your costs and return in real-time. For employers, we offer the same low rates via the Sponsor package.

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Why Vive is the smart choice

The pension investing costs at Vive are not only low but also fully transparent. Where other providers surprise you with extra costs, with Vive you know exactly where you stand: €7.50 per month plus the management fee and fund costs. Our digital approach saves overhead, which we pass on to you in the form of lower costs. With our modern app, you always have insight into your pension build-up without having to wait for an annual pension statement. We combine the low costs of an online broker with the service of an asset manager. For entrepreneurs and employers who want to approach pension investing intelligently, Vive is the logical choice: maximum return through minimum costs.

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