Monzo Pension Fees

This document is about the fees you need to pay for a Monzo Pension (pension account), and the investment products we make available to you within your pension.

To help you understand what you’re paying and why, we’ve used some example calculations to show how the fees work. These are just examples, rather than an indication of the fees you’ll actually pay.

You pay fees to both us and the investment manager that makes the investment products you invest in. At the moment, the only investment products we offer in the Monzo Pension are managed by BlackRock.

We charge you fees for making pension accounts available to you, for arranging for you to buy and sell investments, and for the services we provide through the Monzo app. Our Pension Services Partner (Seccl) charges us for the pension scheme operation and administration services and investment dealing (that is, buying and selling investments on your behalf) it provides you in relation to your pension account. We take that cost into account when we set the fees for our services.

BlackRock charges you fees for managing the investments you choose. ‘Managing investments’ means taking steps to try and make a return on the money you’ve invested. For funds, this means trying to achieve each fund’s investment objective (for example to track the performance of an index or make a return on the money you and other investors have invested). You can see more information about each investment is managed in the key information documents in the app.

The Pension Services Partner may have to undertake certain bespoke actions for you from time to time (usually if you ask for them). This can include things like transferring your pension to an overseas pension scheme, asking for a valuation of your pension at a specific date, or effecting pension sharing orders if you get divorced.

The Pension Services Partner’s fees in these cases will reflect the time and cost it takes them to complete the actions. As long as the Pension Services Partner tells us, we’ll let you know what these fees are before you need to pay them.

Monzo fees

We charge a fee of 0.25% a year, or 0.20% if you subscribe to a plan that offers a lower fee on your pension in the terms. We apply this percentage to the value of investments and cash in your pension account. Our fee may not always apply to all accounts - for example, it may not be charged while you hold certain Monzo products. We'll tell you in your account or product terms if this applies to you (and you’ll also see this in the app).

Fees build up daily, and you’ll pay them each month. We work out the fees you need to pay for each day, add them up over the course of the month, and then charge the fees due for that month. We round the fees down to the nearest £0.01, and collect them on or around the 10th of each month.

We cap the fees we charge each month so that you’ll never pay more than £250 per year (if your annual fee is 0.25%) or £200 per year (if your annual fee is 0.20%). This cap applies across your investment and pension accounts with Monzo and means that if, on the date we collect your fees, your accrued fees exceed the cap, we won’t charge any more than the cap. If you upgrade to or cancel a subscription plan during the month, we will apply the fee rate (either 0.25% or 0.20%) which is applicable on the date we collect your fees (we don’t pro rata it over the previous month). We only look at the fees we’ve actually charged to calculate if the cap applies.

We take the fees automatically from your pension account each month - if there’s not enough cash in your account, we’ll sell just enough of your investments to generate cash to pay the fees. See more details in the terms and conditions.

BlackRock fees

BlackRock charges fees for managing the investment products you choose. BlackRock takes its fees out of the investment products you invest in. This means you won’t see these fees come out of your account, but they’ll reduce the value of the investment products you’re invested in instead. You’ll see the fees for each investment we offer in the app, and if you decide to invest, we’ll give you a document setting out the fees you’ll pay on your investment before you make it.

The fees you pay will depend on the funds you choose and our fees. For example, our fee may be lower if you subscribe to a plan that offers a lower fee on your pension in the terms or it may not be charged while you hold certain Monzo products.

Let’s assume you have less than £100,000 invested in your Monzo Investments and Monzo Pension accounts, and you pay an annual fee of 0.25% for all your accounts. If you invest in one of the Target Date funds (our default fund range for Monzo Pension), in total, you’ll pay 0.43% of the value of your pension account in fees. That’s our fees plus BlackRock’s fees. The fees you pay will reduce the value of your pension account. After you’ve paid £250 in fees over a year (or £200 if your annual fee is 0.20%), then your monthly fees will be capped.

To give you an idea of how this could look, let’s say you have £10,000 invested in the Target Date 2060 fund and your annual fee is 0.25%. If the investment value doesn’t change at all in that year, you’ll pay:

Alternatively, let’s say you have £110,000 invested in the Target Date 2060 fund. If the investment value doesn’t change at all in that year, you’ll pay:

We may offer accounts or plans with terms that mean you don’t pay a fee for Monzo Investments and/or Monzo Pension. When this happens, you’ll still pay BlackRock’s fees.

We’ve partnered with BlackRock to provide the investment products available to you.

BlackRock will work with us on our investments offering, including financially, to help enhance in-app experience and features like educational content.

Based on the number of customers we expect to use Monzo for investments during this partnership, we estimate BlackRock's contribution will be approximately £2.70 per year for each customer.

Generally speaking, it’s not intended that you’ll hold cash for any length of time in your pension account. However there may be circumstances where you do (for example it takes a little time for your investment instructions to complete). The Pension Service Provider may earn interest on cash balances held in your pension account and if it does, it will pay these to charity. If in the future, the Pension Service Provider decides to pay interest to you, we’ll let you know (along with details of the interest rate).

Any interest the Pension Service Provider pays would be accrued daily and paid monthly in the month immediately following that for which it was accrued. Interest would be calculated on cleared cash balances only.

Monzo Bank Limited, authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No. 730427). Registered in England. Registered No. 9446231. Registered Office: Broadwalk House, 5 Appold St, London, EC2A 2AG.

Seccl Custody Limited deals in investments, is the custodian of assets held on the platform and is the operator and administrator of Monzo Pension. It is authorised and regulated by the Financial Conduct Authority, Registration No. 793200 and registered in England and Wales No. 10430958. Registered office 20 Manvers Street, Bath BA1 1JW.

[1] We always round fees down to the nearest £0.01, so a fee of £24.955 becomes £24.95 - this means the amount you’re left with is £9,982 minus £24.95, which is £9,957.05.