Paul Lewis
speaker
150 appearances
6 recordings
1 series
first heard Apr 2011
last heard Jan 2015
Paul Lewis’s voice in public audio — every appearance, attributed to the second.
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Appearances
Yes.
Geoff, can I say first, I think there's something you've perhaps misunderstood, if you'll forgive me.
These charges don't just come off your money once.
They come off every year.
And that means that when you pay in your £1,200 in year one, you'll see...
I've got a spreadsheet here which explains it all.
You've got £1,200 going in.
1.5% of that is £18, which comes off.
Then you get growth on your fund because it's invested.
And at the end of the year, on these assumptions, which I'll explain in a minute, you've got £1,276 in your fund.
So that's carried forward to the next year and you pay in another £1,200.
But the 1.5% charge doesn't just come off the money from the next year, it comes off the first year's money as well.
So if you're in a fund for 46 years, which is the assumption here, then you're going to find that that first year's contribution and the growth on it are taxed, if you like, by this charge 46 times.
So in other words, that first contribution, 46 times 1.5%, is 69% of your money will disappear in charges.
Yes, a lot of it has gone in charges.
And what this spreadsheet does, by showing you that, and I've set it up to compare 1.5% charges here and 3.25% there, so that's half as big.
Now, you see, at the end of year one, it makes almost no difference.
Your charges are just £9 difference.
But as we scroll down, we find this quite extraordinary thing.
And they assume that you're going to work for 46 years, so age 25 to, say, 71.
Showing 61–80 of 150 · page 4 of 8
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