The Cost of Pensionfriend’s Pension Plan Explained

In this article, we will focus on explaining the costs. Not only our costs, and why we opted for a very simple fee based on the size of your assets, but also why alternative cost structures with upfront, exit and hidden fees can be so detrimental for your pension.
Dr. Chris Mulder

Dr. Chris is a former Senior Economist and Manager at the IMF and The World Bank. He is a Hypofriend Co-founder.

Published on Aug 18, 2023 Published on Aug 18, 2023 . Updated a month ago

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Dr. Chris is a former Senior Economist and Manager at the IMF and The World Bank. He is a Hypofriend Co-founder.

German pension plans have great benefits but:

  • These benefits can be undermined by high cost. The Median cost of German pension plans are 2 to 3 % per year if held till the end.
  • Some costs can have far greater impact than appears at face value. Notably, upfront costs can be highly damaging and regularly amount to 20 % annually and more when you cancel the policy early.
  • Costs can also be very intransparent in German pension plans. They are often hidden in the fund costs in the form of management fees.
  • To set us apart, we designed Pensionfriend to be simple and low cost:

  • Pensionfriend's costs are limited to 0,49% - 0,79 % of the assets under management plus ETF costs. This is among the lowest costs of all German pension plans but comes with the most benefits, including regular reporting and control through our digital app.
  • At Pensionfriend we charge no upfront fees and no exit fees. As mentioned above, we only charge a simple percentage of assets. This means our interests are aligned, as we only gain when you gain.
  • At Pensionfriend we only use ETFs without hidden fund management costs. Moreover, we select ETFs that reliably outperform the index that they seek to follow.