The short answer

Long-term savings plans usually carry several layers of charge: set-up or establishment charges, ongoing administration and policy fees, fund charges, adviser fees, currency conversion costs and exit charges if you leave early. Each looks small, but they add up and compound. The one number that matters is the total yearly cost of everything, which you should ask for in writing — as a percentage and in pounds, over the full term — together with what you'd get back if you stopped early. A competitive plan isn't always the cheapest, but you should always know exactly what you're paying and why. Lawrence will check what your plan costs, free.

Why small percentages become big numbers

Charges matter for the same reason investing works: compounding. When your savings grow, the growth earns more growth. When a charge is taken, it removes not just that money but everything it would have earned in every following year.

Think of it as a reduction in your growth rate. If your investments grow 8% a year before costs and you pay 2% a year in total charges, your money grows at 6%. That 2% doesn't sound like much against 8% — but it's a quarter of your return, every year, for as long as you hold the plan.

The chart at the top of this page shows what it means in practice. £500 a month for twenty years is £120,000 paid in. At total costs of 0.6% a year, it could grow to about £273,000. At 1.2%, about £254,000. At 2.0%, about £231,000. At 2.8%, about £210,000. Same saver, same investments, same markets — a gap of more than £63,000, decided entirely by cost.

The layers of charge, one by one

Not every plan has every layer, but these are the charges to look for. The total of all of them is what matters.

Ask for the total of every layer as one yearly percentage — and in pounds for your actual savings.

Establishment and initial charges: the big one

On many international regular-premium plans, the largest single charge is the establishment charge (sometimes called an initial charge or a charge on "initial units"). It pays for the plan's set-up, including the adviser's commission, which is usually paid up front by the provider and recovered from you over time.

There are two common designs. In one widely used plan, payments made during the first 18 to 24 months buy "establishment units", which carry an extra charge of 0.5% a month for the rest of the payment term. In another offshore scheme analysed by Creveling & Creveling, an establishment charge of 1.6% a year for five years applied to each premium — equal to 8% of everything paid in.

Because establishment charges are front-loaded, they're the reason early exit is so expensive: if you stop, the provider recovers the charges it hasn't yet collected.

What an establishment charge can do over 20 years

An illustration: a 20-year plan at £500 a month. The first 24 payments (£12,000) buy establishment units. Growth of 8% a year before charges.

Illustration of the structure only. Many plans add bonus units and loyalty bonuses that offset part of this cost — ask for the plan's own illustration showing the full effect.

What that means for you

The example shows why it's so important to understand how a plan is structured before you sign. A high monthly payment in the first two years means a large amount of money in the most heavily charged units, for the whole term. Some practical consequences follow:

• Start at a payment you can sustain — and increase it later, often with top-ups that avoid the establishment charge.
• Consider a shorter term if the establishment charge applies for the whole term.
• Count the bonuses — many plans add bonus units that offset part of the charge.
• Ask for the plan's own illustration, showing the total effect of charges year by year.

Ongoing charges: administration, policy and platform fees

Most plans also have ongoing charges that apply for as long as the plan exists. They usually come in two forms.

Percentage charges

An administration or management charge taken as a percentage of the plan's value — for example 0.125% a month, which is 1.5% a year. Because it's a percentage, it grows as your plan grows: on a £200,000 plan, 1.5% a year is £3,000 a year.

Fixed fees

A policy or servicing fee taken as a fixed amount — for example £7 a month. Fixed fees bite hardest on small plans: £84 a year is 4.2% of a £2,000 plan, but only 0.04% of a £200,000 one.

Investment platforms may charge a separate custody or platform fee instead, typically as a percentage of the assets you hold. Whichever structure applies, convert it into an annual percentage of a typical plan value so you can compare like with like.

Where to start

Someone to work out what your plan really costs, and two ways to cut the currency cost of funding it.

Fund charges: the layer inside the price

On top of the plan's own charges, every fund you invest in has its own ongoing charge — the cost of managing the fund, taken out of the fund's price before you ever see it. You don't get a bill; the fund simply grows a little more slowly.

Fund charges vary enormously. A low-cost index fund or exchange-traded fund tracking a broad market might charge 0.1% to 0.3% a year. An actively managed fund might charge 0.75% to 1.5% or more, and some add performance fees. In the offshore scheme analysed by Creveling & Creveling, fund charges ran up to 3.35% a year, typically 1.5% to 2% — compared with around 0.25% for a diversified low-cost portfolio of exchange-traded funds.

Because fund charges sit inside the plan's charges, they're easy to overlook. A plan with a 1.5% administration charge invested in funds charging 1.5% costs 3% a year before any adviser fee. When you add up costs, always include the funds.

• Ask for each fund's ongoing charge and whether there are performance fees.
• Compare with a low-cost alternative investing in the same markets.
• Check whether the plan uses "mirror" funds — versions of external funds that can carry extra charges.
• Review your fund choices at least every year or two.

Adviser fees: how advice is paid for

Good advice has value — choosing the right plan, the right term, the right currency and the right investments, and keeping you invested through bad markets can be worth far more than it costs. But you should always know how your adviser is paid and what it costs you.

There are three common models. Commission, paid by the provider and recovered through the plan's charges — often through the establishment charge. An initial fee, agreed with you and paid either directly or from the investment. And an ongoing fee, usually a percentage of your plan each year, for continuing reviews and service. Some arrangements combine them.

None of these is wrong in itself. What matters is that it's clear, agreed in advance and good value for what you receive.

• How are you paid — commission, fees or both?
• How much, in pounds, for my plan, now and over the full term?
• What do I get for any ongoing fee?
• Can I stop the ongoing fee if I no longer want the service?

Currency costs and exit charges

Currency conversion

For expats, there's an extra layer most domestic savers never pay: converting money between currencies. If your contributions start in baht and your plan is in pounds, every payment is converted. High-street banks' margins have been reported at about 1% to 3.55%. On regular contributions, that's a charge on every penny you save before it's even invested. Our guide to investment contributions in multiple currencies explains how to keep it low.

Exit and surrender charges

Exit charges only apply if you leave early — but on plans with establishment charges, they can be large, because the provider recovers the charges it hasn't yet collected. The amount usually falls as the plan gets closer to the end of its term. Always ask what you'd get back after one, three and five years, and never surrender a plan without checking whether pausing or reducing payments would be better.

Working out your total yearly cost

To compare plans — or check your own — bring every layer together into one yearly figure. You can do a rough version yourself:

1. Find the plan's percentage charges and convert them to yearly figures (0.125% a month is 1.5% a year).
2. Turn fixed fees into a percentage of your plan's typical value.
3. Add the ongoing charge of each fund, weighted by how much you hold in it.
4. Add any ongoing adviser or platform fee.
5. Spread the establishment or initial charge over the years it applies.
6. Add your currency conversion margin if your contributions convert.

The result is your total yearly cost. As a rough guide, a low-cost, do-it-yourself portfolio might cost well under 1% a year; an advised plan with good funds might cost somewhat more; anything approaching 3% a year deserves a very close look. Many providers also publish a key information document or illustration that shows the effect of charges over time — ask for it.

Charges on lump-sum investments and bonds

Charges work a little differently when you invest a lump sum rather than saving monthly — but the same principles apply.

With a single-premium investment bond or a lump sum invested on a platform, there may be an initial charge or adviser fee when you invest, an ongoing administration or platform charge, the fund charges and, on some bonds, an early-exit charge for the first few years. Because the whole amount is invested from day one, the ongoing percentage charges matter most: on £200,000, every 1% a year is £2,000 a year, rising as the investment grows.

Our guide to lump-sum investment planning for expats covers how to plan a lump sum as a whole. When it comes to cost, ask the same questions: the total yearly cost, any initial charge, any exit charge and how long it lasts, and how the adviser is paid.

A yearly charges check-up

Charges aren't a one-off decision. Funds change their fees, plans grow until fixed fees no longer matter and percentage fees matter more, and better options appear. Once a year — many people use their visa extension as a reminder — run through this quick check:

• Find this year's statement and note the plan value and charges taken.
• Check each fund's ongoing charge — have any gone up?
• Check you're still receiving the service any ongoing fee pays for.
• Check when exit charges end — your options may have widened.
• Check your currency route — are contributions converting at a good rate?
• Compare your total cost with a low-cost alternative for the same goal.

If any answer surprises you, that's the moment for a review — before another year of charges compounds.

When higher costs can be worth paying

Lowest cost isn't always best value. Some things are genuinely worth paying for — if you actually use them:

• Discipline. A plan that keeps you saving every month for twenty years can beat a cheaper account you stop using.
• Portability. A plan that follows you from country to country, in your chosen currency.
• Estate planning. A plan that can be placed in trust for your family.
• Advice and behaviour. Someone who stops you selling in a panic after a market fall.

The test is simple: you should know what you're paying, what you're getting for it, and whether you could get the same for less. If you can't answer all three, it's time for a review.

Two worked examples

Peter: "I thought it cost 1%"

Peter, 49, lives in Pattaya and pays £600 a month into a 20-year plan he took out in Hong Kong. He believed it cost "about 1%". A free review with Lawrence finds an administration charge of 1.5% a year, a monthly policy fee, funds averaging 1.6% a year, and a 2.5% bank margin on every baht-to-pound conversion. His real total, including currency, is close to 3.5% a year. Lawrence helps him switch to lower-cost funds within the plan and move his monthly conversions to a cheaper route — cutting his yearly cost by well over a percentage point without cashing in.

Nicky and Somchai: choosing a new plan

Nicky and Somchai want to save £400 a month for their daughter's education. Before choosing, they ask every option the same questions: total yearly cost in pounds, surrender values at years one, three and five, fund charges, and how the adviser is paid. With the answers side by side, they pick a plan whose total cost they understand, with low-cost funds and a term matched exactly to when their daughter will start university.

The mistakes we see most often

1. Knowing one charge, not the total.
2. Forgetting fund charges inside the plan's charges.
3. Ignoring currency conversion on every contribution.
4. Starting with a payment that's too high, filling the most heavily charged units.
5. Never asking for surrender values before signing.
6. Cashing in to escape charges and paying a large exit charge instead.
7. Paying an ongoing fee for a service you never receive.
8. Never reviewing the funds inside a plan.

Questions that get a straight answer

• What is the total yearly cost of this plan, as one percentage?
• What is that in pounds for my payments, over the full term?
• What would I get back if I stopped after one, three and five years?
• What are the fund charges, and are there performance fees?
• How are you paid, and is there an ongoing fee?
• Can I see the illustration showing the effect of all charges over time?

Keeping your plan secure

Long-term plans are managed online for many years, often from different countries. A few habits keep them safe:

• Use a password manager and a different strong password for every account.
• Turn on two-factor sign-in on your plan and bank accounts.
• Use a private, protected connection on hotel, café and condo Wi-Fi.
• Be wary of unexpected calls offering to "release" or "transfer" your plan.

How we researched this guide

We used the published charges of the RL360 Regular Savings Plan (GBP brochure RS19b 01/24) as an example of plan structure; Creveling & Creveling's analysis of an offshore insurance-linked investment scheme for examples of establishment, administration and fund charges; and Wise's August 2026 review of UK bank exchange margins. The cost illustrations assume £500 a month for 20 years with growth of 8% a year before charges and are illustrations, not forecasts. Checked 13 October 2026. Investment growth isn't guaranteed and values can fall as well as rise. This guide is general information, not personal financial advice.