Don't forget the fees: Devon pays £40m less than Stafforshire for the same pensions

When Keep it Simple, Stupid comes into its own.

The Financial Times looks into the murky world of public sector pension funds:

Neither Staffordshire nor Devon is exceptional; they are an interesting example because they appear similar. They are the same size: Devon had £2.68bn in March 2012, against £2.62bn for Staffordshire. They have a similar spread of assets in fixed income, equities and property, with a little money given to hedge fund managers. Both hold the same top three stocks (Royal Dutch Shell, Vodafone and HSBC) while three fund managers work for both counties. They follow the same public-sector procurement rules.

Yet Staffordshire paid £7.152m for fund management in 2011-12, while Devon paid £2.669m. And Staffordshire’s bill for administration came to £2.033m, while Devon paid £1.225m.

Over eight years, Staffordshire paid £38.2m more for an investment which returned 0.3 per cent less than Devon did. That's a pretty sizeable difference, and one which we'd ideally try to remove. Of course, the 0.3 per cent difference in returns isn't the sort of thing which you'd want to try and plan before-hand, because it could just as easily have been the other way round. But saving almost £40m for the same service is something which we generally want our local authorities to try to do.

The real point to all of this is that all too infrequently are management fees actually discussed in public. For many people – hopefully not the ones in charge of placing investments at councils, but certainly your average small investor – the only thing worth looking at is the annual rate of return. But management fees can alter that greatly, and unlike rate of return, they're something which can normally be known, and negotiated, in advance.

For pension funds, the lesson stops there. They're big enough, and competent enough, that so long as the client is negotiating well, they still offer the best chance of a good return. But for individual investors, putting a bit of money in an ISA for retirement, there's an even more basic piece of advice: you'll probably minimise your fees if you just get an index tracker. You might not get the best return (although you almost certainly won't get the worst), simplifying investments is an under-appreciated way to work.

Newton Abbot, Dorset, in 1955. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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New Digital Editor: Serena Kutchinsky

The New Statesman appoints Serena Kutchinsky as Digital Editor.

Serena Kutchinsky is to join the New Statesman as digital editor in September. She will lead the expansion of the New Statesman across a variety of digital platforms.

Serena has over a decade of experience working in digital media and is currently the digital editor of Newsweek Europe. Since she joined the title, traffic to the website has increased by almost 250 per cent. Previously, Serena was the digital editor of Prospect magazine and also the assistant digital editor of the Sunday Times - part of the team which launched the Sunday Times website and tablet editions.

Jason Cowley, New Statesman editor, said: “Serena joins us at a great time for the New Statesman, and, building on the excellent work of recent years, she has just the skills and experience we need to help lead the next stage of our expansion as a print-digital hybrid.”

Serena Kutchinsky said: “I am delighted to be joining the New Statesman team and to have the opportunity to drive forward its digital strategy. The website is already established as the home of free-thinking journalism online in the UK and I look forward to leading our expansion and growing the global readership of this historic title.

In June, the New Statesman website recorded record traffic figures when more than four million unique users read more than 27 million pages. The circulation of the weekly magazine is growing steadily and now stands at 33,400, the highest it has been since the early 1980s.