Stakeholder Pensions
A Stakeholder pension is a form of low cost Personal pension aimed at encouraging those people who do not currently have pension provision to save for their retirement. They became available on 6th April 2001. They are not a form of state pension.
In order to reach as wide an audience as possible, Stakeholder pension schemes are intended to be flexible and easy to understand. Employers with 5 or more employees have had an obligation to provide their employees with access to a stakeholder pension scheme since 8th October 2001, although it is not compulsory to save for retirement with a Stakeholder Pension plan or any other savings related product.
Stakeholder pension plans are privately managed and funded but must operate within a standard framework laid down by the Government.
Stakeholder Pension plans are very similar to Personal Pension plans; they are individual pension arrangements, meaning that they are personal and portable - you can take them with you if you change jobs.
We can research the Whole market on your behalf to find a suitable Stakeholder Pension plan, it may be that a Stakeholder Pension plan meets your needs for retirement provision. Following the recent sweeping changes made on the 6th April 2006 to pension legislation (see section on Pension simplification) these contracts are very flexible and can allow contributions to be made of up to 100% of your earnings. Furthermore these plans can be set up for non-working spouses and even children and grandchildren where up to £3600 can be invested annually
An important aspect of the ‘no penalties’ rule in relation to these types of pension plan is that you don’t have to delay starting a plan until you find the right provider. You can start a plan straight away. If the provider doesn’t perform as well as you expect, you can simply take your fund and transfer it to another provider, without penalty. Another big plus for Stakeholder pensions is that providers must allow a minimum premium of £20. This provides much needed flexibility compared to other Pension contracts where minimum premiums may be higher; furthermore there is flexibility to stop and start contributions with unlimited frequency.
SEE: Stakeholder Summary
Stakeholder Pensions
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A Stakeholder pension is a low cost personal pension aimed at encouraging those people who do not currently have pension provision to save for their retirement. They became available on 6th April 2001 and are not a form of state pension.
To reach as wide an audience as possible, stakeholder schemes are intended to be flexible and easy to understand. Whilst employers with 5 or more employees have had an obligation to provide their employees with access to a stakeholder pension scheme since 8th October 2001, it is not compulsory to save for retirement with a stakeholder or any other savings related product.
Stakeholder pensions are privately run and funded but operate within a standards framework laid down by Government.
You can look at stakeholder pensions as a personal pension with limits on charges, similar to CAT standards that have been introduced for some ISAs and mortgages. CAT marks assure the charge limits and terms applied are, as far as the government considers, acceptable and fair. In the case of Stakeholder pensions this means that the complex series of charges and penalties previously found in personal pensions are replaced with a single transparent charging rule...
A single annual management charge of not more than 1% of the pension fund value!
And that’s not all, stakeholder plans are individual arrangements which means you can take them with you if you change jobs. You can even carry on contributing to them when you're not working because, in another change to pension rules, the government now allows you to contribute up to a maximum of £3,600 pa into a stakeholder or personal pension plan! No evidence of earnings, no minimum age. Furthermore, uniquely amongst pension plans, anyone under the age of seventy five can contribute to a stakeholder plan.
Who’s to stop you starting a stakeholder pension for your children?
An important repercussion of the ‘no penalties’ rule is that you don’t have to delay starting a plan until you find the right provider. You can start a plan straight away. If the provider doesn’t perform as well as you expect, you can simply take your fund and transfer it to another provider. No penalty!
Another big plus for stakeholder pensions is the fact that providers must allow a minimum investment of no more than £20. This provides much needed flexibility compared to personal pensions; for instance you could make one payment of £20 and if money is then suddenly tight, you can stop payments until such a time as you can afford them again, whenever that may be. No penalty.
More on Stakeholder
Summary of Stakeholder
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