Stakeholder Pension
Stakeholder Pensions
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.
Stakeholder pension schemes are intended to be flexible and easy to understand.
Stakeholder pension plans are privately managed and funded but must operate within a standard framework laid down by the Government.
They are very similar to Personal Pension plans in that they are individual pension arrangements, meaning that they are personal and portable - you can take them with you if you change jobs.
Following the recent sweeping changes made on the 6th April 2006 to pension legislation 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. Contributions being paid net of basic rate tax.
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. Howewer they may have a limited fund range.
We have the technology to research the Whole market on your behalf to find out if a Stakeholder Pension plan is suitable for you.