Stakeholder Pension Plan

• What is a Stakeholder Pension?
• Key Features of a Stakeholder Pension
• Is it the right option for you?

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What is a Stakeholder Pension?

Stakeholder pensions were introduced in April 2001 by the Government in order to encourage more people to save for retirement.

They are a type of low-charge pension with limited investment options.

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Key Features of a Stakeholder Pension

Stakeholder pensions must satisfy a number of minimum government standards to ensure that they offer value for money and flexibility. These standards include:

• low, clear costs. The only charge is known as the annual management charge (AMC) which is currently capped at 1.5%
• the stakeholder pension contract must not have charges for members transferring into or out of the stakeholder pension scheme
• all stakeholder pensions schemes must accept contributions of £20 or more, though some may accept lower payments
• stakeholder pension contributions can be stopped and started at any time
• investment options are relatively restrictive (typically around 20 funds to choose from run by that particular pension provider)

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Is it the right option for you?

If you feel that this is the right option for you and you are willing to accept a restricted fund choice in order to benefit from the low charges then contact us to obtain an illustration.

If, however, you are looking for a low cost pension but would like to have more control and flexibility over where you can invest, you may want to consider a low-cost Personal Pension Plan or a Self Invested Personal Pension.

It is extremely important to choose a pension that allows access to funds with good performance as this can have a significant impact on the value of your pension over the years.

Pension Fund of	Growth Rate	Fund Value after 20 Years
£50,000	5%	£132,665
£50,000	7%	£193,484

As the example above illustrates a growth rate difference of just 2% results in a difference in fund value of £60,819!