Stakeholder Pensions

Stakeholder pensions have been available since the 6th April 2001 as the government's intention to simplify and reduce the cost of pension planning to the consumer. It is targeted particularly for those with fluctuating, low or no taxable earnings such as a non-working spouse. The maximum annual contribution to a Stakeholder pension is £3,600, which is currently a net contribution of £2,880 as basic rate tax relief applies.

The main points of a Stakeholder pension scheme is that the annual management costs should be no more than 1.5% for the first 10 years of the contract and then 1% after this. There should no penalties for stopping contributions or transferring the pension.

It is generally assumed that a Stakeholder pension will have lower costs than a Personal Pension Plan. This is not always the case.

If you would like more information about Stakeholder pension schemes please contact us.