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Stakeholder Pensions |
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What are Stakeholder pensions ? |
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Stakeholder pensions will be low cost personal pensions aimed at the many people who currently have no pension provision and who earn between £9,000 and £18,500 and are not eligible to join an occupational scheme. |
Stakeholder pensions will be made available via employers or direct to individuals from pension providers. They will also appeal to those investing in a personal pension already, as stakeholder will have a 1% upper limit on charges - making them considerably cheaper than personal pensions. | You will be allowed to invest up to
£3,600 a year in a stakeholder pension, providing you are not a
member of a final salary (defined benefit) occupational pension
scheme.
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| If you belong to a money purchase occupational pension scheme or a group personal pension, you can contribute to a stakeholder as well, providing you do not exceed the personal pension contribution limits which are based on age and percentage of salary. |
If you are unemployed, a student, a non earning housewife, a carer or between jobs, you will also be allowed to contribute up to £3,600 a year. So you could fund your stakeholder from an inheritance, a gift, a redundancy payment, divorce settlement or even lottery winnings. |
In the run up to the introduction of stakeholder pensions in April 2001, the Financial Service Authority has said that pension providers must not sell personal pensions unless they can be transferred into a stakeholder plan without financial disadvantage to the policyholder. A number of pensions are available now which are stakeholder compliant or plans which can be switched into a stakeholder without penalty |
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