Stakeholder Pension

Stakeholder pensions were introduced by the government in April 2001, they were designed to encourage more people to save for retirement, in the first round of pensions reform.

A stakeholder plan is designed to be flexible for the customer, it allows you the options to stop, start or change your contributions, transfer your fund to another provider or change your retirement date to any age over 55 without penalty (however if you are invested in a with profits fund there may be a market value adjustment).

Stakeholder pensions have only one single annual management charge (AMC). This charge is governed by law and is currently capped at 1.5% for the first 10 years (1% thereafter), making them a cost effective way to save for your retirement. Charges cannot be increased beyond these parameters without legislative change.

Stakeholder pensions usually offer a number of fund options to link to, they can however sometimes be limited to a smaller number of funds available to customers than other pension options, owing to the charging structure imposed upon them by law, which may not allow for external fund management links.