Stakeholder Pensions

Stakeholder pensions are a kind of personal pension which you can arrange for yourself or through your employer.

Like a normal personal pension, your contributions are paid to the bank, building society or insurance company which is providing the stakeholder pension and they invest the money on your behalf.

They differ from personal pensions in that the government has set minimum standards which they must meet to qualify as a stakeholder pension:

• A maximum annual management charge of just 1.5% of your fund reducing to 1% after 10 years
• A pension on retirement
• A minimum starting contribution of £20 or whatever figure the individual stakeholder decides.
• Free transfers between schemes.
• Retirement at any age from 55 to 75.
• A tax-free lump sum on retirement.
• A survivors’ pension.
• Either a pension or a lump sum payable to survivors on scheme member’s death.