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stakeholder pensions and personal pensions
The Government introduced Stakeholder Pensions in April 2001 to encourage employers to offer a cost effective and flexible pension scheme to their staff. Although employer's are not obliged to contribute at present, if they have 5 or more staff they should, by law, have a Stakeholder Pension Scheme in place.
A Stakeholder Pension is very similar to a Personal Pension but must allow a minimum contribution of £20, no penalties on transferring to an alternative scheme or taking retirement benefits earlier than planned, a transparent charging structure that is capped at 1.5% of the fund value for the first 10 years and 1% thereafter.
Personal Pensions are still available and generally have a wider range of investment funds. They do not have a cap on charges but most Personal Pensions now have an annual charge of between 1% and 1.5%. Despite the additional charge, you could significantly increase the value of your pension fund by selecting the right investment fund(s).
Both Stakeholder and Personal Pensions are available on an Individual basis and also a Group Basis. Your employer may offer a Group Stakeholder or Group Personal Pension Scheme or if no such scheme is available or you are self-employed an Individual arrangement can be set up.
A brief explanation of each of the various types of Pension Scheme is available from the menu opposite >
Please be aware that past performances are not guaranteed and values can go down as well as up.