Stakeholder Pension Schemes

Pensions

Stakeholder Pension Schemes

A Stakeholder Pension is a type of Registered Pension Scheme. In other words, it is a money purchase arrangement designed to provide a lump sum and income in retirement. Like a Personal Pension Plan (PPP), it is available to any United Kingdom resident under the age of 75 and is available from insurance companies, high street banks, investment houses and some retailers. As with a PPP, a major feature of this type of pension provision is that you do not have to be in employment to take one out and you can provide a Stakeholder Pension for your spouse/partner or your children. In respect of the latter, the policy reverts to the child/children at the age of 18.

A Stakeholder Pension has been designed to incorporate a set of minimum standards laid down by the Government.

These include:

• A charging structure that is capped: a maximum of 1.5% a year for the first 10 years and 1% a year thereafter.
• As with many personal pensions, there are no penalties on stopping contributions to the scheme or on transferring the benefits to another scheme
• The minimum contribution is £20 in any period whether regular or a one-off payment.
• Crystallisation age can be at anytime between the age of 50 and 75 (55 and 75 from 6 April 2010).