Pensions with flexibility and capped charges
Stakeholder pensions are offered by regulated financial institutions such as banks and insurance companies.
They are essentially a personal pension plan which have
to meet certain minimum legislative standards, such as,-
- Management charges - cannot be more than 1.5% of the fund value for the first 10 years and
no more than 1% thereafter.
- Contribution flexibility - you must be able to stop and start contributions when you like
and swith providers all without additional charges being levied.
You do not have to be employed to setup a stakeholder pension, however, as of 1st October 2012 qualifying employers are no longer under obligation to offer access to a stakeholder pension. However, if
you joined a stakeholder scheme through your employer before 1st October 2012 they are obligated to continue
contributing to the scheme on your behalf and take your contribution from your wages. This arrangement will continue until you
ask them to stop, stop contributing yourself or leave the employment.
What ever happens, all monies accrued in your stakeholder pension fund stay in your pension fund until retirement.
You also have the flexibility
to move the pension pot to any other qualifying provider without fear of financial penalty.