Pensions

Stakeholder Pension


Stakeholder Pensions are simplified low-cost personal pension plans. They must satisfy minimum legal standards* to ensure they offer flexibility and value for money.

You can make single or regular payments, or a combination of both; and you can change the amount of your regular payment at any time - the minimum payment is £20 inclusive of basic-rate tax relief, usually payable by direct debit.

Stakeholder Pensions allow you to transfer payments from another pension scheme, stop paying, or take a payment break and restart later at any time.

In each tax year, you can contribute up to 100% of your earnings, but a tax charge may apply if you exceed the annual allowance, which is currently £40,000. If you earn below £3,600, are not earning or don’t pay tax, you can contribute up to £3,600 and still receive 20% tax relief. These limits apply to payments made by you or a third party, but not to payments made by your employer.

You can transfer retirement benefits built up in a previous pension scheme, but we strongly urge you to speak to an Independent Financial Adviser before you do so.

Your retirement benefits can be taken in a variety of ways, but will depend on your fund value and other economic factors such as inflation.

*If you joined a stakeholder pension scheme on or after 6th April 2005, the annual cap is 1.5% for the first 10 years, then reducing to 1%, as long as you remain in the scheme. If you purchased your stakeholder pension scheme before 6th April 2005, the annual charge will remain at 1% for as long as you remain in the scheme.