Stakeholder pensions
The Stakeholder Pension Plan was introduced by the current government in April
2001 to encourage more citizens to contribute towards their retirement. The main
thrust of this contract was to be the lower running costs and simplification.
A Stakeholder Pension is offered via a limited range of providers and offers
lower costs than many traditional personal pension plans or other types of
pension. There is normally no bid offer spread, no policy fees and a maximum
annual management charge (amc) of currently 1.5%. It offers the ability to
cease, recommence or change your contributions without any penalty. The downside
is that it has a much more limited range of funds than
is generally available under a personal pension.
Everybody from a newborn to someone up to 75 can contribute £3,600 per annum into a Stakeholder pension plan regardless of earnings.