Stakeholder pensions
What is a stakeholder pension?
Stakeholder pensions may be a good choice for you if you do not have access to an occupational pension or a good-value personal pension. If you are self-employed, or not earning, a stakeholder pension could also be the best option for you.
Stakeholder pensions are money purchase pensions. As with other types of personal pensions, the pension you get does not depend on your salary and the money you save is put into investments for you. Your fund will then be used to buy an annuity from an insurance company, to give you a regular income when you retire.
Find out more about money purchase schemes and annuities
What are the benefits of a stakeholder pension?
There are some differences between stakeholder pensions and other types of personal pensions. Stakeholder pensions have to meet certain standards set by the Government to make sure they offer value for money, flexibility and security.
- You get tax relief on your contributions up to HM Revenue & Customs limits. This broadly means that (using the basic tax rates for 2006/2007) for every £78 you pay into a stakeholder pension, the Government adds an extra £22. And the more you save the more you get in tax relief
- The charges are capped – there are limits to how much you have to pay the pension fund provider
- There are low minimum payments
- They are more flexible than many other private pension schemes – you can choose when and how often you pay into the scheme and there are no penalties if you miss a payment
- Other people, as well as your employer, can pay into a stakeholder pension on your behalf. This means that partners or other family members can help you to save for your retirement
- You don’t need to be working to save in a personal pension scheme
Contact the Pensions Advisory Service for more information on stakeholder pensions:
Phone the Pensions Advisory Service on 0845 601 2923
Lines are open Monday to Friday 9.00am to 5.00pm. Calls are charged at
local rates
Find out more on
The Pensions Advisory Service website
Read or print Personal pensions and stakeholder pensions – Your guide (PM4)