A few features of Stakeholder & Non Stakeholder pensions
Personal and Stakeholder Pensions are common types of ‘registered pension schemes’. A registered pension scheme allows the member to obtain tax relief on contributions into the scheme and tax free growth of the fund.
A personal pension is a privately funded pension plan. A stakeholder pension is a more tightly regulated personal pension plan particularly over charging levels.
A stakeholder pension has the following constraints on the pension provider:
- a minimum payment cannot be set higher than £20, whether for regular or one-off contributions.
- the management charges are set at an annual maximum of 1.5% for the first ten years and then 1% of the stakeholder owner’s fund thereafter.
- there must be no penalties when the owner stops contributing or transfers the fund elsewhere.
Non Stakeholder Pensions
Stakeholder schemes are not ideal if you want to invest in a wider range of funds. If you are happy to pay a slightly higher charge, you should consider taking out a non-stakeholder personal pension.
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