Stakeholder Pensions
This term is now redundant in its technical pre-April 2006 sense, although it is expected to continue as a marketing/descriptive term.
What you need to know - post April 2006 - if you have an existing Stakeholder contract, it will continue as a Money Purchase Arrangement, and you/your employer can invest as much as you like, subject to the Annual and Lifetime Allowance rules.
The information below relates to pre-April 2006.
This is a low cost pension contract that can be used by a wide range of people who wish to save for their retirement:-
- Are you under 75?
- Do you qualify under UK Residency rules? (Yes, unless you have recently arrived/departed the UK, in which case, seek advice).
- Are you in an Occupational Scheme, (if yes, and you are earning more than £30,000 a year you may not be able to have a Stakeholder). If you are earning less than £30,000 per annum and in an occupational pension scheme you can not contribute more than £300 per month gross.
- Are you, or have you ever been, a Controlling Director? (If so, seek advice, as you may not be able to have a Stakeholder. You may be/have been a Controlling Director if you hold/held shares in a company that you owned or controlled, albeit in conjunction with co-owners, friends or family).
It is worth noting that there are NO requirements relating to income or work up to contributions of £3,600 per annum.
Stakeholder Schemes are also popular with employers who want to offer their staff a simple pension scheme. Most employers are obliged to offer access to such a plan (although they don't need to contribute) unless they can meet certain exemption criteria.
Last updated on May 15, 2006