UK Stakeholder Pension Guide
This is a form of personal pension except there are no initial up front charges - which were the cause of much controversy, when people realised that, say, the first 2 years of their contributions had gone to pay "front-end loaded" charges. Moreover, the pension provider cannot make charge over one percent of the value of the fund each year for administration.
For many, a stakeholder pension is the most appropriate type of personal pension. They are cheaper in general, and they are also more flexible. For instance, should your circumstance dictate that you have to stop paying into the scheme, you will not be penalised. Moreover you can start paying pack into the pension whenever you like. Often you can also change the amounts and frequency of payments.
Most pension providers, including banks, building societies and insurance companies can offer stakeholder pensions. Many employers also offer stakeholder pension schemes to their members. Employees do not necessarily have to join their employer's scheme, and they can join another scheme instead of or as well as their employer's.
However, as an employee you cannot join your employer's stakeholder pension if you:-
 | have not been working there for at least 3 months; or |
| are already joined up to your employer’s occupational pension plan; or |
| do not conform to the scheme's rules forbidding membership of those under 18 not admit you as someone who is under 18 or within 5 years of the scheme's max retirement age; or |
| had the opportunity to join the employer’s occupational pension scheme but declined; or |
| have earned less than the minimum required to pay NI for 3 consecutive months; or |
| are not allowed to because of Inland Revenue rules, i.e. you don't usually live in the United Kingdom. |
An employer by law must offer stakeholder pensions to all their employees, except in the following circumstances:-
| there are less than 5 employees in the firm; or |
| the employer runs an occupational pension scheme that is offered to all employees within 12 months of commencing employment; or |
| the employer offers a personal pension scheme to everyone in the organisation who would otherwise be entitled to join the stakeholder pension scheme. An amount not less than 3% of the employee’s pay must be added to the pension by the employer, and there must be no charges if the employee chooses to abandon the scheme. If the employee wishes, the employer must deduct contributions directly from his pay. |
| The employer runs a combination of occupational pension schemes and personal pension schemes. |
Alternatively, please browse through and compare the following featured pension providers:
