There are numerous stakeholder pensions available in the UK, so how do you gauge which plan is the best stakeholder pension for you? There are many sites that will give you the history of Stakeholder Pensions in the UK with lots of jargon, but if you are looking for Stakeholder Pensions explained in laymens terms, and what you need to look for in picking the right pension for you, read on.
A stakeholder pension is basically a watered down version of a personal pension but with certain guarantees
- You can contribute as little as £20 a month
- For the first ten months the annual charges are capped at 1.50% per annum
- There can be no penalties on transfer away from a stakeholder pension
Disadvantages in comparison to a personal pension
- You may have a limited range of funds available
- If you have an IFA who manages your other savings and investments, you will have to pay any management fees separately
- Due to the restrictions on charges on these plans, stakeholder pension providers usually offer limited online services that you would usually receive with a personal pension, such as online valuations and fund switches.
- A stakeholder pension plan may not be able to accept regular employer contributions
Okay, so what should I look for in searching for the best stakeholder pension for me?
- Check potential providers first before making an application
- Check their website to see what range of funds will be available. A good stakeholder provider will offer at least 20 funds or more. Some may even offer funds from popular external fund managers. See pension funds for more information on this
- Also check if they offer other online facilities such as online valuations or fund switching
- Lastly, seek the advice of an IFA or a pension adviser if you are unsure if you are making the right decision.
