AdviceOnline | Stakeholder pensions
Stakeholder pensions
A stakeholder pension is a form of personal pension which must meet certain criteria set by the government. Like other personal pensions almost anyone under the age of 75 can open one. All contributions are paid net of basic rate tax and for those higher rate taxpayers you claim the remaining tax via your tax return.
Even if you do not have any relevant UK earnings you can still contribute to a personal pension up to £3600 or £2880 Net per year. This may be useful for those that are not currently working who still have sufficient capital or additional income to contribute. You can contribute up to his amount if you wanted to save for your children or grandchildren to give them a good start in life although they cannot withdraw the money until they reach 55 which may change in the future Pensions
Click here to find out about saving for children
Contributions are limited to your relevant UK earnings or the annual allowance which is currently £255000 tax year 2010/2011. Any contributions above these and you could be penalised with a 40 tax charge!
To qualify for a stakeholder product the pension must meet certain conditions on Charges Accessibility and Terms
Charges Capped at 1.5 for the first ten years then reduced to 1 thereafter for as along as you are in the scheme.
Accessibility Minimum contributions of 20 weekly monthly or a one of contribution
Terms Must be flexible in that you can stop start increase or decrease contributions. Must impose no penalty if you were to stop contributions no charges if you were to transfer to another pension or pension provider and provide a default fund choice for those that do not want to make a decision on the fund they invest into.
NestEgg Stakeholder schemes are designed to be simple products and often tend to provide a reduced choice and fairly conservative funds which the providers manage. This is not to say that they are not suitable but if you prefer to have an option of a wider fund choice specialised and sometimes external funds choice then these may not be possible within a stakeholder pension. Specialised and external funds may have additional higher charges
Even if you do not have any relevant UK earnings you can still contribute to a personal pension up to £3600 or £2880 Net per year. This may be useful for those that are not currently working who still have sufficient capital or additional income to contribute. You can contribute up to his amount if you wanted to save for your children or grandchildren to give them a good start in life although they cannot withdraw the money until they reach 55 which may change in the future Pensions
Click here to find out about saving for children
Contributions are limited to your relevant UK earnings or the annual allowance which is currently £255000 tax year 2010/2011. Any contributions above these and you could be penalised with a 40 tax charge!
To qualify for a stakeholder product the pension must meet certain conditions on Charges Accessibility and Terms
Charges Capped at 1.5 for the first ten years then reduced to 1 thereafter for as along as you are in the scheme.
Accessibility Minimum contributions of 20 weekly monthly or a one of contribution
Terms Must be flexible in that you can stop start increase or decrease contributions. Must impose no penalty if you were to stop contributions no charges if you were to transfer to another pension or pension provider and provide a default fund choice for those that do not want to make a decision on the fund they invest into.
NestEgg Stakeholder schemes are designed to be simple products and often tend to provide a reduced choice and fairly conservative funds which the providers manage. This is not to say that they are not suitable but if you prefer to have an option of a wider fund choice specialised and sometimes external funds choice then these may not be possible within a stakeholder pension. Specialised and external funds may have additional higher charges
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