Stakeholder Pension
Stakeholder Pension: may be offered through some employers or you can start one yourself. If your employer has more than 5 staff after 8th October 2001 they must offer a stakeholder pension to staff but do not need to contribute. Stakeholder Pensions are designed as a low cost pension to help you build up income for your retirement. Stakeholder pensions are money purchase pensions and must have certain features.
Some of the Stakeholder rules are:
Stakeholder Pensions
Stakeholder Pensions: Anyone in the UK can have a stakeholder pension including infants which we believe is a good idea if you are able to pay the premiums. Parents and grandparents can contribute to a stakeholder pension for the children or grandchildren. Paying into a stakeholder pension from a young age can be a great benefit to the fund as it has a far greater time period to perform than funds that a taking out in later years. You can contribute up to £3600 per annum for the children into a stakeholder pension and the children can not access the fund until the reach retirement age which is currently at the earliest 55.
Stakeholder Pension Scheme
Stakeholder Pension Scheme: This is generally what people in a stakeholder pension through their work call it or the other name is Group Stakeholder Pension. Employers with more than 5 employees must offer one but do not have to contribute on your behalf. Employers can also enhance your stakeholder Pension contributions if they use salary sacrifice to fund the pension which could substantially increase your pension fund over the years. If you are unsure then ask your employer if they offer this type of benefit to its employees. The employer and employee have to meet certain conditions to qualify for stakeholder pension salary sacrifice scheme.
Best Stakeholder Pension
Best Stakeholder Pension: We will give you the 3 top performing funds for Stakeholder Pensions for each attitude to risk category and you can either compare it against your current performance or it may help you realize the potential of some of the best stakeholder pension funds. You should always remember that past performance is not a guide to future performance and your fund can rise as well as fall in any risk category. The best performing cautious managed stakeholder pension over the last 5 years has returned 39.8% the best stakeholder pension for balanced managed funds returned 56.1% and the best al round fund in the stakeholder pension sector returned 188%. As you can see buy these returns stakeholder pensions can perform well but you should have a financial advisor look after your pension and review it on an annual basis because you want to ensure you are in the best funds at all times. So contact us today and one of our panel of advisors will help you with your pension needs.
Group Stakeholder Pension
Group Stakeholder Pension: If one is offered through your employer, they will have chosen the stakeholder pension provider and they may have arranged for contributions to be paid from your wages or salary in to the stakeholder pension. The employer may contribute to the stakeholder pension scheme but is not at liberty to do so. Your employer deducts contributions from your pay and sends them to the stakeholder pension provider. The stakeholder pension provider claims tax relief at the basic rate and adds it to your stakeholder pension fund. If you are a higher rate taxpayer, you will need to claim the additional rebate through your tax return. Many companies have the opportunity to utilize salary sacrifice which can benefit the individual and enhance their stakeholder pension. If you leave your employer in the future you can transfer your group stakeholder pension to any other stakeholder pension provider you like and will not be charged for it.
How does Stakeholder Pensions work?
How does Stakeholder Pensions work?: Money purchase pensions build up a pension fund using your contributions, investment returns and tax relief. It helps to think of stakeholder money purchase pensions as having two stages:
Stage 1
The stakeholder fund is usually invested in stocks and shares, along with other investments, with the aim of growing the stakeholder fund over the years before you retire. Remember though that the value of investments may go up or down.
Stage 2
When you retire you can take a tax-free lump sum from your stakeholder pension fund and use the rest to secure an income - usually in the form of a lifetime annuity. The normal minimum pension age will rise on the 6th April 2010 from the current minimum age of 50 to 55 unless you have special reasons to start it early. After this date if you decide to retire and draw on your stakeholder pension before the age of 55 you will be liable to further tax charges on you stakeholder.
The amount of pension income you'll get will depend on:
Changing jobs
If you change jobs, you should check whether your new employer offers a stakeholder pension scheme. You can continue paying into your stakeholder pension but you may find you'll be better off joining your new employer's scheme, especially if the employer contributes. Compare the benefits available through your employer's scheme with your stakeholder pension. If you decide to stop paying into a stakeholder pension, you can leave the pension fund to carry on growing, but check whether there are extra charges for doing so.
Stakeholder Pensions
Stakeholder Pensions: Starting your own stakeholder pension. If your employer doesn't offer any pension scheme, you're self employed, or even not working, we can check whether a stakeholder pension is the right choice for you. Our stakeholder pension advisors are happy to answer any questions you may have and can be contacted on 0845 217 1577 . Our advisors will compare stakeholder pension plans to suit your needs.
Key facts about stakeholder pensions
Contribution levels and tax relief on stakeholder pensions
You can now save as much as you like into any number of stakeholder pensions, you get tax relief on contributions of up to 100% of your earnings each year, subject to annual allowance of £245,000 increasing to £255,000 in the tax year 2010-2011. This means for every £80 you personally invest into your stakeholder pension, this will end up as £100 when the scheme reclaims the tax benefit on the contributions you have paid to your stakeholder.
Stakeholder pension and Personal pension switching
Pension Switching is a bit like switching your credit card and mortgages. Many people in the UK could save money by switching their pension to a stakeholder pension or an alternative personal pension, when we switch our mortgage our credit card we do so to try and lower charges and get better benefits than we have with our current products so why do we not do the same with one of the most valuable investments we will ever have in our savings for retirement. It is in your best interests to review your existing pension arrangements to see if you are getting the most out of your pension fund.
To switch or not to switch
Saving money is not the only reason for switching. Modern stakeholder pension plans are also more flexible than some other forms of pension.
Older style pension plans generally offer very little choice such as limited, if any, investment choice and no option to stop, reduce or increase payments, as your circumstances change. Many of these plans are also inflexible in when you are able to start accessing your pension benefits and in what form you can take them. Nowadays however, choice and flexibility come as standard on many pension plans allowing you to be as hands on or hands off as you want when it comes to your pension savings.
Of course the decision to switch pension requires careful consideration and it may not be in your best interest to switch, therefore it is important that you receive financial advice before deciding to move your pension.
Get your Free Pension switching report
Every month we will provide a FREE Report to the first ten people who request it on their current pension provision. This report does not constitute financial advice and is for information purposes only. Don't miss out on this free report as saving for retirement is one of the most important decision you will make, act now and request yours now before its to late.
Stakeholder Pension Funds
How has your pension fund performed over the last 5 years, some with profits funds have had no or little bonuses added over the last 5 years, many equity based funds have returned losses of 20%, 30% and even greater losses while the best performing funds have returned over 200% in the same period, many of these better performing funds can form part of your stakeholder pension. This is another reason you should review your pension. Fund selection is based on attitude to risk and you should speak with a financial advisor to determine this for you. Stakeholder pensions do have some restrictions on fund choice and this is another are you need to discuss with your financial advisor before deciding if stakeholder pensions are right for you. Many personal pension providers also now give incentives and discounts on their personal pension range so they can compete with stakeholder pensions, to request your stakeholder pensions report act now.
Stakeholder Pension Summary
Stakeholder Pensions Summary: Moneyandme hope you have enjoyed this page and would like to thank you for taking the time to read it. The aim of this page and all other pages throughout the site is to give our clients information on the products before they buy them. We hope this page has given you an insight in to Stakeholder Pensions and would appreciate any feedback you have on this or any other page on the site. Please use the feedback button at the top left of the page to give us your feedback and we will take it into account for the future development of this site. We hope the information has been helpful and look forward to helping you with any enquiries you have.
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