Stakeholders are a basic, straightforward form of pension that must meet certain standards of flexibility, value for money and security. In particular, they must have the following features:

• Limited charges: these are capped at 1.5 per cent per year, with no entry or exit charges
• Low minimum contributions: as low as £20 per calendar month
• Flexible contributions: you can stop, restart or change your payments, or switch to a different provider, whenever you like without penalty
• Default investment fund: a fund your money will be invested in if you prefer not to make investment decisions.

Some employers offer stakeholder pensions, or you can also start one yourself provided you are under the age of 75 and a UK resident. If you’re employed, you may well be offered participation in a group stakeholder scheme. If this includes employer contributions, it may be the best option for you.

If not, it would be worth getting independent financial advice. You can also make contributions on behalf of a child through a stakeholder pension. With careful pension fund selection, the child could benefit from a very long period of investment and enjoy the benefits of compound group to boost their pension.

For more information about personal, group or child stakeholder plans, contact us today.