What You Need To Know About Stakeholder Pensions
byon 07-05-2012 at 12:34 AM (189 Views)
"So initial of all what is a stakeholder pension? Nicely it is not a new sort of pension so to speak, but it is a individual pension which has a set of conditions beneath which it should operate in order to be calle...
For those of you who are thinking about planning for your retirement, you will need to do a bit of research on pensions to come across the very best way to save for your future retirement. This write-up is about stakeholder pensions and will explain a bit about them and how they function.
So initial of all what is a stakeholder pension? Well it is not a new type of pension so to speak, but it is a individual pension which has a set of circumstances beneath which it must operate in order to be called a stakeholder pension. It is not restricted to becoming a private pension as it can also be a set of circumstances which applies to a money acquire occupational scheme.
The objective of the set of conditions is to make the pension straightforward, straightforward and good worth for money. So what are the set of circumstances that apply to stakeholder pensions then? Well right here are the minimum standards that apply to it:
1. The charges need to be low at around 1% of the fund invested each and every year.
two. It must be designed to be simple which is done by getting a common investment selection so that you do not have to choose the investments your self.
3. It need to be portable, meaning that you can transfer the stakeholder pension on to a distinct pension which can be one more stakeholder pension or another individual pension. Also if you do this you would not be penalised for transferring it.
4. The pension provider ought to keep you informed of any changes in the charges you have to pay for it by letting you know one month just before the changes take place. They should also send you a statement at least once a year so you are kept up to date with your account.
5. The minimum contribution need to be 20 and you should not be obliged to pay in every single month unless you wish to do so.
So what are the positive aspects of a stakeholder pension? The main advantages are that it has low charges, that it has tax strengths, that they are easy to understand and relatively simple, are generally speaking good worth for money and that you can transfer it to one more pension with out incurring any charges.
Are there any disadvantages to it? Well the major disadvantages are that the pension amount you will get in the future is not predictable, that there is an investment danger and that there is no guarantee that your stakeholder pension will keep pace with cost inflation. quality lead sheet"