Stakeholder pensions date back to 2001. Back then companies with more than five employees had to offer some sort of pension scheme. Employers didn’t have to pay into them but stakeholder pensions were easy to set up so became a popular choice. But, in the recent pension shake-up, auto-enrolment schemes replaced stakeholder pensions schemes from 2012 because employers have to pay into them.
The main things about these pensions were the minimum standards set by the government. Mainly:
1) Low minimum contributions
If you were setting up a personal pension from scratch you were often asked to contribute £200 or more. Stakeholder pensions would take small contributions from £20 a month. This made them ideal for low and middle income earners.
2) Set management charges
The management fees for stakeholder pensions are set at 1% -1.5% per annum for the first 10 years
But, if you joined one of these schemes, you should consider…
Switching your stakeholder pension
When we review pensions we typically look for the lowest management fees and the best choice of fund/s.
While 1.5% sounds low, in about 7/10 cases we can reduce management fees even lower (0.74% is our lowest charge available). If your contributions are small, it’s even more important that as much of your contribution is going into your pension pot. Not being eaten up with management feeds.
We also find a lot of people with stakeholder pensions haven’t reviewed them since they took them out. For this reason, they may not necessarily be in the right fund for them.
We’re impartial. So when we review your pension funds we can choose from all the deals available across the industry. Once we’ve reviewed your pension, and your needs, we give completely impartial FCA regulated advice.
If you’ve got a stakeholder pension scheme – or want to track one down from a previous job – then give us a call on 01772977162. It’s completely no obligation. And there’s no obligation to change if you’re happy with what you’ve got.