What is a Stakeholder
Pension?
Occupational pensions
have been around for many years and are successful in attracting
workforces to join. Personal Pensions, on the other hand, have
mainly attracted people on higher incomes. The Government initiative
to introduce Stakeholder Pensions is aimed at low to middle income
people who feel unable to save for their retirement, but can
benefit most people, whether or not they are in a company pension
scheme. Stakeholder pensions can be used for additional retirement
savings, as an alternative to higher-charging Free-Standing Additional
Voluntary Contribution plans, as long as earnings are no more
than £30,000 per annum in that employment.
The new schemes are aimed
at people earning more than £9,500 who have no access to
an occupational pension. They are a simpler and cheaper to run
version of a Personal Pension Plan. Contributions are set by
the individual and the eventual benefits will depend upon investment
returns over the period. Almost anyone can contribute up to £3,600
per annum (£300 per month) into a Stakeholder Scheme. The
Government assumes that people earning below £9,500 per
annum will receive their Basic State Pension that will form the
bulk of their retirement income. Tax relief is granted at either
22% or 40% dependent upon your personal tax status and contributions
are allowable up to predetermined maximums of your earnings -
see our pensions calculator
to find out how much you could contribute. The current level
of state pension for an individual is £75.50 per week
Employers are obliged to offer
access to a Stakeholder Pension Scheme and deduction through
the payroll. If you are an employer and have not sorted out your
Stakeholder obligations, please contact
us.
For
the latest news on Stakeholder Pensions,
please contact us via our secure enquiry
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The above
statement is based upon our understanding of stakeholder pension
legislation as at July 2001. As with any advice given, personal
circumstances are always taken into account when a financial
planning recommendation is made.
Lewkay
Financial Services
3c Sopwith
Crescent, Hurricane Way, Wickford SS11 8YU * Tel: 01268 762200 * FAX: 01268 762292
Authorised
and regulated by the Financial Services Authority
