Stakeholder Pensions
Like other pension plans, a stakeholder pension is a tax efficient long-term investment, which helps you to save a sum of money to provide an income in retirement.
They were introduced by the government to encourage more people to save and are designed to be simple and easy to understand. They are a popular choice because the annual management charges are capped at 1.5% a year for the first 10 years, 1% thereafter, although many providers charge around 1% throughout. You can contribute from as little as £20 per month.
Stakeholder pensions offer straightforward investment choices with most providers providing either a choice of ready-made portfolios or a limited range of funds so you can select your own.
Why choose a stakeholder pension?
- Low charges, capped at 1.5% a year - stakeholder pensions are a cost efficient pension plan.
- Low contributions - you can pay in as little as £20 a month.
Suitable for:
Someone who wants a straightforward, low-cost pension plan that does not incur high management charges.
The benefits of a stakeholder pension are:
- Your pension attracts tax relief at the rate you pay. So if you are a basic tax rate payer, for every £80 you contribute, £100 is actually paid into your pension.
- You don't have to worry how much is coming out of your pension savings in charges as these are capped by the government at 1.5% of the fund value for the first 10 years, 1% thereafter.
The minimum contribution is just £20 a month and there are no penalties for varying contributions or for transferring away again.
You can invest up to £2880 net into a stakeholder pension each year, or 100% of your earnings (including tax relief), whichever is greater.
You can also get tax relief on your contributions, so you automatically receive 20% added to your contribution by the government. Both the amount you can contribute into a stakeholder pension and the level of tax relief you may claim are subject to HMRC limits.
Other people can pay into a stakeholder pension on your behalf too. This means that partners or other family members can help you save for your retirement, or you could arrange a stakeholder pension for a child or grandchild.
Take out a stakeholder pension through TQ Invest and we sacrifice much of our commission to reduce the initial and ongoing charges.
By saving into a stakeholder pension you are not restricting your options are retirement.
The earliest date you can access your retirement savings is 55. You can take up to 25% of your pension as tax-free cash. The remainder of your money has to be used to provide you with an income, although you have until you are 77 before you have to do this.
There are a range of ways you can take your retirement income. The simplest route to an income at retirement is with an annuity and a range of these products are offered through TQ Invest.
More complex products such as Income Drawdown, Investment Linked Annuities and Alternatively Secured Pensions require the advice of an Independent Financial Adviser. You can talk through these options by speaking to our sister company Torquil Clark, a Chartered firm of Independent Financial Advisers.
Find out more about annuities or get an annuity quote.
Next steps
- Call us on
0800 294 7221 - Our team will provide quotes from the whole of the annuity market.
- When you are ready we will process the application for you - it's as easy as that!
Other pension options available to you through TQ Invest:
Personal Pensions
A long term investment offering a tax efficient way to build up a fund to use when you retire.
Our trusted providers
We choose providers we believe provide the best value. Here are some of our trusted providers:
Need help?
Call our team at TQ Invest on 0800 294 7221 to discuss your options or read some of the pension FAQs.