Stakeholder pension

maypole

Anyone got a stakeholder pension, who with and are you happy with it? and how would this compare to a personal pension.

dunstonh

Which stakeholder and which personal pension do you want to compare?

What investment funds within each do you want to compare?

What timescale do you want to compare?

What fund values and contributions do you want to compare?


You cannot really compare the two without knowing what you terms you are doing it on. Personal pensions tend to have far more options and features and providers will often target different groups.

For example, Norwich Unions personal pension has lower charges than their stakeholder pension due to better fund based discounts. It also offers the stakeholder funds in the PPP (as do most PPPs). However, you cannot put small contributions into the PPP.

Or there are PPPs that have lower charges than stakeholders with terms in excess of 20 years. Yet they would be more expensive for terms less than 20 years.

Most stakeholders offer very few funds (less than 20 typically). Personal pensions tend to be in the hundreds.

maypole

Thank you. I was asking on behalf of a friend and I will show her this. She is in her mid 30s, part time, and her employer is not doing stakeholder or any other pension scheme and she was wondering what to do for the best, get a pension or just save. Is an IFA the answer?

dunstonh

An IFA isnt always the answer but if the person is clueless then it probably makes sense to use one. Its better than using a provider directly or going to a bank or signing up for say Virgin, Tesco or M&S stakeholders.

Stakeholders have a defined charging structure. Personal pensions do not. That doesnt mean a stakeholder is cheaper though. There is a trend oncurrent personal pensions to factor out the advice charge straight away as a one off cost and then drop the annual management charge to 0.4-0.5%. Over the long term that is far cheaper than a stakeholder.

maypole

Thank you Dunstonh for your information :beer:

Milarky

Worth mentioning that whatever stakeholder pension is taken out it remains portable - and you don't have to leave it there. Transfers are straightforward.

Also on charging an 'old' stakeholder contract (taken out before April 2005) was capped at 1% annual management charge (AMC) whereas a new one has a higher cap of 1.5% for the first 10 years (then 1%) So if you have an 'old' stakeholder (doesn't apply here) it would probably incurr a higher AMC if moved elsewhere.

maypole

Thank you for the info

Iljay

I want to buy a stake holders pension for my grandson.

Currently I am thinking of Standard Life but open to suggestions.

How can I avoid or reduce the agent's commission on an ongoing basis?

Suggestions would be welcome

Retired_I.F.A.

You cant buy a pension plan for someone else. Better you give him pocket money and when he's old enough and working let him choose for himself about his pension.

Besides charges are not that important who would say no to gross of 15% less a charge of 3% as oppposed to a 10% gross return less 1% charge.
Many actively managed funds charge more because they do the research and work at it rather than just buy any footsie shares and leave them in the fund.

dunstonh

You cant buy a pension plan for someone else. Better you give him pocket money and when he's old enough and working let him choose for himself about his pension.

You can now. It happened after you retired.

Pensions will accept third party payments and you can be 1 day old to start one (via guardian or parent).

How can I avoid or reduce the agent's commission on an ongoing basis?

dont pay for advice and dont go direct.

Dithering_Dad

Retired_I.F.A. wrote: »

You cant buy a pension plan for someone else. Better you give him pocket money and when he's old enough and working let him choose for himself about his pension.

Jeez, even I knew this and I'm a financial idiot! :rolleyes:

Just how long ago did you retire?