stakeholder transfer

Midas

I am presuming I suppose that you have bought the original stakeholder directly off the provider - not via an IFA, so you are effectively getting nothing for the commission which is just being retained by the original provider.

dunstonh

"Stakeholder Pensions.
Asstakeholder pensions providers aren’t allowed to impose transfer penalties, just transfer your current plan to an absolutely identical one set up by the discounter, effectively keeping your existing plan but at a new lower charge."

This is not a good idea always. Take Norwich Union, for example. Their first version stakeholder offered their full internal fund range. Their current verson only offers 4 funds, which in my view, are pretty poor (balanced managed, cash, with profits, lifestyle, from memory). So, moving from the early version with decent fund selection to the current version with poor version funds to save 0.4% a year is a daft thing to do.

How can you set up a new plan via a discount broker while you still have an existing plan.

Ask them.

Do you have to cease payments to your original plan first? Surely you can only pay into 1 stakeholder in any one tax year?

You can have as many as you like providing you dont exceed contribution limits.

ii) Why would a provider allow you to do this? Could they prevent it?

Yes, some providers can prevent it or not offer the terms requested. As already mentioned in this thread.

iii) If your provider did attempt to prevent it, could you transfer your fund to a different provider for a few months, then back to your original provider again (via the discount broker obviously).

Yes you can. However, some providers do ask if you have had a pension with them before on the application. Don't know if they would block you as I have never been in that position.

Remember that V1 stakeholders may have better terms than the V2 stakeholders that now exist so dont assume that all stakeholders with the same provider are the same.

Midas

dunstonh wrote:

This is not a good idea always. Take Norwich Union, for example. Their first version stakeholder offered their full internal fund range. Their current verson only offers 4 funds, which in my view, are pretty poor (balanced managed, cash, with profits, lifestyle, from memory). So, moving from the early version with decent fund selection to the current version with poor version funds to save 0.4% a year is a daft thing to do.

Perhaps Martin should add this information to his article as people may not be aware of this potential problem. However, Martin's point still stands as long as the same product is still available (e.g. V2 stakeholder to V2 stakeholder with same provider.

Midas

dunstonh wrote:

You can have as many as you like providing you dont exceed contribution limits.

I wasn't aware of that, thanks for the info. I was presuming (wrongly) that the situation was similar to that of mini cash ISA's, i.e. only contribute to one per year.

EdInvestor

Midas

Contact the discount IFA and explain what you want to do.They will handle all these administration matters for you.There is no need to worry about them yourself.

whiteflag_3

EdInvestor wrote:

Hello whiteflag

I don't believe I mentioned stakeholder pensions in my post about trail commission.:)

Hello Edinvestor - I know you didnt, but given that the thread is headed stakeholder transfer was I being really stupid in assuming you were talking about the subject of the thread rather than assuming you were off on another of your rants!