Stakeholder Pension L&G
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SeanW
Posts: 322 Forumite
To start, I dont really understand much about Pensions at all.
My company ended their finaly salary scheme just before I joined, and instead are providing access to a stakeholder pension with L&G with a slightly reduced Charge, they will also pay a percent of my salary if I pay a minimum, so for the first 4 or 5 years, if I pay >=3% of my salary, they will pay 3%, rising later should I be with them in many years to come (probably not likely).
People on these forums (I read a recent thread, and the sticky thread at the top, and others) and elsewhere dont seems to always favour stakeholder pensions, and especially not always L&G. However, it seems as though I should join this anyway, just for the company's contribution.
Is it possible to join this and pay in the minimum, considering charges are all percentages, this shouldn't be negative? And also do pension savings elsewhere which have the same tax benefits. As my salary isn't yet great as I am just starting out(I am 22yr old graduate), 3% (x2) is not much for the future.
All I have at present is 2 years worth of cash ISAs (including this year), and half of this years mini stocks and shares isa in funds.
My company ended their finaly salary scheme just before I joined, and instead are providing access to a stakeholder pension with L&G with a slightly reduced Charge, they will also pay a percent of my salary if I pay a minimum, so for the first 4 or 5 years, if I pay >=3% of my salary, they will pay 3%, rising later should I be with them in many years to come (probably not likely).
People on these forums (I read a recent thread, and the sticky thread at the top, and others) and elsewhere dont seems to always favour stakeholder pensions, and especially not always L&G. However, it seems as though I should join this anyway, just for the company's contribution.
Is it possible to join this and pay in the minimum, considering charges are all percentages, this shouldn't be negative? And also do pension savings elsewhere which have the same tax benefits. As my salary isn't yet great as I am just starting out(I am 22yr old graduate), 3% (x2) is not much for the future.
All I have at present is 2 years worth of cash ISAs (including this year), and half of this years mini stocks and shares isa in funds.
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Comments
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Is it possible to join this and pay in the minimum, considering charges are all percentages, this shouldn't be negative? And also do pension savings elsewhere which have the same tax benefits. As my salary isn't yet great as I am just starting out(I am 22yr old graduate), 3% (x2) is not much for the future.
You join to get the maximum employer benefit possible. Anything you want to pay above that could be redirect to an ISA or alternative pension scheme offering the features and funds required. You never give up on that "free" money from the employer though.
All personal pension arrangements have exactly the same tax rules.
The only difference between stakeholder pensions and personal pensions is that stakeholders have a defined contribution limit and some types of investments are not allowed. There are a number of personal pensions which are cheaper than stakeholder. Stakeholder is not a guarantee of being the cheapest. It is a guarantee of being charged in a certain way.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
The only difference between stakeholder pensions and personal pensions is that stakeholders have a defined contribution limit and some types of investments are not allowed.
Stakeholder pensions have a number of special characteristics:
*The max annual charge is 1.5% for the first 10 years and 1% thereafter (this may or may not be cheaper than personal pensions)
*You can stop or start contributions at any time
*You can transfer to another provider penalty-free at any time
*There are contribution rules as DH mentions ( IIRC you can pay in very low amounts like 25 quid(?).
Some providers don't offer many good funds for stakeholders.L&G has a decent selection though.Trying to keep it simple...
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