Stakeholder Pensions

We’ve selected four low cost stakeholder pensions that we think offer great value for money.

• We do not take initial commission and there are no set up costs so that 100% of your money is invested from outset.
• We arrange to be paid 0.2% p.a. renewal commission for arranging stakeholder pensions. This is less commission than is generally available. Taking a small amount of commission usually reduces the annual management charge.
• Additional discounts may apply to larger funds. Contact us for further information.

Below is a comparison of the annual management charges for the stakeholder plans that we offer. In most cases it is cheaper to set up a new pension via CommShare than it is to set up the plan direct.

	Aviva	Legal & General	Scottish Widows	Standard Life
Standard Annual Management Charge for online applications	1%	1%	1%	1%
Annual Management Charge for direct applications	1% for paper applications 0.9% for online applications	1% for funds of £15,000+ 1% for all online applications 1.2% for paper applications if funds are under £15,000
Annual Management Charge for applications via CommShare	0.75%	0.8%*	0.93% for regular premiums and 0.75% for transfer and single payments over £5,000**	1%

*No commission is payable on Legal and General stakeholder pension contracts where the initial contribution is under £200 per month, £2,000 a year or transfer value/single premium is less than £25,000.

** No commission is payable on Scottish Widows stakeholder pension contracts where the initial contribution is under £150 per month or the transfer/single premium is less than £5,000.

If renewal commission is not available the annual management charge will be in line with the standard contract charges and we will instead deduct initial commission.

All four of the stakeholder pensions that we offer have similar features:

• A choice of in-house funds and some links to funds from well-known fund companies.
• Annual management charges capped at 1.5% in line with stakeholder rules.
• Free switching between funds.
• Accept transfers from other personal pensions, including protected rights

The annual management charges vary from provider to provider and depend on the size of your existing pension fund or planned investment(s). The best pension for you will depend upon your circumstances and requirements.

Minimum stakeholder pension requirements

Stakeholder pensions have been designed to offer investors value for money, flexibility and security. At present, the minimum standards include:

Limit on annual management charges:

• The annual management charge must be 1.5% or less for the first ten years of the plan, reducing to 1% after ten years.

Flexibility

• To be able to pay as little as £20 per month, the choice to pay your premiums weekly, monthly or at less regular intervals.
• To be able to stop and start contributions when you want and to change the level of contributions as you wish without incurring a penalty.
• The option to switch to a different pension provider free of charge.

Security

• The scheme must be run by trustees or by an authorised stakeholder manager, whose responsibility will be to make sure that the scheme meets the various legal requirements.

If you are considering a stakeholder pension but you are unsure as to whether this will meet with your requirements, the Money Advice Service’s ‘Stakeholder Pension Decision Tree’ is designed to help you - http://yourmoney.moneyadviceservice.org.uk/trees.aspx

The Money Advice Service is an independent organisation funded by the financial services industry and you’ll find lots of information about pension planning and other personal financial matters on their website - click here.

Please do not hesitate to contact us for more details, if you have any questions about stakeholder pensions in general, or if you require any literature for any of the pensions detailed above.

Remember: we cannot offer you advice. If you are unsure about your pension planning and require help you should contact a suitably qualified financial adviser.

Here’s an idea:
Why not think about investing £2,880 for your child or grandchild? The government will add another £720, taking the total amount to £3,600. You can do this every year if you want and there’s plenty of time for the funds to grow because they’ll be locked away until retirement.

...Parents - did you know that under current legislation saving for your child (under 18) could increase your personal tax bill? Although you are entitled to give your child as much as you like, if you investment money which earns more than £100 interest or dividends each year, the interest and / or dividends will be taxed as if it were your income. Income generated by pensions is not subject to income tax on any gains arising and will not be added to your tax bill. Depending on your circumstances, this could save you considerably.