A stakeholder pension plan is a very flexible way of saving - you can make regular monthly or yearly payments, as well as one-off contributions. Because of the tax benefits, the Government sets limits on how much you can pay into the plan.
Contributions
You can make contributions of up to the greater of 100% of your UK taxable earnings and £3,600 a year gross regardless of how much you earn*. You can change or even stop your contributions, or transfer your money into another pension fund, at any time.
If you stop paying contributions into your plan or take a contribution break, your pension may be lower than shown in your personal illustration.
Retirement
You can set your retirement date at any age between 50 (rising to 55 on 6 April 2010) and 75. However, you don't have to retire at that time - it's simply the date at which you stop paying into the fund and can use the money to buy an annuity, which gives you a regular income for the rest of your life or provide an unsecured pension (or an alternatively secured pension if you're over 75).
Tax-free lump sum
You may be able to take up to 25% of the fund as a tax-free lump sum, although this will reduce your pension payments.
* This information is based on our understanding of current taxation law and Revenue practice, which may change.
Fund choice
Choosing which funds you want to invest your money in is a really important decision – we give you a wide choice of funds so there should be something for everyone.
Further information... Who should I talk to?
Speak to your financial adviser to find out more. If you don't have an adviser, the IFA Promotion Service or the Society of Financial Advisers can help you find one.
