Stakeholder pensions

Pension planning is of vital importance. The longer you delay starting a pension, the smaller your eventual pension could be. When properly planned, a good pension should ensure that your retirement is comfortable and financially secure. The basic State pension benefit for a single person is currently only £97.65 per week, (£5,077.88 per annum). Including the State Pension Credit, which is a means-tested benefit, the minimum income guarantee is only £132.60 per week, (£6,895.20 per annum), so anyone wanting to enjoy a comfortable standard of living in their retirement is going to need to make additional provisions.

Why were stakeholders introduced?

The government was concerned about the fact that many people are not contributing to a private or company pension scheme, so they decided to introduce a new pension arrangement - the Stakeholder Pensions scheme. This scheme has been introduced because the government is concerned that there should be a low cost alternative to existing pension schemes, and also because the government wishes to encourage employees, and the self-employed in particular, to contribute to private pension arrangements.

Opportunities for more people

Anyone can make contributions into a personal pension or stakeholder arrangement up to £3,600 a year gross regardless of  earnings. Those with earnings can contribute up to the level of those earnings, across any number of schemes. This means more flexibility and access to pensions for many people including:-

	Part-time workers
	Members of occupational pension schemes, wishing to top up their benefits
	Non-earning spouses
	Children

All personal pension contributions are paid net of basic rate tax, meaning that your contribution will have a basic rate tax credit added to it by the HM Revenue and Customs. This is the case, even if you currently have no income!

Here's how it works

	£80 Your Contribution
	£20 Government Contribution
	£100 Gross Contribution

The opportunities to develop your own pension arrangements have never been better. You should remember that inflation could erode the value of your pension in the future, so it's important to review your pension provision on a regular basis to ensure your contributions will be enough to help you live the retirement you want.

The value of a stakeholder pension can go down as well as up so you may not get back what you invested.

Tax treatment depends upon the individual circumstances of each client and may be subject to change in the future.

NFU Mutual's Stakeholder Pension Plan NFU Mutual's Stakeholder Pension Plan is a low cost, flexible way of investing for your retirement that offers all the tax privileges available to pension plans of this kind. Find out more information.

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