What is Stakeholder Pension?
It is a type of personal pension that is flexible. It is so flexible that you could stop and re-start your payments whenever you desire. It has also minimum payments that are so low, which is aside from the limit on annual management charges that it has.
It works just as like any other type of money purchase pensions. You pay money into your scheme to increase the amount of your fund.
On your behalf, this scheme’s manager will be the one to invest your pension fund. Aside from the amount you contributed, your fund’s value will be based also on how well the fund’s investments have performed. Meaning to say, if you want the value of your fund to increase, you should of course pay your contributions as regular as possible.
But in case you can’t pay regularly, it is alright, because due to the schemes flexibility, you could stop your payments, and just re-start it whenever you can. Although when you stop, you will have a smaller fund.
Take note also that with stakeholder pension, most typically wait until they’re 60 or 65 years old before acquiring from their fund. But of course, if you desire, this benefit can already be used even while you are still working.