Summary of how your Stakeholder Pension Plan works

How are contributions made?

You can make contributions by direct debit, directly from your bank. If your employer is deducting the contribution from your pay, they will be responsible for paying them to us.

How much should I contribute?

As mentioned earlier the amount you contribute should reflect the income you want when you retire.

Can I change the amount I contribute?

Yes, you can stop, start, reduce or increase your contributions whenever you like. Simply ring us on the phone number shown on your statement. Where contributions are deducted from your pay you will instead need to inform your employer of any changes you wish to make to your contributions.

How often do I contribute?

How often you contribute is entirely up to you. You may contribute every month, every three months, every six months or every year and make lump sum contributions when you feel like it. Although you can stop, start or miss contributions whenever you want, most people like to get into a routine. Whilst you have the safety net of being able to stop or change your contributions at any time, your aim should still be to achieve the level of retirement income you will need.

Is there any restriction to the amount that I can contribute?

Most UK residents who are younger than age 75 can contribute up to the 'earnings threshold' which is a figure set by the HM Revenue & Customs and may be increased each year. For 2005/06 tax year the earnings threshold figure is £3,600.

For those wishing to contribute more than this, the Government allows you to contribute up to 17.5% of your earnings, or more if you are over 35.

You will need to provide evidence of your earnings if you contribute more than £3,600 in any one tax year.

What are the tax advantages of the Stakeholder Pension Plan?

You will pay contributions net of basic rate tax and you can claim any higher rate tax relief to which you may be entitled through your annual tax returns.

Employers receive tax relief in respect of any contributions they make on behalf of their employees.

The funds in which we invest your contributions are free of UK taxes (except for dividend income from UK equities).

When you retire you can take up to a quarter of your fund as a tax-free lump sum.

What are the charges?

The only charge we make for the routine administration of your plan is an annual management charge. The maximum charge is about 1% per annum. When your total fund reaches £25,000 we will add bonus units, which has the effect of reducing this charge to 0.8% per annum for all funds except externally managed funds where the charge remains at 1%.

When can I take my money out?

You may take your non-Protected Rights benefits (which are benefits built up by your contribution and any employer contributions) at any time from age 50 or even earlier for a few occupations, which are listed elsewhere in this site. If it suits your circumstances, you can phase in your pension benefits by taking some of your pension and leaving the rest to benefit from any fund growth. Any Protected Rights benefits (which are benefits built up by your contracting out of the State Second Pension, formerly SERPS) cannot, by law, be taken before age 60.

Can I take my pension but continue to work?

Yes, you can take your non-Protected Rights pension but continue to work as long as you are aged 50 or over.

What will I receive when I take my pension?

This will depend on the size of your fund at that time. You can take up to a quarter of your non-Protected Rights fund as tax-free cash. We will use the rest of your fund to give you an income. The size of that income will depend on the type of pension you choose, and whether it needs to be a pension just for you or for your partner as well if you die. Any Protected Rights fund must be used to secure a pension.

If another company can give you a greater pension from the money you've built up then you can transfer it to them at no charge.

What happens if I die before I retire?

If you die before you retire, we will normally pay the fund you have built up as a lump sum. However, if you prefer, we can use your fund to provide a pension for your husband, wife or other dependants.
Any Protected Rights fund must normally be used to set up a pension if you are married. There are however some circumstances where the fund may be paid as a lump sum.

Can I take money back out of my pension?

You will not be able to get at the money in your non-Protected Rights fund until your 50th birthday. For any Protected Rights monies this will be your 60th birthday. In return for this, Stakeholder pensions are granted valuable tax benefits to help you save for retirement. (If you become seriously ill or are in certain occupations, you may be able to take your non-Protected Rights money out earlier).

You will find full details of our Stakeholder Pension Plan in 'your plan in detail'.