The Government wanted to encourage people to start saving for their retirement and introduced a low-cost pension in April 2001 that allowed anyone, even people who were not in work, to start saving for their retirement, and that is exactly what a Stakeholder pension does.
If you are not working you can put – or have someone put in on your behalf – up to £3,600 a year including tax relief into a stakeholder pension.
Given that each of us has the ability to fund a stakeholder pension, it means you can set these up for children and/or grandchildren and get tax relief on the contributions.
If you are employed or have income from self-employment the amount you can contribute to a Stakeholder pension is the same as for any other type of defined contribution pension. These are often viewed as the ideal pension plan for new savers as the charges which can be levied by the pension provider are capped by legislation.
Stakeholder pensions are typically offered by traditional pension companies (Insurance Companies) and are not available as a platform pension.