Stakeholder pensions are low-cost pensions for employees who are not currently in occupational pension schemes. The Government hopes they will also help Britain to move away from the system in which current workers' contributions pay for pensions.
Social Security Secretary Alistair Darling said: "Stakeholder pensions are a low cost, secure and flexible pension option for moderate and higher earners.
"Two in five working people have no pension for their old age apart from their state pension. We want people who can save to do so and stakeholder pension gives people more options.
"By law stakeholder pension must meet a number of standards to make sure they offer value for money, flexibility and security." These standards include that stakeholder pension schemes cannot charge more than one per cent on the value of each members fund.
Members of stakeholder pension schemes must also be able to transfer into or out of the scheme without facing any charge.
All stakeholder pension schemes will accept contributions of as little as Â£20 but some may accept less. Up to Â£2,808 each year plus tax relief can be invested into a stakeholder pension no matter how much a person earns.
Unless they are exempt all firms with five employees or more must provide their relevant employees with access to a stakeholder pension by October 8 2001.Reuse content