According to just released figures from the Association of British Insurers, Stakeholder pensions have not been taken out by those the Government intended.
The Government target market for stakeholder pensions was those people earning between £10,000 and £20,000 per year. This meant that they expected monthly contributions of around £140.00.
The ABI figures showed that only 40% of people that had taken out a stakeholder pension fell into the target market category. There is also speculation that this figure is now somewhat lower than 40%.
When stakeholder was originally planned, it was aimed at lower earners. However, even now the £140 per month contribution level could be pushing it for a person earning £10,000 per year.
Everyone should save towards their retirement but they should only save amounts that are affordable. If it is affordable, people are more likely to keep going, rather than starting and stopping payments.
To learn more about low charging Stakeholder pensions visit the Stakeholder Cafe.com.
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