The Association of British Insurers has issued figures that the sale of the new style and lower charging stakeholder pensions (see our site the Stakeholder Cafe.com) has completely missed its target audience.
Stakeholder was designed to be the clear, transparent contract that you could stop and start when you wished, without penalty and pay in what you want to, when you want to with premiums starting from as low as £20 and a maximum charge of 1% of the fund. E.g. Pay in £20pm and the charge over 12 months would be roughly £2.40. Great value.
However, figures show that the average 'payment in' is coming from the wealthy, who wish to take advantage of low charges, at about £140pm and roughly half of all stakeholder type pensions are from people transferring pensions into lower charged plans from higher charged plans. The target of encouraging the lower paid has been completely missed.
Our View
What a surprise! We wrote a feature last year saying the stakeholder will fail! Did anyone listen “ no". It is no surprise that people with a little extra money, or those with pension funds already built up are considering these low charged pensions, it could mean a much larger pension fund in retirement purely by switching to lower charges. We have even written a new free fact sheet on Switching to Stakeholder.
Learn more about Stakeholder Pensions in our website completely dedicated to it - the Stakeholder Cafe.com. Search the news archive for other Stakeholder pensions stories. Search & Buy a Stakeholder Pension now.
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