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For those of you who are thinking about preparing for your retirement, you will need to do a bit of investigation on pensions to discover the ideal way to save for your future retirement. This write-up is about stakeholder pensions and will explain a bit about them and how they work.

So very first of all what is a stakeholder pension? Nicely it is not a new sort of pension so to speak, but it is a private pension which has a set of circumstances beneath which it should operate in order to be known as a stakeholder pension. It is not limited to being a personal pension as it can also be a set of circumstances which applies to a funds acquire occupational scheme.

The objective of the set of circumstances is to make the pension simple, effortless and excellent worth for cash. So what are the set of circumstances that apply to stakeholder pensions then? Well right here are the minimum standards that apply to it:

1. The charges need to be low at about 1% of the fund invested every year.

2. It must be designed to be easy which is carried out by having a normal investment choice so that you do not have to decide on the investments your self.

three. It must be portable, which means that you can transfer cash pension the stakeholder pension on to a various pension which can be yet another stakeholder pension or an additional individual pension. Also if you do this you would not be penalised for transferring it.

4. The pension provider need to keep you informed of any modifications in the charges you have to spend for it by letting you know one month just before the modifications take spot. They must also send you a statement at least once a year so you are kept up to date with your account.

5. The minimum contribution ought to be 20 and you must not be obliged to spend in every month unless you wish to do so.

So what are the benefits of a stakeholder pension? The primary positive aspects are that it has low charges, that it has tax advantages, that they are simple to comprehend and comparatively easy, are normally speaking excellent worth for income and that you can transfer it to an additional pension with out incurring any fees.

Are there any disadvantages to it? Well the principal disadvantages are that the pension quantity you will obtain in the future is not predictable, that there is an investment risk and that there is no guarantee that your stakeholder pension will preserve pace with value inflation.