A stakeholder pension (SHP) is a defined contribution pension scheme designed to provide financial benefits for retirement – based on the following factors:
Pensions are a long-term investment. The money you pay into a pension is invested and the value of investments and any income generated from them can go down as well as up and are not guaranteed. You may not get back the amount originally invested.
You should look to take advice or speak to someone before implementing any major changes to your finances or assets to mitigate the tax-burden.
Stakeholder pension schemes provide a flexible way to contribute to your pension fund and save for retirement.
Can you cash in a stakeholder pension early?
Most stakeholder pension schemes won’t allow you to withdraw your funds until you turn 55. However, you should be able to move your funds to another stakeholder pension provider.
Some pension plans will let you cash in your pension funds early, if you become seriously ill.
Do stakeholder pensions offer a drawdown option?
Yes. Most stakeholder pensions will offer a drawdown option. Drawdown becomes available to you once you turn 55, and involves leaving your money invested in your pension pot to withdraw as and when you need it.
Is a stakeholder pension a defined contribution scheme?
Yes, a stakeholder pension is classed as a type of defined contribution scheme. They’re a flexible way to build your retirement savings and top up your state pension once you retire.
Can I transfer my stakeholder pension into a SIPP?
Most schemes will allow you to transfer your funds into a self-invested personal pension (SIPP). You can generally move your stakeholder pension at any time of year before you start drawing out your retirement benefits.
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