No one likes to think about it, but we are all getting older. The times when we knew a pension would be waiting for us has have all but gone, and it is vital to start thinking about our financial standing in the future. With State pensions a thing of the past for most people, it is now our own responsibility to take matters into our hands in regards to our finances when we retire.
We work our whole lives and as the retirement age approaches, it would be nice to think that we could look forward to our “golden years”, without the dread of wondering how we are going to live on very little money. That is why it is never to early to start thinking about our retirement. By starting to save a little towards our future each month now, when the time does eventually come, we can live our lives comfortably and do all the things we dreamed of doing when we were younger.
Stakeholder Pensions are a relatively new idea, consisting of a low cost pension that can be taken out to enhance our incomes in retirement. The Stakeholder pension was made available to practically everyone since April 2001.
The Stakeholder Pension is a tax efficient method to allow you to buy a lifetime income when you do finally retire. Meeting all Government standards, the Stakeholder pension has very low charges which the Inland Revenue contributes to after each payment you make. For example, for every 78p you pay, this will actually be worth £1, regardless if you pay tax or not.
For those people who fall into the higher band of tax rates, you can apply to claim back more tax through your tax return.
There are several reputable banks which are offering Stakeholder pensions. Contact your own branch to see if they have this on offer. Quite often your own bank will offer you better rates for your Stakeholder pension.
One bank which has built quite a solid reputation as supplying the public with a quality Stakeholder pension is Halifax. By starting a Halifax Stakeholder pension, you are rewarded by no initial charges and 0.9% annual charge which reduces as your entire contributions exceed £49,999. You are also allowed to choose your own combination of investment funds and have a no minimum contribution level.
One of the key features of the Halifax Stakeholder pension is the fact that you can stop and start your contributions whenever you like. So should your money be tight one month, you can always hold off for a while, then make up the difference later. Like wise, should you suddenly find yourself with some extra funds, then you can put it to your Stakeholder pension.
The Stakeholder pension is an investment made by you and is based on the performance of the stock market or other investments. By investing your money this way, you do run the risk that your money may fluctuate somewhat and not always in the direction you would hope. Sometimes your money may go down and the money is not guaranteed. These factors should always be taken into consideration before you make any decisions.
