What is the difference between a stakeholder pension and a group personal pension?
The main differences are: • Access to stakeholder pensions will not be restricted to the employed. It will even be possible for parents to pay into a stakeholder pension on behalf of their children. Group personal pensions on the other hand are restricted to just those in employment. The maximum that can be contributed into an employee’s stakeholder and group personal pension plan is dependent on an individual’s age. Age at beginning of tax year Percentage of net relevant earnings Maximum contribution 2001 -2002 Below 36 17.5 16,695 36-45 20 19,080 46-50 25 23,850 51-55 30 28,620 56-60 35 33,390 61-74 40 £38,160 The current earnings cap for pensions is 95,400 • The annual cost of a stakeholder pension should not exceed 1% of the fund value. The annual cost of a Group Pension Scheme may be more than 1% of the fund value.
