What is a stakeholder?

A stakeholder is not a vampire slayer’s assistant but something far less interesting.

The government decided that the savings gap between how much people need in retirement and how much they were actually saving was too great (£27bn). If pensions cost less to administer then people will rush out and buy them. The solution was government certification for cheaper pensions that meet their criteria.

Has it worked?

A TUC Report published in 2004 showed that the take-up rate was three in every hundred employees. The average employee paying 2% of salary.

The next solution

Personal Retirement Accounts which are even cheaper to run should be introduced by 2012 (or maybe 2015/16).

They will be based on ‘automatic enrolment’ with the employer paying 3% and the employee paying 4% (plus an extra 1% tax relief – bringing the total to 8%).

Personal Retirement Accounts will be better than nothing and if you are happy for your future pension planning to happen without any thought from you then do nothing and join when they start.

I believe the answer however is that

‘Low price and good quality don’t go hand in hand. I always find it’s better to decide on the quality you require and then search for the best price’

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