Frequently Asked Questions
There are a number of questions we are asked frequently about the CIS Stakeholder Pension. Check below and find out exactly what Stakeholder from CIS is all about. Fuller and more particular details are available in the Key Features section, which we strongly advise you read before applying for a CIS Stakeholder Pension.
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What is a stakeholder pension?
It's a type of pension to help people save for their retirement in a tax-efficient way. It meets the minimum standards set by the Government. These are to do with payment levels, costs and terms and conditions.
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How flexible is it?
You can make one-off contributions at any time to top up your plan and/or you can change your regular contributions at any time.
The HM Revenue and Customs limits the contributions you can make - see "How much can be paid into my plan each year?"
You can stop contributing, or take a contribution 'holiday' at any time.
You can take a contribution 'holiday' for a total of two months in any 12-month period.
However, you should note that if you stop your contributions, or take a contribution 'holiday', pension benefits will be lower than those you would have received if regular contributions had continued up to your chosen retirement age. In addition, stopping contributions will mean that waiver cover will cease.
You can continue contributing to your stakeholder pension regardless of the number of times you change jobs. However, if your new employer operates a company pension scheme, it will normally be in your best interests to join it. You may still be able to contribute to your stakeholder pension as well. You must notify us of any change of employer. -
How much can be paid into my plan each year?
The minimum contribution including tax relief is £20 for both monthly contributions and single contributions. Monthly contributions are normally payable by direct debit, single contributions by cheque.
The HM Revenue and Customs sets a limit on the amount each tax year that can be contributed to a stakeholder pension. Up to £3600 including basic rate tax relief can be contributed each tax year into personal pension and/or stakeholder pension plans regardless of earnings. It may be possible to contribute more depending on your circumstances. -
What about tax?
Your employer will pay its contributions including any tax relief.
You will receive tax relief on the other pension contributions into your plan. You will not receive tax relief on any waiver premiums. We claim the tax relief at the basic rate from the HM Revenue and Customs and add it to your plan. If you're a higher rate taxpayer, you can claim the extra relief through your tax return. -
What are the charges?
If you make additional contributions to a plan set up before 6 April 2005, there is an annual management charge of 1% of the value of the funds you accumulate. If your fund is valued at £500 throughout the year, this means that we deduct £5 that year. If your fund is valued at £7,500 throughout the year, we will deduct £75. When we set each day’s unit price, we allow for the annual management charge. These charges may vary in the future.
For new plans and those set up your plan after 5 April 2005, there is an annual management charge of 1.5% of the value of the funds you accumulate. If your fund is valued at £500 throughout the year, this means that we deduct £7.50 that year. If your fund is valued at £7,500 throughout the year, we will deduct £112.50. When we set each day’s unit price, we allow for the annual management charge. On the 10th anniversary of your plan, the annual management charge will reduce to 1% of the value of the funds you accumulate. These charges may vary in future. -
What other benefits can I choose?
The contribution payer can apply for waiver of contribution cover to provide cover for your pension and life contributions if the contribution payer is unable to work as a result of sickness or accident. If your employer pays into your plan, contribution is also covered if you take out waiver of contribution.
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What happens if I die before I retire?
We'll pay the plan value.
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Can I change my mind?
If we accept your application we will send you a notice of your right to cancel. On receipt, you will then have 30 days in which you can change your mind and we'll give you and/your employer your money back. This should put you back into the position you were in before you bought our product.
