The Stakeholder Pension Plan was introduced by the current government in April 2001 to encourage more citizens to contribute towards their retirement. The main thrust of this contract was to be the lower running costs and simplification.

A Stakeholder Pension is offered via a limited range of providers and offers lower costs than many traditional personal pension plans or other types of pension. There is normally no bid offer spread, no policy fees and a maximum annual management charge (amc) of currently 1.5%. It offers the ability to cease, recommence or change your contributions without any penalty. The downside is that it has a much more limited range of funds than is generally available under a personal pension.