Stakeholder pension (SHP)

Types of pensions

A SHP is another form of personal pension. It is similar to a regular personal pension but is effectively a simplified version – the government has laid out certain eligibility criteria for SHPs to ensure they are accessible to as many people as possible.

Conditions include a cap on the annual management fee (1.5% for the first 10 years and 1.0% thereafter), minimum contributions are not allowed to be higher than £20, and a ‘default fund’ must be provided(which is where savers’ money is automatically invested; the riskiness of the fund decreases as savers approach retirement age).

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