The basics

• Employers and employees looking for a low cost, practical and tax efficient way to plan for the future may want to take advantage of Legal & General's Stakeholder Pension Scheme.
• You can contribute a regular amount or simply invest a one-off lump sum, including a transfer from another pension plan. The minimum contribution is £20 gross.
• Group Stakeholder pensions are low cost pensions arranged by employers for employees. Under these schemes, each employee has their own plan, which they can take with them if they change jobs.
• Our scheme is designed to help employers meet their legal obligations simply and efficiently. It's a legal requirement for certain employers to offer employees access to a group Stakeholder pension if they don’t offer an occupational pension scheme or group personal pension. The same applies if they do offer such schemes but not all the necessary exemption conditions are met.
• These schemes are tax efficient. Any employer contributions are paid gross and are normally deductible as a business expense. Employer contributions are not chargeable to National Insurance and they are not classed as a benefit in kind.
• Contributions members make to their pension scheme qualify for tax relief and any growth in their pension fund is free of UK income tax and capital gains tax. However, we cannot reclaim the tax paid on dividends from UK companies.
• Employee contributions automatically include the benefit of basic rate tax relief. If a member pays higher rate income tax, they will need to claim the extra tax relief through their tax office. The law and tax rates may change in the future and the value of tax relief will depend on the member's individual circumstances.
• Members of a group Stakeholder pension scheme can contribute up to 100 per cent of their annual earnings, or £3,600 gross if greater, each year and still get full tax relief including higher rate (where appropriate) whatever type of pension is held. Members can contribute more than this but they wouldn't get tax relief on the excess. However a 40 per cent tax charge will be levied on any excess of the total contributions to all Registered Pension Schemes, including any paid by the employer, above the Annual Allowance.
• For the 2007/2008 tax year, the Annual Allowance has been set at £225,000. It will increase in stages to £255,000 for the tax year 2010/2011 and will be reviewed on an ongoing basis after that. This limit will not apply in the actual year retirement benefits are taken.
• The Government's maximum permitted annual management charge for Stakeholder pensions is currently 1.5 per cent a year of the value of the fund for the first 10 years of a pension scheme and 1.0 per cent a year after that.
• Members can take up to 25 per cent of their pension fund tax free (subject to the Lifetime Allowance) when they take their benefits.
• If the value of the benefits from all the Registered Pension Schemes of a member exceeds what is called the Lifetime Allowance (LTA), the excess will be subject to a tax charge. The standard LTA is £1.6 million for tax year 2007/2008 but this allowance may be affected by personal circumstances.
• There is a tax charge on the value of benefits over the Lifetime Allowance, which is currently 25 per cent if taken as income, with a further 40 per cent payable as PAYE tax on income. If the excess is taken as a lump sum a tax charge of 55 per cent will be levied.
• We offer an extensive choice of investment funds to choose from.
• Employers and members can access and manage their pension schemes online.
• To make it easier to join a Group Stakeholder Pension Scheme, we've simplified our joining facility. Contact us to find out how.
• There are no penalties or charges for transferring the value of your pension benefits to another provider.

The value of the units which make up a fund can go down as well as up, so the value of a member's fund is not guaranteed. It is particularly important to remember this if a member is close to retirement. Please remember that the money is tied up until a member takes their retirement benefits. Please view the other risk factors associated with this product. 

To find out more, read the Group Stakeholder Pension Scheme key features (PDF 1.6MB) document, which is available to download as a PDF from the right hand menu.

Your options

• You can make contributions up to 100 per cent of your yearly earnings, or £3,600 gross if greater, each year and still get full tax relief including higher rate (if appropriate). You can pay this up to age 75, even if you are not working. However, if your contributions exceed the Annual Allowance, tax relief will be limited.
• The Group Stakeholder Pension Scheme offers great flexibility - you can stop or start contributions according to your personal circumstances.
• You can normally take your pension when you're aged between 50 and 75, although the minimum retirement age will rise to 55 for those taking their retirement benefits after 5 April 2010.
• You don't need to stop working to take your benefits.
• To give you more choice over where to invest your contributions, we offer a range of
  Legal & General and external funds.
• You can opt for a lifestyle profile that aims to reduce investment risk as you approach your chosen retirement age.
• You have complete flexibility over where your contributions are invested.
• You can take out a separate Pension Payment Protection Plan to protect your contributions, should you be unable to work due to sickness or accident.

Risk factors

All investments carry an element of risk. Please bear these points in mind:

• The value of the units that make up a fund can go down as well as up, so the value of a member's fund is not guaranteed. It is particularly important to remember this if a member is close to retirement. Please remember that the money is tied up until a member takes their retirement benefits.
• The amount of pension income provided by a retirement fund will depend on a number of things, including investment returns and the rates available to buy a pension when a member decides to take this benefit.
• The fund or funds a member chooses to invest in will have specific risks. These risks are described in the leaflet, Choosing Your Investment Fund (PDF 1.7MB).
• Employees should be aware that joining a pension scheme may not be suitable for them, particularly if small amounts of savings may affect their entitlement to any means tested State benefits.
• We can increase our charges, but we will let the member know before we make any change. Because this is registered as a Stakeholder scheme with HM Revenue & Customs (HMRC), we will not charge more than the maximum allowed for this type of scheme. The maximum Stakeholder charge is currently 1.5 per cent a year of the value of the fund for the first 10 years, reducing to 1 per cent a year for subsequent years.
• If a member decides to cancel within the 30 day cancellation period, the refund may reflect any reduction in investment value.
• The law and tax rates may change in the future and the value of tax relief will depend on the individual's circumstances.
• Past performance is not an indicator of future performance.