Stakeholder pensions for individuals - The basics

• A Legal & General Stakeholder pension is a simple, low cost, tax efficient way to save for your retirement.
• You can invest from as little as £20 gross up to the limits set by the Government. These are listed in our Guide to Stakeholder Pensions.
• The money you pay into your Stakeholder pension (your 'contributions') is put into an investment fund. The aim is to build up this fund to provide you with a pension income when you take your benefits.
• Your chosen retirement age for a Legal & General Stakeholder personal pension must be at least five years away.
• With a Stakeholder pension, you can stop, start, increase or decrease, and pay in single contributions at any time without penalties.
• Our Stakeholder pension is great value. We offer low annual management charges and we reduce the rates of your charges as your fund grows.
• We also offer an extensive choice of pension investment funds, so you can select the type of investment and level of risk that suits you.
• You can manage your Stakeholder pension online so that you can see how your pension investment fund is performing. You can also change funds, whenever you choose, at no extra cost.
• You may benefit from lower charges when you apply for a Legal & General Stakeholder pension online. It takes just 20 to 30 minutes to complete your application.

To find out more about Stakeholders for individuals, read our Guide to Stakeholder Pensions.

The value of the units which make up your fund can go down as well as up, so the value of your fund is not guaranteed. It is particularly important to remember this if you are close to taking your benefits. Please remember that your money is tied up until you take your benefits. Please view the other risks associated with this product.

Your options

1. Choose an investment fund, or funds, to suit you

Legal & General offers a wide range of pension investment funds with varying levels of risk and potential reward. You can choose to invest your contributions into one or more funds according to your attitude to investment risk. You can switch your investment from one fund to another, whenever you choose, free of charge.

• There are over 20 Legal & General pension investment funds to choose between, ranging from index-tracking funds (which track the performance of a market or geographical region) to actively managed investment funds (where a fund manager decides what to invest in, in order to best achieve the fund's aims).
• Alternatively, there are 17 funds from a set of specially selected external fund managers.

For more information on our pensions investment funds, please click on the fund information link on the right-hand menu.

2. Choose a lifestyle profile

You also have the option of a lifestyle profile. This is where your contributions are initially invested in funds for the potential of long term growth and then your investment is steadily switched into lower risk funds as you get nearer your chosen retirement age.

3. Take the default option

If you prefer not to choose a pension investment fund, your contributions will be invested into our default investment option - the UK Equity Index Lifestyle Profile. This means your contributions will initially be invested in the UK Equity Index Fund then, starting 10 years before your chosen retirement age, your investment will be gradually switched to the lower risk Fixed Interest and Cash Funds.

We recommend that you read the leaflet Choosing your investment fund (PDF 89KB).

The charges

The Government's maximum permitted annual management charge for Stakeholder pensions is currently 1.5% a year of the value of your fund for the first 10 years of your pension plan and 1% a year after that. Compared with this, Legal & General's charges for online applications provide great value for money.

Legal & General's basic annual management charge is tiered according to the value of your fund. As your fund grows the rate of charge decreases.

For example, if your investment in Legal & General funds is worth £40,000 throughout the year, the rate of annual management charge would be (£25,000 x 1.0%) + (£15,000 x 0.9%), which is £250 + £135 = £385.

If you decide to invest in any externally managed investment funds, an additional annual management charge (currently 0.15% a year) will apply to your investment in those funds only.

You can of course apply on a paper application form if you wish. However, an extra charge will apply if your initial investment is less than £15,000. Full details can be found in your paper application pack, which you can request using the contact us section on the right-hand menu.

If you are transferring the value of your pension plan into a new Legal & General Stakeholder Pension Plan, an extra charge may apply, as professional advice is provided.

Risk factors

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

• The value of the units which make up your fund can go down as well as up, so the value of your fund is not guaranteed. It is particularly important to remember this if you are close to taking your benefits. Please remember that your money is tied up until you take your benefits.
• The amount of pension income provided by your retirement fund will depend on a number of things, including investment returns and the rates available to buy your pension when you decide to take this benefit.
• The fund or funds you choose to invest in will have specific risks. These risks are described in the leaflet, Choosing your investment fund (PDF 89KB).
• We can increase our charges but we will let you know before we make any change. The Total Annual Management Charge will not exceed the Government's maximum permitted charge for Stakeholder schemes, which is currently 1.5% a year of the value of the fund for the first 10 years of your plan, and 1% a year thereafter.
• If you decide to cancel within the 30-day cancellation period, your refund may reflect any reduction in investment value. You can read more about Your Right to Change your Mind at the start of our online application form.
• The law and tax rates may change in the future and the value of tax relief will depend on your individual circumstances.
• You should be aware that joining a pension scheme may not be suitable for you, particularly if small amounts of savings may affect your entitlement to any means tested state benefits.
• The past performance of a pension fund is not an indicator of its future performance.