One Million take up Stakeholder Pensions

More than one million stakeholder pensions have been sold since they were introduced in April 2001 according to statistics from the Association of British Insurers (ABI). Despite this there is still concern that people are not saving enough and the Government realises that it must take action to increase take-up of stakeholder pensions.

The ABI study on who is buying stakeholder pensions shows that in the first six months of last year, 56% of stakeholder pensions were bought by men and 44% by women. In all 97% of stakeholder pensions were bought for people of working age and 74% by those intending to make regular contributions. Just over half of the contracts were taken out by individuals rather than through schemes designated by employers.

Limited information is available on whether people maintain their regular contributions and it seems that perople are taking advantage of the flexibility offered by stakeholder pensions regarding the ability to stop and start their contributions.

The ABI is especially concerned that 90% of employer-designated schemes have no members meaning that employers are unable to attract employees into membership. Although the only obligation upon clubs with more than five employees is to offer a stakeholder pension it is important that employers do all they can to ensure their staff plan effectively for the future.

May 2003