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State pensions: no impact on basic state pension but could
historically be used to contract out of SERPS and can now be used
to contract out of S2P.
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Retirement annuities: charges for stakeholder plans will
tend to be lower. Clients may consider redirecting contributions
but different contribution limits apply.
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Personal pensions (non-stakeholder): the greater contribution
flexibility and transparency of the charging structure may result
in a reduction in personal pension charges.
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Occupational pensions: employers who are not exempt had
to designate a stakeholder scheme by October 2001. Some employers
have amended existing schemes which did not fulfil the exemption
requirements so initially they now meet the criteria.
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AVC/FSAVCs: for scheme members who are not controlling directors
and do not earn more than £30,000 pa stakeholder provides
an alternative means of topping up benefits. An advantage of stakeholder
pensions is that unlike FSAVCs and post April 1987 AVCs part of
the benefits can be drawn as cash. The low charges offered by stakeholder
plans may also cause members to use a stakeholder plan rather than
AVCs or FSAVCs.