Can, and should, I take out a stakeholder pension?

A stakeholder pension is a special type of personal pension designed to be reasonably low cost (though the costs cap rose in 2005 to 1.5% a year).

There used to be restrictions on who could have a stakeholder and how much people could pay into them each year.

But the big shake-up to pensions that took place in April 2006 swept away most of these rules.

Any employer with more than five staff, who does not already have good pension arrangements, must offer a gateway to a stakeholder pension.

You can get more details about stakeholder pensions:

• in the pdf of the FSA guide to pensions 1: Starting a pension
• on the Pension Service website
• There is a helpful ‘decision tree’ that can help decide whether a stakeholder is right for you on the FSA website.