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Legal & General Stakeholder Pension

Pension (Stakeholder)
Published 28 January 2010
Helpful? 20
Open Quote One of the better plans on the market. If you’re looking for a straightforward, low cost pension plan you won’t go far wrong with this.End Quote
Thumbs Up
  • Wide fund choice including external managers
  • Competitive charges
Thumbs Down
  • External funds could be more compelling
  • Expensive versus an ISA if you just invest in trackers
Candid Rating
4.3
Candid Charges
Initial/Setup

Nil

Annual/Ongoing

0.8% - 1.15%

Exit/Redemption

Nil

Other

None

You might think that all stakeholder pensions are alike; after all they all have to follow a strict set of rules covering charges and flexibility.

However, there are two areas where they can differ...greatly. The choice of investment funds offered and the extent that charges are below the maximum allowed. Given these two factors can make a big difference to the size of your pension pot at retirement they should be top of your list when comparing stakeholder pensions.

The Legal & General stakeholder pension gets off to a good start in this respect. It offers a choice of 40 funds and competitive charges.

The fund range comprises 23 Legal & General funds and 17 run by other managers such as Aberdeen, Newton and JPM. The Legal & General funds provide options for cash, fixed interest, property and stockmarkets, with most of the latter being trackers. The externally managed funds are all actively managed and mostly focus on the stockmarket.

The wide choice of index-tracking funds is welcome and while none of the external funds are likely to set the world on fire, there are some solid performers including Newton Income, Aberdeen Life Global and JPM Lifetime Growth.

The annual charge is 1% for the first £25,000 of pension fund, 0.9% for the next £25,000 0.8% thereafter. If you opt for a non Legal & General fund you’ll pay an extra 0.15% a year, subject to the total annual charge not exceeding the stakeholder maximum of 1.5% for the first 10 years and 1% thereafter.

The minimum you can pay in is a stakeholder standard £20 and you can stop contributions without penalty.

My only criticism is that I’d like to see a more compelling range of external funds. They’re not bad, but if you’re a keen investor you’ll probably find a low cost self-invested personal pension (Sipp) more to your liking. You could also argue that charges look expensive vesus an ISA if you only opt for tracker funds, but that currently holds true for all stakeholder pensions.

Overall I think the Legal & General Stakeholder pension is currently one of the better plans on the market. If you’re looking for a straightforward, low cost pension plan you won’t go far wrong with this – just choose your funds carefully.

Web Link: http://www.legalandgeneral.com/pensions/stakeholder-for-individuals/

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