Next month sees a revolution in the way thousands of childcare workers will be able to plan and save for their retirement, with the launch of the Government's stakeholder pensions scheme.
Successive governments have worried that while the state pension scheme would be insufficient to provide adequate incomes for an increasingly long-lived population, too few people were attempting to provide for themselves. The stakeholder scheme, to be introduced on 6 April, aims to plug the savings gap between occupational and state pensions for up to five million low-to-middle income earners.
The stakeholder scheme is designed to be flexible, transparent and cheap. By law, stakeholder pension providers can only charge management costs of a maximum of one per cent of the value of a person's pension fund each year, so if a contributor builds up a pension fund of 30,000 he or she will only pay 300 a year in administrative charges.
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