Standard sticks knife into stakeholder

MUTUAL insurer Standard Life has dealt a hammer-blow to the heart of the Government's flagship pension policy.

From mid-August, the insurance giant will refuse to set up stakeholder pension schemes for employers who are unable to pay in a set level of contributions each year.

The plan flies in the face of Labour's attempts to encourage greater levels of saving among the lower-paid, by introducing the low charging and transparent pension.

The move means only firms that can offer Standard a quick profit from higher levels of pension payments will be allowed to set up one of its stakeholder pensions.

Companies required to set up a stakeholder scheme will have to pass three tests. These include having at least five members, each member's contributions adding up to at least £1,000 a year, and the total amount paid in by the company being at least £10,000 a year.

Standard marketing director Barry O'Dwyer said workers at companies not meeting its criteria can still take out individual stakeholder pensions.

Under government rules, stakeholder pensions introduced in 2001 can take in as little as £20 a month, and have a maximum 1% annual charge. Companies with five or more employees have to give access to a stakeholder pension scheme if they do not already offer some form of pensions to their staff.

A spokesman for the Department of Work and Pensions said: 'We are aware some companies are doing this. If someone is refused by one firm, we would urge them to speak to others.'