Stakeholder Pensions Guide

Scottish Life Stakeholder Pension

Exemptions from providing Stakeholder Pensions


If you meet one of the conditions listed below, you may be exempt. However, even if you are exempt, you can still give your employees access to a stakeholder pension scheme if you want to.

You are exempt if:

  • You employ fewer than five people, including company directors (but not self-employed people).
    • If you have five or more employees, and fewer than five of them meet the conditions for access to a stakeholder pension scheme (see below), you must provide the eligible employees with access to a stakeholder pension scheme.
    • If you employ a fifth staff member, you must offer a stakeholder or other scheme within three months.
  • You offer an occupational pension scheme that all your staff can join within a year of starting to work for you (except those aged under 18 or within 5 years of retirement).
    • You offer your employees access to a personal scheme which meets the following conditions:
    • It is available to all employees who should have access to a stakeholder pension scheme (except those under 18)
    • You contribute at least 3 % of the employee’s basic pay (before deduction of tax and National Insurance, and excluding commission, overtime and bonuses) to the personal pension
    • The scheme has no penalties (‘exit charges’) for members who stop contributing or who transfer their pension
    • You deduct the employee’s contributions through the payroll (unless your employees request you not to)
    • The pension must be part of an employee’s contract of employment
    • The waiting period to join must be no more than three months
    • You offer an occupational scheme for some staff and a personal pension scheme for the rest of your employees, and the schemes meet the conditions set out.
  • If all your employees earn below the National Insurance Lower Earnings Limit (£67 per week in the current tax year)

If you have an existing occupational or personal pension scheme you should check with your scheme provider, or with your independent financial adviser, to find out if the scheme meets the conditions for being exempt.


You do not have to provide access to a stakeholder pension scheme for any employee who:

  • has worked for you for less than three months in a row
  • is a member of your occupational pension scheme, or can join it within 12 months of starting work for you
  • is under 18 or within five years of the scheme’s normal pension age
  • could have joined your occupational pension scheme but has decided not to
  • whose earnings have not reached the National Insurance lower earnings limit for at least three months in a row (£67 per week in the current tax year)
  • cannot join a stakeholder pension scheme because of Her Majesty’s Revenue & Customs restrictions (e.g. the employee doesn’t normally live in the UK)
Stakeholder Pension Guide Copyright © is4profit Ltd 2000-2008
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