Stakeholder pension charges are capped by law at 1.5% a year for the first 10 years and 1% after that, for people who joined from 6 April 2005.
The stakeholder pension charge cap sits in regulation 14 of the Stakeholder Pension Schemes Regulations 2000 (SI 2000/1403), as amended in 2005. It is a ceiling on what a stakeholder plan may take, not a price list, and a separate and lower 0.75% limit covers some workplace schemes. This guide sets out what the stakeholder rule says, what it counts and leaves out, how it differs from the 0.75% rule, and what to ask your own provider. A plan's actual charge is in its own documents. Reading a plan's charge next to your other pensions is something an FCA-authorised adviser does for a living; this page's form is the route to an introduction, and sending it is free.
The stakeholder cap as the regulation words it
Regulation 14 lists the only ways a member's rights in a stakeholder scheme may be reduced. The main one is a limit on deductions from the member's fund which, together with any charges taken inside the funds it is invested in, may be "no greater than" a stated daily percentage of the fund's value for every day the scheme holds it (or, at the provider's choice, the fund's share of that percentage of all members' funds). The regulation sets that percentage per day rather than per year, and it depends on when the member joined:
| Member | Daily percentage in regulation 14(7) | Over a 365-day year |
|---|---|---|
| A new member, for the 10 years beginning with the first payment into the scheme | 3/730 per cent. | 1.5% |
| A new member after those 10 years | 1/365 per cent. | 1% |
| An established member | 1/365 per cent. | 1% |
The yearly column is our working, shown in the sources entry dated 20 October 2026. The Explanatory Note to the 2005 amending regulations (SI 2005/577) describes the change the same way: the cap was raised from 1% to 1.5% a year for the first 10 years of membership. The Note is not part of the law, and where it says "after 6th April 2005" the regulation's own definition says "on or after".
Who gets 1.5% for ten years and who stays on 1%
The regulation defines both groups. An established member first acquired rights in the scheme before 6 April 2005 and has kept rights in it since. A new member first acquired rights on or after that date, or reacquired rights after that date having previously transferred all of their accrued rights out to another scheme or arrangement. For a new member the ten years begin on the day of the first payment in, or on the day a pension-sharing credit is added if that comes first. How the ten years run for someone who left and came back is a question for the provider.
The cap is a percentage, so the pounds depend on the fund. Held for a year at a steady £10,000, the ceilings work out as below. These are limits, not what any plan charges, and the working is in the same dated entry.
| Ceiling | On £10,000 held for a year |
|---|---|
| 1.5% (new member, first 10 years) | £150 |
| 1% (after 10 years, or established member) | £100 |
| 0.75% (workplace default fund, see below) | £75 |
What the cap counts and what sits outside it
Two kinds of cost are inside the limit. The first is what the scheme deducts from the member's fund. The second is any "indirect charges", which the regulation defines as management charges deducted from a fund that the scheme's own fund is invested in, directly or indirectly. The 2005 Note says the cap was made to apply expressly to indirect as well as direct management costs. A reader comparing a plan's annual management charge with a fund's charge is therefore looking at two parts of one capped figure.
Other deductions are permitted on top of it. Regulation 14 also allows these further reductions:
- charges incurred in buying or selling the investments held for the scheme, to the extent attributable to the member;
- costs of maintaining or repairing land or buildings the fund invests in, or of collecting rent from their occupiers;
- administrative expenses of buying an annuity for the member, or of paying income other than by an annuity;
- costs of complying with a court order;
- a dilution levy or, for rights in a with-profits fund, a market value adjustment;
- the costs of pension sharing, and any payment the scheme makes to settle a tax liability under the Finance Act 2004 in relation to the member.
So a plan that stays inside the cap may still reduce a pot by dealing costs or by an expense when income starts. Cost types outside any headline charge are explained in pension charges and fees.
Each of these deserves a question to the provider: what is the annual management charge, which funds add a fund charge, and what dealing or income-payment costs apply.
Why the 0.75% workplace cap is a different rule
The figure 0.75% can appear beside a stakeholder pension because a separate, lower limit covers the default fund in a workplace scheme an employer runs for automatic enrolment: for occupational schemes it sits in SI 2015/879 (regulation 6), and for personal and stakeholder schemes in the FCA's COBS 19.6.6R. What that limit reaches is set out on pension charges and fees and workplace pension charges.
The stakeholder regulations make the hand-over themselves. Regulation 13(5) says regulations 13 to 14C, which include the 1.5% and 1% limits, do not apply in the circumstances set out in regulation 14D. For a member of a stakeholder scheme that is a personal scheme, those are that the scheme is a qualifying scheme in relation to an employer and the member's workplace contributions are allocated under a default arrangement. For a member of a stakeholder scheme that is an occupational pension scheme, they are that Part 2 of the Occupational Pension Schemes (Charges and Governance) Regulations 2015, the part containing regulation 6, applies to the scheme. Where either is met, the stakeholder limits do not apply to that member, and the charge limits in play are the workplace ones, which are written for the default arrangement.
A stakeholder pension opened by an individual, which no employer uses to meet its auto-enrolment duties, is outside the personal-scheme circumstances, so regulation 14 remains its rule.
What else a stakeholder pension has to allow
The regulations set conditions beyond charges, and the plain-English summary from MoneyHelper is capped charges, lower minimum payments, fee-free transfers and, usually, a range of investment funds to choose from. Taking them in turn:
The minimum payment
Regulation 17(1) says the scheme instruments "may permit" the provider to refuse a payment of less than £20. That is a permission, so a provider may set its own minimum at £20 or lower, and one cannot be assumed. The same regulation says a provider may not refuse a payment of tax relief from HMRC; how that relief arrives is in pension tax relief. A related rule stops a scheme restricting membership by reference to financial status, the amount of contributions or the manner of paying them, subject to exceptions in the regulation.
No investment choice needed
Under regulation 3 no member is required to choose how a payment is invested. If a member makes no choice, regulation 10A requires the rights to be "subject to lifestyling", a strategy that progressively reduces the risk of large swings in value, from a date at least five years before the retirement date (or soon after joining, for someone who joins later). The regulations make exceptions, and someone who joined before 6 April 2005 gets it only on request. The trade-offs are in pension lifestyling. As with any investment, the value can fall as well as rise and you may get back less than was paid in.
Moving the pension
Regulation 14's list of permitted reductions does not name a transfer charge, though dealing costs on selling investments are on it. MoneyHelper describes stakeholder pensions as having fee-free transfers; the plan's own terms say what applies. Separately, the FCA's early exit charge rules (COBS 19.6A) cover charges when a member who has reached normal minimum pension age takes or transfers benefits before the expected retirement date, and bar them on contracts from 31 March 2017; older contracts are covered on pension transfer fees, and the steps in how to transfer a pension.
What named providers publish about their stakeholder charges
Because the cap is a ceiling, a provider's charge can be lower, and only its own document says by how much. Two published statements read on 20 October 2026:
Legal & General's Key Features of the Group Stakeholder Pension Scheme (W13785, June 2026) gives the government maximum as 1.5% a year for the first ten years and 1.0% a year after that, and says L&G's own charge is currently no more than 1.0% a year. The same document sets out the lower workplace limit, 0.75% for the default investment option, and says the total annual charge "will not be greater than the maximum for Stakeholder pensions". Its fuller treatment is on Legal & General pension fees.
Scottish Widows' adviser page for its Stakeholder pension is undated. It gives the annual management charge as its only charge, currently set at a maximum of 1%, and notes the government permits 1.5% for the first 10 years. Charges can change, so the plan's current key features and the latest annual statement are the places to confirm.
For other stakeholder plans, such as those from Halifax, Reassure or Aegon, the plan's key features and annual statement give the charge. Charges for Aviva, Royal London and Nest are on their own pages. Holding a stakeholder plan next to other pots? Submit this page's form and an FCA-authorised adviser firm phones you to talk it through.
Stakeholder pension charges: questions people ask
Is the maximum stakeholder pension charge 1% or 1.5%?
Both, depending on the member. A new member is held to 1.5% a year for the first 10 years from the first payment and 1% after that; an established member, who joined before 6 April 2005 and has kept rights in the scheme since, is held to 1%.
Does the stakeholder cap include fund charges?
Management charges deducted inside the funds the scheme invests in count towards the cap. Dealing costs on buying and selling investments, and some other items the regulation lists, are allowed on top.
How much is a stakeholder pension to pay into?
Regulation 17 lets a scheme refuse a payment of less than £20, so a provider's minimum may be £20 or lower. The annual charge is the plan's own, which must stay within the cap, and the key features give it.
What do Halifax, Reassure or Aegon charge on a stakeholder pension?
Each plan's key features document and annual statement give its current charge, which can change. Whatever the figure, the charges counted against the cap cannot exceed the legal ceiling above.
Are stakeholder pensions cheaper than other personal pensions?
MoneyHelper's view is that workplace and stakeholder pensions usually cost less than a personal pension arranged on your own, though older schemes can carry higher charges than newer ones. Whether one is worth having is on are stakeholder pensions any good, and the features are on stakeholder pensions.
Your next step
The cap tells you the most a stakeholder plan may charge, not what yours does. To have your own plan's charge looked at against your other pensions, leave your number through this page's enquiry form, and an FCA-authorised adviser firm rings you back. There is no fee for asking.
Sources, accessed 20 October 2026: Stakeholder Pension Schemes Regulations 2000 (SI 2000/1403) regulations 3, 10A, 13, 14, 14D and 17, and the Explanatory Note to SI 2005/577; SI 2015/879 regulation 6; Financial Services and Markets Act 2000 section 137FBB; FCA Handbook COBS 19.6 and 19.6A and Glossary; MoneyHelper, Personal pensions (archived 5 June 2026) and Pension scheme fees and charges explained (archived 19 August 2026); Legal & General, Key Features of the Group Stakeholder Pension Scheme (W13785, June 2026); Scottish Widows adviser site, Stakeholder pension.