When you stop paying into a personal pension plan or stakeholder pension scheme,
the money that is invested will remain invested and fluctuate in
line with investment returns until you decide to take the benefits
of the plan.
However, some personal pension providers may charge you for
stopping contributions early and most providers will continue to
levy annual administration charges. The effect of these may mean
that your fund reduces to zero over time. You need to find out what
the policy conditions say and this can be done either by looking at
the policy document or contacting the provider.
Stakeholder pension schemes cannot charge you for stopping
contributions. You can stop and start again as often as you want
without charge. However, the annual charge will continue to be
made.
Q & A's
This will probably be because the previous statement included an
assumption that contributions would continue until you reach
retirement age. As they have now stopped, the value of these future
contributions cannot be included.
You will also have been told of the charges in the key features
document which you should have received before you agreed to take
out the pension plan. When you took out the plan, you should have
received a document known as the Cooling-off Notice which allows
you 14 days to change your mind and cancel the contract from the
start. In the Cooling-off Notice, all charges should also have been
disclosed.
Most personal pensions and all Stakeholder pensions will allow
you to stop contributions and restart them at any time.
You cannot have a refund even if the amount paid in is very
small.
