A Stakeholder Pension is a tax-efficient, flexible, low cost pension plan that you can save regularly towards and make one off lump-sum payments as and when you like.

Your money is invested in the Stakeholder Pension Fund which aims to take advantage of any stock market growth during the good times. But like all funds that invest in stock market based assets, the value of your investment will go up and down in line with the financial markets and we cannot predict what your pension will be worth at retirement.

It is very difficult to predict exactly what you'll get back as your payout will depend on the performance of our Stakeholder Pension Fund, which is where your money is invested.

Your money is invested in the Stakeholder Pension Fund which aims to take advantage of any stock market growth during the good times. But like all funds that invest in stock market based assets, the value of your investment will go up and down in line with the financial markets and we cannot predict what your pension will be worth at retirement.

When you claim your pension, you can take up to 25% of your fund as a lump-sum, which will be tax-free. You'll have to convert the rest into a pension income, which is usually done by buying an annuity from an authorised provider. We don't currently provide annuities.

If you're over your lifetime allowance (£1.8 million for the 2011/2012 tax year) when you claim your fund, a tax charge will apply on the excess.

But remember the government may change the tax rules in the future.

You can save regularly from £20 a month and make top up payments from £20 by cheque whenever you like.

However, like all pensions, there are contribution limits and if you have more than one pension, you need to remember the combined total must not be more than the below otherwise you will be subject to tax penalties.

Annual allowance

You can contribute the greater of £3,600 (gross) or 100% of your gross UK earnings up to £50,000 per year before you are subject to tax penalties.

Lifetime allowance

You can contribute a maximum of £1.8 million (2011/2012 tax-year) to all your pensions in your lifetime before you are subject to tax penalties. The Government has confirmed that this limit will reduce to £1.5 million in the 2012/2013 tax-year.

But remember the government may change the tax rules in the future.

Due to tax reasons, you can only make regular payments by Direct Debit and top up your investment by cheque.

Your Stakeholder Pension will continue as normal and you'll still be a member of Police Mutual so you could take out further plans if you want to.

If you die before taking your pension benefits up to the age of 75, your fund can be paid as a lump-sum to your family.

This lump-sum will be tax-free if the value is less than your available lifetime allowance at the time of your death.

If you die before taking your benefits after age 75 there will be a tax charge of 55%.

But remember the government may change the tax rules in the future.

The Stakeholder Pension is generally for anyone who doesn't get the full benefit of an occupational (company) scheme.

This could be for you if you're a Police Officer serving less than 35 years and want to boost your pension pot. Or if you're a member of Police Staff looking to build up your pension.

Most people can benefit from a Stakeholder Pension, whether they are employed, self-employed or not employed, providing they are able to make sufficient contributions.

• Employed - you can contribute to a stakeholder pension even if you're part of an occupational pension scheme. It's a good way to boost your retirement income.
• Self-employed - a stakeholder pension could be particularly suitable for someone who is self-employed, such as an Officer's partner running their own business.
• Not employed - even if you're not in work, you can put up to £3,600 gross (£2,880 net) into a pension per year and still receive tax relief. So you get back tax you haven't even paid.
• Children - there's no lower age limit to stakeholder pensions, so even children can have a plan. You can help your children or grandchildren plan for their long-term future.

But remember the government may change the tax rules in the future.

There are several tax relief measures, so it is tax-efficient, but there is some tax to pay depending on how much you contribute and when you take the benefits.

Here's a summary of the tax relief available.

Contributions

For every £80 you pay into your pension, £100 is invested. This is because the tax you've already paid on your income - at 20% - is given back to you and put into your stakeholder pension.

Non-earners also receive this tax benefit and so will get more tax relief than they've actually paid. Higher rate tax payers can claim further tax relief through their tax returns.

At retirement

When you retire, you can take up to one quarter of your fund as a tax-free lump sum. The remainder must go to purchase a pension income in the form of an annuity, which you may pay income tax on.

But remember the government may change the tax rules in the future.

Our Stakeholder Pension can run alongside the Police Pension Scheme and other occupational schemes. It's a great way to supplement your current pension but shouldn't be viewed as replacement for it.

However, like all pensions, there are contribution limits and if you have more than one pension, you need to remember the combined total must not be more than the below otherwise you will be subject to tax penalties.

Annual allowance

You can contribute the greater of £3,600 (gross) or 100% of your gross UK earnings up to £50,000 per year before you are subject to tax penalties.

Lifetime allowance

You can contribute a maximum of £1.8 million (2011/2012 tax-year) to all your pensions in your lifetime before you are subject to tax penalties. The Government has confirmed that this limit will reduce to £1.5 million in the 2012/2013 tax-year.

But remember the government may change the tax rules in the future.

We can accept transfers from most other pension arrangements once your Stakeholder Pension has been set up. Although you'll need to check if your existing pension provider charges you for this.

You should also seek advice to see whether transferring is the correct option for you. Transfers do not normally count towards your annual payment allowance.

We'll send you a statement each year which will show the performance of your pension so you'll be able to keep track of your fund.

You can also contact us when you'd like an update in between your statements.

A Stakeholder Pension cannot be cashed in until you are 55 years of age. Except within the 30 day cancellation period you have when you first take out the plan.

Saving for your retirement should be seen as a long term commitment. We have a range of options to choose from if you are looking for a different type of savings or investment plan.

> Savings

> Investments

There's no interest rate with the Stakeholder Pension. Any growth in your investment is based on the performance of our Stakeholder Fund.