Are stakeholder pensions risky?
A reader from London wants to know the risks of a stakeholder pension.
Andrew Norton, Halifax and Bank of Scotland investments expert, tackles the problem.
Hilary from London asks:
Some of my colleagues are trying to convince me to open a stakeholder pension, but I'm not sure. Are there risks involved?
Andrew replies
Yes, your contributions are invested into an investment fund and the value of your plan is based on its performance.
The value of your investment can go down as well as up and you may get back less than you originally invested. Different types of investment funds carry different levels of risk depending on the assets the fund invests in. The value of your stakeholder pension may be based on the performance of UK and international stock markets or interest rates.
Generally, the more risk you take the more potential you have for growth or loss.
There are other types of risk associated with pension planning and an individual will need to discuss their situation with a financial adviser.
If you have a question for Andrew, go to the myfinances.co.uk Ask the Investments Expert section
Or for more information on your investment options go to investments at Halifax.
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