Stakeholders suite providers

Regulations for a new suite of financial products came into force yesterday. Known as the Stakeholder suite, and an outcome of the 2002 Sandler Review, the new regulations are a welcome step forward for consumers looking to invest in simple, low-cost, risk-controlled savings and investment products.

The Stakeholder suite forms a key part of the Government’s wider saving and assets strategy. The suite introduces criteria for a new cash deposit account, and medium term investment vehicle, as well as the Child Trust Fund, and builds on the successful introduction of the Stakeholder pension in April 2001.

Providers and distributors are rolling out products that meet the Stakeholder criteria. Among those whose products meet the deposit account specifications are HSBC and Nationwide. Those whose products meet the medium term investment fund specifications are HBOS, Legal & General and Nationwide.

The Stakeholder pension is already offered by over 30 registered providers. And there are now over 90 official providers and distributors of the Child Trust Fund. All make the option of a Stakeholder Child Trust Fund account available to their customers.

Consumer awareness of the suite will be facilitated by a major marketing campaign scheduled for later this year.

Notes for editors

1. The Sandler Review of Medium and Long-term Retail Investment set up by the Chancellor of the Exchequer in July 2001, reported in July 2002.

2. The new Stakeholder suite deposit account will:

a. pay interest of no less than 1% below base rate;
b. feature unlimited withdrawals and free transfers between accounts and providers; and
c. have a minimum deposit amount of £10.

3. The medium term investment vehicle in the Stakeholder suite will:

a. feature the capped charging regime of 1.5% annual management charge for 10 years and 1% after;
b. hold a maximum of 60% in equities and property and must be diversified, with the remainder in lower risk assets such as cash or bonds; and
c. include free transfers.

4. The revised stakeholder pension:

a. builds on the existing stakeholder pension, of which 2.3 million had been sold by the end of December 2004;
b. features the new capped charging regime of 1.5% annual management charge for 10 years, and 1% after; and
c. provides for investments to migrate from high to low risk products as individuals move closer to retirement date (lifestyling).

5. The Stakeholder Child Trust Fund:

a. has an annual management charge capped at 1.5%;
b. provides exposure to equities;
c. investments must be diversified; and
d. includes the provision for investments to move from shares to lower risk investments such as bonds and cash from the child’s 13th birthday until maturity at age 18.

6. Media enquiries should be addressed to Will Straw at the Treasury press office on 020 7270 4420.

7. Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk.

8. This press release and other Treasury publications and information are available on the Treasury website at www.hm-treasury.gov.uk. If you would like Treasury press releases to be sent to you automatically by e-mail you can subscribe to this service from the press release site on the website.