The media has been full of stories about the new "Stakeholder Pensions" being introduced in 2001. What are they - perhaps more importantly, what effect will they have on businesses?

In essence, Stakeholder is a low-cost savings vehicle aimed primarily at those earning between £9,000 and £18,500 per annum (though others may wish to take advantage) and it will be available from April 2001. There are no new incentives and no compulsion (yet!), so it remains to be seen how successful it will be. The only really new feature is that all businesses must consider whether they are required to offer their employees "access" to a stakeholder scheme. This would involve;

Consulting with employees to select and "designate" an appropriate scheme.

Providing employees with details of the scheme.

Allowing representatives of the designated scheme access to employees to provide information.

Offering payroll deduction facility, on request.

Note the potential obligation which is not there. There is no requirement on the employer to contribute to a Stakeholder scheme on behalf of employees - although of course some businesses may decide this is something which they wish to do

Many businesses will be exempt or can make themselves exempt from Stakeholder by making adjustments to existing arrangements. We can provide a flow chart which should help you decide whether your business is exempt or whether you need to take advice on the options open to you. We can also advise you on changes that may be required to your payroll and, if you do not have your own advisor, JWP Financial Services can provide advice to ensure that you comply with the new legislation.

There will be no shortage of salesmen trying to sell you their favoured product - you need to ensure that whatever action you take is tailored not to their needs, but to the current and future needs of your business. In any event, Stakeholder comes into force in just 6 months time, so you need to start planning now.