Stakeholder Pension a good idea?

Will keep it short:
Am self employed UK/US dual citizen residing in UK. Have no pension other than tiny stakeholder that I haven't contributed to for about a decade. Should I start contributing again or will the IRS crucify me? Thanks for any thoughts.

All right then, a reply in short.

Basics:

- a stakeholder pension is just an investment account, and if you agree that the life companies are not scouring the world trying to make you money, but simply investing where you tell them to, then the only measures of value are the charges you pay for them doing so, the taxes you save/pay and will pay, and whether you can invest in the markets you want to. The same reasoning applies to your UK auto enrolment pension, by the way.

- in terms of charges, stakeholders should have been averagely expensive (Sandler) but turned out not to be. However for accounts of less than 30k, about the best you can do. Unless of course you have not brought all your pensions together

- in terms of tax, a UK pension is still tax efficient from a US/UK national in the UK, but so is a US pension account. In fact, if you can work the option (not so easy), the US account is more tax efficient than the UK one both in accumulation and in depletion (pay out). Assuming that is, you are resident in the UK when you take an income. If you will be resident in other countries, the above may not be true. Also, you would not believe the tangles that US companies get into when they realise you are not US resident. Actually,you probably would,

- the big trouble with stakeholders is that you can't invest where you want to (where the growth is).

Summary

UK Stakeholders are ok as a start, until you get enough in the account to get an optimal return from world markets. While you're accumulating that, invest safely. When you get enough move it all into a SIP. To figure out the best would need a lot more information from you.

If I were you, I would work out a strategy of how to maximise both UK and US state pensions first. They're better value.

I can give you a shortlist of three companies to advise you, probably 1000 to 2500 GBP.

If I wrote a book on this, priced, say £15, would you buy it? Is there a market for it?

You might want to look into a US ROTH if you have earned income on your 1040.....the difficulty is that it is very difficult to open a US investment account without a US address.

The stakeholder pension will be tax efficient in both the US and the UK, however, whether it is a good investment will depend on the funds and fees of the pension. I would first look at your pension and understand exactly what you have, then take advantage of the new UK pension rules and shop around for a pension with some low cost index tracker funds and start invest in an asset allocation appropriate for your goals and circumstances. It might be best for you to move the stakeholder pension if your current company does not offer low cost trackers.

Keep your investing simple and minimize fees. Don't over emphasize high growth world markets or sectors as they also come with added risk. I'd put most money in the FTSE and S&P500, maybe put 20% in other international markets and stick to high quality fixed income, you won't get rich, but you won't lose your shirt either......and use inexpensive trackers, avoid actively managed funds and if you can DIY, fees are the biggest drag on a portfolio.

Thank you for some great advice both of you. And yes, I would buy a book on the subject. Let me know when you've written it!