Should I take out a stakeholder pension?

Q I'm in desperate need of some unbiased advice. I'm a 31 year old single female homeowner with ?45,000 mortgage. I'm self employed, and earn between ?l2, 000 to ?l5,000 a year.

I don't have a pension although I am looking at taking out a stakeholder pension. Since l have my working life living abroad, and only recently returned to the UK so have very little National Insurance contributions, I can't seem to get any helpful advice on whether a stakeholder pension would be worthwhile. I'm wondering if the money would be better in a cash individual savings account (Isa), which I am doing at the moment.

Meanwhile l am at present paying ?l5.33 a month for life cover and critical illness, and ?23.76 mortgage repayment protector (which l feel is expensive, unnecessary and unsuitable since it covers redundancy and l am self-employed). Both policies are with my bank, which supplied my mortgage.

PT

A My unbiased advice would be to start making regular contributions to a stakeholder and forget about the cash Isa for the time being. The attraction of a stakeholder pension is that the government is effectively making a contribution of over 20% and charges for managing the fund are kept under control by the "cap" of 1% annually. I think they give very good value. The reason why stakeholder pensions have not been a great success is that the cap on charges means very little commission for financial advisers, who therefore do not recommend them.

As to your insurance needs, you have to take into account what it is for-if you die, for example, who would your money go to? I think you should switch to a decreasing term assurance to cover repayment of the mortgage, which would be cheaper than life insurance, but stick with the critical illness cover. I would cancel the mortgage repayment protector policy, since as you say it is inappropriate for your circumstances and very expensive.