By Sarah Toyne BBC News Online personal finance reporter

The stakeholder pension scheme celebrated its first birthday on Saturday.

The scheme was designed to offer a low-cost and transparent way of saving - and has been, in that sense, partly successful.

Who is buying a stakeholder?*

Over 750,000 people have bought a stakeholder pension 97% have been bought by or for people of working age, 2% were bought for children and 1% by those aged 65 or older 69% of stakeholder pensions have been bought by men and 31% by women *April 2001 to February 2002

By February 2002, 750,000 people had signed up to a stakeholder plan, investing �619m in total.

The scheme has also had an impact on the rest of the pension industry - higher standards are expected and charges have been eroded as a result of their launch.

But a champagne-fuelled celebration this Saturday by the government was unlikely - it would be too premature.

While news of multi-million pound investments into stakeholder plans is a positive sign for the government, such sums represent a mere blip when compared with the UK's estimated �27bn savings gap.

Stakeholder benefits

Stakeholder pension plans are good news for a beleaguered financial services industry and promise cheap charges and transparency for investors.

The main features are:

• Annual charges can be no more than 1%.

• Investors are free to deposit as little as �20, and can stop and start their investments penalty-free at any time.

  Pension contributions could be compulsory

• Their introduction in April has opened up retirement planning for women who have given up work to have children. Previously, anyone without an income was excluded from saving into a personal pension.

• Non-earners can invest up to �2,808 a year and receive basic-tax relief. This means the government will contribute 22p for every �1 invested - a total of �3,600 a year.

• Plans are aimed at people earning �9-18,000 a year.

Tax dodge?

Stories that wealthy grandparents and parents have been using the scheme as a tax dodge for future generations of their families appear unfounded.

Only 2% of plans were bought for children, and 1% by those aged 65 or older between April 2001 and February 2002.

There was a hint of delight in the statement released by the Department for Work and Pensions this week.

Alistair Darling, secretary of state for work and pensions, said: "Yet more encouraging results that tend to give the lie to all those stakeholder pensions bought by grandparents for their grandchildren.

"Early results show steady sales going to people for whom they are intended."

Growing awareness

There is evidence - from another survey published this week - that the public's awareness of stakeholder plans has grown.

A survey by Marks & Spencer Financial Services found that only 49% of people were unaware of the scheme, compared with 70% a year ago.

But if this growing awareness fails to materialise in sales, the government could, in a move many in the trade see as increasingly likely, make private pension contributions compulsory.

As Jeff Rooker, then a social security minister, confirmed to a social security select committee in July 2000 - before pensions became the political hot potato they are today - in 50 years the state pension is predicted to amount to just �31 a week in today's terms.

"It will form an ever-diminishing contribution proportionate to the total pensioners income," Mr Rooker said.

"Looked at on its own, if you like, it can be done as an academic exercise, but that is not the real world. Nobody is expected to live on it."

In that sense, the debate about the stakeholder pension is so much wider than people saving for their retirements.

The issue is at the heart of public services, the welfare state and the creation of National Insurance Contribution (Nics) in 1948.

Other critics are concerned that compulsion could cause yet more complications for the UK pension industry - and the consumers who are desperately trying to understand what on earth it is all about.