A pension for my 7yo child?
hazyfish
Posts: 13 Forumite
hello all, i'm pondering starting a pension for my 7 year old child.
is this a good thing to do? who knows what the pension climate will be like in 60 years - i imagine both pros and cons for starting a pension now.
And if yes, any recommendations for a good company to go with?
Thanks v much.
is this a good thing to do? who knows what the pension climate will be like in 60 years - i imagine both pros and cons for starting a pension now.
And if yes, any recommendations for a good company to go with?
Thanks v much.
0
Comments
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Well yes, it can be a good idea.
But a JISA is a good idea too. Think of all the expenses your child will have before retirement. Such as University, a house, wedding, children etc.
So dont JUST do a pension, save elsewhere for them too.0 -
I considered it for my son but decided that the tax benefit was marginal and could be completely removed if there are future increases in pensioner income tax and reductions in the tax free lump sum.
However investing young has many advantages in terms of riding out periods of loss and compounding returns. I decided to do a S&S Junior ISA with Orbis Access as they are running an offer where fund units bought in the first 12 months (which can cover 2 tax years) have no fees until 18yrs old. I will probably move it to cash or a safer Vanguard fund once he is 14 to moderate down the risks of investing.
Also I am saving for my son in my Nutmeg LISA (with a £1k pa bonus) as when I am 60 he will be 24 and looking for help with wedding, house deposit, etc.
Alex0 -
Say you put £20k in a pension, leave it there for 65 years @ 6% growth it will be worth 882k, thats without the initial £20k being tax deductible, i'm not sure if it would be or not?
Assuming 2.5% inflation over that period £1 now would be worth £5 in 65 years time.
I'd say putting a few quid aside now in a pension could be an incredible decision to protect them against there almost certainly not being state provision for anyone with any form of wealth in the future.0 -
Say you put £20k in a pension, leave it there for 65 years @ 6% growth it will be worth 882k, thats without the initial £20k being tax deductible, i'm not sure if it would be or not?
Assuming 2.5% inflation over that period £1 now would be worth £5 in 65 years time.
I'd say putting a few quid aside now in a pension could be an incredible decision to protect them against there almost certainly not being state provision for anyone with any form of wealth in the future.
I am, definitely, no pension expert but surely £2880 (to become £3600) is the maximum annual contribution for a non-earner? If not, I would be pleasantly surprised.0 -
A friend took out a stakeholder pension for his kids 16 years ago. £16pcm and they are now each worth £9k. The older ones are now incorporating them into their company pensions and it is making them think long term and that they have a good start. Job done.0
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I will tag on with my question - any recommendations/observations on a child SIPP that would have L&G multi asset fund with minimal contributions (about £50 monthly) - what provider ? suggestions of other fund would be welcome as well. I looked it up briefly and it appears that HL is the cheapest option with no charges on SIPP wrapper and funds buying.
Silly question - is L&G multi index the same as L&G multi asset?The word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers usually to difficult choice between two undesirable options.
Often people seem to use this word mistakenly where "quandary" would fit better.0
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