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    • Catherine2017
    • By Catherine2017 13th Jul 17, 10:44 PM
    • 1Posts
    • 0Thanks
    Children's pensions
    • #1
    • 13th Jul 17, 10:44 PM
    Children's pensions 13th Jul 17 at 10:44 PM
    We are thinking of setting up a children's pension for our child. Can you share your insights on the following:
    - Is it a good idea to pay into a children's pension?
    - Which one is better: children's stakeholder pension or SIPP?
    - Which provider is most cost efficient, in terms of setting up fees and annual fees, etc.?
    - Are pension savings safe - if a pension provider closes down for whatever reason, what happens to the pension savings?

    Any help is much appreciated.
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    • Alexland
    • By Alexland 14th Jul 17, 11:10 PM
    • 1,998 Posts
    • 1,410 Thanks
    • #2
    • 14th Jul 17, 11:10 PM
    • #2
    • 14th Jul 17, 11:10 PM
    It might be a good idea if tax rules don't change much in the next 60 years. If contributing to a SIPP you get a government top-up but it is likely that your child will pay income tax when drawing income in retirement (the state pension uses up most of a pensioners 0% income tax allowance). The 25% tax free lump sum brings this down a bit.

    Defined contribution stock market pensions are protected by FSCS up to £50k (not much these days) however there is no protection if the investment s don't perform and you suffer capital losses.

    Personally I am using an Orbis Junior ISA and my own Nutmeg Lifetime ISA to invest for my son so cannot comment on Junior SIPP best buys but Fidelity look safe and simple (eg the low cost tracker) or AJ Bell for DIY investing.
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