Pension for Son
Options
sunnyjim1234
Posts: 41 Forumite
Hi,
Back in 2005, I read a newspaper article about starting a pension for a child. It seemed like a good idea,my son was 8yrs old at the time, so I took out an Individual Stakeholder plan with Axa. ( The plan subsequently became a Friends Life plan.)
My intention was, that on graduating from Uni, my son would take over the monthly payments and would have the benefit of a bit of a head start with his retirement planning.
I never really took much interest in the funds performance, just set up a direct debit and forgot about it.
My son is now half way through a PhD, so has spent longer at Uni than anticipated and is still not yet in a position to start making his own contributions. I'd like to think this will change in two years time, but you never can tell!
My circumstances have changed recently and I am looking to cut my fixed outgoings, and would ideally like to cease paying the monthly contributions, but am concerned about how this plan will perform without regular contributions.
The monthly contribution is only £80, so I could suck it up if necessary, I just wonder whether I might be better transferring to something like VLS 100:think:
Would be grateful for any thoughts or suggestions.
Regards
James
Back in 2005, I read a newspaper article about starting a pension for a child. It seemed like a good idea,my son was 8yrs old at the time, so I took out an Individual Stakeholder plan with Axa. ( The plan subsequently became a Friends Life plan.)
My intention was, that on graduating from Uni, my son would take over the monthly payments and would have the benefit of a bit of a head start with his retirement planning.
I never really took much interest in the funds performance, just set up a direct debit and forgot about it.
My son is now half way through a PhD, so has spent longer at Uni than anticipated and is still not yet in a position to start making his own contributions. I'd like to think this will change in two years time, but you never can tell!
My circumstances have changed recently and I am looking to cut my fixed outgoings, and would ideally like to cease paying the monthly contributions, but am concerned about how this plan will perform without regular contributions.
The monthly contribution is only £80, so I could suck it up if necessary, I just wonder whether I might be better transferring to something like VLS 100:think:
Would be grateful for any thoughts or suggestions.
Regards
James
0
Comments
-
Lucky son!
I would advise him to start paying it himself now even if it means a small part time job.
Jerry0 -
An old fashioned product but fine for certain situations and quite flexible.
https://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/contract-based-schemes/stakeholder-pension-schemes?moreInfo=4
It is possible to make very modest contributions to a stakeholder.
Time for sonny Jim to take over and contribute £20 a month - gives him the chance to start taking responsibility for his future and helps him to consider his options when he starts work and has a workplace pension.0 -
sunnyjim1234 wrote: »My circumstances have changed recently and I am looking to cut my fixed outgoings, and would ideally like to cease paying the monthly contributions, but am concerned about how this plan will perform without regular contributions.
At this point, especially given your financial circumstances, that should be be his concern, not yours. He's a big boy now and daddy should tell him about it and hand over the documents and leave him to it.0 -
-
AnotherJoe wrote: »At this point, especially given your financial circumstances, that should be be his concern, not yours. He's a big boy now and daddy should tell him about it and hand over the documents and leave him to it.
Thank you Joe,
Very succinctly put, as usual. You're spot on.
Like you say, it's not really my problem, it's up to him to make the most of it.
Just didn't want to see the pot gradually deplete.
Regards
James0 -
sunnyjim1234 wrote: »Thank you Joe,
Very succinctly put, as usual. You're spot on.
Like you say, it's not really my problem, it's up to him to make the most of it.
Just didn't want to see the pot gradually deplete.
Regards
James
There's no way the pot should deplete ! It should still grow due to the underlying investments growing (obviously in the long term no doubt it can fluctuate though I know nothing about this particular plan.)
. If the charges are high enough that that's happening then transfer it to a low cost SIPP or similar.0 -
The monthly contribution is only £80, so I could suck it up if necessary, I just wonder whether I might be better transferring to something like VLS 100
You havent actually said what you put in place to begin with. So, we cant say whether VLS100 is a better option without knowing what it may be better than.So you think the product is ok to stick with
The old AXA stakeholder was available in two forms. It was also variable priced depending on where you bought it. So, again, without information we can't say.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
You havent actually said what you put in place to begin with. So, we cant say whether VLS100 is a better option without knowing what it may be better than.
The old AXA stakeholder was available in two forms. It was also variable priced depending on where you bought it. So, again, without information we can't say.
Thanks for your reply.
Sorry to be so vague. At the time I started the plan I was taking out a new mortgage and I asked the mortgage adviser to recommend something suitable. Looking through the paperwork, all I can see is that the contributions were invested in the Lifestyle retirement fund(s) which was the default investment choice.
Not sure if that means anything to you?
Regards
James0 -
Incidentally, you said your son was eight years old in 2005 which makes him only 20 now.
You also say
My son is now half way through a PhD, so has spent longer at Uni than anticipated
Is he an exceptionally bright young fellow or is there a typo somewhere?0 -
0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards