Pension for my son

Grashnak

I'm going to become a father very soon and see no reason why I shouldn't think about his very long term financial security from day 0. So whilst I am planning on building up a small pot of funds for him to go to college/university/deposit for house e.t.c. also struck me that I could get him started on his pension. Even smallish regular contributions would certainly add up by the time he joins the rat race and hopefully enjoy a very large amount of compound intrest by the time he retires.

However - and I guess these are the key questions, would any contributions I make now recieve tax relief ? Also of course, is there a limit on the age I can start his pension ?

TotallyBroke

I'd be interested to see info on this also. The difference is I know nothing about pensions so want to get my ds started on one so he doesn't end up in the same boat as me.

Lokolo

Yes. You can make payments of upto £2000 and something and they will add the other 20%. I can't find the exact figures wait there!

HMRC wrote:

For registered UK schemes, you can get tax relief on contributions of up to 100% of your UK earnings, or, if you are a non-taxpayer, every £100 of contributions will receive a contribution of £25 from HMRC up to a maximum of £3,600 per tax year. You can contribute more than this, but your fund will not receive any further contributions from HMRC.

However saying that it is pretty pointless because he won't get access to the money til he is 55+.....

Grashnak

Thanks for the quick response Lokolo ! Appriciate it is likely he won't be able to touch it for a very, very long time (who knows what future legislation will make that time), just the idea of an extra couple of decades of compund intrest is very appealing.

Mini_Bear

But surely inflation would erode the value of the cash over time?

Lokolo

Mini_Bear wrote: »

But surely inflation would erode the value of the cash over time?

Who says that this is all going to be cash based?

EdwardR_2

You can contribute £2880 per tax year. 20% tax relief will then be added to bring it to £3600.

This is the same even if you are a non taxpayer, basic rate tax payer or a high rate tax payer.

knuckledragger

Grashnak,
I did just the same thing for my kids in the last financial year. I opened up SIPP for them. The provider automatically claimed the tax back on the contributions that I made.
It was a crazy year in the markets and I felt happy with a great deal of risk as it was the start of their pensions, so I bought and sold shares in several companies. I was very lucky and made a return of about 80%. I am a little more cautious this year with their pots...

Grashnak

Thanks guys I'll talk to an IFA