Pension for a New Baby

angelofabundance

I took a pension out for my son (now aged 11) with Standard Life, hoping he might benefit from a payout if they demutualise. Looks like this will happen.
My daughter is expecting her first baby in June and I wonder if there is another mutual company where a windfall might be in the offing if she wants to start a pension for the baby.

I think stocks and shares is probably a better bet than pensions really but the advantage is that they cannot access the money until they are 50, whereas it seems unless you undertake complicated legal stuff that everything else you do for children they can get their hands on when they are 18 when they might not be particularly financially mature.

Unless anyone can tell me otherwise of a better idea to set your children up for their future.

dunstonh

No more major mutuals left.

To be honest, i wouldnt be looking at a mutual anyway. It may be a small £1000 payout but over 40 years, a cheaper provider than standard life would save you more than £1000. Plus there is no guarantee that they are going to demutualise. If the vote was done today to demutualise, it would fail.

The minimum pension age is going up from 50 to 55. Its a good idea to do a pension for children. I have for my two and anyone considering it should do so before the charges increase in a couple of months. The way I see it, they are going to suffer with higher tax and bigger mortgages in their lifetime so putting a small amount away for them now will help them out a fair bit later on. Getting tax relief now and having it invested for 60 years is going to do very nicely.

angelofabundance

This seems to be the trouble with pensions, you take it out thinking it is 50 and then they seem to be able to change the rules as and when they like.
Anyway that aside, if you were me would you stick with Standard Life and change after they demutualise (I can do this can't I?) or do you think I would be wiser to change now. If you do , who is offering cheap rates at the moment?
Thanks for all your knowledge.

dunstonh

The age thing will probably be 60 by the time your children get there. The state retirement age could be 70-75 as well. Who knows?

I would stick with Standard Life for now as we will know about demutualisation in the next 18 months. After that, the decision can be made.