Pensions for children.

fimonkey

Hi, Am looking for information regarding starting a pension for my two nieces who are currently 10 and 13yrs old. I read an article somewhere about this but didn't take much notice at the time... Anyone point me in the right direction please?

If I were to put £20 month away for them each, regularly, would a pension be a good place to start? (Don't want it to be instant access for them, i want to do something long term, and one that makes best use of tax breaks etc, - whatever they may be).

Cheers

jezebel

I think that a better idea for them at this age would be a savings bond or account of some description that pays out when they are 18 (or an account in their names that they do not have access to). This way they can use it for weddings, university or any number of other things that they will face a long time before retirement and still it will have the effect of teaching them the value of money. My parents paid into a life insurance scheme for me for 16 years through my childhood and I got a £1800 pay out before I went to Uni, it helped curb student debt in my case and meant that I had a computer for my college work.

fimonkey

My sister has already taken care of those aspects and there is an education fund as well as an account that matures when they reach 18. I though starting a pension early would encourage them to take it over when they're 18, and if not at least whatever I've put in there will continue to grow.

Anyone know if there is more (objective) info online?

Cheers

Moonbeam

I've started a pension at £10 per month for my 3 year old to take advantage of the amount the government will also put in and the hope that it will encourage him along a route of long-term planning at a young age.

This is together with other short-term and medium-term savings and investments. It seems to me that it can be a useful form of saving and I certainly know I would be in a better financial position now if a relative had done that for me. I'm sure there is another thread somewhere on here where it has been discussed before.....

Desperate_Housewife_2-2

Virgin money do pensions for kids http://uk.virginmoney.com/pension/child/
and you can start one from £1. You could do a cheap one and give it to them for their eighteenth birthday to get them started as well as a medium term fund to help with education costs when they are 18.

dunstonh

Virgin pensions are awful. Avoid them at all cost. They probably have one of the worst pensions you can buy.

Moonbeam

"Virgin pensions are awful. Avoid them at all cost. They probably have one of the worst pensions you can buy."


Based on what.....I've taken my son's out with Halifax, but would like to know why Virgin's are so bad?

dunstonh

Virgin charge on the same basis as if you had received advice. There is no discounting to reflect execution only. The couple of funds offered are useless for investing.

Halifax wont be much better either I'm afraid. Full cost, limited investment options and below par investment funds at that. Nothing against Halifax there but it is typical that banks have poor quality investment funds in general.

Moonbeam

thanks - interesting to know - I work in banking, but can honestly say that the one area that remains pretty much a mystery to me is pensions - I have a rough grasp of them but there are huge gaps in my knowledge.

Presumably even if you start a pension with a bank you can transfer it to another provider in the future though.....or maybe I'm being naive about that too....

bootman

I did my sons with standard life. I pay I think £19.50 a month and it gets topped up to £25. After a bit of advise from the forum that the set up I had was pants, I have picked a few funds myself to play with.

dunstonh

Presumably even if you start a pension with a bank you can transfer it to another provider in the future though.....or maybe I'm being naive about that too....

Yes you can. No charge for doing so.