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Contribution to son's stakeholder pension
hillabaloo
Posts: 14 Forumite
Our son (19) is starting a low paid job and considering a stakeholder pension (not offered by the company). I understand we can contribute up to a certain amount. How does this work? Do we transfer the money to him to reinvest (not ideal!) or can we contribute directly? What is the limit to our contribution?
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Comments
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I understand we can contribute up to a certain amount. How does this work?
£3600 a year or 100% of his gross earned income upto £50,000 a year whichever is higher.Do we transfer the money to him to reinvest (not ideal!) or can we contribute directly?
Direct debit comes from his account as he is not a minor and you set up standing order to pay him to go through say a week before the direct debit is due.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 -
I don't know of any reason why you can't pay directly, and if anyone knows differently then I'd love to know as we pay into a pension for our 18yo daughter.
As long as the payment you make is from your income, and there is no effect on your standard of living, or if you don't give him anything else so the total pa is <£3k, then you should be OK regards inheritance tax.
http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm
Keep records of all gifts as it makes things a lot easier if you suddenly fall victim to the number 37 bus!I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0
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