Researching Pension Options for Children - Advice Please!

DontDoDebtKids

Hi everyone,

I read an article ages ago about setting up pensions for children and always planned to do so for my own children. I now have a daughter and would like to figure out whether it is worth it and what the options are (as the costs of the pension will matter over a long period and also the amount I would need to contribute every month will be a factor).

Has anyone got any experience of doing this? Should I simply look at the annual management charges and choose on the basis of this? Any other tips?

So far I've found:

1) Legal & General

http://www.legalandgeneral.com/pensions-retirement/stakeholder-pensions/stakeholder-pension-for-children/

Seems like the minimum you need to invest is £20 (either as a one off or regularly).

The annual management charge is 1.0% for up to £25,000 but then there seems to be a further "temporary management charge" of 0.2% if you have less than £15,000 in the pension...

2) Virgin Children's Pensions

http://uk.virginmoney.com/virgin/pension/kids/

Seems like the minimum here is only £1 (one-off or regularly)

Fees only seem to be 1% a year

3) AVIVA Stakeholder Pension for Children

http://www.aviva.co.uk/stakeholder-pension/stakeholder-pensions-for-children.html

Minimum contribution seems to be £20

Fees however seem to be 0.55%, which is much better than the other two!

4) Scottish Life

No real details on this but it's mentioned that you can get it via IFAs and has a 0.9% charge: http://www.moneywise.co.uk/banking-saving/savings-accounts-isas/best-pension-kids-2015

xylophone

A pension is fine but when I was Trustee for a minor I made sure that there were cash/stocks and shares savings as well for use in the near/medium term.

Are you using JISA as well?

FatherAbraham

DontDoDebtKids wrote: »

Hi everyone,

I read an article ages ago about setting up pensions for children and always planned to do so for my own children. I now have a daughter and would like to figure out whether it is worth it and what the options are (as the costs of the pension will matter over a long period and also the amount I would need to contribute every month will be a factor).

Has anyone got any experience of doing this? Should I simply look at the annual management charges and choose on the basis of this? Any other tips?

...

3) AVIVA Stakeholder Pension for Children

http://www.aviva.co.uk/stakeholder-pension/stakeholder-pensions-for-children.html

Minimum contribution seems to be £20

Fees however seem to be 0.55%, which is much better than the other two!

From your research, Aviva sounds like the best of the bunch. Fairly low fees. Small minimum payments. Almost certainly sufficient fund variety and investment options to be a good place to put funds long-term (sixty to seventy years). What's not to like?

There's an MSE article you could read: http://www.moneysavingexpert.com/savings/discount-pensions#best

I've used Cavendish Online as a flat-fee IFA to set up a child's pension. As usual, the anti-money-laundering regulations make setting things up slightly tedious and risky (identity documents sent through the postal system etc), but then laws are designed to punish the innocent, aren't they?

The important thing is probably to get started, and avoid the pension arrangements which have minimum contributions which are too high for you.

Remember that you're giving your money away, and it will be impossible to get it back. Ensure that your own pension provision is adequate before funding someone else's retirement.

Warmest regards,
FA

atush

I agree with post 2.

Pensions for children are all well and good, but I feel a JISA or other equity savings plan for ages 18-25 and a savings acct for pocket money bday presents and a pension after.

DontDoDebtKids

We've sorted the savings account - we went for the Halifax Young Saver Account:

http://www.halifax.co.uk/savings/accounts/junior-savers/

This earns her 6% interest (we've registered for gross interest).

I get the feeling I should also look into a Junior ISA but I'm not sure what else I should be looking at...

DontDoDebtKids

OK I found this article:

https://www.moneyadviceservice.org.uk/en/articles/junior-isas

It seems that I would struggle to get an cash JISA account that pays above 6%, so it isn't worth moving the money from my daughter's current savings account.

Also, if she ever pays tax in the future, the amount in her savings account would be able to be transferred using one year's JISA allowance - £4,080.

So, I need to look into JISAs that enable investment in shares...

DontDoDebtKids

Seems to be backed up by the MSE article on JISAs

http://www.moneysavingexpert.com/savings/junior-isa

Top JISA cash rate is only just about 3%. Doesn't seem to be an article on shares JISAs though

xylophone

The interest rate on the regular saver is 6% but you are limited to a maximum deposit of £100 a month.

Halifax offer 4% on a JISA if the parent contact for the JISA has an ISA with them.
http://www.halifax.co.uk/isas/cash-isas/

Halifax does offer a stocks and shares JISA but you might prefer a wider choice of funds and cheaper management charge.

http://www.mummymoneymatters.com/savings-junior-isa/

https://www.gov.uk/junior-individual-savings-accounts/overview

DontDoDebtKids

Ooops, I meant 3% - it's the young saver account... :mad: