Pension for a baby

Spidernick

All I would add is that would you be able to afford to do the same for any other children you have (if that's the plan)? I'm sure you'd want to give all children the same, so that's something worth considering.

JackRussell

Spidernick wrote: »

All I would add is that would you be able to afford to do the same for any other children you have (if that's the plan)? I'm sure you'd want to give all children the same, so that's something worth considering.

Luckily we would be in a position to do the same for another child should we erase the sleepless nights and zombie feeling from our mind Good point though, hadn't really thought about that. :beer:

audigex

I'd totally agree with the house deposit being a bigger priority

Helping with their house as much as possible will help them when they are teens and early 20's, when money is tightest. It will also put them in a much better position to build up their own pension later. Equally it will save them money on interest on a mortgage etc.

A house is security for life, a pension is security when you're old and have had an entire life to prepare for it. I can't think of anybody who would prefer a little extra money in their old age, over the extra money to enjoy when they're young, and the increased security/reduced costs of a lower mortgage payment in the middle of their life when they're raising their own children.

Besides, you can just leave your children your own house in your will, with a stipulation that it goes to their pension. Voila... you've done both.

Triumph13

audigex wrote: »

Besides, you can just leave your children your own house in your will, with a stipulation that it goes to their pension. Voila... you've done both.

Exactly the point I was going to make. Depending on how young you are now, the time your child(ren) will be retiring is probably about the same point as you'll be shuffling off this mortal coil - and leaving them your house and anything left in your pension.
It probably makes more sense to help them with house purchase early on which will leave them better off throughout their lives, rather than suddenly dumping both an inheritance and a pension on them when they're 60-odd.

LeadFarmer

I want to set up a pension for my 9yr old son.

I accept the comments about helping them in other ways such as with their first house purchase etc but I've already got this covered. So I've decided I want to start a pension for him, but where to start....?

1) Can I approach a company like Aviva directly and set one up, or do I need a Financial Advisor?

2)What types are available?

3)Finally, a morbid topic, in the event of his death can someone else benefit from his pension pot, such as myself or family member? Or would a will be needed?

jamesd

3. A will would make no difference because a pension is not part of a person's estate and hence is not governed by what a will says. An "expression of wishes" form that tells the trustees what the pension owner wants to do is the method used. In your situation it is likely that his parents would inherit while he is still a minor. I'm unsure whether he could provide an effective expression of wishes while not a minor, for example he might choose a friend or sibling. As soon as he's not a minor he can nominate anyone he likes.

1. You can approach a company directly but just going to a company like Aviva is likely to be poor because of the nature of that and the other big insurance companies and the way they price products. Better to use one of the companies that has direct sales to consumers as its main market and which prices accordingly. You don't need a financial adviser to buy a pension product.

2. There's only one broad type, the personal pension. A sub-type is the self-invested personal pension (SIPP) that can often offer more choices of investment than products marketed using just the personal pensions name.

LeadFarmer

Thanks for the reply jamesd.

Ive been looking at the Aviva stakeholder pension through Cavendish. Their pension can be claimed from age 55. Fees start at 0.55% and reduce to 0.5% and 0.45% dependant on size of fund.

ourcornercottage

I have a stakeholder pension set up for my 7 year old with Aviva. When I set it up last year they were touted online as the best option for kids.

You cannot deal directly with then, when I dealt with them they only go via financial advisers and it cost me about £175 to set up :mad:

I pay in £20 per month currently to the pension but like others have said I have enough in my sons savings for uni fees or new car or house deposit already. That is sitting earning at least 3% interest and I'm adding £100 to it every month.

I'm too old to have more kids so don't need to consider that option :rotfl:

I think even at my £20 per month for 50 odd years that's got to result in a fair chunk for him taking into account potential growth and compounding. As time goes on the £20 will increase with inflation and if I remember right the prediction was about £80-90k which even in 50 years will be a nice bonus for him.

[Deleted User]

Yeah the Aviva Stakeholder for DD cost ~£30 to setup through Cavendish though if I was doing it again I would have gone straight to the HL SIPP with zero setup cost Cheers

OldBeanz

I took out a Stakeholder pension for my kids. Showing them how saving 50p per day turned into £6k+ 14 years later is a good lesson in the benefits of long term savings of even trivial amounts. Also shows why a daily bought coffee and packet of cigarettes could make the difference between a pension and an excellent pension.