Pension for a baby

LeadFarmer

jeepjunkie wrote: »

Just what I said above really, nice to have more flexibility and online access......

Thanks

Did HL give you an option of a SIPP that they manage for you, where they make all the decisions, or did you have to choose one where you decide where to invest the money?

Thanks

[Deleted User]

LeadFarmer wrote: »

Thanks

Did HL give you an option of a SIPP that they manage for you, where they make all the decisions, or did you have to choose one where you decide where to invest the money?

Thanks

HL do have ready made portfolios to match your desired level of risk etc. Not quite the same service as an IFA though.

For my wife's HL SIPP we chose the investments directly.

If unsure give them a ring or contact a local IFA.

Cheers

LeadFarmer

Thanks, I will probably give Hargreaves Lansdown a ring in Monday. I may start with one of their Ready Made Portfolio SIPPs where I choose from 3 levels of risk and then they do the decision making.

http://www.hl.co.uk/pensions/sipp/investment-ideas-for-your-sipp/portfolio-plus

Im thinking of starting it off with £2k from my sons savings, and I shall then contribute £30/month myself.

Just need to decide which risk level to choose - low/medium/high.

LeadFarmer

Never did get around to sorting out my sons pension, but this week I'll be getting the money together and will be applying for a HL pension.

Not sure whether to start it off with £1k or £2k. Not sure how much of a difference this would make in the long term?

atush

well it will grow twice as much lol?

What do you think about current market volatility? If you are fine (and I would be with all the decades this has to run) go ahead with a Lump sum. If it will bother you to see it shrink if Brexit wobbles worsen, then put the money in say 100/month til what you have set aside runs out?

LeadFarmer

atush wrote: »

well it will grow twice as much lol?

What do you think about current market volatility? If you are fine (and I would be with all the decades this has to run) go ahead with a Lump sum. If it will bother you to see it shrink if Brexit wobbles worsen, then put the money in say 100/month til what you have set aside runs out?

Thats a good idea atush. I wasn't sure if my investment would just get mixed into one massive existing pot of money, or whether it gets invested at todays current rates? I don't know if I've explained that well?

MoneySavingUser

LeadFarmer wrote: »

I may start with one of their Ready Made Portfolio SIPPs where I choose from 3 levels of risk and then they do the decision making.

http://www.hl.co.uk/pensions/sipp/investment-ideas-for-your-sipp/portfolio-plus

Portfolio name
Ongoing charge (OCF/TEF) Adventurous Income 1.36% Balanced Income 1.35% Conservative Income 1.35% Adventurous Growth 1.46% Balanced Growth 1.44% Conservative Growth 1.39%

Those are quite expensive - you might want to read up on active vs passive investing and consider a tracker fund: http://www.hl.co.uk/funds/index-tracker-funds/core

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As an aside - in theory the child could wait until they are 18 and take out all the money (and suffer the 55% tax charge) - is there any way to prevent this?

atush

LeadFarmer wrote: »

Thats a good idea atush. I wasn't sure if my investment would just get mixed into one massive existing pot of money, or whether it gets invested at todays current rates? I don't know if I've explained that well?

It gets invested on the day you ask it to be (unless your order is made outside trading hours).

Unless you are investing in an investment trust (and I do). In that case, the deal is made at 12 noon on the next trading day (unless you invest early in the day ie before 12 noon.

Prothet_of_Doom

I think you must be slightly mad. Yes we all want to make life easy for our kids, but a pension ? I suppose if you have excessive piles of cash sitting around and nothing to spend it on, but personally I think you should give money to a charity, for children who are facing challenges. I'm thinking ambitious about autism. https://www.ambitiousaboutautism.org.uk/ Tax efficient if you gift aid.
Perhaps get involved with your kids and teach them that not everyone has the advantages they have.
In fact my daughter (and I) are about to run a half marathon in october and have just the fundraising page ready. How about the first months pension contibution?
https://www.justgiving.com/fundraising/Grace-Jackson2

jamesd

There are quite a lot of people here who are well off enough to be able to do both pensions and other things, partly due to the wide age range which means that there are a lot of older people who have already accumulated significant assets.

Pension contributions for a grandchild or child can be a handy tool because if given out of ongoing income they are exempt from inheritance tax. Same for ISAs and other investments, of course.

For charity giving it'd be more efficient to wait until death if inheritance tax will be a factor. This is because a charitable contribution of just £10,000 from an estate can result in a £7,600 reduction in inheritance tax. Far greater gain than giving while alive.