childrens pension

edinburgher

I agree with both Number75 and henry24!

We went through the same thought process Number75 did for our own daughter, but henry24 strikes me as perfectly logical in expecting parents/grandparents to do the heavy lifting as regards any 'life event funding'.

The pension idea is a lovely thought, I am sure that your Godchild will be very grateful one day

[Deleted User]

For us, daughters pension contributions are currently one fifth of the overall total. With the remainder in NS&I and a JISA.


Only started the pension [Cavendish] for her a couple of years ago so is tiny in value when compared to money that will be used for uni, house, car, travel etc...


Likely to only be contributing to it for another sever years so it will never be something to live off but that is not the plan. It's nice to have pockets of money to look forward to in the future.


I would add that as her overall savings have really started to build up [more than me!] we have now started using my wife's ISA allowance so we have some control...


Cheers

triple_choc_chip

Another vote for a pension from me. I originally paid £100 a month to my son's JISA, but diverted £60 to a stakeholder pension when he was 16.
Since he turned 18, what was the 'JISA' £40 has been swallowed up with his first car extraneous expenses - oil, windscreen wipers, headlight bulbs, tyres etc. but now he's got a weekend job and will spend his earnings on the car, I'm going to invest the full £100 into his pension until such time he takes it on (after school and uni).
It was very easy to set up - as he was 16 it wasn't a secret from him as he had to provide ID and sign the forms.

Sea_Shell

Very interesting!! Never thought that something like that could be set up. Although it's a shame that you cannot just open them directly (as a relative), without having to try and badger parents to open one first, before you can contribute to it. As i think it would be a nice thing to give as a gift....which would hopefully "keep on giving" long after we've shuffled off!!

ukdw

Number75 wrote: »

So even though I love the idea of compound interest over all those years, I decided that she could potentially make more of my money earlier in her life - and may not even need it as a pensioner.!

Thought I would do some quick calculations to see how much a single gross £3,600 pension contribution could be worth in 35 years (child) or 60 years (grand or godchild), based on returns of 4.5% above inflation after charges for the whole period.

In today's money 35 years comes out at about £16.8k and 60 years comes to about £50k.

Neither of these numbers are particularly significant in pension terms.

However if a generous grand/godparent hasn't got too many children, and has spare cash left after helping children out in earlier life, then 10 years worth of grand or godchild pension contributions (£28.8k) could if my calculations are correct compound up over ave 55 years to more than £400k in today's money - which would be a fairly large part of the lucky grandchilds total pension requirement!

[Deleted User]

On of the reasons I do is I don't know what the future holds [or care]...

Say I need a care home in 40 years... deprivation of assets to daughters pension contributions at such a young age is unlikely to be an issue


As I say it's just one reason of many and is the smallest of her investments by far. Cheers