Are children's pensions a good idea?

The_Doc

Alice_Holt wrote: »

It helps me with IHT planning (contributions out of income); is tax efficient; and will reduce the need for them to allocate scarce funds to pension planning in the years when they have their own family commitments.
I was lucky to have a DB scheme, uni grant, good job prospects, and affordable housing. - I'm not sure their future looks as beneficial!!

I have done the same. To claim relief from IHT for gifts from excess income you will need to keep records (it will benefit your estate's executor!). I keep a spreadsheet that mirrors page 6 of the following form. Trying to work this out after a family death is the last thing they will feel like doing.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/497798/IHT403.pdf

G4OJR

can you claim income tax relief on contributions to childrens' pension or are they just gifts?

Alexland

Its just a gift the pension provider will collect the 25pc bonus from the govt and put it in the childs pension.

TARDIS

Alice_Holt wrote: »

I was lucky to have a DB scheme, uni grant, good job prospects, and affordable housing. - I'm not sure their future looks as beneficial!!

We've the same motivation. Also watching my parents trying to do IHT planning in their 70s largely based on crossing their fingers they live another 7 years makes me want to avoid putting it off till it's potentially too late.

The_Doc, Excellent point about keeping records it's out of excess income and great excuse to start another spreadsheet!

OldBeanz

G4OJR wrote: »

can you claim income tax relief on contributions to childrens' pension or are they just gifts?

The child gets the tax back through the pension company.

[Deleted User]

Aviva stakeholder here for daughter


Value is about a 10th of her other monies, rest is JISA, Children's Bonds, Reg savers etc.


For all the reasons people have posted above.


Cheers

TARDIS

jeepjunkie wrote: »

Aviva stakeholder here for daughter


Value is about a 10th of her other monies, rest is JISA, Children's Bonds, Reg savers etc.


For all the reasons people have posted above.


Cheers

If you don't mind me asking what fund(s) did you choose out of interest?

[Deleted User]

Off the top of my head might be this one...

Mixed Investment (40-85% Shares)


Cheers

TARDIS

jeepjunkie wrote: »

Off the top of my head might be this one...

Mixed Investment (40-85% Shares)


Cheers

That's the one I'm currently veering towards too.
Looks nice and simple, medium risk, nothing to tempt them to fiddle with unnecessarily when they take control (I hope)

Radiantsoul

I think financially they make sense, but I guess I always wonder if you may miss the joy in their eyes when they spend the money....