Are children's pensions a good idea?

justme111

you will see a joy in their eyes when they realise they can afford to redirect money which would otherwise were placed in pension to other worthwhile causes. Joy in their eyes when thanks to your contributions and being accustomed to contribute to something that always was there they realise they can quit a degrading disheartening job.

[Deleted User]

TARDIS wrote: »

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)

All the best, cheers!

downshifted

I too am looking at Aviva stakeholder for my granddaughters - they are 4 and 1 and I would put in the full 2880 each this year and then a small amount each month. Because they have so long to invest I would have preferred something more risky than the medium risk fund chosen by others - I have looked at the list, but am not sure which to choose (they don't have Vanguard 100%, which is what I would have chosen in a SIPP)

Anyone have any ideas to narrow down the list before studying in detail please?

Alexland

The default Aviva Mixed Investments 40-85% fund is more than medium risk with the datasheet showing it currently has over 70% shares, over 4% property and over 3% alternative investment so the risk is similar to a VLS80.

100% equity funds don't tend to perform as well over the long term as they miss the benefits of rebalancing between asset classes during the full cycle.

Aviva's lifestyle strategy only reduces allocation into this fund in the 5 years leading up to target retirement date whereas a Vanguard Target Retirement fund would spend 25 years reducing risk. So you could argue it's too high risk but your granddaughters might not keep it that long if they transfer it into an employer scheme in future.

I don't think you need to go any riskier for your granddaughters because of their age. I opened one for my younger wife and am very happy with it. My SIPP is in VLS so I don't want too much exposure to Vanguard anyway.

Alex