Ideal pension platform for children

intowhere

Hi


I am looking for a decent pension plan for my children. It needs to be one where I can add money on an ad-hoc basis rather than one where I have to invest a set amount each month. I plan on saving every few months; when I get a bonus or I have a spare £100 to invest.


Or --
Would I better off just putting the money in an ISA for them? (I don't have an isa for them yet)

MallyGirl

I'd go ISA - no tax advantage you putting money into someone else's pension

Malthusian

MallyGirl wrote: »

I'd go ISA - no tax advantage you putting money into someone else's pension

There is - children still get 20% tax relief up to £2,880 net / £3,600 gross. (More if they have earned income, of course.)

However the question for the OP remains - why do you want to? Most people who think they want to pay into their child's pension shouldn't, as they have not exhausted all the other options. Many of them wouldn't even have a tax issue if they kept the money in their own name, to be passed to the child when they saw fit.

intowhere

I was thinking of the 25% uplift they would get whenever I put money in and as my personal pension situation is awful, I'd like to ensure they had a decent pot when they start their working life.

intowhere

I didn't think a child could open a lifetime isa. I will look into this - thanks!

xylophone

as my personal pension situation is awful,

Do you need to attend to this before worrying about a pension for the children?

intowhere

I am trying to attend to this now . But I thought the odd £50 - £100 might result in a tidy sum for them

Malthusian

Have you never been on a plane and heard the saying "Put your own oxygen mask on first before helping others"?

Fix your own retirement provision first, then once you find that you have more income than you need to live on, give some to your children.

They wouldn't want you to give them money if it leaves you in poverty.

If your pension position is "awful" then it doesn't matter what the odd £50 - £100 would grow into, as you don't have £50 - £100 to spare.

Alexland

Malthusian wrote: »

There is - children still get 20% tax relief up to £2,880 net / £3,600 gross. (More if they have earned income, of course.)

Yes but under current rules (assuming their own future pension contributions use up their retirement income tax personal allowance) they would pay tax on 75% of that income in retirement so the benefit is marginal and the tax system is likely to change (perhaps to their disadvantage) in the next 50+ years. I think it might be more useful to have access to the money earlier in life.

intowhere wrote: »

I didn't think a child could open a lifetime isa. I will look into this - thanks!

They can't you need to be 18 to open a Lifetime ISA. They can however have a Junior ISA.

If you really want a simple low cost pension then perhaps the Aviva stakeholder via Cavendish.

https://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/aviva/

Alex