SIPP for child

tim_n

Hi all, I am looking to contribute to my new born child by setting up a SIPP and putting in roughly 2,880 this year and 2,880 next year on a regular £240pcm contribution.

I've been looking at https://www.bestinvest.co.uk/pensions/sipps/pensions-for-children but is there a cheaper platform? Aware that best invests pension for kids is a branded product and other SIPP providers will just do a basic SIPP - but some don't take under 18s!

I appreciate at present best invest charges £100 for adult accounts, doesn't appear to affect childrens SIPPs.

Don't need opinions on whether this is the best thing to do (I've read some of the other discussions & it's been done to death I think) just what platforms will take an under 18 and are cheapest best at this time of their life. Thanks!

dunstonh

I've been looking at https://www.bestinvest.co.uk/pensions/sipps/pensions-for-children but is there a cheaper platform?

Do you really need a platform for a small value pension like that?
Do you really want your child to get thrown right in on a SIPP at age 18?

Stakeholder pensions are most typical with children.

cloud_dog

L&G Stakeholder via Cavendish, possibly.

menziesthefish

Stakeholder pensions are most typical with children.

Are Stakeholders not expensive (1% AMC) compared to 'modern' pension options.

Providers such as Hargreaves Lansdown, amongst others, offer their regular SIPP at much lower charges, accept very low regular contributions, and can be opened for children. May be worth a look?

dunstonh

L&G Stakeholder via Cavendish, possibly.

I think L&G have pulled out.

Are Stakeholders not expensive (1% AMC) compared to 'modern' pension options.

Be hard pushed to find one at 1% nowadays. 0.4-0.5% is typical nowadays

Providers such as Hargreaves Lansdown, amongst others, offer their regular SIPP at much lower charges, accept very low regular contributions, and can be opened for children. May be worth a look?

HL is 0.45% plus investment charges on top.

menziesthefish

Be hard pushed to find one at 1% nowadays. 0.4-0.5% is typical nowadays

Really? A quick online search shows Scottish Widows, Standard Life and Aviva (to name just 3) all at 1% (albeit some tier drop-off as values increase, though not relevant in this case). Which is why I suggested a low-cost SIPP. Strikes me as having better longevity too.

HL is 0.45% plus investment charges on top

Agreed, but a multi-asset tracker would add maybe 0.10% - 0.15% at most which would be very comparable to the 0.4%-0.5% Stakeholder cost you refer to but without being stuck to the provider's own model/in-house funds.

dunstonh

Really? A quick online search shows Scottish Widows, Standard Life and Aviva (to name just 3) all at 1% (albeit some tier drop-off as values increase, though not relevant in this case).

All three of those are available cheaper than that. You are looking at their original retail price and not their current. It is possible if bought direct from them that they are still retailing at the full cost. Most often here, you see people saying to buy them via Cavendish.

Agreed, but a multi-asset tracker would add maybe 0.10% - 0.15% at most

What multi-asset tracker is available at that price?
VLS is 0.27%. (0.22 OFC and 0.05% TC) HSBC GS is 0.20% (0.19% OCF plus 0.1% TC).

but without being stuck to the provider's own model/in-house funds.

Some of the in-house funds are not bad.

A SIPP is an advanced option that is not suited to someone with no investment knowledge and experience. An 18 year old taking over a SIPP with 30,000 investment options, most of which are unregulated, could lead to problems with some. A stakeholder pension has to carry out due diligence on the funds offered. Its not fashionable but you can do little wrong with it.

menziesthefish

All three of those are available cheaper than that. You are looking at their original retail price and not their current.

By 'original' do you mean 'standard'? In which case yes, getting them through a broker/portal like Cavendish may be cheaper. Though I suspect not many people would be confident going through a company they've not heard of versus applying directly.

What multi-asset tracker is available at that price?

Good point. Using individual trackers could keep the weighted average under 0.15% but not a single fund. I stand corrected.

A SIPP is an advanced option that is not suited to someone with no investment knowledge and experience. An 18 year old taking over a SIPP with 30,000 investment options, most of which are unregulated, could lead to problems with some.

An interesting viewpoint. I do agree with the logic, though if the OP is financially aware enough to consider setting up a pension for a new child, one would assume them to be equally keen to educate the child in finance so that by age 18 they are as sensible as an 18 year old is ever likely to be!

craig1912

menziesthefish wrote: »

By 'original' do you mean 'standard'? In which case yes, getting them through a broker/portal like Cavendish may be cheaper. Though I suspect not many people would be confident going through a company they've not heard of versus applying directly.

You apply via Cavendish on Aviva forms and your money goes direct to Aviva. Most people shouldn’t have an issue and max charge is .55%