SIPP for child

Flobberchops

Hi all, anticipating this will be a quick and simple question to answer, although my own attempts at searching have not been fruitful.


In a nutshell: a child can have a SIPP. My question is, are all SIPPs equal, or does there exist a "junior SIPP" in the same way Junior ISAs exist?



Many thanks in advance.

Alice_Holt

Yes.

Maximum annual net contribution £2,880 (plus £720 tax relief added back).

As an example:
https://www.bestinvest.co.uk/pensions/sipps/pensions-for-children

Which platform are you considering?

SonOf

In a nutshell: a child can have a SIPP. My question is, are all SIPPs equal, or does there exist a "junior SIPP" in the same way Junior ISAs exist?

I tend to use stakeholder pensions for children. Mainly to avoid an 18 year old being given control of the most advanced pension version when they dont have a clue about those things. A stakeholder pension protects them from themselves.

MaxiRobriguez

They might not make it to pension age. Sorry to be grim but one thing to consider, especially when they're likely to need the cash to buy a property in their 20's which, if it's anything like today, will be almost impossible without help.

Worth considering anyway if your only objection is their potential misuse of the funds.

Flobberchops

Alice_Holt wrote: »

Yes.

Maximum annual net contribution £2,880 (plus £720 tax relief added back).

As an example:
https://www.bestinvest.co.uk/pensions/sipps/pensions-for-children

Which platform are you considering?

Sorry, my fault for posing an ambiguous question, but when you say "yes" do you mean yes, there are a separate class of SIPPs solely for children?


I'm keeping an open mind about platforms, partly because I'm confused about which ones support children's SIPPs. But all things being equal I would want the one with the lowest fees! I am thinking of making regular, small contributions.

Flobberchops

SonOf wrote: »

I tend to use stakeholder pensions for children. Mainly to avoid an 18 year old being given control of the most advanced pension version when they dont have a clue about those things. A stakeholder pension protects them from themselves.

That's something I wasn't aware of, much less something I had considered. Thanks for that.

louloubelle79

I use a stakeholder pension for both my children.

Flobberchops

MaxiRobriguez wrote: »

They might not make it to pension age. Sorry to be grim but one thing to consider, especially when they're likely to need the cash to buy a property in their 20's which, if it's anything like today, will be almost impossible without help.

Worth considering anyway if your only objection is their potential misuse of the funds.

Yep, that's something I'm aware of, but I'll be hoping for the best while planning for the worst. I won't be using this SIPP for all, or even most, of my daughter's future savings - that's already taken care of by a JISA and my own savings earmarked for helping her out. But, the prospect of saving into a tax-privileged account with 50+ years of compounding returns is too good an opportunity to pass up! It's the kind of foresight my parents didn't show, nor did theirs, so I'm hoping to be the first link in the chain that starts building intergenerational wealth.

AnotherJoe

SonOf wrote: »

I tend to use stakeholder pensions for children. Mainly to avoid an 18 year old being given control of the most advanced pension version when they dont have a clue about those things. A stakeholder pension protects them from themselves.

.. and removes them from being able to touch the money until they are perhaps 60, ( if they live that long, there's a surprisingly high chance they won't.)
In the meantime they've missed out on being able to use money for education, housing, family, travel, health. "Thanks dad" ..... for nothing".
If you want to hold the money back just invest it in your own name instead of po8nlessly locking it away for 60 years
A pension for kids should be the last resort after you've used up every other savinsg vehicle,

SonOf

.. and removes them from being able to touch the money until they are perhaps 60, ( if they live that long, there's a surprisingly high chance they won't.)

Access to stakeholder pension is the same as personal pensions and SIPPs. Currently, 55, rising to 57 and expected to move to 58

About 1 in 5 will not make retirement. That means around 4 in 5 will.

In the meantime they've missed out on being able to use money for education, housing, family, travel, health. "Thanks dad" ..... for nothing".

We dont know the finances of the op or the contribution level. However, a small contribution of around £20-£30pm from birth can make a massive difference to a child's retirement plans. If this is in addition to other things, then it should be commended.

Reaper

I have a child pension for my son as regulars will know. I absolutely don't think it should be used instead of other savings but when used in addition I believe it has value.

The child is normally expected to start contributing to a pension just at the point they have a lot of other demands such as buying a first car, first house, getting married, having kids etc. Knowing they already have a pot means they can postpone or reduce their own contributions at a time when money is tight without being disadvantaged.

Also what other child investments are there were the child is given a generous tax refund top up when they haven't even paid any tax?!