SIPP for child

puk999

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?

I've been using BestInvest for my children's SIPPs for four years. "Time in the market" we keep hearing. Well, better start early then! Stick £1000 in, government adds £250 tax relief. Tax relief could be scrapped by future government, get it now while you can. They also have JISAs (with Charles Stanley Direct) which they can use earlier in life.

Even though they don't have access to the SIPP money until late fifties (or whatever legislation decides over the decades), I think there's potential to ease their financial burden earlier: they may decide in their forties (for example), because of their pension pot size, to lessen their pension contributions and have more of their earnings available to them.

Flobberchops

AnotherJoe wrote: »

A pension for kids should be the last resort after you've used up every other savinsg vehicle,

Understood and acknowledged, as above. I wouldn't choose this as the primary way of saving for my child. I'm treating this more as a nice additional way of starting a long term investment which she will take over (and hopefully continue paying into herself) at age 18.

AnotherJoe

That's fair enough but someone could read the earlier comments on getting one, think neat idea, and jump in without considering the consequences

Alice_Holt

puk999 wrote: »

Even though they don't have access to the SIPP money until late fifties (or whatever legislation decides over the decades), I think there's potential to ease their financial burden earlier: they may decide in their forties (for example), because of their pension pot size, to lessen their pension contributions and have more of their earnings available to them.

Very good point.
Absolutely agree, this advantage tends to get overlooked.

As well as the tax relief, the contributions I make to my nieces pension will ultimately reduce my IHT bill.

And as Son of remarks even small contributions from birth could make a massive difference to a child's retirement plans. Compounding over a period of 50-60 years could be very powerful!