Pension for teenage children

cloud_dog

jamjar92 said:

Been thinking about this recently, if I pay into the fund on the child’s behalf do they get my tax relief? Looking to move the CTF into an ISA S&S before she is sixteen.

Children have their own allowance, just like adults.  If they have relevant earnings then they can pay up to 100% of this in to their pension.  If they have zero relevant earnings then they can contribute a maximum of £2880 net / £3600 gross in to a pension (just like adults).

Transfering a CTF in to a JISA is easily done (assuming the recieving schemes supports transfering in a CTF).  I believe Fidelity do accept a CTF transfer in to a JISA.

Murphy_The_Cat

cloud_dog said:

jamjar92 said:

Been thinking about this recently, if I pay into the fund on the child’s behalf do they get my tax relief? Looking to move the CTF into an ISA S&S before she is sixteen.

Children have their own allowance, just like adults.  If they have relevant earnings then they can pay up to 100% of this in to their pension.  If they have zero relevant earnings then they can contribute a maximum of £2880 net / £3600 gross in to a pension (just like adults).

Transfering a CTF in to a JISA is easily done (assuming the recieving schemes supports transfering in a CTF).  I believe Fidelity do accept a CTF transfer in to a JISA.

I transferred my childrens CTF into JISA's and as long as you had all of the relevant information, it was straightforward, if relatively slow.

Murphy_The_Cat

xylophone said:

As they already have an existing small pension with L&G, would that be a good place to start to look 

Will you transfer to the new SIPP?

I've found the existing pensions that haven't seen any action for a while and had a smile at their current transfer value.

If they are transferred into a new SIPP and a couple of £3600 payments are dropped in (one eitehr side of 5th April) the little so and so's will each have a VERY nice nestegg in 50 or so years time.

Murphy_The_Cat

Thank you to everyone who contributed to this thread.

The confirmation has just come through from Fidelity that their first contributions are being taken next month and they have started the process of transferring the existing pensions in from L&G/Reassure.

Hopefully they'll have  a drink in my memory when they start taking the pension !

ukdw

If they get an average of 5% real growth after changes the £7,200 could increase by about 11 times in real terms over 50 years to about £80k which will certainly be a very good start.

Murphy_The_Cat

ukdw said:

If they get an average of 5% real growth after changes the £7,200 could increase by about 11 times in real terms over 50 years to about £80k which will certainly be a very good start.

Just in case they/I aren't able to put some lump sums in, I've started a monthly contribution for both of them so they should still have a decent pot to enjoy when they get to their respective retirement time.

Nurse2047

Thankyou for this thread was also looking to transfer my children’s from L&G/Reassure also. 

Murphy_The_Cat

MFW2026 said:

Thankyou for this thread was also looking to transfer my children’s from L&G/Reassure also. 

The transfer of my sons pension from L&G/Reassure went without a hitch,my daughters is dragging on.  The more details you can give Fidelity to help them track the childs pension, the better.  The problem seems to be at the L&G/Reassure end.

caveman8006

Just be very careful about not over-contributing to children's pensions...in some ways it is the mirror image of the urge (tempting but usually wrong) to avoid/pay-off student debt which rarely needs to be paid off within 25 years anyway. So, with the LTA at "only" c£1m,  many parents who have spare cash to fund children's SIPs will also have children who will reach the LTA anyway with normal working contributions so your investment will effectively be taxed in the long run. Much better to fund ISAs. 

Murphy_The_Cat

caveman8006 said:

Just be very careful about not over-contributing to children's pensions...in some ways it is the mirror image of the urge (tempting but usually wrong) to avoid/pay-off student debt which rarely needs to be paid off within 25 years anyway. So, with the LTA at "only" c£1m,  many parents who have spare cash to fund children's SIPs will also have children who will reach the LTA anyway with normal working contributions so your investment will effectively be taxed in the long run. Much better to fund ISAs. 

My opinion is that a little bit per month now, is much, much, much better than maybe/possibly/probably having to play catchup later on, because not enough attention/time/moneyhas been put into your pension.  They may be fortunate and get jobs/careers with fanatastic contribution rates - but possibly they'll be brassic for years when they get on the property ladder and are working in jobs with "standard" pension contributions and are unable to make decent contributions, especially in the very early years of their working lives.

Contributing to ISA's/Junior ISA's is another idea - whether it is the best long term alternative is a moot point.

I'm going "belt and braces" and doing a bit of both.