My daughters Stakeholder - Do I move it ?

rj500

Like most parents we want to give our daughter every chance in later life including an early start on her pension. We took out a Stakeholder pension in my wife's name for our daughter when she was two weeks old.

However, we have been reviewing our situation and I wonder whether the Stakeholder is best held in my wife's name or mine given that my wife is a 22% tax payer and I am a 40% tax payer. Any suggestions? Also how does the system know that the payments should be grossed up by 22% or 40%?

isasmurf

Oh dear, I suspect many have made the same mistake. If the Stakeholder is for your child, it should be in her name, not yours or your wifes. The pension is not transferable between people so your question is irrelevant. What money is in the pension in your wifes name will be your wife's pension, and not your daughters.

I doubt that you can rectify this situation with the money already in the pension. I think you would need to discuss this with your pension provider or a financial advisor.

On the tax repayment situation, the pension provider will reclaim basic rate tax (22%) on your contribution from the Inland Revenue and add this to your pension fund. If you are a higher rate taxpayer, you will need to reclaim the rest through your Self Assessment return.

dunstonh

It does look like it is an error here. You cannot make any correction to it i'm afraid. Your only option is to cease contributions and start a new one set up correctly.

If you obtained advice, you could go back to advisor and complain and then you would get your contributions refunded but if you did it yourself, you have no comeback.

Also, the child is unlikely to be a higher rate tax payer (very nice start to life if she is ;D ), so only basic rate tax will be applicable. You cannot apply your tax codes to her pension. She is her own person as for as stakeholders go.

rj500

Thanks for your responses.

Made me sweat for a moment but I am glad to say there was an error in my communication on the subject - the Stakeholder is in my daughters name! My wife is merely the contact.

Thanks again.