Buying pension for adult children

[Deleted User]

A lifetime ISA might be an alternative solution, depending on circumstances, and if she's eligible.
You could pay in £4k each year, with the Govt topping it up to £5k.
Benefit of this route is that withdrawals would not be taxable income at the other end and might complement any other pension arrangements quite nicely.

QrizB

We really need to OP to come back to the forum and explain exactly what they had in mind when they said:

RonnieIH7151 said:

Is it possible to buy a pension for my adult daughters?

It's not at all clear (to me, at least) whether they are hoping to make contributions to a pension scheme so their daughters can draw a pension in the indefinite future, or whether they want to buy annuities so their daughters can receive a pension now.

Marcon

Secret2ndAccount said:

Yes, and no.
The main benefit of paying into a pension is that you get tax relief. You probably pay some tax when you eventually take it out, but you saved more tax when you put it in. I realise that you are trying to give your daughter a comfortable retirement rather than handing her a pile of cash. The problem is that you have already paid tax on the money you would use. If you pay it into a pension for her, nobody gets the tax relief, but she will pay tax on it when she draws it out. A bit of a waste - a proportion of the money just goes up in smoke.

If it's a DC contribution, which it almost certainly will be (especially if it's one set up by the parent for the daughter), then the provider normally claims basic rate relief and adds it to the daughter's pension pot, regardless of whether the contribution is paid by her, her employer or a third party. Doesn't sound as if there's any issue with breaching annual contribution limits, so no reason why this isn't a viable route.

Secret2ndAccount

Actually I agree with this. I have paid into a SIPP for someone, and nobody chased up where the money came from - they just added the tax relief.
I think the point is that you can't just open a pension for someone as a birthday surprise, and pay in an unlimited amount. There are too many rules and limits. The daughters need to be part of the process, and the tax relief may be quite limited..

dunstonh

Actually I agree with this. I have paid into a SIPP for someone, and nobody chased up where the money came from - they just added the tax relief.

The key thing is that you paid into it.  Its a different matter if the money comes from someone else's account.