Can you single out a parent as a beneficiary of a child's SIPP?

Albermarle

Using either a SIPP or ISA type product is the way I would go, but a SIPP seems to me to be very restrictive in when the child can actually use the benefit of your generosity, maybe in 20 years time you'll want to help them on the first rung of the housing market, but there's no way to do it if the cash is all in a SIPP which they can't access for another multiple decades.

I would agree with this. Despite the extra tax benefits of a SIPP, I would think most people would benefit most from having access to a sum of money in their Twenties or Thirties ( Getting married, house deposit, a car etc) By the time they get to 60 they may well have built up a decent pension anyway.

cloud_dog

masonic said:

The trustees will be the people responsible for administering the pension at Fidelity. They will use the expression of wish in their decision making process, but have discretion over whether or not to follow it. They are also able to consider claims from others and judge them on their merits.

Just talking specifically about Fidelity, they allow a 'person' (I use the term loosely) to set up both 'beneficiary/ies' and nominee(s) against the account.

lopsyfa

Just give the money to the mother to keep for the child in her SIPP/ISA/savings/investment account whichever is appropriate. Then she can give the money to the child when she grows up or God forbid, keep the money if the child dies.

B0bbyEwing

EthicsGradient said:

If the parents were to have another child (which seems quite possible, with this child being so young), I wonder if the trustees would see that child (or children) as the best beneficiaries - even if they could not yet access it. And you may well feel that way yourself.

Yep. I know my sister wants a 2nd child & in that scenario then no problem any money going to them as beneficiary. 

Malthusian said:

didn't like the father 

Let's not get this confused - I've not said I do not like her partner. Just because I don't want my money to find its way to him doesn't mean I like or dislike him. 

And 'legally speaking' it may go to him in such a scenario but that doesn't make it 'right' in my eyes, which is all that matters. More on that in a sec since Reed_Richard's post deserves a response on its own.

Notepad_Phil said:
Using either a SIPP or ISA type product is the way I would go, but a SIPP seems to me to be very restrictive in when the child can actually use the benefit of your generosity, maybe in 20 years time you'll want to help them on the first rung of the housing market, but there's no way to do it if the cash is all in a SIPP which they can't access for another multiple decades.

I'm going SIPP (or those are my intentions) because that's what I want to help with. 

Going totally off myself, pensions were a thing for old people. You got to an age, you stopped work & then that was it. I paid it no mind how you funded retirement, I thought you just got paid off whoever, the government maybe & that was your life until you died.

It was only as I started moving through my 20s & getting to my late 20s and taking an interest in money did I realise hang on, I'm wasting time here (although was also trying to save for a house) and started trying to learn more about it and take charge. 

Now granted not everyone will be like that. Some will have it at an early age, others later than I was & some wont ever get it, but at the same time it doesn't matter - it's retirement I want to help contribute towards. Other people, as is typically done, pick up the here & now.

B0bbyEwing

Reed_Richards said:

B0bbyEwing said:

Investing in own name is now looking more appealing. 

Obviously it's just easier in the child's name. Everything stays invested until retirement. 
 

Are you sure you're not letting the tail wag the dog here?  You're rejecting the obvious choice of investment because of what, hopefully, is a very unlikely scenario.

Unlikely isn't impossible. 
Yes it's unlikely, I agree. Statistically speaking I imagine there's every chance that this isn't even a consideration.

But having recently seen 'the right thing' NOT done - with a family members will being contested by people who got given things anyway but went NWNF to try & claim for even more.
Using their debt as a reason to ask for even more on top of that - yet when declaring records in court you can see the constant credit card loans, alcohol, takeaways, so on & so forth.
Having partners getting in their ear telling them to squeeze more money out of the pot that shouldn't be theirs anyway.
And the rest of the family potentially looking at the scenario where they may have to sell their own homes to fund the legal costs to defend the nonsense.
And then the scummy relatives while not walking out with what they tried to get, did get more than they should've.


Then I prefer to make 100% sure that what is done is what is right. 

Ok we've shifted from talking about putting cash aside for a little one to contesting wills but it boils down to what is right & I prefer not to take the chance. At the end of the day I want >MY< money to go to the child, nobody else. If it had to be someone else then it'd be any sibling should there be one. Should there be no sibling and I couldn't have it then I'd want it to go to the mother, my sister and as it's MY money to begin with, there's absolutely nothing wrong at all (I know you didn't say there was) with wanting that.

So if I have to put it in my own name now to make that happen then that's what I'll have to do.

masonic

cloud_dog said:

masonic said:

The trustees will be the people responsible for administering the pension at Fidelity. They will use the expression of wish in their decision making process, but have discretion over whether or not to follow it. They are also able to consider claims from others and judge them on their merits.

Just talking specifically about Fidelity, they allow a 'person' (I use the term loosely) to set up both 'beneficiary/ies' and nominee(s) against the account.

Yes, and 'nominees' would be considered if any of the beneficiaries were considered inappropriate:

But like the beneficiaries, there is no guarantee that a long list of nominees could be used to exclude an individual the trustees deemed appropriate to receive a share of the benefits. It seems to be just a helpful way of providing contact details of those who the trustees might already be considering.

lr1277

This might be stating the obvious but if you open a S&S ISA, won't you be using up your own ISA allowance? Do you not have plans of your own for your ISA allowance? And in every year you contribute to the money intended for the child, you are using up allowance you could use for yourself.

The only solution I can see which might also solve the problem of splitting money within an ISA is to open a new GIA. You could do this with your current broker or open it with a new broker. You would have to pay taxes but so be it. And you would have to write your will or write a letter of expression noting that the contents of this acount are for the child or any children.

Malthusian

EthicsGradient said:

If the parents were to have another child (which seems quite possible, with this child being so young), I wonder if the trustees would see that child (or children) as the best beneficiaries - even if they could not yet access it. And you may well feel that way yourself.

I am not a pension trustee, but I think it is very unlikely that the pension trustees would use their discretion to pay the benefits to a sibling - unless their parents/guardians rejected the money and asked them to.

The bereaved parents are far more likely to have a need for the money than a sibling who may not be able to access it for another 50 years or more. For example, the dead child will have funeral costs, and the family may have suffered financially (time off work etc).

If a minor child dies and has no spouse or children, English/Welsh intestacy law says the parents inherit everything. That doesn't bind the trustees but it shows what society considers to be the default position.

This is purely about the view the trustees might take. If the OP wants to keep the money in their own hands then they can do whatever they see fit in that unlikely event.

B0bbyEwing

lr1277 said:

This might be stating the obvious but if you open a S&S ISA, won't you be using up your own ISA allowance? Do you not have plans of your own for your ISA allowance? And in every year you contribute to the money intended for the child, you are using up allowance you could use for yourself.

The only solution I can see which might also solve the problem of splitting money within an ISA is to open a new GIA. You could do this with your current broker or open it with a new broker. You would have to pay taxes but so be it. And you would have to write your will or write a letter of expression noting that the contents of this acount are for the child or any children.

You're correct. 

From your post I imagine you're possibly in the lucky position to max out your ISA allowance each year, as I suspect others on this forum can. 

I however could only dream of being able to set aside £20k each year so for me it doesn't matter if the allowance is £20k, £200k or £2million because my 'spare money' doesn't come close. 

lr1277

B0bbyEwing said:

lr1277 said:

This might be stating the obvious but if you open a S&S ISA, won't you be using up your own ISA allowance? Do you not have plans of your own for your ISA allowance? And in every year you contribute to the money intended for the child, you are using up allowance you could use for yourself.

The only solution I can see which might also solve the problem of splitting money within an ISA is to open a new GIA. You could do this with your current broker or open it with a new broker. You would have to pay taxes but so be it. And you would have to write your will or write a letter of expression noting that the contents of this acount are for the child or any children.

You're correct. 

From your post I imagine you're possibly in the lucky position to max out your ISA allowance each year, as I suspect others on this forum can. 

I however could only dream of being able to set aside £20k each year so for me it doesn't matter if the allowance is £20k, £200k or £2million because my 'spare money' doesn't come close. 

No I am not in that position. But I do like 'clean' solutions. No mixing, confusion or other complications.

Edited to add: I prefer a separate account because you can then assign the funds in the account to specific people. Should the worst happen and you pass before the child or children reach 18, it is much less complicated for your executor to deal with. But I suspect it might not be much more complicated if things were all in one pot. Don't know.