FIRE Girls Pension Diary - Aim High & Dream Big

LL_USS

Somebody said:

@Firegirl Why wait till they're 18 before opening a pension for your kids?  If you have the cash I would bung in £2,880 (£3,600 with the tax relief) for each of them now and repeat in future tax years.

We did this for ours for a couple of years which ended up in ReAssure plans; they have all transferred to Vanguad now and choosing their own funds so it got them interested in investing to an extent.

@Somebody and @Firegirl : I have been trying to work out how to move my cash LISA account to S&S LISA today and now thinking when I have a bit of saving leftover outside of my own allowances, should i pay in a LISA for my older kid (aiming at pension rather than buying a house, as perhaps the purchase will be over 425K within LISA rule).  Still not sure whether to help them with a S&S LISA or SIPP/ Vanguard now. Any advice? Thank you.

Firegirl

I’ve been thinking about the same thing recently! I keep thinking I don’t want to put all eggs in one basket and maybe do a little bit of both to spread the risk of future rule changes.  Also it introduces them to both for them to think about in the future.  What do you think?  

Somebody

It boils down to whether you're happy for them to have access when they are younger adults, or for the investments to be tied up till their old age.  We did more in ISAs and Junior ISAs.  We "diversified" £3,600 gross in pensions for a couple of years so it gave them a good start in terms of compounding with the 25% tax relief top up. 

LL_USS

I am thinking any ISAs for the kids will/would just be only a bit for emergency for them, the rest only temporary until they buy.

Any further help beyond helping them buy I am considering putting into building up their pension small bit by bit, especially when they don't have a defined benefit. So they learn how to manage investment too, with longer term view rather than worrying too much about market going up and down.

Having said so after I help both my children buy (retaining a part of what I pass on as long-term loan for emergencies in my retirement) I don't have much cash flow left to play with. I would love to still spread out in LISA and SIPP but the management fees would be higher if we spread, right?

Firegirl

@somebody thanks for the reminder. I want to wait and see what they get up to in maybe mid 20s. Still thinking I won’t have to support them through Uni but it’s anyone’s guess right now.

I think I might put a wee bit in a private pension when they work out what they are dining in life but that doesn’t need to happen straight away.

I’m also considering just sticking to plan and saving in my ISA and means I can just give when the time is right.  What if I save to a LISA and they decide to live somewhere else in the world!

emmmmm lots to think about! 

Firegirl

Update as of today:

October £4600 added to Pension 1 


Pension 1-£211,000
Pension 2-£62, 500 (Approx)
Pension 3-£12,000  (Approx)
ISA-£118,500

Total- £403,000

Last update Total £405,000. So considering I added £4600 we’re seeing a dip.  Let’s see what the markets make of the US elections.  I’ll post again over the next few days out of interest.

Firegirl

Day of US election result:

Pension 1-£210, 500
Pension 2-£62, 500 (Approx)
Pension 3-£12,000  (Approx)
ISA-£119, 500

Total- £404, 500

Firegirl

Day after US election result 7/11/2024:

Pension 1-£214, 000
Pension 2-£62, 500 (Approx)
Pension 3-£12,000  (Approx)
ISA-£122,500

Total- £411, 000

LL_USS

@Firegirl the new budget stating pension is not taken into the total asset to calculate IHT. What a bummer. With rising property value, it can push the amount up so fast. 

Firegirl

Well just have to spend it all