JUNIOR SIPP

Albermarle

22225 said:

But they may not be responsible with money at 18. Hopefully at 60 they may have more wisdom.

Most likely they will not be that responsible at 18, and will blow some/most of it but then you are only young once.
At 60 they might well have plenty of money and this JSIPP will just sit there unused.

Probably in an ideal world there should be a product that they can access at say 25. However unless you get into the complicated world of trusts, this seems to be not possible 

DT2001

Our children had a SIPP opened for them at birth by their grandmother who put in £3,600 gross. None have been added to until our eldest started work (self employed)  - they have all seen how time invested works so if nothing else it has provided a good lesson.
More recently we used the help to buy ISA which whilst accessible at 18 to blow has the link to house purchase.
Our surplus goes into our pensions and quite possibly will grow throughout our retirement (partly as we built up reasonable ISA pots for flexibility before funding pensions). We could take part of the 25% tax free sum out when they were 25 or whenever. In addition they will almost certainly inherit my pension pots before their SPA (I would be over 100 when my eldest reaches 67)

Nurse2047

I pay into fidelity same fund you want £25 per child per month. I don’t fill my own isa each year but want to give my children a little head start- better than I had. 

j_netprofit

cloud_dog said:

jay_ftw said:

Marcon said:

jay_ftw said:

Cheers @cloud_dog

Do you know if it's free to regularly invest into funds?

See https://www.fidelity.co.uk/junior-sipp/fees-and-charges/

You're gonna have to point it out for me mate, already have that tab open but can't see a mention of it which is why I asked 

👍

OEICs (funds) do not incur a transaction fee.

Thanks again buddy, appreciate you're input here!

j_netprofit

Albermarle said:

jay_ftw said:

OK...

I've used my personal ISA allowance (16k S&S 4k LT). 

Why is utilising the full JISA allowance first better than the JSIPP?

I understand putting your own lifejacket on first etc but I'm happy to not utilise my full personal 60K pension allowance to give me children leg up.

The issue is that by the time your children see the benefit of the JSIPP, they will not be children anymore ! 
They will probably appreciate money at 18 with the JISA more.

I see this as less of a negative issue and more of a extra hand in my children's distant future. I've always been cautious with money but no way was I the most responsible with cash at the age of 18. This is why I'd like to go with both options of the JISA and the JSIPP.

j_netprofit

DT2001 said:

Our children had a SIPP opened for them at birth by their grandmother who put in £3,600 gross. None have been added to until our eldest started work (self employed)  - they have all seen how time invested works so if nothing else it has provided a good lesson.
More recently we used the help to buy ISA which whilst accessible at 18 to blow has the link to house purchase.
Our surplus goes into our pensions and quite possibly will grow throughout our retirement (partly as we built up reasonable ISA pots for flexibility before funding pensions). We could take part of the 25% tax free sum out when they were 25 or whenever. In addition they will almost certainly inherit my pension pots before their SPA (I would be over 100 when my eldest reaches 67)

Wow that's great! If you wouldn't mind sharing, can I ask what the pot was worth 18yrs later? 

Completely agree, great lesson in compounding!!

j_netprofit

ader42 said:

I concur with OP. I save the maximum into my son’s JSIPP with HL as I want him to have a pot in his 50s, and the Tax Relief is a no-brainer.
I will also be filling his LISA each year from the age of 18. 

Do you mind me asking why you chose HL?

artyboy

I'm all for long term planning, but given just how much pensions have been messed around with by successive governments, I have very little faith in an investment now being a slam dunk win for the kids 50 years from now. Or possibly 60, because the age when they can access it is only heading in one direction...

So whilst I admire the sentiment, in my case there are better ways to handle transfer of generational wealth (two words guaranteed to get the hackles up of some people here...)

j_netprofit

Fair comment @Artboy and for a long time I was very much not a fan, but for the sake of a couple hundred pounds a year I figure the wild years of compounding isn't to be ignored, especially if the children continue to pay into it.

And even if they don't...(putting my maths to the test here!)

If I save them £25p/m in a global tracker averaging 7% a year for 18yrs, I deposit £5,400 it could be worth >£10k.
If they don't add anything to that particular pension, by the time they're 60 the same pot could be be worth >£100k.

Obviously 100K in 60yrs time will be nominal sum I'm sure however it's not about what the pot is worth, it's about how much it's grown.

artyboy said:

in my case there are better ways to handle transfer of generational wealth

Can I ask what they would be, please?

Albermarle

jay_ftw said:

Fair comment @Artboy and for a long time I was very much not a fan, but for the sake of a couple hundred pounds a year I figure the wild years of compounding isn't to be ignored, especially if the children continue to pay into it.

And even if they don't...(putting my maths to the test here!)

If I save them £25p/m in a global tracker averaging 7% a year for 18yrs, I deposit £5,400 it could be worth >£10k.
If they don't add anything to that particular pension, by the time they're 60 the same pot could be be worth >£100k.

Obviously 100K in 60yrs time will be nominal sum I'm sure however it's not about what the pot is worth, it's about how much it's grown.

artyboy said:

in my case there are better ways to handle transfer of generational wealth

Can I ask what they would be, please?

One way is to not worry about JISA/JSIPP etc and just make sure your own finances are as healthy as possible. Then at the appropriate time you can make large gifts, such as for a house deposit.