Kids pension or ISA....am I doing the right thing?

Baldytyke88

kinger101 said:

Another fan of the JISA here.  Help getting a foot on the housing ladder will mean they can give their pension better consideration earlier on.

The 20 % tax relief ignores that fact that pension income is taxable.

When a pension is cashed in, 25% is tax-free and there could be a larger tax-free allowance when its taken., so you will benefit.

I don't see how an ISA and SIPP are comparable, they are different. You can choose to give them money when ever you want, they will only get tax relief with a SIPP or LISA.

The LISA will be the best one.

Alexland

I opened my kids a junior SIPP with Fidelity to get them a protected access age of 55 before the cut-off date but have only contributed small amounts. I quite enjoy thinking about the long term compounding.

I've made bigger contributions to their JISAs however I've stopped contributing now as there's a limit to how much I trust the eldest at 18. Their investments have done well and I have the annoyance of topping the youngest's account up to match and it's currently about £13k less.

I am using my own S&S LISA to invest with 25% government bonuses towards helping them with house deposits etc as when I am 60 and can withdraw without penalty they will be early to mid 20s. I also expect they will get gifted some of my S&S ISAs if they want to go to uni etc.

eskbanker

Baldytyke88 said:

kinger101 said:

Another fan of the JISA here.  Help getting a foot on the housing ladder will mean they can give their pension better consideration earlier on.

The 20 % tax relief ignores that fact that pension income is taxable.

When a pension is cashed in, 25% is tax-free and there could be a larger tax-free allowance when its taken., so you will benefit.

I don't see how an ISA and SIPP are comparable, they are different. You can choose to give them money when ever you want, they will only get tax relief with a SIPP or LISA.

The LISA will be the best one.

A LISA wouldn't fit OP's requirements of putting money aside in the kids' names, so the valid options are SIPP or JISA....