Starting a pension for my Grown up kids without them knowing - is this legal?

grumpsthegit

Hi as per the title I would like to start SIPP's for my daughters but did not want to tell them I was doing this in case it stops them from doing something themselves. I am not going to be contributing much after an initial 5k starting pot so do not need to worry about being anywhere near hitting any max contribution limits, maybe just £50 per month each and more if I get a premium bonds win :-).

So I looked at invest engine as that seems like a good cheap platform and started by opening an account for one of my daughters, but the first hurdle is that they need the name of the bank account associated with the Invest Engine account to be the same as the holder of the account.  So i was thinking maybe I could open a bank account in my daughters name and then transfer funds to the SIPP via that account - but a little voice in the back of my head is telling me that this might not be entirely legal? Am I right - is  this fraud/identify theft even if being done out of good intentions? 

If this is a no go do any of you have any alternative suggestions - I really would like to do this without my daughters knowing as I just know they would use that as an excuse for not making their own arrangements.

Thanks in advance 

elsien

You absolutely can’t open an account in someone else’s name when they are adults unless you have power-of-attorney for them. 
How were you planning to pass the identity checks, as a starting point? The money laundering regulations are there for a reason, whatever the intent behind it.

grumpsthegit

Yeah I thought as much - it's been over 40 years since I opened a bank account so I guess my memory is a little hazy on the checks. Perhaps a joint account is the answer? 

Devongardener

If you don’t want your daughters to know you won’t be able to open a joint account either.  

Could you save into a longer term savings account in your own name and split it between them at some point in the future, and stipulate that in your Will?

Marcon

Why not use your contributions to incentivise theirs - ie 'I'll put £x into your pension scheme if you put in £y'.

dunstonh

Hi as per the title I would like to start SIPP's for my daughters but did not want to tell them I was doing this in case it stops them from doing something themselves.

Under 18s yes.  Over 18s no.

You could invest the money yourself and just earmark it internally for their benefit.  e.g. if you don't use the ISA allowance in full, you could put some away in there.   You still own it and its part of your estate but if they are the ultimate beneficiaries, then that wont be an issue unless IHT is in play.

You can pay money to your daughters bank accounts which in turn gets a direct debit to the pension for the same amount.  Your daughters will know but it will get money in their pension.

etienneg

grumpsthegit said:

Yeah I thought as much - it's been over 40 years since I opened a bank account so I guess my memory is a little hazy on the checks. Perhaps a joint account is the answer? 

Things are very, very different now from what they were 40 years ago!

A joint account ties you together in terms of credit files, so can only be opened with the consent of both parties. Many providers insist on both parties living at the same address. Anyway, this doesn't change the pension issue - a pension being inherently for an individual. And a pension involves tax relief, etc., things which cannot happen without the knowledge of the person to whom it belongs.

I appreciate that your intensions may be well founded, but what you have in mind is a definite no-no in today's world. You just cannot legally make financial arrangements for another adult (without power of attorney) without their knowledge.

LHW99

Apart from anything else, if they should eg have a premium bond win, and decide to make a one-off contribution up to their maximum salary, it could put them the wrong side of the tax man if you are putting extra money in that they don't know about.

3rd party payments are included in the calculation for the maximum you can pay in to pensions

grumpsthegit

Marcon said:

Why not use your contributions to incentivise theirs - ie 'I'll put £x into your pension scheme if you put in £y'.

Nice idea but at their current stage in life they are struggling with the rent and bills so that would be a no starter - hence my desire to get them at least off the starting blocks - as everyone always says the sooner the pension starts the better.

dunstonh said:

Hi as per the title I would like to start SIPP's for my daughters but did not want to tell them I was doing this in case it stops them from doing something themselves.

Under 18s yes.  Over 18s no.

You could invest the money yourself and just earmark it internally for their benefit.  e.g. if you don't use the ISA allowance in full, you could put some away in there.   You still own it and its part of your estate but if they are the ultimate beneficiaries, then that wont be an issue unless IHT is in play.

You can pay money to your daughters bank accounts which in turn gets a direct debit to the pension for the same amount.  Your daughters will know but it will get money in their pension.

Yeah IHT is something that will be very likely unless disaster strikes.

etienneg said:

grumpsthegit said:

Yeah I thought as much - it's been over 40 years since I opened a bank account so I guess my memory is a little hazy on the checks. Perhaps a joint account is the answer? 

Things are very, very different now from what they were 40 years ago!

A joint account ties you together in terms of credit files, so can only be opened with the consent of both parties. Many providers insist on both parties living at the same address. Anyway, this doesn't change the pension issue - a pension being inherently for an individual. And a pension involves tax relief, etc., things which cannot happen without the knowledge of the person to whom it belongs.

I appreciate that your intensions may be well founded, but what you have in mind is a definite no-no in today's world. You just cannot legally make financial arrangements for another adult (without power of attorney) without their knowledge.

Maybe a joint account would be the least erm.. dodgy thing - I could justify that at any time they could move back home so my address could be theirs. They do still treat the place like a hotel popping back to stay whenever it suites them! 
I don't know it seems like this may be a non starter now, at least doing it under cover :-(

 

la531983

grumpsthegit said:

Maybe a joint account would be the least erm.. dodgy thing - I could justify that at any time they could move back home so my address could be theirs. They do still treat the place like a hotel popping back to stay whenever it suites them! 

 

No! You cant open a joint account with them without their permission! Plus does she want to be financially linked to you?

kempiejon

If the offspring are employed perhaps they already have some pension provision? Talking to them about that might be a good start. If they're struggling with rent and bills perhaps now is the time to refresh the financial education you gave them whilst younger as perhaps they're straying from the path.