Junior SIPP

NoMore

You may be within the rules but AJ Bell may not allow it, but the question is why do you want to do this? You are going to end up with less for the previous years than if you just saved it in an ISA compared to non-tax relief pension contributions. This is because you're not getting the advantage of tax relief on the way in but it will now be taxable on withdrawal.

That's the point, there is very little advantage to putting non-tax relievable money in a pension.

Dazed_and_C0nfused

MortagageWannabe said:

Thank you for the further responses. This has helped clarify things (somewhat).

Can I therefore contribute £2,880 x2 for 2023/24 and 2024/25 tax years with no expectation of receiving tax relief and £2880 for 2024/2025 which will attract £720 tax relief?

AJ Bell JSIPP T&Cs only mention a maximum of £3,600 per year

https://www.ajbell.co.uk/pensions/junior-sipp

No, unless you have a TARDIS you have missed the boat for those tax years.

You may be able to contribute more in 2025-26 without receiving tax relief (above the basic £720) but you would need to find a provider who would accept contributions that are not eligible for tax relief.

Albermarle

Pension providers are set up to automatically to add basic rate tax relief. So if you added £20K they will add on £5K and claim it back from HMRC.
The problem is that one day HMRC will realise something is wrong, and the situation will have to be unwound which could be messy . The system relies on the customer not to add more than they are eligible for .

As above if you call Aj Bell in advance they will surely say no as it would be a disruption to their automatic systems.
Plus as said there are VERY few circumstances where adding to a pension without getting tax relief makes any sense.

MortagageWannabe

Thank you for the replies. I greatly appreciate it.
To keep things simple, I will only contribute £2,880 to the JSIPP for 2025/26 tax year.

Thanks again.

Marcon

MortagageWannabe said:

Thank you for the further responses. This has helped clarify things (somewhat).

Can I therefore contribute £2,880 x2 for 2023/24 and 2024/25 tax years with no expectation of receiving tax relief and £2880 for 2024/2025 which will attract £720 tax relief?

AJ Bell JSIPP T&Cs only mention a maximum of £3,600 per year

https://www.ajbell.co.uk/pensions/junior-sipp

Not quite - you need to read the full T&C(!):

QrizB

My local hand car wash has deluxe valeting options that run into three figures.

So just hypothetically...

1. Your child registers with HMRC as self-employed and starts a car cleaning business.

2. You contract your child to wash & vacuum your car.

3. Over the financial year, your child charges you £8640 for washing your car.

4. Your child contributes £8640 to their JSIPP.

I guess there might be wrinkles with this plan (particularly if the child is a pre-schooler), but it's somewhere to start!

NoMore

QrizB said:

My local hand car wash has deluxe valeting options that run into three figures.

So just hypothetically...

1. Your child registers with HMRC as self-employed and starts a car cleaning business.

2. You contract your child to wash & vacuum your car.

3. Over the financial year, your child charges you £8640 for washing your car.

4. Your child contributes £8640 to their JSIPP.

I guess there might be wrinkles with this plan (particularly if the child is a pre-schooler), but it's somewhere to start!

Just to be clear that's not using carry forward just still the tax relief limit. If the child earned more than 60k then carry forward could come into play, but they would have needed to already been a member of a Pension.

There's nothing special about a Junior SIPP (it's a marketing term rather than a legal thing specifically for children, unlike a JISA which does have specifics for children), it's still just a pension subject to the same rules as other pensions, the £2880 (£3600 gross) tax relief limit applies to all non-earners, it's just much more likely a child will be a non-earner, but not impossible that they do have earnings then that becomes the Tax relief limit for them, just like an adult.

MortagageWannabe

Thank you for the helpful responses.

I could register my child as a self employed model for my business’ marketing catalogues. I reckon child models could potentially earn up to £12,570 annually, which would then be contributed to their JSIPP. We may need to register for a child work permit beforehand. 🤔 

Dazed_and_C0nfused

MortagageWannabe said:

Thank you for the helpful responses.

I could register my child as a self employed model for my business’ marketing catalogues. I reckon child models could potentially earn up to £12,570 annually, which would then be contributed to their JSIPP. We may need to register for a child work permit beforehand. 🤔 

Just go be clear, they would only be adding £10,056.

The basic rate tax relief would make it up to a gross contribution of £12,570.

Albermarle

MortagageWannabe said:

Thank you for the helpful responses.

I could register my child as a self employed model for my business’ marketing catalogues. I reckon child models could potentially earn up to £12,570 annually, which would then be contributed to their JSIPP. We may need to register for a child work permit beforehand. 🤔 

The question about JSIPPs is would your child not appreciate getting money to help with buying a car, going to Uni, rather than receiving it when they are 60 when they might well be financially comfortable anyway?
There are differing opinions on the topic.