Kids pensions

lush_walrus

Hoping someone can help. We have already maxed out JISAs for our children and are now thinking about starting pensions for them to spreed their future benefits. I understand the principal and that £2800 can be added per year with tax relief.

Really just wanted to ask some advice on where's good to start one for them, one of my pensions is with Aviva, Max risk and seems to be doing ok so considering them. Any advice is greatly received.

billyboy

I started one for each of my grand daughters 9 and  6 years ago. One with Hargreaves Lansdowm and the other with Fidelity. Both superb, tax reclaimed automatically. I picked 3 trusts each and have all done well (better than the ones I have for myself) One UK tracker, one European and one global.

NoMore

Just a correction, it’s £2880 you can add with basic tax relief of £720 bringing it to £3600

cloud_dog

lush_walrus said:

Hoping someone can help. We have already maxed out JISAs for our children and are now thinking about starting pensions for them to spreed their future benefits. I understand the principal and that £2800 can be added per year with tax relief.

Really just wanted to ask some advice on where's good to start one for them, one of my pensions is with Aviva, Max risk and seems to be doing ok so considering them. Any advice is greatly received.

Just to confirm that any other financial undertakings are or will be covered, e.g. University?

I would suggest that it is generally felt that starting pensions is the lowest priority but, where you have spare income / capital using a pension can be helpful.

Fidelity are useful for their SIPP as they do not apply their platform fee for juniors... 

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

JamesRobinson48

Your intentions are admirable.  And your plan seems highly efficient from a family tax planning point of view.

But personally, I decided against when this opportunity first became available many years ago.

Depending on your children's ages, it's going to be 40-50 years before the children can access the pension.  Before locking the money up for so long, I'd want to be very sure that neither I, nor the children, will need that money for anything else (home deposit, car, college fees, etc) beforehand.  

I feel this one is most suited to seriously rich people, who already possess sufficient resources to fund their extended families for decades to come. And I'd be interested if anyone knows how many people are putting into pensions the £2880 annually for kids.

NormalNorman

Daughter now 18 but still has the Aviva pension we started when she was born. Still pay into it as a third party. Don't see any benefit to moving it to another provider anytime soon.

Being 18+ her significant JISA has already passed over.

Thank goodness she has turned into a scrooge like saver, lol!

Albermarle

JamesRobinson48 said:

Your intentions are admirable.  And your plan seems highly efficient from a family tax planning point of view.

But personally, I decided against when this opportunity first became available many years ago.

Depending on your children's ages, it's going to be 40-50 years before the children can access the pension.  Before locking the money up for so long, I'd want to be very sure that neither I, nor the children, will need that money for anything else (home deposit, car, college fees, etc) beforehand.  

I feel this one is most suited to seriously rich people, who already possess sufficient resources to fund their extended families for decades to come. And I'd be interested if anyone knows how many people are putting into pensions the £2880 annually for kids.

I also avoided doing this, due to the very long time scales involved.

artyboy

Albermarle said:

JamesRobinson48 said:

Your intentions are admirable.  And your plan seems highly efficient from a family tax planning point of view.

But personally, I decided against when this opportunity first became available many years ago.

Depending on your children's ages, it's going to be 40-50 years before the children can access the pension.  Before locking the money up for so long, I'd want to be very sure that neither I, nor the children, will need that money for anything else (home deposit, car, college fees, etc) beforehand.  

I feel this one is most suited to seriously rich people, who already possess sufficient resources to fund their extended families for decades to come. And I'd be interested if anyone knows how many people are putting into pensions the £2880 annually for kids.

I also avoided doing this, due to the very long time scales involved.

Ditto. Well, that and the constant tinkering that successive governments have done with pensions legislation. I'd have zero confidence that a 40/50 year investment would be safe from future negative changes.

I do echo the sentiment about admirable intentions though. I just wonder, would they have an indulgent grandparent or two that could perhaps gift them money for savings (thereby avoiding the £100 interest tax trap)? Obviously if you decided to show said grandparent similar largesse in return, then that's entirely up to you 

AlanP_2

Our first grandchild should (fingers crossed) arrive in a few months and we are planning on doing this at £2k net per year when she does (and for any future ones that may come along).

Our children all have good jobs and should be well positioned to deal with any and all costs as they grow and enter the adult world so we thought we'd take the very long term viewpoint.

We have both benefited from good DB pension opportunities as well as significant asset value growth (investments and house) so have "spare income" which can be used.

Given that it would take a 7 figure pot to generate the equivalent of one of our DB pensions using 3.5% drawdown then all assistance we can give to provide a firm foundation for the time they reach our age makes sense to us.


We also plan to make ad-hoc deposits at Birthday / Christmas in to a JISA as well but that is just a bonus.

Everyone makes their own decisions and this is one we feel comfortable with. Yes, pension legislation will change over the many years this pension will be in existence but we can't wait until we know the regime in 2090 

NormalNorman

artyboy said:

Albermarle said:

JamesRobinson48 said:

Your intentions are admirable.  And your plan seems highly efficient from a family tax planning point of view.

But personally, I decided against when this opportunity first became available many years ago.

Depending on your children's ages, it's going to be 40-50 years before the children can access the pension.  Before locking the money up for so long, I'd want to be very sure that neither I, nor the children, will need that money for anything else (home deposit, car, college fees, etc) beforehand.  

I feel this one is most suited to seriously rich people, who already possess sufficient resources to fund their extended families for decades to come. And I'd be interested if anyone knows how many people are putting into pensions the £2880 annually for kids.

I also avoided doing this, due to the very long time scales involved.

Ditto. Well, that and the constant tinkering that successive governments have done with pensions legislation. I'd have zero confidence that a 40/50 year investment would be safe from future negative changes.

I do echo the sentiment about admirable intentions though. I just wonder, would they have an indulgent grandparent or two that could perhaps gift them money for savings (thereby avoiding the £100 interest tax trap)? Obviously if you decided to show said grandparent similar largesse in return, then that's entirely up to you 

That's what people were saying 18 years ago when we started a pension for daughter. Not much has changed but I'd say it's even more valuable for her now. 

artyboy

NormalNorman said:

artyboy said:

Albermarle said:

JamesRobinson48 said:

Your intentions are admirable.  And your plan seems highly efficient from a family tax planning point of view.

But personally, I decided against when this opportunity first became available many years ago.

Depending on your children's ages, it's going to be 40-50 years before the children can access the pension.  Before locking the money up for so long, I'd want to be very sure that neither I, nor the children, will need that money for anything else (home deposit, car, college fees, etc) beforehand.  

I feel this one is most suited to seriously rich people, who already possess sufficient resources to fund their extended families for decades to come. And I'd be interested if anyone knows how many people are putting into pensions the £2880 annually for kids.

I also avoided doing this, due to the very long time scales involved.

Ditto. Well, that and the constant tinkering that successive governments have done with pensions legislation. I'd have zero confidence that a 40/50 year investment would be safe from future negative changes.

I do echo the sentiment about admirable intentions though. I just wonder, would they have an indulgent grandparent or two that could perhaps gift them money for savings (thereby avoiding the £100 interest tax trap)? Obviously if you decided to show said grandparent similar largesse in return, then that's entirely up to you 

That's what people were saying 18 years ago when we started a pension for daughter. Not much has changed but I'd say it's even more valuable for her now. 

If it works for you then great, personally I can find better ways to help my children than locking up money in an account that the government can raid far more easily than they can access for the next half century.