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    • queenbee22
    • By queenbee22 18th Apr 17, 8:45 PM
    • 4Posts
    • 1Thanks
    Stakeholder pension for children advice please
    • #1
    • 18th Apr 17, 8:45 PM
    Stakeholder pension for children advice please 18th Apr 17 at 8:45 PM
    I am thinking of starting a stakeholder pension for my children who are 17, 15, 11 and putting about 35 per month in each one for the next 20 years. The only reason I am thinking of doing this is because I used to work for someone who did this for her kids and she was super savy! Please would some of you kind informed people give me your opinion on the pros and cons of that type of thing.

    I liked the idea of the stakeholder because it has a chance to grow to a decent sum. I don't like the idea of giving my kids too much money. My 15 year old would spend anything I gave him within a month so I would prefer to put my money in an ISA in my own name and give it to the kids when I wanted (perhaps towards a house deposit).

    I know they can't get their hands on it until they are 55 which perhaps seems a bit long term. Is there a stakeholder that anyone would recommend?

    Many thanks
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    • Asghar
    • By Asghar 18th Apr 17, 8:54 PM
    • 144 Posts
    • 78 Thanks
    • #2
    • 18th Apr 17, 8:54 PM
    • #2
    • 18th Apr 17, 8:54 PM
    Hi there,

    Not sure about the right investment for you but bear in mind that the age when they will be able to access the pension will increase.
    At the moment it is 55 but from 2028 you will have to be 57 years of age and will probably increase further by the time your kids near retirement.
    • dunstonh
    • By dunstonh 18th Apr 17, 10:08 PM
    • 92,141 Posts
    • 59,296 Thanks
    • #3
    • 18th Apr 17, 10:08 PM
    • #3
    • 18th Apr 17, 10:08 PM
    Lots of people do this. as long as you can afford it, it is a nice thing to do. However, remember to index that monthly contribution as 35 today wont have the same value in 10 years time. Also, dont let your children think 35 is enough. They will still need to do their own planning .
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • JustAnotherSaver
    • By JustAnotherSaver 18th Apr 17, 10:25 PM
    • 2,898 Posts
    • 479 Thanks
    • #4
    • 18th Apr 17, 10:25 PM
    • #4
    • 18th Apr 17, 10:25 PM
    Also, dont let your children think 35 is enough. They will still need to do their own planning .
    Originally posted by dunstonh

    Your kids may well be tuned in when it comes to thinking of the future. I certainly wasn't at that age. Pensions were things that 'old people' had so i didn't need to worry about all that nonsense.

    Only 10 years later at the age of 28 did i start to realise how i really wasn't helping myself & i needed to act on it.

    I don't know if you can start it without them knowing (others would advise) but i'd say if you could then do it for the reason dunstonh said. If anything your contribution should be seen as a bonus in my view. My opinion is it'd be better if they made their own plans as though you hadn't helped out - that way when they can call on that money it'll be a nice bonus for them.

    • edinburgher
    • By edinburgher 19th Apr 17, 9:04 AM
    • 11,057 Posts
    • 59,304 Thanks
    • #5
    • 19th Apr 17, 9:04 AM
    • #5
    • 19th Apr 17, 9:04 AM
    If you can afford to do it, it's a lovely thing to do, but remember that they may have shorter term needs for money (houses, as you've mentioned, but also things like education, or relocation or a car for work purposes etc.)

    I'm just about young enough to remember my late teenage years/early 20s and yes, I probably would have wasted any significant cash gift, but the 'serious stage' came quite soon afterwards and relatively modest family gifts made all the difference (a few from an inheritance that allowed me to pay the deposit on a tiny rented flat in a new city, a gift from the inlaws towards our first deposit and a secondhand car that makes life so much easier now we have our own family).

    None of these gifts were expected or solicited, but they made a massive difference at some critical life stages

    Ps. Why not avoid the '35/month is not enough' issue by keeping the pensions secret?
    • xylophone
    • By xylophone 19th Apr 17, 12:43 PM
    • 25,133 Posts
    • 14,806 Thanks
    • #6
    • 19th Apr 17, 12:43 PM
    • #6
    • 19th Apr 17, 12:43 PM
    A young relative's grandparent contributed to a stakeholder for him - he transferred it to a SIPP and runs it alongside his occupational DB pension.

    However, there were other savings set aside for him to use through university and later.
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