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    • TARDIS
    • By TARDIS 23rd Sep 17, 9:19 AM
    • 111Posts
    • 80Thanks
    Are children's pensions a good idea?
    • #1
    • 23rd Sep 17, 9:19 AM
    Are children's pensions a good idea? 23rd Sep 17 at 9:19 AM
    Thinking about starting a pension for my kids, but not sure if it's a good idea or not. Would be interested to hear other's thoughts/experiences please.

    I like the idea of free money from the government and compounding over many decades, but who knows when they'll be able to access it in the future. And if I did open one for them, not sure what to choose either. Possibly a SIPP with VLS100 or 80.

    They already have full JISAs, but maybe I should just use up the rest of my ISA allocation instead and give them it later if I don't need it?
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    • Radiantsoul
    • By Radiantsoul 26th Sep 17, 6:10 PM
    • 1,997 Posts
    • 1,989 Thanks
    I think financially they make sense, but I guess I always wonder if you may miss the joy in their eyes when they spend the money....
    • justme111
    • By justme111 26th Sep 17, 9:09 PM
    • 3,002 Posts
    • 2,900 Thanks
    you will see a joy in their eyes when they realise they can afford to redirect money which would otherwise were placed in pension to other worthwhile causes. Joy in their eyes when thanks to your contributions and being accustomed to contribute to something that always was there they realise they can quit a degrading disheartening job.
    • jeepjunkie
    • By jeepjunkie 27th Sep 17, 8:03 AM
    • 1,410 Posts
    • 1,335 Thanks
    That's the one I'm currently veering towards too.
    Looks nice and simple, medium risk, nothing to tempt them to fiddle with unnecessarily when they take control (I hope)
    Originally posted by TARDIS

    All the best, cheers!
    • downshifted
    • By downshifted 2nd Oct 17, 11:50 AM
    • 914 Posts
    • 1,944 Thanks
    I too am looking at Aviva stakeholder for my granddaughters - they are 4 and 1 and I would put in the full 2880 each this year and then a small amount each month. Because they have so long to invest I would have preferred something more risky than the medium risk fund chosen by others - I have looked at the list, but am not sure which to choose (they don't have Vanguard 100%, which is what I would have chosen in a SIPP)

    Anyone have any ideas to narrow down the list before studying in detail please?
    Last edited by downshifted; 02-10-2017 at 11:50 AM. Reason: typo

    September GC 251.21/250 October 248.82/250 January 159.53/200
    • Alexland
    • By Alexland 2nd Oct 17, 1:56 PM
    • 2,574 Posts
    • 1,956 Thanks
    The default Aviva Mixed Investments 40-85% fund is more than medium risk with the datasheet showing it currently has over 70% shares, over 4% property and over 3% alternative investment so the risk is similar to a VLS80.

    100% equity funds don't tend to perform as well over the long term as they miss the benefits of rebalancing between asset classes during the full cycle.

    Aviva's lifestyle strategy only reduces allocation into this fund in the 5 years leading up to target retirement date whereas a Vanguard Target Retirement fund would spend 25 years reducing risk. So you could argue it's too high risk but your granddaughters might not keep it that long if they transfer it into an employer scheme in future.

    I don't think you need to go any riskier for your granddaughters because of their age. I opened one for my younger wife and am very happy with it. My SIPP is in VLS so I don't want too much exposure to Vanguard anyway.

    Last edited by Alexland; 02-10-2017 at 2:33 PM.
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