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Results: Have you set up a pension for your child?

Yes

11.11% • 4 votes

No

88.89% • 32 votes

You may not vote on this poll

36 votes in total.

  • FIRST POST
    • mcooke999
    • By mcooke999 8th Nov 18, 1:32 PM
    • 20Posts
    • 4Thanks
    mcooke999
    Pension for Child?
    • #1
    • 8th Nov 18, 1:32 PM
    Pension for Child? 8th Nov 18 at 1:32 PM
    Has anyone set up a pension for their child?



    If you are happy sharing then I'd also be interested to know how much you put in either initially and/or monthly. Assuming the latter, how long do you intend on contributing?
    Last edited by mcooke999; 08-11-2018 at 1:37 PM.
Page 1
    • dunstonh
    • By dunstonh 8th Nov 18, 3:19 PM
    • 95,815 Posts
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    dunstonh
    • #2
    • 8th Nov 18, 3:19 PM
    • #2
    • 8th Nov 18, 3:19 PM
    Oh great. A poll that will automatically bump the thread to the top despite no-one posting.

    Does it really matter what other people have done? Everyone is unique and decisions will be made on their own circumstances. Surely you should be considering your own circumstances rather than worrying about others.
    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.
    • Herbalus
    • By Herbalus 8th Nov 18, 3:22 PM
    • 2,143 Posts
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    Herbalus
    • #3
    • 8th Nov 18, 3:22 PM
    • #3
    • 8th Nov 18, 3:22 PM
    Surely that depends entirely on how much money you have available that you don’t need?
    • AnotherJoe
    • By AnotherJoe 8th Nov 18, 4:19 PM
    • 11,495 Posts
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    AnotherJoe
    • #4
    • 8th Nov 18, 4:19 PM
    • #4
    • 8th Nov 18, 4:19 PM
    In most cases i think this is a poor idea.
    There are much better uses that can be made of the money that will be much more help to the child much earlier in life (that will in many cases mean they can set up their own pension anyway whereas setting up a pension will not help them with education or a house). I'd say its only really a good idea if you've exhausted other options such as building up money for education and housing that can be used at a much earlier age. And also you can see them get the benefit of.

    Its also burning your boats, the money is irrevocably committed for some 50 or 60 years hence, many events could transpire in that time making it irrelevant /unwanted (maybe they "go off the rails" at a later age, and you wish you hadnt committed to give them money at all).

    It could even engender annoyance, eg "if only you had given me that £20k for the extra deposit to get me started on a house / that course to be a pilot / those doctors studies, now I've got to wait 50 years for a pension instead, fat use that is now when i need it".

    Its also a sad fact that at a very young age, something like 1 in 10 wont live long enough to see that pension anyway.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Tiger Moth
    • By Tiger Moth 8th Nov 18, 5:02 PM
    • 5 Posts
    • 1 Thanks
    Tiger Moth
    • #5
    • 8th Nov 18, 5:02 PM
    • #5
    • 8th Nov 18, 5:02 PM



    Its also a sad fact that at a very young age, something like 1 in 10 wont live long enough to see that pension anyway.
    Originally posted by AnotherJoe
    Not to mention the possibility of losing half or more in Divorce:sad
    • masonic
    • By masonic 8th Nov 18, 6:22 PM
    • 10,134 Posts
    • 7,421 Thanks
    masonic
    • #6
    • 8th Nov 18, 6:22 PM
    • #6
    • 8th Nov 18, 6:22 PM
    Perhaps we need a re-run of this poll:

    https://forums.moneysavingexpert.com/showthread.php?t=5858591

    Polls bumping threads is the most annoying feature of this forum (I can turn off the horrible white theme, otherwise that would be #1).

    PS I voted no in this poll because I don't have any children. Hope that feedback is helpful
    • Skibunny40
    • By Skibunny40 8th Nov 18, 9:20 PM
    • 141 Posts
    • 119 Thanks
    Skibunny40
    • #7
    • 8th Nov 18, 9:20 PM
    • #7
    • 8th Nov 18, 9:20 PM
    I clicked yes, but it's actually my dad who puts the money in for my son via DD each month. It's a gamble in terms of "the world could be a very different place in 50-60 years" but the money benefits from tax relief and hopefully the benefit of time in the market. He also contributes to a JISA for my son as well (I know, my son's very lucky) so hopefully both bases are covered.
    • Alexland
    • By Alexland 8th Nov 18, 10:23 PM
    • 3,632 Posts
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    Alexland
    • #8
    • 8th Nov 18, 10:23 PM
    • #8
    • 8th Nov 18, 10:23 PM
    Totally agree with AnotherJoe on this one the tax benefit is marginal (as the child will probably have to pay tax as a pensioner) and there are usually far better things to do with the money that would give the child a better start in life.

    Also it's nice to leave the child some things that they can achieve for themselves. I wouldn't have wanted my parents to waste a proportion of my LTA by making child pension contributions. I plan to use my remaining LTA exclusively for higher rate tax relief.

    Alex
    • macgyver
    • By macgyver 8th Nov 18, 11:54 PM
    • 1,117 Posts
    • 554 Thanks
    macgyver
    • #9
    • 8th Nov 18, 11:54 PM
    • #9
    • 8th Nov 18, 11:54 PM
    Totally agree with AnotherJoe on this one the tax benefit is marginal (as the child will probably have to pay tax as a pensioner) and there are usually far better things to do with the money that would give the child a better start in life.

    Also it's nice to leave the child some things that they can achieve for themselves. I wouldn't have wanted my parents to waste a proportion of my LTA by making child pension contributions. I plan to use my remaining LTA exclusively for higher rate tax relief.

    Alex
    Originally posted by Alexland
    I very much agree with Alexland's point here
    I wanted to thankyou a million times but its a shame that I can press the button just once
    • trailingspouse
    • By trailingspouse 9th Nov 18, 8:33 AM
    • 3,031 Posts
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    trailingspouse
    Agree that there are very many more useful things that you can do in the here and now that would have a (potentially) greater benefit. For example - funding their education (either full-blown private school, or extra tutoring or, later, funding their university costs), paying towards hobbies (horse riding, ice skating, golf don't come cheap and who knows where your child's interest/talents may lie - or what they may lead to). I'm sure you can think of more - in fact just being able to afford to live in a decent area with decent schools will benefit them.

    One of my husband's relatives scrimped and saved to put money into a savings account for him. When it matured he got £800. He earns that in a day now.
    • funnymonkey
    • By funnymonkey 9th Nov 18, 11:24 AM
    • 117 Posts
    • 15 Thanks
    funnymonkey
    I put some money into a junior sipp and junior isa with Hargreaves lansdown. I believe by doing both it protects them against the possibility of spending the lot down the pub when they're 18 if it were all to be in an isa
    depends on everyones circumstances
    • mcooke999
    • By mcooke999 9th Nov 18, 7:58 PM
    • 20 Posts
    • 4 Thanks
    mcooke999
    Looks like most people haven't set one up then.

    If I did, it would be along side other savings such as a JISA so they had something to help towards more relevant things at circa 18.
    • justme111
    • By justme111 10th Nov 18, 9:20 AM
    • 3,042 Posts
    • 2,952 Thanks
    justme111

    One of my husband's relatives scrimped and saved to put money into a savings account for him. When it matured he got £800. He earns that in a day now.
    Originally posted by trailingspouse
    Who knows , may be the chap earns that precisely because he seen his patent doing what they done
    I definitely will try and open a pension for my daughter before she starts working - if anything for instilling the ethos of pension savings and to pass the baton to her once she starts working. Have not done it till now because money is limited - mortgage , my pension, savings for her out of pensiin and expenses for her extracurricular activities etc are indeed priorities. Although when I think k about mortgage and see how inflation affected the value of my payments in just 7 years I indeed start to question the wisdom of early repayments...
    • AnotherJoe
    • By AnotherJoe 10th Nov 18, 9:28 AM
    • 11,495 Posts
    • 13,282 Thanks
    AnotherJoe
    Who knows , may be the chap earns that precisely because he seen his patent doing what they done
    I definitely will try and open a pension for my daughter before she starts working - if anything for instilling the ethos of pension savings and to pass the baton to her once she starts working. Have not done it till now because money is limited - mortgage , my pension, savings for her out of pensiin and expenses for her extracurricular activities etc are indeed priorities. Although when I think k about mortgage and see how inflation affected the value of my payments in just 7 years I indeed start to question the wisdom of early repayments...
    Originally posted by justme111
    Yep that's one of the reasons that scrambling to pay a mortgage off early is generally a poor idea along with the opportunity loss of the moneynthat could be put toward a pension plus often the loss of high rate tax relief .
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Alexland
    • By Alexland 10th Nov 18, 9:41 AM
    • 3,632 Posts
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    Alexland
    Although when I think k about mortgage and see how inflation affected the value of my payments in just 7 years I indeed start to question the wisdom of early repayments...
    Originally posted by justme111
    Yes over the long term once you have reached a low enough LTV to access the best interest rates and if your repayments are clearly affordable (even if rates go up) then further overpayments become suboptimal. Our ISAs will soon overtake our remaining mortgage balance and although they carry volatility risk they are more likely to beat interest payable over the next circa 20 years before early retirement. We could have cleared the mortgage a couple of years ago if we hadn't made such heavy pension contributions. I'm planning to fix the mortgage again this month for another 5 years of low rates.

    Alex
    • george4064
    • By george4064 10th Nov 18, 9:45 AM
    • 1,044 Posts
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    george4064
    I would say JISA would be much better because as many others have pointed out, a young person needs a lot of help with house deposit etc rather than their pension.

    If you think about, in a way if you help your child with their costs earlier in life (first house deposit, university fees etc.) it will be putting them in a better position for things like a pension that they will need to think about later in life. However this relationship doesn’t really work if they have a decent pension, since they can’t touch that till later in life it won’t help them at all with other important life events they’ll come across before benefiting from a pension.
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    • moxter
    • By moxter 10th Nov 18, 10:53 PM
    • 101 Posts
    • 97 Thanks
    moxter
    I'd like to for my two year old - a few other priorities to sort out first, but I'm hoping to put a small amount away each month within the next couple of years or so. Yes I want to help her in other ways, but if there's something to offset her inevitable "If only I'd put money in my pension in my twenties" in 30 years time, then that could only be a good thing. The simple power of that long term compound interest - it'll do her far more good than many other things I could do with my money.

    At the same time it does feel a bit of a luxury. It's something I'll only be doing when I feel relatively comfortable, and the first thing to go if things get tight.
    • veryintrigued
    • By veryintrigued 10th Nov 18, 11:32 PM
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    veryintrigued
    I thought the thread title was the O.P. offering up their child in exchange for a decent pension.
    • louloubelle79
    • By louloubelle79 11th Nov 18, 3:53 PM
    • 371 Posts
    • 196 Thanks
    louloubelle79
    I pay in £20 each for my two children hoping they continue payments when they start working
    • Alexland
    • By Alexland 11th Nov 18, 5:49 PM
    • 3,632 Posts
    • 2,969 Thanks
    Alexland
    I doubt having a child pension will make any difference to if they opt out of their workplace scheme (which is usually the best way to make contributions). It might even cause them to opt out thinking they already have some money put aside..
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