Save for pension or children's future?

[bumblebeewine]

Hi everyone,

DH and I are mid twenties, with two young children. There are so many contributing factors to this but to make a long story short, we can only feasibly put some money aside every month to give to our children when they're 18 or into a pension. It's literally like £20 a month each but I don't want them to have nothing, at the same time I am panicking as we have no money for a pension and only one of us has a tiny pension from work (like 1.3% or something). Which one would you pick? I feel crap that we have to do one or the other as it is

[TheKarenWhoKnocks]

Pension and start putting into savings for kids when they're older and you're not paying childcare any more. If you have a few years of not paying into pensions with compound interest it penalises you way more down the line than a few years of not getting 2% interest on a child's savings account.

[Nosuchluck]

Pension

[OhTheRoses]

Pension.

[TheKarenWhoKnocks]

Although I think the minimum contribution you can make to a workplace pension scheme is now over 4%? So you may not be able to do that anyway if you've only got twenty quid.

[astoldbyginger]

Pension. Your children can earn their own money when they're older. You can't earn a pension.

[AriettyHomily]

Pension.

[JoJoSM2]

Pension. It comes out off gross pay so you have more money going into the pot. You’re still very young so there will be time for the money to grow.

[Thneedville]

Pension. It’s also a tax efficient way of saving and you might be missing out on employer contributions too otherwise?

Not everyone is able to save for their child, it’s a nice to do not an essential. Paying into a pension should be the higher priority.

[InTheWings]

Pension.
A little saved now will work hard for you over the years, with compound interest, tax contribution and the length of time invested.

You can start to save for the kids later on, as your childcare costs decrease, and hopefully your salaries go up.

[motherf88]

Pension. There's plenty of time to save up for the children later. You'll miss out on tax relief if you don't do the pension and it all adds up over time.

[labyrinthloafer]

Pension.

[Socre383]

Pension and if possible put any birthday or Christmas money to one side for your DC. You may well find that finances get easier as you get older. DH and I really struggled in our twenties. We’re early ‘40’s now and things are a bit better. Not massively but enough that we can save a bit more each month. It’s good that your thinking about this now.

[Mintjulia]

Op, I’m 57 so I can access my pension and use 25% of it for the benefit of my ds. However in the interim, the govt & my employer have kindly doubled the contributions.

So your choice is not necessarily one or the other. You could funnel your money through your pension, claim your tax rebate and your employer’s contributions and then use it as you want to when you reach 55.

[WisestIsShe]

Pension as pp have said with compound interest and length of time it's the best bet at the moment.

[MrsT1405]

Definitely pension. You dont know what children will do or need! You really do need a good pension and also you can help your dc with it.

[MysteriesOfTheOrganism]

Pension! Your kids at 18 have decades to work for what they want. But if you have nothing at 65 then you're fucked.