Do you have a SIPP for your DC?

[Bluebluetuesday]

Having read about this a few times lately, it got me wondering. Is it worth starting one, will there be so many changes implemented by various governments along the way they'll end up disadvantaged by having one?
Do your DC have one, who with? I think I've read too much and now can't decide whether to start some and invest a small amount each month.

No.

My current thinking (may change) is that id rather see them enjoy any money I can give them while I’m alive to see it.

If I can give them eg a chunky house deposit, that will free up plenty of their own income to put toward a pension.

I think id be kicking myself if I got 30 years into a SIPP for them and actually they really needed money for something else but basically couldn’t access it.

I save weekly into s&s ISAs for my kids but I've also been looking into a SIPP for each of them. I'm looking at Fidelity as the provider.

I've opened SIPPs for both my DCs (aged 7 and 5 at the moment).

There are several motivations - one is to shield the capital gains and the income from tax (their ISAs are already maxed out), one is to start early and benefit from compunding over the next minimum 50 years, and one is to use the tax relief.

This is money that they will not be able to piss up the wall for five decades, and if I put in the maximum of £2880 each year the government adds an extra £720, which I'm happy to take on their behalf.

If you can spare the money and live with the idea that you won't be around to see them enjoy it, it's a bit of a no-brainer.

I have opened a SIPP for all 3 teenage/adult DC. They have other savings as well in ISA's and LISA's.

The logic behind a SIPP for them is that firstly they can't touch it or waste it and if all else goes wrong at least they will have a nest egg for when they retire, they will be able to spend their own money on the things which they choose to spend on, they can also learn by example how a small amount saved over a long period will grow. We track all our spending and investments together as a family once a month.

So many people in 20's, 30's and even 40's don't think about saving in pensions and are more likely to spend their money on things they need there and then.

Another good reason is for the tax relief for non earners who don't even pay tax - ie free money.

Ours are with AJ Bell who have low fees but a good choice of investments the investments are in the Vanguard Lifestrategy 100 fund to keep it simple for now.

I wouldn't worry about what may or may not change in the future, you can only work with the system you have in front of you and at the moment it will give you up to £60 a month free money so why not take advantage. Why do you think they would be disadvantaged by having a pot of money which had been growing for circa 50 years by the time they retire.

I wanted to get one sorted out for my son but it made my head hurt. He's put a few grand in a LISA instead.

Yes - grandparent offered some money and we put it in a SIPP, also with AJ Bell.

Our thinking was that it’s really hard to know where to start to save into a pension, at least kicking it off makes that easier for them. Also the tax benefits and long term growth.

I also like the idea that it will help them long after we’re gone.

It depends on how well sorted YOU and your own pension / savings are IMO, that should be a top priority.
If you really have surplus income, it's worth doing.

Yes, all 3 of mine have SIPPs with AJ bell. Start off as soon as you can & every little bit helps.

Yes. I have a SIPP for my 12 year old, with Hargreaves Lansdowne. She knows she has it, and is interested in it's ups and downs, and also in the management of her holdings.

Yes. With HL. I put very little in, but it’s part of their financial education and it’s set up with a bit of a start when they’re adults.

The power of compounding over 60 years is amazing. Now obviously inflation is a factor but £10k in by 5 compounding for another 53 years at 6% would be worth £240k.

Yes, alongside JISA’s we’re paying into JSIPPs. I’m not sure how much we’re aiming to build but we’d like it to be enough to get the ball rolling and to form the nucleus of a conversation with the kids about saving for retirement as soon spas they start work.

In my view its a way of leaving them a guarenteed inheritance, should I need to sell my house to pay for care fees. (Aware this view is coloured by the experience of several older releatives going through the 'care' system)

So easy to let the years go by and not sort this out. Even a tiny amount a month is probably worth doing

Yes, we've been paying into a SIPP for our 9 year old for the past 4 years. We pay £30 per month and government "tops up" a further £7.50. It's with Fidelity, invested in a global equity index tracker.

We separately save a larger amount for her each month for costs of young adulthood but given the 25% government top-up and the huge compounding of investing in the stock market for 50+ years we really wanted to give her a start on retirement savings - who knows what the state pension will look like when she's retirement age. The plan is to carry on investing until she's working in her 20s (the junior SIPP will convert to an adult one at 18 so will have to check how we invest on her behalf at that point).

Yes, got pensions and ISAs since birth. Mostly going into ISAs so they have something to for a house deposit when they are older (currently 7 and 9). Pension to make sure they have something to get them going and you can get tax relief on it too up to a limit. Sort yourself out first but if you want to give them a good start in life, and have a good retirement, then you can’t start early enough in my view.

Yes - we recently did this (with Fidelity).

Obviously it makes sense to do JISA first, and we might not put into the JSIPP every year, but thought it made sense to get something going on the basis that it has a lot of time to grow, and it will be a place where, once it converts to a regular SIPP, they could consolidate future work pensions.

My DS6 has a SIPP with Fidelity, an JISA with Vanguard and a kids savings account which I can access if he ever needed/wanted anything that we were not in a position to fund at that time for whatever reason.
As PP said, I want him to have some kind of inheritance in the event that we end up with nothing, potentially the opportunity to retire earlier if his health is failing him (he is T1D so I’m painfully aware a lot could go wrong), ease the financial pressure on him to start paying in to his own pension as a young adult, no faith that I will ever get a state pension, let alone his generation, be able to demonstrate the power of compound interest, make sure he has something in the event that he’s a total spendthrift and burns through the JISA money when he takes control at 18, powerful reminder when I will likely be long gone that mum absolutely meant it when she said she’d love him forever and ever (if that’s not to sentimental a reason for the investment board 😳).
That said, successive governments and their light fingers and tinkering make me feel nervous. So I guess the key must be to make sure our own ship is as watertight as possible, and hope for the best.

Yes recently set up a SIPP after maxing out junior ISA contributions.

I started a SIPP for my son the year he was born. It’s up 77% since inception. I’ve since stopped paying into it, once I realised it’s soon going to be worth more than mine (I paid the maximum in over a decade), but it’s going to be a great bonus for him in later years. The ‘free’ money (provided you choose to invest it wisely) is a no-brainer for me.

I agree with PP that it's a great way to leave something directly to your kids, rather than getting tangled up in making decisions for your own later life purely based on inheritance concerns.
From our income, we contribute to a JISA and a JSIPP for our DS.
The numbers become seemingly fantastical over a long period.
We will continue to contribute to both until our DS is 30 and then hand over to him.
The JISA will allow him to buy a home or invest for other priorities, depending on what is important to him.
He could take his JSIPP pot at 30 and never put more in other than free employer money, if that's available to him, and he would be set for a generous retirement.
There are so many variables to factor in, of course. But there is a golden opportunity to use small regular sums x with time to give them a return we could only dream of!

No they both have their own pensions and lifetime ISAs. They earn more than me!

I’d love to benefit from the wisdom of previous posters on this thread if that’s okay?

I know that the popular firms mentioned all charge fees. Is it still worth opening a SIPP if all you can spare is £50 (or even less, say £30) a month?

Yes
I sent one up for all of them before they were a year old. It’s going to be my way of looking after them from beyond the grave.

Just watch out for the charges. Vanguard is very good I believe.