How much do you save for your DC?

[Chocolattcoffeecup]

How much are you saving for your DC and how are you saving it?

On an average income and save £30 a month split between a savings account and JISA. This thread is so mumsnet.

Those SIPP numbers are accurate. That’s how compounding/investing works over such a long period of time.

https://goodmoneyguide.com/investing/junior-sipps/junior-sipp-calculator/

You can test for yourself here. A initial investment of £2880 with no further payments and 58 years of compounding at 7.5% is £200k+.

It’s always fun playing about with these calculators and seeing how much relatively small sums can turn into over long periods of time.

Could someone recommend an SIPP please? And also an online account I can pay cheques into (as she was given one for her birthday and I really need to psy it in.)

As you can see I have namechanged for this 😁the compounding calculation is entirely correct - here is another calculator for good measure.

https://www.aviva.co.uk/investments/savings-accounts/compound-interest-calculator/#compound-calculator

I will not be sharing how much DC has in their JISA or SIPP as I would prefer to avoid unpleasantness.

I'm loathe to recommend the one I use only because I'd hate it if wasn't the best for you. There are a few recommendations here:

https://www.moneysavingexpert.com/pensions/how-pensions-work/

I don’t see how the calculator works. The relevant fields just stay blank, there’s no final projected outcome.

Our Junior SIPPS are with AJ Bell:

https://www.ajbell.co.uk/pensions/junior-sipp

There was a previous thread where Hargreaves Lansdowne was also a popular Junior SIPP provider. Key thing is to compare charges very very carefully, they really eat into an investment, even when they seem low.

I like the idea of kicking it off for them. Firstly because it’s bloody difficult to build up a pension. Secondly they get to understand how investing and growth works. Also, they can’t burn through it at 18.

The maths is sound, which is why I am baffled that people seem to find every excuse I can think of (as well as quite a few I can't) not to do it.

Weird, mine works okay. Maybe a browser issue! There’s loads of them around so maybe try another.

I don’t put anything in their names after watching a friend spend his entire inheritance in a single summer. They can be amazing kids and amazing adults and still make bad decisions you can’t come back from in a few weeks of low impulse control at 18.
We have bought a flat for each child and paid off the mortgage but it isn’t in their name and won’t be until they are ready; they don’t know about them yet.

Ours is a managed one with HL. I just wanted to stick the money in and forget about it and it only took minutes to set up. I just really liked the idea of DH and I being most likely long gone but able to do a final act of providing for them.

My DC's SIPPs are with AJ Bell too. Like @WaterlooBridge says, keeping the fees low is a big thing: run your figures through one of the calculators with, say a 0.25% difference in the rate of return to represent higher fees, and look at the difference.

The great advantage of AJ Bell is that I can link the DCs SIPPs to my own log in: I can trade for them under my own log in and can view all the accounts (JISAs as well) as a combined portfolio.

That's fair enough after looking at the calculations you are right. We have one for our son but none of our friends are interested..I think some think of it as being way off in the future. We created it so we can show him the benefit of pensions and how it can all add up over the years.

I feel the same, a way of looking after them from beyond the grave!

Nothing. We are paying school fees currently and then we will help out whilst at uni. We will then save some money to support with a house deposit.

I'd encourage you all to have a conversation with grandparents if they are thinking of leaving a legacy. I DO appreciate that few young families have the means to pay in £2880 themselves. For those, I may suggest saving £288 a year into an ISA and then making the SIPP payment when their child is 10 years old (Assuming the same regime exists).

That’s what we did, £100 a month in an JISA. It was over 45K when they got to 18!

I have been tempted by the SIPP but also think how unpleasant it'd be having 100k in a pension when jobless and homeless with 2 kids at 30.

Are the maturing ages on your SIPPs fixed or do they raise with the governments minimum retirement age?

£300 a month to each.

eldest is about to text 18 and we’ve saved just over £40k for him.

child trust fund for eldest and isa for younger one

Are the flats held in a trust or something or are they in your name?

Would it lead to a large IHT bill if you die early (sorry!). Will you need to pay CGT on the gains when you give yo the DC?

I'm sure there's a way round this, rich people are always doing it.

They are the same as any private pension, at the moment it's 55 to be able to withdraw the money but I believe that's going to 57 in a couple of years

I think SIPP saving for children has to be last in line when you’re confident other priorities are likely to be covered.

Any yes, the rules on withdrawal can be changed by government at any time, as with all pensions.

One of the beautiful features (currently) of the SIPP is that they are not included in the calculation of benefits such as ESA/JSA, so you could have a quarter of a million in one and still claim benefits if out of work. You couldn't with an ISA. But yes - it's locked up - for good reason.

If you're jobless and homeless at 30 that's a tough place to be, but you deal with it using the support available and there's still time to come back from that. But you certainly wouldn't be building up a pension in those circumstances, which means the risk of hitting retirement age with nothing is much higher... from which there's no coming back.

Also, whatever's in a pension won't be counted for means-tested benefits under current rules, but anything in, say, an ISA will.

There's no such thing as a maturing age on a SIPP. In exchange for the generous tax regime applied to them you cannot access them until the age of 55 (going up to 57 next April). From 55/57 you can take up to 25% of the pot as a tax free lump sum, and you can take as much or as little of the rest out as and when you please after turning 55/57, although anything over the 25% lump sum will be taxed at your marginal rate. These are current rules, nothing to say they can't be changed.

You can actually continue to contribute to a SIPP until you're 75, but once you've started taking money out there are more restrictions.