Childs pension

[Youseethethingis]

I'm thinking of setting up a SIPP for my 2 year old. He already has a cash savings account and also a JISA, combined value of about £10k. I'm happy to just leave that to grow and FIL pays into his cash account monthly. I think that's plenty to be going on with aged 18 and not necessarily particularly sensible.
I'm now focusing on building my own savings/investments but I'd still like to put something away in DS name, hence have arrived at a junior SIPP.
I'm thinking of moving maybe £1k across from his cash account to get things going then pay in £30 a month from then on.
Where would you put it? Its not a huge amount so don't want it eaten up by fees. Easiest thing would be to just open it alongside his Vanguard JISA but eggs and baskets etc. are holding me back.
Baffled by it all

A child (or other non taxpayers) can get tax relief on up to £2,880 so they will get the tax relief before they are earning as an adult

@choccyscot

A child (or other non taxpayers) can get tax relief on up to £2,880 so they will get the tax relief before they are earning as an adult

Thanks @choccyscot, I didn't know this. So they are claiming tax relief in tax that hasn't been paid?

Correct. You can put £2,880 pa into a child's pension and the government makes it up to £3,600.

Thanks @50andup, and apologies all for my bad advice above.

No problem and as @choccyscot said, non-taxpayers can do it too. It's a big incentive for e.g. SAHMs.

@LabradorLover1

This thread is a wind up, right?

Life insurance for unborn babies and toddlers with bigger pension pots than half the country?

If this is genuine - I am sincerely sorry for your loss but I am truly weeping for social inequality.

You see I don't understand this. We don't have takeaways, go to cafes, eat out, go to cinema, but we do save into the children's pensions and JISAs. Surely people can spend their earnings as they like? It just depends what you view as a priority.

@LabradorLover1

This thread is a wind up, right?

Life insurance for unborn babies and toddlers with bigger pension pots than half the country?

If this is genuine - I am sincerely sorry for your loss but I am truly weeping for social inequality.

I think my life insurance would provide a payment for the death of a child, it's an addition on a lot of policies. I'm pretty sure the OP wouldn't have added that detail in to the story as "a wind up".

@LabradorLover1

What a horribly insensitive post.

“I’m sorry for your loss but I’m going to use your personal tragedy as an opportunity to make a wider political point that signposts my own virtue and excellent social conscience”

Behave yourself

Seems a great idea to me and I don't see why it's so controversial. The power of compound interest over the length of a child's life will maximise any investment and will take a lot of stress off your child later in life.

OP, how is your pension pot looking? You need to be sorting yours first

OP ignore all the negative posts here. If you want to start a SIPP for your child, you do it.

I started one for my DGD. I put in the max I could for one tax year, the government added a further 20% and there I have left it. Her mother administers it. It's with HL, who are pricey, and it is a junior SIPP. It automatically becomes an adult SIPP with rules that attach to those at age 18. They have online tools to help you choose funds.

The idea is not to make her a pension millionaire but to give her a boost so she doesn't start from £0 when she pays into a pension in her own right. And the earlier you start, the longer it will be invested and growing.

I'm just starting small ones for my children with fidelity as vanguard don't do one unfortunately.

Its a good idea op - there is tax relief up to £3600 (gross) so every £80 you put in is immediately made up to £100. Then there is compound interest and that they get it when they are as sensible as they are ever going to be.

I have a stakeholder for both dds who are in primary at the moment. Its a great way to save for them (they have JISA's and other savings too). When they are 18 I will pay into a LISA instead (if they are still available). Im a single parent and not super rich but my number one priority is to provide for my dds future.

I have the plans with Aviva as Vanguard doesnt allow pensions for under 18s.

also so sorry for your loss op.

So Fidelity and Vanguard look to be sensible choices for junior pensions any other recommendations please?

I just wanted to add to this in case it’s useful for anyone in the future. This is an excellent idea and small amounts, invested in a global index tracker and left for 60 years grow into a HUGE amount. The power of compound interest. I’m doing for all 3 of my kids. There’s a really amazing episode of money to the masses where the figures are explained.

And fidelity is a great choice. No fees at all until they are 18!

You can add £2880 pa and this becomes £3600 with government gross up

This is the podcast: moneytothemasses.com/news/podcast/mttm-podcast-how-to-become-a-millionaire/amp

Powerful stuff

Hello, thanks for the thread OP and please ignore all the crappy comments. I’m looking into this too. I’d like to go with Vanguard as I already have an SSISA with them but they don’t do Junior Sipps. I’m leaning towards Fidelity because of the low costs and it seems you can access the Vanguard funds through them? In which case, great. I’m looking to put in £50 per month for each child. That’s on top of our own savings, pensions (and very generous ongoing charity commitments, for those judging earlier).

For those wondering why this is a thing to do, my main reason is actually so that the decision to start a private pension is already taken and actioned - my kids won’t have to think about it or have dilemmas in their 20s about how to apportion their money. For a young person, there is never going to be a good time to start a pension, there are always too many competing demands on their income. I know people in their 50s who’ve never started a pension, which kind of proves this point. This way, it’s done and they can take over responsibility for the pension as soon as they are able. It’s an added bonus that compound interest will work in their favour over such a long period of time.

We can afford the £100 pm for the 2 kids. We don’t have a hugely materialistic lifestyle. I know people who spend their money in different ways, including spending eyewatering amounts on upgrading houses/new cars etc but that’s their call. Do what you want.

I think it’s shocking that we don’t provide more financial education to all our children in school. It would help them to make good decisions in the future, regardless of income. By doing this for my kids, I’m also trying to give them an element of that financial education. It’s not about babying them or ignoring a social duty, quite the reverse.

OP, I’d be quite interested to know of anything you’ve found out or if you’ve made a decision about the provider. And I am so very sorry about the loss of your baby 💐

I have opened a JSIPP for my kids because I won't be around when they are retired, and that is my way to help them then.
Over the last few years, I have seen several family members and friends having their life destroyed due to divorce, illness or death. I would like to think that if any of my kids have the misfortune of losing their partner, being scammed, bad divorce, etc, they won't be old and poor. I assume that during youth, they will be strong to work as hard as it takes to provide for themselves.