Do I get tax relief on a Junior SIPP?

[Colourfulponderings]

I’m looking at setting up Junior SIPPS for my children but want to check if I get higher rate tax relief.

I can see online that yes, basic rate tax relief is paid into the fund by the government, but on my self assessment do I include my payments made and therefore get higher rate tax relief like I would on my own SIPP?

Giving this a bump

I can't find the answer to this, either! One source I found says yes and another says no 🤷‍♀️

It seems like a pretty basic question about it doesn’t it? I’m surprised it’s not spelled out anywhere?!

It's the child's pension not yours so they get 20% up to £2880 per year

Sorry £2880 is the max you can add and the 20% tax relief is added on via the SIPP provider claim

That suggests the tax is sort of independent to my tax. But if the government adds 20% tax relief, where is it coming from. My 5 y/o doesn’t pay tax to reclaim it from?

You don’t have to be paying tax to get tax relief on pension savings. Most adults who don’t earn enough to pay tax get their pension boosted by 25% too. It’s claimed automatically by the SIPP provider.

When the pension holder finally withdraws their pension they will pay tax on it, so they may never see the extra top-up.

It's independent of your tax as it's the child's pension

Non tax payers(including children) all have a basic allowance that is £2880 for pension contributions. With the Government Tax Relief it means the total input per year is £3600

That makes sense now. Thanks all.

Got to weigh up the benefit of higher rate tax relief putting it into my own pension vs compound interest of a junior sipp.

The important thing to weigh up is whether you want the money to be yours or not.

If you gift it to your DC (whether by placing it in an investment or pension, or just giving them cash) then it ceases to be yours - you can't just farm it out to DC and take it back (and the tax office has been all over that since at least the 1970s)

Yeah, I definitely do want it to be DCs but I like the idea of putting it into a SIPP because:
a) they’ll access it when they’re more responsible (hopefully!)
b) I know it will be hard for them to save for retirement in the early part of their lives and it gives them a decent start to build on
c) compound interest is the 8th wonder of the world.

I looked JSIPPs and ended up deciding not to.
i
a) they’ll access it when they’re more responsible (hopefully!)
Hopefully they'll be more responsible at a much earlier age than retirement. And unless they're very well provisioned they'll probably have more acute need for money before then.

b) I know it will be hard for them to save for retirement in the early part of their lives and it gives them a decent start to build on
People are generally contributing to their pensions more and earlier thanks to auto-enrollment.

c) compound interest is the 8th wonder of the world.
indeed it is, but your money can compound in exactly the same way in other places, like their JISAs, and your own ISA and SIPP to be gifted to them with more flexibility.

To my understanding, the only time JSIPP's might start to make sense is if you're already maxing all other tax advantaged saving mechanisms, and expect to be doing so regularly.

@oldwhyno really good, considered points, thank you.