Parents considering starting an early pension for their offspring should think again about the suitability of self-invested personal pensions (Sipps), according to an expert.
Mark Andrews, managing director of financial advisers Purplecircle Consulting, suggested that while Sipps had their advantages for adult investors, there was no evidence to suggest that they were suitable for child pension saving.
He went on to say that the Financial services Authority was concerned over the mis-buying of the pensions.
Sipps are tax-free wrappers that allow savers to invest across a range of areas including stocks and shares and commercial property.
A maximum of £3,600 can be contributed to the pension funds of non-wage earners each tax year.
"Anyone's who got the spare cash to set aside for their child – if a pension is the particular thing they want to do – then great.
"There are also things like child trust funds available now."
He added that the self-administration aspect was attractive to some people.
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