Children's Stakeholder Pensions

Information on Pensions for Children

Under current pension legislation parents or grandparents can save up to £3,600 a year into a stakeholder pension scheme on behalf of their children or grandchildren. The main features of a child stakeholder pension are:


  • Contributions attract tax relief e.g. based on an investment of £1,000 into a stakeholder pension for a child assuming they are a non-taxpayer or pay basic rate tax the government pays back 20%, making the sum invested £1,200.
  • A parent or guardian or grandparent can set up a stakeholder pension and pay the contributions for any number of children under 18.
  • The plan can be transferred from one pension stakeholder provider to another.
  • The money is invested for the long term and cannot be accessed until the child reaches 55. This is a long term investment with good prospects of growth.
  • Many stakeholder pension providers have a range of funds that can be invested in depending on requirements.
  • There are rules on how pension benefits are taken e.g. Only 25% of the fund can be taken as tax-free cash.


If you are interested in examining stakeholder pension options for children or grandchildren, then it is advisable to discuss this with an independent financial adviser.

Other types of pension plans include general stakeholder and personal pensions, and Self Invested Personal Pensions (SIPPs), known as defined contribution schemes; and final salary or defined benefit occupational schemes.


For other children savings options see below:

Junior ISA Selection
ProviderJunior ISA ProviderRegular SavingsInvestment OptionsOnline ValuationsMore Info
Scottish Friendly My Select Junior ISAyesA range of assets including UK and global shares, bonds and cashyesMore Info >
  • Invest up to £4080 pa per child
  • Invest from only £10 a month, or a lump sum from just £50, or a mixture of both
  • Raise, lower, or stop and restart your payments any time you like
  • Available for children under 16, who didn't qualify for a Child Trust Fund
  • Available for Junior cash ISA holders
  • The value of investments and any income can fall, so the Junior ISA could return less than you invest
  • Returns on investment funds are not guaranteed
One Family Junior ISAyesApply online and set up a direct debit of £20 or more and receive a £30 Amazon voucher. T&C’s apply, see OneFamily website. The OneFamily Junior ISA helps you to invest for your child’s future. It could help towards going to uni, driving lessons or perhaps helping to pay for a flat of their own. yesMore Info >
  • Award winning: Winner of the Moneyfacts Award for Best Junior ISA Provider (Awarded to Family Investments in 2014. OneFamily was established following a merger between Family Investments and Engage Mutual)
  • You choose how much you want to pay in, and when. From £10 to £340 a month up to £4,080 in the 2015/2016 tax year.
  • Available for children under 18
  • Open your child’s Junior ISA online and set up a Direct Debit and as a thank you OneFamily will send you up to £30 in vouchers (terms and conditions apply – please see OneFamily website).
  • Annual management charge 1.5% deducted directly from the fund's income.
  • Because it invests in stocks and shares, the Junior ISA's value can fall as well as rise, so your child could get back less than has been paid in.
Junior Stocks and Shares ISAyesFREE Children's ISA Guide. Choose from over 2,500 unit trusts and OEICs from leading fund managers. Invest from £25 per month or lump sums of £100.yesMore Info >
  • Same tax benefits as an adult ISA - no capital gains tax, and no further tax to pay on income.
  • Anyone can contribute - useful for birthday and Christmas gifts.
  • Withdrawals possible from age 18.
  • Open with a lump sum from £100 to £4,080 or start a monthly direct debit from just £25 per month.
  • Free mobile app to deal shares, access prices, indices, news and research.
  • The value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. 
  •  If you’re unsure about the suitability, we recommend you ask for independent advice.
  • Tax rules can change and the reliefs depend on your child's personal circumstances. 
Charles Stanley Stocks & Shares Junior ISAyesCharles Stanley Direct offers a Stocks and Shares Junior ISA with no initial charges or additional annual fees. Choose from a range of investments including shares, funds, gilts, bonds, investment trusts and ETFs.yesMore Info >
  • Save tax – shelter up to £4,080 per annum and pay no further on capital gains or on income from your investments.
  • Invest from £50 a month, or a lump sum from £500, or a mixture of both
  • Flexibility – choose from a wide range of investments to create a portfolio that suits you.
  • Transfer in Child Trust Funds or existing Junior ISAs
  • Automatic conversion to full ISA at age 18.
  • The value of investments and any income can fall, so the Junior ISA could return less than you invest
  • Returns on investment funds are not guaranteed
Children's Investment Plans
ProviderServiceISA OptionMinimum InvestmentMore Info
Scottish Friendly Child Bondno
£25.00 pm
More Info >
Invest £25 a month with Scottish Friendly for a child under 16. Make regular tax-free investments for 10 years minimum to build a cash sum for the child's future
Shepherds Friendly University Savings Planno
£100 pm
More Info >
Save tax-exempt up to £2400 per year.
Shepherds Friendly Young Saver Planno
£7.50 pm
More Info >
Save tax-exempt up to £1200 per year.