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:
|Provider||Junior ISA Provider||Regular Savings||Investment Options||Online Valuations||More Info|
|Charles Stanley Stocks & Shares Junior ISA||Charles 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.||More Info >|
|Scottish Friendly My Select Junior ISA||A selection of eight funds to choose from, so you can tailor your child's investment||More Info >|
|One Family Junior ISA||Apply online and receive a £30 Amazon e-voucher (T&C;’s apply – see OneFamily website for details). 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.||More Info >|
|Junior Stocks and Shares ISA||FREE 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.||More Info >|
|Shepherds Friendly Junior ISA||A range of assets including UK and global shares, bonds and cash||More Info >|
|Provider||Service||ISA Option||Minimum Investment||More Info|
|Scottish Friendly Child Bond||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 Plan||More Info >|
|Save tax-exempt up to £2400 per year.|
|Shepherds Friendly Young Saver Plan||More Info >|
|Save tax-exempt up to £1200 per year.|