Pension News Kids Becoming 'young Age Pensioners' 17630161
Kids becoming ‘young age pensioners’
12 September 2006
The company reports than one in ten pensions it arranged in the last year were for children, with around half of kids having a pension started for them being under the age of five.
A pension fund which receives a £660 gift at birth and the monthly child benefit payment of around £75 could, assuming seven per cent growth, be worth over £600,000 when the child retires, even if the child adds no extra payments later in life.
“It’s an excellent way to start building a secure financial future for your children, grandchildren, nieces and nephews,” a press release from Virgin Money stated.
“They won’t be able to spend the money until they retire but you’re giving them a head start now so that they don’t have to save so hard later,” added the company.
Virgin charges a reasonably competitive one per cent annual administration charge, and monthly payments can be as little as £1.
The period of consultation on the government’s White Paper on pensions reform has now closed, with consumer group Which? backing the Pensions Commission’s call for a low-cost pension saving scheme in which workers will be automatically enrolled.
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