Kids pension

[Bullionbilly]

Got the little en's savings going nicely, looking to set up a pension ( if its worth it ) .

She's 6. Im looking at options for a pension. 

Anyone set up something ? Or and advise ?

Thanks in advance 👍

 

[5huggy]

At that length of time !!- I would grab gold as a "starter" (physical) - - I think it will far outperform FIAT over that time period

BUT if I am incorrect - it would be relatively easy to swap AU back to Fiat  -

then go for an index tracker (when and if the markets look better)

IMHO

5huggy

[Stu]

Be careful what you choose. I set up child trust funds for my boys and both have been abismal.  Don't mind naming either, Scottish friendly and RBS. They managed to lose money even when the stock market was roaring. Still took their 2% or whatever though. I seriously think they performed deliberately poor as they were too much hastle and wanted the accounts to transfer elsewhere.

[Martysmith]

I'd setup a junior ISA through someone like Hargreaves Lansdown and choose an low cost global index tracker to invest in. 

[blindedbythelight]

Vanguard offer a Junior ISA with very low fees and good index tracking funds (their founder championed passive tracker index investing)  but the minimum investment is £100 a month, you can do lump sums though instead once initial £500 is invested.

Worth pointing out with Junior ISA that the child will gain control of this when they reach 18 - so possible they go through a few "rebel" years and decide to take the money out and blow it on good times etc. So may not be suitable if you want to ensure they get the money only when a lot older or when you decide.

[goluckystayhappy]

Setup a Junior ISA and go for a small selection of shares that pay a good dividend. Select automatically reinvest dividends and then forget about it until the next years allowance then repeat with a different selection of shares.

[TheGeneral]

I see my Gold stack as my little ones pension. I hope to educate her on it as she gets older and hope she picks it up. 

I’m also saving  some Fiat in a normal account. She can have this when she is 18 for a car/travelling. I hope that by making this available to her when she is young she can blow off steam while keeping my gold stack for later life. 

Im open to other ideas though. 

[KDave]

Do you want a pension or to set up savings in an ISA for use at 18. In theory the compounding and tax benefits will be the same in either an ISA or a pension so its rather a question of when you want her to access the money. I understand the reluctance of giving an 18 year old access to a decent sum, I wonder whether there is more value in a pension. I guess it depends what they do with the money 

I have not done a pension yet, we just set up buying low cost trackers in a couple of Junior ISA's for the kids a few years ago, paying in monthly and buy a set amount of physical gold per year.

[vand]

You can contribute up to £2880 to a Junior SIPP, and with the 25% tax back it goes up to £3600.

However, be aware that if you do this year after year then even with average growth rates it could quite possibly run into the lifetime allowance (current £1.05m) well before their pension age, such is the power of compounding from such an early age.

Of course, this would be a nice problem to have, but it is a problem nonetheless. 

I personally don't see the tax relief as a better deal than having their own tax-relief + employer contributions when they eventually start working (let's say from age 22 onwards), so it might be a better idea to contribute towards a Junior ISA instead, or at least split between the 2 wrappers.

I have set up both JSIPP and JISA from my little 'un, but I prioritize the JISA. The ISA will allow access to money when they most need it for things like university, home deposit, starting a business etc, while the JSIPP will be their million-pound windfall.

[tallyhojim]

On 25/11/2019 at 21:29, Bullionbilly said:

Got the little en's savings going nicely, looking to set up a pension ( if its worth it ) .

She's 6. Im looking at options for a pension. 

Anyone set up something ? Or and advise ?

Thanks in advance 👍

 

Do not go with ANYTHING that involves giving money (fiat) to a third party like a bank or other such scam.

Start stockpiling gold and silver on her behalf instead and then hand it over when she reaches a decent mature enough age to be able to continue it herself, and explain to her why so. And also constantly remind her to keep her trap firmly shut regarding said gold/silver stockpiling.

Oh, and teach her how to fight (BJJ) and shoot/hunt etc.

[AuricGoldfinger]

I find this a bit of a dilemma. The Jnr ISA is good apart from the fact they get access at 18 - I have always been pretty shrewd but i still wouldn’t trust my 18 year old self with a big lump sum.

Same as with premium bonds bought for them, they ultimately have access and can choose to blow it all while they are still financially immature. OR they could win a million and forget to look after their poor old parents LOL.

I don’t see anything wrong with putting aside a pot, whether in gold, your own ISA or even buying property with a view to handing it to a child when they come of age. I understand there’s other complications and it’s useful to have extra allowances for the child if you’re already maxing out your own allowances.

I also want my kids to value money and not think their old man is a bottomless money pot. So although i could buy them a house, a car etc I would much rather do the minimum to push them in the right direction so they don’t need me - even though I’d be there. I think thats why we don’t alway see the generational transfer of wealth - the kids who are spoiled don’t have the hunger to take their parents wealth to the next level as they are so used to spending it.

[vand]

On 29/11/2019 at 10:54, tallyhojim said:

Do not go with ANYTHING that involves giving money (fiat) to a third party like a bank or other such scam.
 

Total nonsense. 

It's SHTF survivalists like you that give PM investors a bad rep.

[Notafront4adragon]

On 29/11/2019 at 10:54, tallyhojim said:

Do not go with ANYTHING that involves giving money (fiat) to a third party like a bank or other such scam.

Start stockpiling gold and silver on her behalf instead and then hand it over when she reaches a decent mature enough age to be able to continue it herself, and explain to her why so. And also constantly remind her to keep her trap firmly shut regarding said gold/silver stockpiling.

Oh, and teach her how to fight (BJJ) and shoot/hunt etc.

What's BJJ?

[AuricGoldfinger]

Brazilian Ju Jitsu

[Bullionbilly]

On 26/11/2019 at 18:44, KDave said:

Do you want a pension or to set up savings in an ISA for use at 18. In theory the compounding and tax benefits will be the same in either an ISA or a pension so its rather a question of when you want her to access the money. I understand the reluctance of giving an 18 year old access to a decent sum, I wonder whether there is more value in a pension. I guess it depends what they do with the money 

I have not done a pension yet, we just set up buying low cost trackers in a couple of Junior ISA's for the kids a few years ago, paying in monthly and buy a set amount of physical gold per year.

Ive got a savings account for her with a few thousand in. This is for a house deposit and shes not blowing it on bad  especially a silly expensive wedding 🤣 ( im a tight arse yorkshireman )

I wanted to start a pension aswel so she could retire early . ( shes only 6 ) so it'd be worth something if she took it over at 18 and looked to retire at say 55.

 

[Bullionbilly]

On 28/11/2019 at 21:18, vand said:

You can contribute up to £2880 to a Junior SIPP, and with the 25% tax back it goes up to £3600.

However, be aware that if you do this year after year then even with average growth rates it could quite possibly run into the lifetime allowance (current £1.05m) well before their pension age, such is the power of compounding from such an early age.

Of course, this would be a nice problem to have, but it is a problem nonetheless. 

I personally don't see the tax relief as a better deal than having their own tax-relief + employer contributions when they eventually start working (let's say from age 22 onwards), so it might be a better idea to contribute towards a Junior ISA instead, or at least split between the 2 wrappers.

I have set up both JSIPP and JISA from my little 'un, but I prioritize the JISA. The ISA will allow access to money when they most need it for things like university, home deposit, starting a business etc, while the JSIPP will be their million-pound windfall.

Could i transfer from her savings a lump of £2880 anually and get the 25 % ?

[Bullionbilly]

On 29/11/2019 at 11:12, AuricGoldfinger said:

I find this a bit of a dilemma. The Jnr ISA is good apart from the fact they get access at 18 - I have always been pretty shrewd but i still wouldn’t trust my 18 year old self with a big lump sum.

Same as with premium bonds bought for them, they ultimately have access and can choose to blow it all while they are still financially immature. OR they could win a million and forget to look after their poor old parents LOL.

I don’t see anything wrong with putting aside a pot, whether in gold, your own ISA or even buying property with a view to handing it to a child when they come of age. I understand there’s other complications and it’s useful to have extra allowances for the child if you’re already maxing out your own allowances.

I also want my kids to value money and not think their old man is a bottomless money pot. So although i could buy them a house, a car etc I would much rather do the minimum to push them in the right direction so they don’t need me - even though I’d be there. I think thats why we don’t alway see the generational transfer of wealth - the kids who are spoiled don’t have the hunger to take their parents wealth to the next level as they are so used to spending it.

Id not tell her it was there until she needed it.

Ill see if i could draw it out myself before her 18th into another account for her.

Also , like you i dont want her thinking daddies a cash machine

[Daytona]

Buy her a very big garage bullion billy,and fill it with motorcycles,and maybe the odd ford Capri/cortina,💰

[Bullionbilly]

Theres an idea

Thought about a rs cossworth for me... i mean her

[vand]

3 hours ago, Bullionbilly said:

Could i transfer from her savings a lump of £2880 anually and get the 25 % ?

Yes. The platform provide will automatically reclaim the tax back on your behalf on deposits into the SIPP. Takes a few weeks.

[tallyhojim]

14 hours ago, vand said:

Total nonsense. 

It's SHTF survivalists like you that give PM investors a bad rep.

Not an argument, piss flaps.

[Bullionbilly]

7 hours ago, vand said:

Yes. The platform provide will automatically reclaim the tax back on your behalf on deposits into the SIPP. Takes a few weeks.

Great. Thanks. Ill take a look into them, are any better than others ?

[Pete]

There are 2 possible simple & fast, cost free routes for young kids.

1. ISA - this enables the investment to grow tax free but assumes growth in the first place.
Unless you are well versed in funds and other investments which carry some risk of loss, remaining in cash will unlikely keep pace with inflation.
ISAs were great when you could get 5% or more interest. Stock market rises have been much higher but it's all about risk /reward.
On the plus side the money is instantly available.

2. SIPP ( I recommend Hargreaves Lansdown )
Every tax year ( ending each April 5 ) you can invest a maximum of £2,880 for a non-tax payer and the government automatically adds £720 cash making £3,600
The government "gift" is 25% of your investment and this does not have to be a single transaction.
If you do this before April 5th you can repeat a few days later so gaining £1,440 per child using current and next tax year allowances.
Repeat every year for another £720 gain if you wish.
You can remain in cash or invest in tracker or other funds - exactly the same opportunities with the ISA which does not yield 25% in the first year.
The downside is you cannot withdraw cash until the child is aged 55 ( from memory so please check ) but the upside is that your child cannot withdraw either and fritter your money on whatever suits them perhaps at the wrong stages or circumstances of their lives.
Your child when working can add to their SIPP and manage the portfolio themselves saving exorbitant financial advisers fees.
Another plus of a SIPP is that the money falls outside of Inheritance tax so if it builds up to £1 million ( which it can starting so young ) the government of the day cannot take its big chunk.
 

[MancunianStacker]

JISA might help her get onto the property ladder when she needs a lump sum deposit! 

[AuricGoldfinger]

For Me i see the sipp as a bit silly. I’m all for pensions but the age is changing to 57 and will probably be 65 be then. I think the money you put into that could go to setting them up in other ways potentially for life - which begins a lot earlier than 55/57/65. I think i prefer the JISA over any other options.