Pension for 16 year old?
Discussion
Always intended to set up a pension for my son when he was born, for compounded interest, but I never did. So the next best time is now.
At 16yrs old I could set one up for him and pay into it monthly, he can then carry this on in a few years when he is in a position to do so. Or it merges/freezes when he joins an employer's pension (I expect this wont be until his mid 20's, after Uni and having found a job).
So whereas the best place to start researching a pension? Years ago Aviva and Cavendish were tipped to be good by Martin Lewis.
PS. I realise this money could instead be used to help fund Uni, house purchase, car purchase etc, but i'm putting that idea to one side as other plans are in place for those situations, and just concentrating on the pension option for now.
At 16yrs old I could set one up for him and pay into it monthly, he can then carry this on in a few years when he is in a position to do so. Or it merges/freezes when he joins an employer's pension (I expect this wont be until his mid 20's, after Uni and having found a job).
So whereas the best place to start researching a pension? Years ago Aviva and Cavendish were tipped to be good by Martin Lewis.
PS. I realise this money could instead be used to help fund Uni, house purchase, car purchase etc, but i'm putting that idea to one side as other plans are in place for those situations, and just concentrating on the pension option for now.
I have them for my kids (2&8) with Intelligent Money, along with an s&S ISA each
Don’t contribute much but obvs over the next 30 years of my working life it will be better than a kick in the teeth
It also means I can get them into the habit of automatically saving money as soon as the have proper bank accounts
Don’t contribute much but obvs over the next 30 years of my working life it will be better than a kick in the teeth
It also means I can get them into the habit of automatically saving money as soon as the have proper bank accounts
Doddler said:
I have a fidelity junior sipp for both of my kids (15 +13). They were the cheapest platform at the time of opening, choose a fund and pay in a small amount monthly. The app works very well too.
With a junior SIPP, what happens when they are 18? Do you have to move it elsewhere or does it just continue?I have with HL, not the cheapest platform but I like it and have other things with them. It goes a long way really with the government too ups. I also have a junior ISA setup with one family. Not great return so looking to move it to vanguard when I can be bothered.
His pension is going for 5 years now and all I can say is that is growing very nicely.
Off course money can be put elsewhere but I am giving the best start I can and this is just one of my choices.
Goes without saying but look after your own pension first..
His pension is going for 5 years now and all I can say is that is growing very nicely.
Off course money can be put elsewhere but I am giving the best start I can and this is just one of my choices.
Goes without saying but look after your own pension first..
LeadFarmer said:
Out of interest, is the state of the financial market at the point of starting a pension relevant? If started during the lowest point of a recession would that help at all, or does the very nature of it being long term mean that's irrelevant?
Regular monthly contributions will iron out any peaks and troughs…now is a good a time as ever given the long term nature of a pension investment.LeadFarmer said:
Out of interest, is the state of the financial market at the point of starting a pension relevant? If started during the lowest point of a recession would that help at all, or does the very nature of it being long term mean that's irrelevant?
People always wonder if it's a good time to start investing but if you look at almost any historical graph of global markets and pick a time when you might have asked the same question it's difficult to find a time when the answer would have been "no" given a decent time horizon.Vanguard is a decent suggestion as it's cheap and investing in something like a global tracker keeps costs low and avoids having to worry about being an investor you just need to keep on buying.
LeadFarmer said:
Doddler said:
I have a fidelity junior sipp for both of my kids (15 +13). They were the cheapest platform at the time of opening, choose a fund and pay in a small amount monthly. The app works very well too.
With a junior SIPP, what happens when they are 18? Do you have to move it elsewhere or does it just continue?Thanks.
I plan to retire in 5yrs (which may coincide with my son being able to take over payments when he's age 21) and so I will have less money available to pay into his pension, I assume I can adjust payments as and when, or maybe once per year?
With 'young uns' not hatching from university until their early 20's, carrying huge student debt, and starting off at the bottom of any pay scales, it might not be until their late 20's onwards that they can make any decent contributions. Im thinking that gives me 10yrs to give him a start on the pension ladder.
I plan to retire in 5yrs (which may coincide with my son being able to take over payments when he's age 21) and so I will have less money available to pay into his pension, I assume I can adjust payments as and when, or maybe once per year?
With 'young uns' not hatching from university until their early 20's, carrying huge student debt, and starting off at the bottom of any pay scales, it might not be until their late 20's onwards that they can make any decent contributions. Im thinking that gives me 10yrs to give him a start on the pension ladder.
Edited by LeadFarmer on Friday 16th September 11:43
Doddler said:
I have a fidelity junior sipp for both of my kids (15 +13). They were the cheapest platform at the time of opening, choose a fund and pay in a small amount monthly. The app works very well too.
I believe Fidelity is still the cheapest option as they don't charge a platform (they call it service) fee on Junior SIPP saving you around 0.2%-0.25% per annum. Also, Fidelity have access to the whole market i.e. no restrictions on investments choice so you can still buy your Vanguard funds if you wish, or change to another offering all under the same account.I set up a junior SIPP for my son with HL. Not the cheapest (0.45% per year) but it was one of the few platforms that offered junior SIPPs at the time. I had to fill in an actual paper form and attach a cheque. I paid in £2,880 in November 2020, HL added £720 tax relief which made a total of £3.600 which is the most you can pay in per year.
It's now worth £4,181 from being invested in Vanguard FTSE Global All Cap. I assume when he hits 18 we can transfer it to a cheaper platform with a non-junior ISA. Is he grateful? Is he f***.
It's now worth £4,181 from being invested in Vanguard FTSE Global All Cap. I assume when he hits 18 we can transfer it to a cheaper platform with a non-junior ISA. Is he grateful? Is he f***.
To be fair I doubt most 16-18 year olds are interested in investing or pensions as it seems so far away.
This always seems something worth showing them as it may just stick.
https://theescapeartist.me/2019/11/09/how-to-build...
This always seems something worth showing them as it may just stick.
https://theescapeartist.me/2019/11/09/how-to-build...
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hstewie said:
hstewie said: To be fair I doubt most 16-18 year olds are interested in investing or pensions as it seems so far away.
This always seems something worth showing them as it may just stick.
https://theescapeartist.me/2019/11/09/how-to-build...
That's a good point. He likes coding so I might ask him to write something to extrapolate his performance to date with more savings thrown in.This always seems something worth showing them as it may just stick.
https://theescapeartist.me/2019/11/09/how-to-build...
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