Junior Self-invested Personal Pension (SIPP)
Give children a financial boost – kick off their pension.
With pension investment, both the money you invest and the income from it can fall in value.
Before transferring, see Transfer considerations.
What is a Junior SIPP?
A Junior SIPP is a Self-invested Personal Pension for a child. As with other pensions, it allows you to save in a tax-efficient way for a children. And because it’s a SIPP, it also gives you the freedom to choose from a wide range of investment options.
Key features of a Junior SIPP
A child’s parent or guardian can open a Junior SIPP. After that, others can contribute up to £2,880 each tax year. The Government automatically adds 20% to every contribution, boosting the annual amount you can invest in a Junior SIPP to £3,600.
When the child turns 18, they will take control of their SIPP and make all future investment decisions. Junior SIPP investments are locked away until the child turns 57 (it’s currently 55 but rising to 57 in 2028). Like other SIPPs, investments in a Junior SIPP are free from income tax and capital gains tax.
Remember, a pension is made up of investments and you can get back less than you originally invested. Prevailing tax rates and reliefs depend on individual circumstances and are subject to change.
What could a child’s pension be worth?
As a rough indication, let’s say you opted for a risk-rated Ready-made Portfolio and contributed £2,880 into Junior SIPP every year until they turn 18 and achieve 5% annual growth, a child could have a pension of more than £700,000 by the time they reach 55.
Over 18 years you would contribute a total of £51,840 and the government would add £12,960 to give a child a pension pot of around £64,800.
This figure is based on an investment return of 5% per annum after our current Ready-made Portfolio service fees of 0.2%, compounded annually. Other charges have not been taken into account, these would reduce the total return. Returns could be higher or lower than this amount and the future performance of funds is not guaranteed. Pension and tax rules as well as charges may change and benefits depend on individual circumstances.
Why choose Bestinvest for your child’s Junior SIPP?
Our Junior SIPP is quick and easy to set up and manage, and features:
Investment choice
Choose from our range of quality investments including funds and US shares, or make investing easier for yourself with one of our Ready-made Portfolios.
Value for money
0.2% per annum discounted service fees for Ready-made Portfolios and US shares, and 0.4% a year for other investments. There’s no charge to transfer investments to us and trade US shares online (a 0.95% FX fee applies). Other fees and charges may apply – see our Key facts and SIPP charges for details.
Peace of mind
You’re in safe hands – we’re backed by the resources of our parent company, Evelyn Partners, one of the UK’s leading wealth management firm.
Expert support
It’s easy to arrange a free investment coaching session, with no ongoing commitment whenever suits you.
Start investing with us now
Please send certified copies of your child’s passport or birth certificate as proof of identity; these documents will be returned to you.
Pension transfer considerations
Before you consider transferring a pension, it is important to ask yourself:
- Will I lose any valuable benefits or features from my existing pension plan?
- Will I incur any penalties on my existing pension if I transfer?
- Is it an occupational final salary pension scheme? (In which case it is very unlikely to be advisable to transfer).
- Have I considered the charges on my current plan? (A new arrangement may be more expensive – especially if you have a stakeholder pension).
- Have I checked the investment options available and whether I need the wider choice offered by a SIPP?
- If the pension is an employer-related plan, have I checked if the employer will cease to pay in benefits if it is transferred elsewhere?
Frequently asked questions about Junior SIPPs
To be eligible for a Junior SIPP, a child must be resident in the UK.
You can contribute to a Junior SIPP in a few ways, either as a one-off lump sum or regular payments.
One-off lump sum
- Debit card transaction with your Junior SIPP provider
- Bank transfer to your Junior SIPP provider’s sort code and account number (an extra contribution form is usually required for this option)
Regular payments
- Direct debit usually set up with your provider via monthly savings
- Standing order set up with your bank (they usually require an additional contribution form)
When you set up monthly savings at Bestinvest, you automatically enter our monthly savers’ prize draw (T&Cs apply).
Happy days – it’s easy to arrange contributions. Log in to your account and choose Add cash or Monthly savings from the main menu.
As always, our friendly team is standing by for your questions. Give them a call on 020 7189 9999.
It’s possible to invest in some personal pensions or stakeholder pensions on behalf of children.
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