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A child’s pension is for life, not just for Christmas

It’s that time of year when you need to buy Christmas presents for the children in your life. While the latest must-have toys and gadgets are at the top of many Christmas lists, you could consider getting them something different this year. Rather than traipsing around the packed high street or searching high and low for the best deal online only to buy them something that will be thrown in the back of the cupboard by the end of January, you could get them a gift to last a lifetime, like a pension.

Published on 05 Dec 20174 minute read

Pensions for children – the gift that keeps on giving

While a pension is unlikely to appear at the top of a child’s Christmas list, it is one of the greatest gifts you could give them. When considering investing for children, many people think about saving for life events such as a wedding, buying a house or even towards the costs of higher education but just because it is further away does not make their retirement any less important. By starting to save for their retirement now, all of their Christmases could come at once when they can access the funds after the age of 55.

The child’s parent or guardian will need to set up the pension but once opened, grandparents, friends and relatives can make contributions into it. The maximum that can be paid into a child’s pension is £2,880 per year. You could pay in a lump sum all at once, or spread your contributions out across the year by investing a smaller amount each month.

If the maximum annual contribution is made, the state will top it up by £720, making a total contribution of £3,600. Over a period of 18 years, this would add up to £64,800 (£51,840 in personal contributions and £12,960 in Government tax relief). Paying £2,880 into a child’s pension every year until they turn 18, and achieving 5% annual growth, would give them a pension of more than £700,000 by the time they reach 55*.

Santa’s elves would be hard pushed to create something as good as this!

The Bestinvest SIPP

SIPPs (Self-invested Personal Pensions) are a type of pension that give you more control over your retirement investments. They give you access to a wider range of investments than many pensions and the option to choose and manage these for yourself or have an expert do it for you.

At Bestinvest, we offer SIPPs to children under the age of 18. Opening a SIPP for a child is slightly different to opening a regular one, so please call us on 020 7189 2400 and we can guide you through this.

With the Bestinvest SIPP, you’ll benefit from:

  • low annual fees of 0.3% or less
  • choosing how much involvement you (the parent or guardian) have with your child’s investments
  • our award-winning online service if you choose to manage your child’s investments yourself
  • the expert knowledge of the Bestinvest team, and no annual account fees, if you buy a Ready-made portfolio**

It’s easy to see how a pension could make a cracker of a gift for the children in your life.

For more information on investing for children, please download our guide or get in touch with one of our wise men and women. Call us on 020 7189 2400 or email

Important information

Please keep in mind that SIPPs are not suitable for everyone. If you don’t want to invest across different asset classes or don’t think you will make use of the investment choices that SIPPs give you then a SIPP might not be right for you. Please contact us for guidance or advice if you are unsure whether a SIPP is right for you.

Please note that the figures shown are examples and are not guaranteed. What you will get back depends on how your investment grows and the tax treatment of the investment. Charges may vary. Do not forget that inflation would reduce what you could buy in the future with the amounts shown. This article does not constitute personal advice. Please also see the information below.

*This figure is based on an investment return of 5% per annum after fees, compounded annually. You should note that investments can go down as well as up and it is possible to get back less than originally invested.

**Before claiming this offer you should make sure that our Ready-made Portfolios meet your needs and objectives. You should also bear in mind that other investments may have lower fees, and that it may also be cheaper to choose your own investments – which the Best SIPP lets you do. We have removed our service fees of 0.3% (or less) a year, but like all funds our Ready-made Portfolios have ongoing charges for everyday costs such as researching and managing the investments. There could also be fees to pay if you close your Best SIPP or transfer to another provider.

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