“When saving for your children, pension funds offer you government tax relief of 20% as a top-up to your contributions, coupled with tax-free growth and a superb opportunity for long-term investment in the stock markets. Taking all that together, a children’s pension is simply unbeatable.”
Gareth Flanagan, Managing Director, Principle First
Click here now for Pension advice or call 0800 678 5929
Did you know that, until recently, only 1 person in 5 was saving regularly for their children’s future? (Source: The Children’s Mutual).
However, there are many options and products now available, designed specifically for saving for children. At Principle First, many of our clients are families, and as part of our rounded financial planning service we do of course advise them on the many children’s savings options available. Let us tell you about the whole market of products for investing for your children!
Click here now to read more about Children’s Savings
Children’s Pension
It is a happy fact that, unlike people, money grows more attractive as it grows older.
This is certainly true of money enjoying tax-free growth in a child pension fund.
There is an old saying among pensions experts that ‘It’s the first pound that makes the most money’. Therein lies the secret of a children’s pension fund. With that in mind – if the notion of pensions for children sounds strange to you, it may be time to think again.
We all accept that a pension is a great and tax-efficient way of saving for our own future, and we know that savings earmarked for your retirement are best placed in a pension fund, to take advantage of government tax relief and tax-free growth. That also applies to saving for our children!
Pension funds usually expose your savings to the stock markets, and stock market investments can develop strongly over time. History shows that you should plan stock investment for not less than 15 years - in fact, the longer, the better.
The fantastic truth is that, if you set up a child pension for your little one now, the early contributions you pay in for them during the first 18 years of their life could potentially provide more for them than the pension savings they make themselves, during their working career!
You can start a pension fund for your child with as little as £20 a month, but you may pay in up to £2,880 per year. This maximum would be topped up, by government tax relief, to £3,660. If you were able to pay in the maximum for each of your child’s first 18 years, then, assuming growth of 7%, that would mature into a fund worth over £3.1 million by the time your child reached 65!
What better way to ensure you will always be fondly remembered by your children!
Click here now for Pensions Advice or call 0800 678 5929
