It may be an old adage, but definitely one that remains true – it really never is too early to start a junior pension. So, if you’re looking to help secure the long-term financial future of your child, or grandchild, saving into a junior pension on their behalf may be a suitable option worth considering, in addition to provision for earlier decades.
Tax incentives and compound returns
In some ways, saving for a child’s pension when they are so far from retirement can seem odd but it can actually make sound financial sense. Junior pensions can be set up as soon as a child is born and contributions up to £2,880 per annum attract tax relief of 20% from the government. Another benefit of saving at a young age is the power of compounding returns which provide growth on growth across the years.
Small amounts add up
These two factors mean you don’t have to save huge sums to make a big difference; saving little and often really can add up in the long term. Current rules allow savings of up to £2,880 per annum into a junior pension.
Fulfilling and rewarding
Providing financial security for children, or grandchildren, is a key goal for many and saving on their behalf can therefore be fulfilling for you and rewarding for them. If you’d like to give your loved ones a financial head start wih a junior pension, then get in touch.
Talk to us
Clifford Osborne are Independent Financial Advisors (IFA) specialising in Pension Advice. We always offer a free initial pension review, so please don’t hesitate to get in touch to book yours.
We are based in Eastbourne, East Sussex and work with clients across the South East including Brighton, Uckfield, Lewes, Tunbridge Wells, Hastings, Bexhill, Newhaven, Seaford, Crowborough and surrounding areas.
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The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.
It is important to take professional advice before making any decision relating to your personal finances. Information within this blog is based on our current understanding of taxation and can be subject to change in future.
It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.
If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Taxation depends on individual circumstances as well as tax law and HMRC practice which can change.
The information contained within the blog is for information purposes only and does not constitute financial advice.
The purpose of the blog is to provide technical and general guidance and should not be interpreted as a personal recommendation or advice.
