OcUK Dadsnet thread

[theone8181]

Junior SIPP, we are with Fidelity as they don't charge fees on it. https://www.fidelity.co.uk/junior-sipp/

Don't know about sipps for kids. I've just been paying into a junior ISA for the kids, but don't think any pay 20% interest . Might have to change it over. Don't realise it's for pension. I was thinking more for house deposit/uni fees. Might not do anything with it then.

 

[ChrisD.]

Don't know about sipps for kids. I've just been paying into a junior ISA for the kids, but don't think any pay 20% interest . Might have to change it over. Don't realise it's for pension. I was thinking more for house deposit/uni fees. Might not do anything with it then.

They'll get the SIPP when they're 55, even a small amount will compound over decades.

There are ISA savings account options as well, which they get at 18 I believe.

Check out this video which has a decent amount of information.

 

[Rob_B]

Going to watch that now, my first thought though is that at 55 it's too late, if I have a finite amount of cash and with housing/cost of living as it is, wouldn't I best best letting them have access at say 20 or even later to cover "life"

Don't take this as though saving for their retirement is a bad thing, but what do you prioritise, maybe split between ISA and SIPP ? I guess it's a nice problem to have.

 

[ChrisD.]

The issue I see is that if they get a lump of cash at 18, it gets spunked on cars and holidays. I'd like to think by the time my boy is 18, I would be able to provide a house deposit, or money towards further education from my own savings. With a SIPP, you are effectively guaranteeing that they have a decent pension come retirement age. We are lucky that we can pay into both, but I appreciate not everyone has that luxury. Damien's videos are informative, and funny, and he goes through some of the points I make.

 

[tom_e]

The issue I see is that if they get a lump of cash at 18, it gets spunked on cars and holidays.

This is exactly why I'm currently avoiding setting up an ISA for our little one. I remember a couple of my mates getting lump sums just after we finished school and then going on a lads holiday and blowing large amounts of it.
Now I'm hoping my daughter will be slightly more sensible but I'd rather not risk it

 

[theone8181]

The issue I see is that if they get a lump of cash at 18, it gets spunked on cars and holidays. I'd like to think by the time my boy is 18, I would be able to provide a house deposit, or money towards further education from my own savings. With a SIPP, you are effectively guaranteeing that they have a decent pension come retirement age. We are lucky that we can pay into both, but I appreciate not everyone has that luxury. Damien's videos are informative, and funny, and he goes through some of the points I make.

I suppose both is best, but I'd like to think the kids will follow me and hammer the pension as soon as possible. Having a nest egg at retirement is good, but you've still got to get there .

 

[Fireskull]

The issue I see is that if they get a lump of cash at 18, it gets spunked on cars and holidays. I'd like to think by the time my boy is 18, I would be able to provide a house deposit, or money towards further education from my own savings. With a SIPP, you are effectively guaranteeing that they have a decent pension come retirement age. We are lucky that we can pay into both, but I appreciate not everyone has that luxury. Damien's videos are informative, and funny, and he goes through some of the points I make.

This is exactly why I'm currently avoiding setting up an ISA for our little one. I remember a couple of my mates getting lump sums just after we finished school and then going on a lads holiday and blowing large amounts of it.
Now I'm hoping my daughter will be slightly more sensible but I'd rather not risk it

Would we 'Legally' have to tell them about it at 18? I guess probably because it goes against their own credit rating? but what about a little white lie and they can have it when they are 25 and maybe more sensible...?

 

[ChrisD.]

Would we 'Legally' have to tell them about it at 18? I guess probably because it goes against their own credit rating? but what about a little white lie and they can have it when they are 25 and maybe more sensible...?

If it's a Junior ISA they can legally take control at 16 but cannot withdraw until they're 18.

 

[Rob_B]

I think the point was if they aren't aware it even exists then they can't withdraw from it...

 

[platypus]

Would we 'Legally' have to tell them about it at 18? I guess probably because it goes against their own credit rating? but what about a little white lie and they can have it when they are 25 and maybe more sensible...?

if you put the money into a trust you can decree what age they’re able to inherit it.

As well as junior Sipps, we’ve got two trusts set up for our boys to inherit at 22, which is an age we feel they’ll likely need a chunk of money.

 

[TNA]

if you put the money into a trust you can decree what age they’re able to inherit it.

As well as junior Sipps, we’ve got two trusts set up for our boys to inherit at 22, which is an age we feel they’ll likely need a chunk of money.

How much did it cost to set that up? Easy to do?

 

[platypus]

Going to watch that now, my first thought though is that at 55 it's too late, if I have a finite amount of cash and with housing/cost of living as it is, wouldn't I best best letting them have access at say 20 or even later to cover "life"

Don't take this as though saving for their retirement is a bad thing, but what do you prioritise, maybe split between ISA and SIPP ? I guess it's a nice problem to have.

I think the saying goes “the best time to invest was yesterday, the second best is today”.

Maximising the pension allowance is a good aim, but it’s not drawable until later on so there is a risk. ISA allowance can at least be got at.

 

[platypus]

How much did it cost to set that up? Easy to do?

it was very easy in so much as we asked our solicitor to do it . I don’t know what it cost to be honest because we pay a regular fee for overall wealth management (i hate that term, it’s so pretentious and *****; we’re doing well but not wealthy) and estate planning.

 

[platypus]

with our finanicial situation looking brighter now. I'm starting to think about putting money away monthly for the little gremlin. what's the best way of doing this, still SIPP?
if so anyone could recommend one?

Id second @ChrisD. recoomendation of fidelity. We’ve got two junior sipps that we made a maximum contribution to this tax year (3,600£), and don’t intend to invest much more in unless things go really well, since it’s locked away until 57. We will of course encourage them when they take ownership to made additional contributions. Even without further contributions though at a reasonable conservative growth rate of 4% that’s roughly 32K£.

Find a global etf tracker with low fees and just forget about it (other than the possible additional contributions), eg I use LGGG which has fees of 0.17%, but most global trackers are similar.

 

[Rob_B]

I think the saying goes “the best time to invest was yesterday, the second best is today”.

Maximising the pension allowance is a good aim, but it’s not drawable until later on so there is a risk. ISA allowance can at least be got at.

My point is that it's great to save up for their retirement, but my kids have 50yrs until that happens, they'll need to live, to potentialy buy a house, start a family etc in an ever more expensive world and a SIPP does nothing immediately to help.
They could choose to reduce their own retirement savings to do this but then that's another gamble, in a perfect world it wouldn't be an issue but personally I lean towards helping them in the near future with less (but still some) help for when they're much older.

 

[Noughtboy]

My point is that it's great to save up for their retirement, but my kids have 50yrs until that happens, they'll need to live, to potentialy buy a house, start a family etc in an ever more expensive world and a SIPP does nothing immediately to help.
They could choose to reduce their own retirement savings to do this but then that's another gamble, in a perfect world it wouldn't be an issue but personally I lean towards helping them in the near future with less (but still some) help for when they're much older.

A middle of the road option is to set up a trust that is able to invest in a Junior ISA, a normal ISA and/or a SIPP but instead of stipulating an age for access, it could be accessed for the express requirement or either paying University tuition OR putting down a home deposit.

Bear in mind that purchasing a house could very well be seen as an alternative to funding a pension in the property market we have seen over the last 35 odd years. Yes there is CGT but the capital growth does tend to account for that.

 

[platypus]

My point is that it's great to save up for their retirement, but my kids have 50yrs until that happens, they'll need to live, to potentialy buy a house, start a family etc in an ever more expensive world and a SIPP does nothing immediately to help.
They could choose to reduce their own retirement savings to do this but then that's another gamble, in a perfect world it wouldn't be an issue but personally I lean towards helping them in the near future with less (but still some) help for when they're much older.

yes you’re right of course, and we’re investing in an isa and trust fund exactly for that reason. We’ll only invest further in their sipp in exceptional years.

 

[regulus]

Interesting discussion regarding investing for kids. I’m in NZ so our investment vehicles are a bit different here.

I have three investment accounts for my daughter. She just turned 4.

Retirement account I’m chipping in 20 bucks a week since she was born. Currently this cannot be touched until she’s 65. It can also be used as a deposit for a first home, or it can be withdrawn if she permanently leaves the country. That’s the current rules though. It can obviously change in the future. This account is an ETF, overweighted to US stocks and a smaller mixture of Europe and Australasia stocks.

Then I have the ‘Roman Empire’ fund. We started with 10k when my wife fell pregnant. That gets a healthy deposit every fortnight of a few hundred. This cannot be touched until she is 25, at which stage is legally transfers over to her. I just hope she is ready for what’s coming her way then. We can also transfer when she’s 18 or 21. But for the moment, no. It’s happening at 25. This is currently a Global 100 ETF. Performing really well so far.

Then we have a ‘Travel/University’ fund. This also gets a smaller helping every two weeks. This is to ensure the poor kid don’t leave high school with nothing and have to join the hordes of other 18yo scrapping for pennies. And let’s face it, it’ll make it easier on us as well as her ‘help’ will be sitting there, ready for her. She doesn’t need to know about it though.

Probably overkill, and we’ll look at it in years to come for exactly that, but I’d hate for her to be chucked into a future world without a penny to her name.

 

[TommyV]

Oh the joy, just had a call from my old man saying that the little one is being sick. Well we had a decent 3 week gap between illnesses atleast.

It's always after her Monday>Thursday block of sessions at nursery!

 

[Quartz]

Just curious if this is a George thing or a 6 year old thing but he's pretty much wetting the bed every night.

Some boys will wet the bed until puberty. They simply do not have control of the relevant sphincter / muscle (I forget the details). The medical term is nocturnal enuresis. You may find that waking him at eleven or midnight for a **** helps. The important thing is to not criticise him or stress him about it. He physically cannot help himself. Just get on and deal with it.