Pensions

A change in legislation in April 2001, means that it is now possible for adults to put money into personal or stakeholder pensions on behalf of children of all ages and the children will benefit from added tax relief.

So, after tax relief, a net contribution to a pension of, say, £100 would be worth £128. Up to £2,808 net or £3,600 gross per tax year can be invested for a ch child.

Investing in a pension when children are young will give them a significant head start in their retirement planning because of the length of time the money will have to grow.

The drawback is that the children won't be able to access the money until they reach age 50, as this is the earliest age at which a pension can be drawn. However, some people may see this as an advantage as it avoids the danger of the child squandering the money as a young adult.

For more information please visit www.savingforretirement.co.uk