Can I set up a pension for my children/grandchildren?

I realise that I’ve been very fortunate with my retirement income, but my son’s new little one won’t have it so easy when she comes to retire. Is there a way I can start a pension for my new granddaughter and any other grandchildren I might have with my surplus income to ensure they all get a chance at a comfortable retirement as well?

Question asked by Mrs A Richards
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Answered by Michael Englefield

Can you make pension investments for children and grandchildren?

Yes, you can set up a pension for your children or grandchildren on their behalf.


Non-taxpayers, including children, can hold money in a personal pension scheme and benefit from basic rate tax relief at 20% on the first £2,880 a year put into the pension. For every £2,880 that is paid in, the government will top up this amount to £3,600.  This won’t have any impact on your tax bill.

One of the advantages of setting up a pension for a child is that any money paid in while they are young will benefit from decades of investment growth.

The downside, however, is that your children or grandchildren won’t be able to access any money held in a pension for them until at least the age of 55. That means if they need funds to cover higher education costs or to get onto the property ladder, they won’t be able to use money saved in a pension.

Pensions and tax
This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
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