Family SIPPs and Grandchildren Pensions
This is one for wealthier grandparents.
Basically a family set up a pension fund and anything left over from your share of the fund, once they die, is recycled back into the fund for the benefit of other members.
A word of caution
The Government is not keen on intergenerational transfers of wealth – that’s leaving your hard earned cash to your nearest and dearest – and so may decide to apply an inheritance tax charge on this “left over” share before it is reabsorbed into the family pension pot.
But then again. Both the Conservatives and the Liberal Democrats are on record as thinking people should be able to leave their pensions pots to who ever they want.
Given that consulting group Capital Economics puts the shortfall (the difference between what is being saved and what we need) at £160 billion, they argue that the Government’s determination to impose an inheritance tax charge on those leaving money behind in a pension fund, is clearly just plain barmy.
Don’t forget
Do remember that if you decide to set up a pension for your grandchild, to tell someone about it, or at the very least include mention of its existence in your will.
That way you won’t add to the £15.3 billion currently lying around in forgotten savings and insurance plans.
If you would like to speak to an Independent Financial Adviser about setting up a pension for your grandchild we can put you in contact with one here. Read more
Setting your grandchildren up with a pension
Reasons for starting a pension for your grandchild