Virgin Children's Pensions - It is never too early to start saving for their future

Pensions explained

A great way to save for your children's future

Pensions are a great way to save for your children’s future, especially as they are incentivised by the taxman.

In fact, the taxman is very generous when it comes to personal pensions, adding to your child's pension every time you pay money in. Every £80 you pay in is automatically topped up to £100, giving your child’s savings an immediate boost of 25%.*

This, combined with the opportunity of a lifetime’s stock market growth, will give them a great head start on saving for their future.

The amount of pension income provided by your child's retirement fund will depend on a number of factors, including investment return and annuity rates when they retire.

Please remember that your child's money is tied up until they take their benefits (at age 55 or more). Tax benefits depend on individual circumstances and may change in the future.

Investments can go down as well as up and there is no guarantee you will get back all you invest.

*On the first £2,880 paid in each tax year.

Pensions explained

Who can invest in your child's pension?

To start a pension for your child you must be:

• The child's legal guardian (normally the parent they live with)
• Aged 18 or over
• A UK resident

Your child also needs to be a UK resident.

Once it's set up anyone can pay in. So grandparents, god parents, aunts and uncles can all give a gift.

Pensions explained

When can my children take the pension benefit?

Firstly they can't get their hands on their pension until they're at least 55 years old, which is good because it gives them time to build up a bigger pension, without the temptation to dip into their savings.

When they take their benefits they can normally choose to take up to a quarter of their benefits as a tax-free cash sum*.

They'll need to use the rest of the money in their pension to buy an annuity. An annuity is an investment that guarantees to pay them a regular income for the rest of their life, no matter how long they live.

Please remember, the amount of income provided by their pension will depend on a number of factors, including investment returns and annuity rates when they retire.

*This information is based on our current understanding of taxation law and HM Revenue & Customs practice in the UK. Taxation law and practice may change in the future.