Our children’s pensions solutions offer tax-efficient ways to build a bright future for your child.
Important: Childhood pensions
The value of investments and the income from them can fall as well as rise, and investors may not get back the full amount invested. Past performance is not a guide to the future and investments do not have a capital or return guarantee. Any investment decisions should be made after receiving professional advice. Pension and tax rules apply and it is important to remember that the rules can change.
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A Junior self-invested personal pension (SIPP) is a pension scheme for children that offers a tax-efficient way to save for their retirement.
As a parent or guardian, you can choose and manage investments for them from a broad range of options until they reach 18.
Similar to adult pensions, children’s pensions attract a 20% Government contribution – even with no taxable income. This benefit is unique compared to other savings options like ISAs.
Help your children secure a brighter financial future by harnessing the power of childhood pensions and compound interest. In this video, Wealth Management Consultant Matt O’Hara explains how starting early can significantly boost your child’s retirement fund.
We all want to do the best we can for our children. By opening and investing in a childhood pension when they’re young, you’re helping your children prepare for their retirement. There is no longer a need to wait until employment to start retirement planning.
At Mattioli Woods, we have developed our SIPP and SSAS pensions to be multi-member arrangements, allowing your children to consolidate or build their own retirement fund. Your adviser can even talk through potentially reducing fees based on your children's share of the overall pension scheme.
Plus, we provide all our clients with a dedicated adviser and client relationship manager, meaning your children will benefit from a bespoke consultancy-led approach too.
If you’re new to Mattioli Woods, book an initial FREE consultation to see how we can help you and your children’s finances.
Giving your child an early financial advantage can make a powerful difference to their future. Our children’s pension solutions are backed by decades of experience, helping families build long term wealth efficiently, with clear guidance at every stage.
Childhood pensions can be opened by parents and guardians of a child; however, deposits can be made by others, e.g. other family members.
As a parent or legal guardian, you can open a Junior SIPP on the day they’re born, allowing maximum time for the investments to potentially grow. If they’re older, they just need to be under the age of 18 to receive the Government’s tax benefits.
As with all pensions, the funds will only be available at retirement. This is currently age 55, rising to age 57 in April 2028; however, this could be higher by the time your child reaches the end of their career.
If you want your child to receive the funds earlier – for example, for university or a first home – you should consider a Junior Individual Savings Account (JISA). You can open one instead of or alongside a childhood pension.
As most children (up to the age of 18) are not yet in employment, there is an annual allowance of £2,880 for the 2026/27 tax year. Add the Government’s 20% tax relief and this is an allowance of £3,600 per year.
It’s a highly tax-efficient option, as any growth generated within the pension will not be subject to either Capital Gains Tax (CGT) or Income Tax. The 20% tax relief on contributions is another tax advantage.
When they come to take benefits, any withdrawals above the tax‑free lump sum will be subject to Income Tax at their marginal rate. Under current rules, they can usually access their pension from the government’s minimum pension age (currently 55, due to rise to 57 from April 2028) and may be able to take up to 25% of their fund as a tax‑free lump sum, with the balance taxed as income.
All of these rules, including the tax‑free lump sum and access age, are set by the government and could change before your child reaches retirement.
Yes, as you are effectively ‘gifting’ your payments, they will be covered in the tax-free gifting allowance – currently £3,000 – therefore reducing the size of your estate. However, this can be a difficult area to navigate, so you should discuss this with your financial adviser.
Another yes. Thanks to the way compounding works, even those smaller contributions can build up over time. By saving earlier and often, you could see a greater impact than larger contributions later on.
Because any money generated within the pension is reinvested, there is a possibility this too can generate growth. Therefore, the earlier you start investing, the bigger the opportunity for compounding – or interest on your interest!
Making regular contributions over many decades could help your child’s pot grow significantly, thanks to the Government’s 20% tax relief and potential investment growth. We’ve provided some example figures below based on a retirement age of 57 and different levels of annual investment growth. As with all investments, growth isn’t guaranteed.
The examples assume the maximum annual contribution of £3,600 every year (£2,880 plus £720 tax relief) from birth until age 18, after which there are no more contributions and the pot is left to grow. However, your child will be free to continue making contributions.
| Annual investment growth | Amount in pension pot at age 57 |
| 3% | £280,500 |
| 5% | £716,698 |
| 7% | £1,903,338 |
A childhood pension automatically converts into an adult pension when the child turns 18. This can either be left where it is or moved to a different provider.
Both Junior SIPPs and Junior ISAs can act as tax-efficient savings vehicles for your child. Compare the key differences at a glance:
| Feature | Junior SIPP | Junior ISA (JISA) |
| Annual contribution limit (2026/27 tax year) | £2,880 (£3,600 with £720 tax relief) | £9,000 |
| Who contributes? | Anyone (parent or guardian must open and manage until age 18) | Anyone (parent or guardian must open account) |
| Access to funds | Locked until at least age 55, rising to 57 from 2028 | Child gains management at age 16 if they wish, and withdrawals from age 18 |
| Tax benefits | Tax-free growth + 20% Government tax relief on contributions | Tax-free growth, dividends, and capital gains |
| Investment options | Broad, e.g. funds, shares, ETFs, bonds (depending on provider) | Cash or stocks & shares |
| Best for | Long-term retirement planning | Medium- to long-term goals, e.g. education, first car, first home, general savings |
| Control at age 18 | Child controls investments (but can’t access funds) | Child can withdraw or continue investing freely |
Yes, you’re free to open and manage both accounts for your child. Making separate contributions can be a smart way to support shorter- and longer-term goals, from first cars and university through to a comfortable retirement.
While not a nice thought, it can be reassuring to know that your child’s junior pension will stay safe if you pass away before they turn 18.
The pension is in your child’s name, so any remaining fund can normally be paid out as a death benefit to beneficiaries chosen by the pension provider’s trustees, for example, parents or siblings, in line with the scheme rules and any expression‑of‑wish form.
The tax treatment of pension death benefits, including any Inheritance Tax or Income Tax that might apply, depends on the legislation in force at the time and could change in future. Under current rules, pensions are generally held outside the pension holder’s estate for Inheritance Tax purposes, but future changes (including changes announced for pensions from April 2027) could affect how pensions are treated for Inheritance Tax in the future.
