Frequently Asked Questions About Junior SIPPs (Children’s Pensions)

4 min read

A Junior SIPP (Self-Invested Personal Pension) is a long-term savings plan designed to help parents and guardians invest for their child’s future retirement. While it may seem early to start a pension for a child, the power of compound growth and tax benefits make Junior SIPPs a valuable financial tool.

Here are 20 frequently asked questions to help you understand how Junior SIPPs work.

1. What is a Junior SIPP?

A Junior SIPP is a pension account for children under 18, managed by a parent or guardian. It allows tax-efficient investing for long-term growth

2. Who can open a Junior SIPP?

Only a parent or legal guardian can open a Junior SIPP on behalf of a child.

3. How much can I contribute to a Junior SIPP?

✔ The maximum contribution is £3,600 per tax year.
✔ Parents can contribute £2,880, and the government adds £720 in tax relief.

4. What tax benefits do Junior SIPPs offer?

✔ 20% tax relief on contributions.
✔ Tax-free growth – No capital gains or income tax on investments.
✔ Inheritance tax benefits – Contributions may reduce taxable estate value

5. What can I invest in with a Junior SIPP?

✔ Stocks & Shares
✔ Bonds & Fixed Income
✔ Exchange-Traded Funds (ETFs)
✔ Investment Trusts & Mutual Funds

6. Can my child access the money before retirement?

No, Junior SIPP funds are locked until age 55 (rising to 57 in 2028).

7. What happens to the Junior SIPP when my child turns 18?

✔ The Junior SIPP converts into a regular SIPP, and the child gains full control over investment decisions.

8. Can grandparents contribute to a Junior SIPP?

Yes, anyone can contribute, but the total annual contributions must not exceed £3,600.

9. What are the fees associated with Junior SIPPs?

✔ Platform fees – Charged by the provider for managing the account.
✔ Fund management fees – Costs associated with investment funds.
✔ Trading fees – Charges for buying and selling investments.

10. Can I transfer a Junior ISA into a Junior SIPP?

No, Junior ISAs and Junior SIPPs are separate accounts, and funds cannot be transferred between them.

11. What happens to the Junior SIPP if the child dies?

✔ The funds are passed to beneficiaries tax-free if the child dies before age 75.
✔ If the child dies after 75, withdrawals are taxed at the recipient’s income tax rate.

12. Can I invest in property with a Junior SIPP?

No, Junior SIPPs do not allow residential property investments, but they can invest in commercial property funds.

13. Can my child have both a Junior SIPP and a Junior ISA?

Yes, a child can have both accounts, allowing tax-efficient savings for different financial goals.

14. How do I choose a Junior SIPP provider?

✔ Compare fees, investment options, customer service, and platform usability.
✔ Popular providers include AJ Bell, Hargreaves Lansdown, and Fidelity.

15. Can I change the investments in a Junior SIPP?

Yes, parents can adjust investments based on market conditions and financial goals

16. What happens if I stop contributing to a Junior SIPP?

✔ The existing investments remain and continue to grow.
✔ You can resume contributions at any time.

17. Can my child contribute to their Junior SIPP?

No, only parents, guardians, or other adults can contribute until the child turns 18.

18. What is the annual allowance for Junior SIPPs?

✔ £3,600 per tax year, including £720 tax relief from the government.

19. Can I invest in international stocks with a Junior SIPP?

Yes, Junior SIPPs allow investment in global markets, including US, European, and Asian stocks.

20. Is a Junior SIPP right for my child?

✔ Ideal for long-term financial planning and tax-efficient growth.
✔ If you prefer flexible savings, a Junior ISA may be a better option

Final Thoughts

Junior SIPPs offer tax benefits, investment flexibility, and long-term growth, making them a powerful financial tool for securing a child’s future. Whether you’re starting a Junior SIPP, choosing investments, or planning contributions, understanding the rules and options can help you maximize your child’s pension savings.