A short video by Ndubuisi 'Andy' Egwim explaining Junior (child) SIPPs — Self Invested Personal Pensions for people under 18 — outlining key benefits (20% government tax relief on contributions, long-term compound growth) and the principal drawback (funds are locked until retirement).
Self Invested Personal Pension
20% tax relief
Any child under 18
£2,880 annually
"3,006 per year" (as stated in the video)
So genius SIP. Basically, SIP is Self Invested Personal Pension. The genius SIP. The government has 20% tax relief on contributions even though your child is not earning. Yet again, it's pension. So any child under 18 can have a genius sip. You can contribute up to £2,880 annually and the government has 720, bringing it up to 3,006 per year. Again, some of the pros, you get the tax relief, 20% tax relief on every contribution you do. And there's long term growth because since the money is locked away until retirement, that's pension. It compounds compound interest, has several decades to work its magic. Again, the downsides are part of the benefits that the downsides is locked away till retirement.
