Updated: May 30, 2019

Child SIPPs Explained

What exactly is a child SIPP and how do they work? All the information you need is right here in this comprehensive guide.

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Tony Stevens

Author: Tony Stevens - Finance Expert

Updated: May 30, 2019

We’ve put together this comprehensive guide for those who are looking for information about junior SIPPs, specifically whether these products could be a good investment for their child, how they would go about opening one and if there could be any risks involved.

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What is a junior SIPP?

A junior (Self Invested Personal Pension) SIPP is a type of pension for a child. It enables you to pass SIPP savings onto your children. The difference between a regular SIPP and a junior SIPP is that the pension account is managed by a parent or legal guardian who makes any investment decisions until the child turns 18.

If you’re looking for a tax efficient way to start building a retirement fund for your child, a junior SIPP may be the answer.


You can open a SIPP for children under 18, however, the child will need to sign a junior SIPP application if they are over the age of 16.


Deposits of up to £2,880 per year can be paid into the SIPP, and with 20% tax relief added, this figure will rise to £3,600.

It’s a tax-efficient personal pension that often offers access to a wider range of investments than other types of pension would.

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What are the benefits?

If you chose to open a SIPP pension for your child or your grandchildren, even relatively small regular payments could build up into a significant pension pot.

Because of the compound effect of your investments, the sooner you start, the more you will get back for your children’s SIPP over the long-term.

Child SIPP tax benefits include:

  • Relief on money going in
  • Possible inheritance tax exemptions
  • Tax free growth

If you want to reduce the value of your taxable estate, any gifts over £3,000 per year will be taxed if you die within seven years of making it.

However, if you pay the maximum of £2,880 per year into your child’s or grandchild’s SIPP you could stay within tax free gift limits, and through tax relief your gift will become £3,600.

What are the risks?

With decades to mature, a SIPP for your child can follow a more risky investment strategy. This has the potential to bring in greater rewards, but it comes with no guarantees. Investments could go down in value as well as up, so your junior SIPP pension could end up giving back less than what you invested.

Speaking to a financial advisor who can provide expert knowledge of which child SIPPs have performed at peak levels will help you select a provider and get the best returns on your investment over the long-term, as well as minimise the level of risk.

The advisors we work with have in-depth knowledge of the junior SIPP market and can help you find the right product if you make an enquiry today.

How do I find the right provider?

You should start by seeking advice from one of the specialist pensions experts we work with. Since the market is vast, this is the best way to ensure that you’re paired up with the junior SIPP provider best positioned for your needs and circumstances.

Which providers offer the cheapest SIPPs for children?

There’s no straightforward answer to this, and you should always keep in mind that “cheapest” doesn’t always mean it’s the right deal for you.

Stipulations for minimum deposit requirements, what level of investment risk you take, and the range of investment options available will vary depending on who your junior SIPP provider is.

  • Barclays’s child SIPP offers a wide range of investment opportunities and flexibility on whether you want to pay lump sums or make regular contributions.
  • Hargreaves Lansdowne’s junior SIPP offers regular savings starting from just £25 per month.
  • With a Fidelity International junior SIPP, you can start saving for your child’s SIPP from £50 a month.
  • A child SIPP from Charles Stanley could give you access to the same wider range of investment opportunities as a Stocks and Shares ISA or investment account.
  • Alliance Trust offers over 4,000 investments to choose from for your junior SIPP.

These are just a few of the many junior SIPP providers available. Seeking independent advice from one of the pensions experts we work with on the best junior SIPP to pass to your children will ensure you get the best deal on the market – tailor-made to your circumstances.

How do I pass a junior SIPP to my children?

Control over the investments in a junior SIPP will be passed on to the child once they turn 18. However, withdrawals are not normally possible until the child turns 55, this is set to increase to 57 years of age in 2028 and it will likely rise further in coming years.

Junior SIPP vs. junior ISA

A Junior Individual Savings Account (ISA) is a tax-free savings account for children.

Parents and legal guardians can open a Junior ISA for a child who’s under 18 years old and residing in the UK. The account is managed by the adult on behalf of the child. The junior ISA can be passed on to the child when they turn 16 and they can begin to withdraw money at age 18.

A junior SIPP allows you to save into a pension for your child. It’s managed by a parent or legal guardian who makes investment decisions until the child turns 18. However, the child will only be able to withdraw funds when they turn 55.

What are the main differences between the two?

  • Junior SIPP terms specify you can pay a maximum deposit of £2,880 per year. With 20% of tax relief added this figure will grow to £3,600.
  • The limit for yearly investments into a junior ISA is currently capped at £4,260. It’s a tax free saving and you won’t pay tax on the interest you accrue.
  • A child can begin to withdraw from a junior ISA at age 18, but they can only take out funds from their junior SIPP at 55 years old or later.

Junior SIPPs and junior ISAs are great tools for building towards your child’s long-term future. Speak to an expert pensions advisor to discuss which saving account would be a good match for your circumstances and goals.

What charges are involved?

Charges and fees for your junior SIPP will vary depending on the provider you choose. Speaking to a pensions advisor we work with will give you a clear overview of fees and help you find the best junior SIPPs on the market.

Providers will charge a service fee and there may be additional charges for managers of your funds or if you engage in certain types of trading.

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Tax relief

The government will add 20% tax relief to savings into your junior SIPP up to a maximum yearly deposit of £2,880. This means you can get a yearly tax bonus of up to £720 which will bring your annual junior SIPP pension growth to £3,600.

How do I choose the best junior SIPP?

All junior SIPP accounts come with different charges, perks and benefits. Given that the market is vast, it can be difficult to navigate on your own.

Approaching providers direct is not recommended as you will only have access to their products and this could potentially mean missing out on a better deal elsewhere. Online rates tables can also be unreliable, since they aren’t tailored to you as an individual and often give prominent placement to sponsored products.

With this in mind, speaking to a pensions expert is the best way to find the right junior SIPP for you. The advisors we work with will look closely at your needs and circumstances and pair you up with the provider best positioned to help.

Make an enquiry here and we will connect you to a specialist junior SIPP expert.

How do I carry out a comparison?

Why do the legwork yourself? The pensions experts we work with have whole-of-market knowledge and they can compare all of the available deals on your behalf, before introducing you to the provider best positioned to offer favourable rates.

Where can I find a calculator?

They’re available on a number of pension websites and financial hubs, but making an enquiry and speaking to a specialist advisor is always a better alternative to crunching the numbers yourself. The experts we work with can run the numbers through a calculator for you, return accurate results and offer bespoke advice along the way.

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Providers charge flat fees for their services. These include the costs of managing your account and other services such as buying and selling your investments.

Whether you’re looking for the cheapest junior SIPP, or just need further information on tax relief, HMRC, allowance, rules, charges, comparisons and calculators, one of the pensions advisors we work can shed light on the options available to you.

If you’d like comprehensive and personalised advice to help you decide which investment is right for you or your child, call us today on 0808 189 0463 or make an enquiry here and we’ll connect you free of charge to a broker we work with.

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We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in pensions. Ask us a question and we'll get the best expert to help.

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Tony Stevens

Tony Stevens

Finance Expert

About the author

Tony has worked in a vastly diverse array of areas in the pensions industry for over 20 years. Tony regularly writes for trade press, usually on topical and pensions pieces as well as acting as a judge at prestigious national events.

Tony is also a highly qualified Independent Financial Adviser in his own right. His mantra has always been “Hope for the best, but plan for the worst”, and believes that the biggest impact that an adviser can have on a client’s life journey is to take them on a journey from generally having little or no real idea of what their retirement will look like, to giving them the understanding of what their retirement looks like now, then helping them navigate a path to what they want their retirement to be.

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