We're saving £100 a month into pensions for our toddler and baby - here's why

Richard and Caitlin Brain, who reside in Swansea, south Wales, have already established pension accounts for their two children, aged 20 months and five months respectively. The couple, with Richard aged 30 and Caitlin aged 28, each contribute £50 per month into their children’s pensions, a sum that will remain inaccessible until the youngsters reach age 57 under current UK private‑pension rules. Consequently, the older child will wait until 2082 and the younger until 2083 to draw the funds. Richard describes the decision as the right one, saying, “Paying into their pensions means we can play a part in their future far beyond our own years. And the money has decades to grow.” To accommodate these contributions, the Brains have adjusted their lifestyle. Richard, who works for an investment firm and earns under £90,000 annually, notes, “We’re not on the breadline, but investing this money does mean doing a little less.” He adds, “We don’t eat out as often as we used to, which as foodies is simply a pain,” and explains that they also curb spending on gifts for one another so they can still celebrate birthdays and Christmas with the children. Caitlin, presently on maternity leave from her role with the local council, has not yet returned to work after her statutory maternity pay of £194 per week ended. In addition to the children’s pensions, the family has opened Junior ISA savings accounts for each child, depositing £60 per month per account—funds the youngsters may access when they turn 18. The Brains view this arrangement as combining the benefits of both vehicles: the ISAs could assist with university expenses, business start‑ups or housing deposits, while the pensions aim to deliver long‑term financial security later in life. Altogether, they allocate £220 each month to the children’s funds and an additional £200 to their own private pensions and savings, prompting them to live more frugally than before. The concept of Junior self‑invested personal pensions (SIPPs) was introduced in the United Kingdom in 2001. Contributors may pay up to £2,880 per year, with the government adding £720 in tax relief to reach a total of £3,600. Industry data indicate rising popularity; Harg Read the full story at BBC News →