Stakeholder Pensions for a Child

Parents and relatives can set up a stakeholder pension as an investment on behalf of a child, with tax relief available on contributions.

The stakeholder pension must be set up in the name of a parent or guardian and the child cannot have access to the money until at least the age of 50 (possibly older).

The funds then will probably also have to be taken as a pension rather than a lump sum. This is of course, a very long term investment, however if you invest the full amount for 18 years, and assuming the fund grows by 7% per year, by the time they reach the age of 65, the child could possibly have a pension fund of £3.1 million.