Do more for your family
with our Junior Pension.

What is a
Junior Pension?

A Junior Pension is a type of personal Pension that is managed on behalf of a child by a parent or legal guardian until the child turns 18.

As with a Junior ISA, investing early in life with a Pension can bring long-term returns as the impact of compounding is seen for a longer period. It’s also a tax-efficient account as returns aren’t subject to Income or Capital Gains Tax whilst invested within the Pension.

A Pension for an Under 18 has two main benefits over a Junior ISA:

• Contributions attract up to 20% tax relief
• The child cannot access their money until 57 – meaning it can be used for helping them to achieve their long-term goals

Whilst a Junior Pension provides a long-term investment option for a child’s future, they won’t be able to access their money until they reach the normal minimum pension age. If parents or grandparents are looking to provide children with a financial boost before they retire, a Junior ISA which is accessible at 18 years old may be a better option.

Parents and Grandparents can also reduce potential Inheritance Tax liability for their loved ones as payments into the Pension may be covered by the £3,000 annual gift allowance, or the exemption for payments from income whilst invested.

It’s important to remember that with investing your capital is at risk and investments can fluctuate in value over time, meaning you may get back less than you invest. Speak to a financial adviser if you’re not sure whether investing is right for you.

How much can
be contributed?

The True Potential Junior Pension benefits from an Annual Allowance of £3,600 in the 2024/25 tax year and contributions will attract tax relief.

For example, you can add £2,880 into a child’s Junior Pension in this tax year and the government will add in £720– representing 20% in tax relief.

The total amount added to the Junior Pension will be £3,600.