Stakeholder pensions for children
Indulge more than their imaginations
Invest in their future with a Stakeholder Pension Plan for children
While your children are growing up, it’s easy to indulge their dreams of becoming a mermaid or starting their very own ice cream farm. But when it comes to their real ambitions – from travelling the world, to starting a family of their own - one thing’s for certain: they’ll be living in a world that’s more expensive than ever.Our Stakeholder pension is a simple, low cost, tax efficient way to help provide for your child’s future.
The basics
Investing starts from as little as £20, up to a limit set by the government. These are listed in our Guide to Stakeholder Pensions.
The money you pay into the Stakeholder pension (your contributions, including the tax relief you receive) is put into an investment fund. The aim is to build up this fund to provide your children with a secure future, by having a pension income at their retirement age.
With a Stakeholder pension, you can stop, start, increase or decrease, and pay in single contributions at any time without penalties.
And it’s great value too. We offer low annual management charges on our Stakeholder pension and we reduce the rates of the charges as the fund grows.
We also offer an extensive choice of pension investment funds, so you can select the type of investment and level of risk that suits you.
Remember…
It doesn’t matter whether you are a parent, grandparent, aunt, uncle or godparent – anyone can begin putting money aside for a child. If you start now, you’ll be helping to give that child greater security in an otherwise uncertain world.
The named child on your investment will not have access to the funds until they take their pension benefits so you can be sure the money will be there for them when they retire (current minimum retirement age is 55).
See how much your child could have by the time they retire by using our children’s calculator in the right hand column.
It’s easy to apply.
Our Stakeholder pension can be managed online so you can see how your child's pension investment fund is performing. You can also change funds, whenever you choose, at no extra cost. When the child becomes age 18 they will then take ownership of the plan and will make the decisions around its management.
You may benefit from lower charges when you apply for a Legal & General Stakeholder Pension online. It takes just 20 to 30 minutes to complete your application.
To find out more about Stakeholder pensions for children, read our Guide to Stakeholder Pensions.
The value of the units which make up your fund can go down as well as up, so the value of your fund is not guaranteed. Please remember that your money is tied up until your loved ones take the retirement benefits. Please view the other risks associated with this product.
Your options
1. Choose an investment fund, or funds
Legal & General offers a wide range of pension investment funds with varying levels of risk and potential reward. You can choose to invest your contributions into one or more funds according to your attitude to investment risk. You can switch your investment from one fund to another, whenever you choose, free of charge.
There are over 20 Legal & General pension investment funds to choose between, ranging from index-tracking funds (which track the performance of a market or geographical region) to actively managed investment funds (where a fund manager decides what to invest in, in order to best achieve the fund's aims).
Alternatively, there are 17 funds from a set of specifically selected external fund managers.
2. Choose a lifestyle profile
You also have the option of a lifestyle profile. This is where your contributions are initially invested in funds for the potential of long term growth and then your investment is steadily switched into lower risk funds as your child gets nearer to the chosen retirement age.
3. Take the default option
If you prefer not to choose a pension investment fund, your contributions will be invested into our default investment option - the UK Equity Index Lifestyle Profile. This means your contributions will initially be invested in the UK Equity Index Fund then, starting 10 years before the chosen retirement age, the investment will be gradually switched to the lower risk Fixed Interest and Cash Funds.
We recommend that you read Choosing your investment fund (PDF 89KB)
The charges
The Government's maximum permitted annual management charge for Stakeholder pensions is currently 1.5% a year of the value of your fund for the first 10 years of your pension plan and 1.0% a year after that. Compared with this, Legal & General's charges for online applications provide great value for money.
Legal & General's basic annual management charge is tiered according to the value of the fund. As your investment grows the rate of charge decreases.
| Retirement Fund Value Bands | Basic Rate of Online Annual Management Charge Applicable to Band |
|---|---|
| Under £25,000 | 1.0% |
| £25,000 to £50,000 | 0.9% |
| £50,000 and over | 0.8% |
For example, if your investment in Legal & General funds is worth £40,000 throughout the year, the rate of annual management charge would be (£25,000 x 1.0%) + (£15,000 x 0.9%), which is £250 + £135 = £385.
If you decide to invest in any externally managed investment funds, an additional annual management charge (currently 0.15%) will apply to your investment in those funds only.
You can of course apply on a paper application form if you wish. However, an extra charge will apply if your initial investment is less than £15,000. Full details can be found in your paper application pack, which you can request using the contact us section on the right hand menu.
If you are transferring the value of an existing pension plan into a new Legal & General Stakeholder Pension Plan, an extra charge may apply, as professional advice is provided.
Risk factors
All investments carry an element of risk. Please bear these points in mind:
The value of the units which make up your fund can go down as well as up, so the value of your fund is not guaranteed. Please remember that the money is tied up until the retirement benefits are taken.
The amount of pension income provided by the retirement fund will depend on a number of things, including investment returns and the rates available to buy a pension when the decision to take the benefit is made.
The fund or funds you choose to invest in will have specific risks. These risks are described in Choosing your investment fund (PDF 89KB).
We can increase our charges but we will let you know before we make any change.
The Total Annual Management Charge will not exceed the Government's maximum permitted charge, which is currently 1.5% a year of the value of the fund for the first 10 years of your plan, and 1% a year thereafter.
If you decide to cancel within the 30-day cancellation period, your refund may reflect any reduction in investment value. You can read more about Your Right to Change your Mind at the start of our online application form.
The law and tax rates may change in the future and the value of tax relief will depend on your individual circumstances.
The past performance of a pension fund is not an indicator of its future performance.
