Skip to main content Skip to footer

Thinking ahead for your child? Consider pension contributions!

Share this page

facebook logo   X logo   Linked in logo

Many people want to make sure they pass down their wealth to their children in a tax efficient way. One way to give them a head start is by making pension contributions on their behalf. Not only does this help secure their tomorrow, but it also comes with fantastic tax advantages – both for yourself and for your child. Let's delve into some of the benefits and how you can make the most of them.

Tax benefits

Picture this: for every £80 you contribute to your child's pension, the Government chips in an extra £20 through tax relief. That's a remarkable 25% boost right off the bat. You can contribute up to £2,880 each tax year, on top of which the Government will contribute a whopping £720. What's more, the investments within the pension account can grow tax free. This double tax advantage helps to create a fertile ground for their savings to flourish in over the years.

What about putting cash into a bank account in their name?

Where parents deposit money into an account in their child’s name whilst they’re still under 18, the parents are often taxable on any interest paid on that account. If you’re a high earner, you may find you land up with a nasty tax bill you might not have been expecting. Pension contributions, on the other hand, ensure any growth within the pension fund is tax free.

Can grandparents contribute?

Grandparents, godparents and other loved ones can contribute to a child’s pension pot, as well as their parents. Consider making contributions a thoughtful gift for special occasions, magnifying their future financial security. Not only does it contribute to their financial future, but it also promotes the importance of long-term financial planning from a young age. Total contributions before the tax relief can’t exceed £2,880 per year per child though, so this is something to watch out for.

What’s more, these pension contributions may also save some inheritance tax. If the contributions are made out of spare income after your regular living expenses, the payments could fall completely out of your estate. This could potentially save another 40% in tax!

Monitoring and adapting

Keep in mind that pensions, like any investment, require periodic check-ins. As your child grows, their financial needs and goals may shift. Regularly reviewing and adjusting their pension strategy makes sure that it stays aligned with their evolving circumstances. A financial adviser can help with this, and can even help you pick the right kind of pension for your child.

Want to learn more?

If you’d like to hear more about making pension contributions for a child, please get in touch with your usual Larking Gowen contact and we’d be happy to help. You can find contact details on the Our people section of our website. Alternatively, call 0330 024 0888 or email

Emma Walker


About the author

Larking Gowen


Sign up to receive the latest news from Larking Gowen

facebook logoX logoLinked-in logorss logo

Cookie Notice

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.
Find out more here