Make your child a millionaire: part 3

Pensions are boring. Everybody says so, don't they? So they must be. Whatever they are. And frankly, if your ambition is to live through life's work-free fun years in front of a one-bar electric fire watching imaginary EastEnders reruns in your head because you can't afford a telly then, yes, pensions are dull. As dull as death.

But if, with a bit of parental foresight, you were worth £500,000 before your 40th birthday and could retire a millionaire because of pensions, is that boring?

A (really) quick guide to pensions: A pension is a savings account with tax-free knobs on. The death knell of the state pension was sounded in the 1980s when the Thatcher government removed its link to average earnings in favour of a link to inflation. As inflation fell but earnings rose, the state pension became increasingly worthless. It forced people to take responsibility for their own pensions - but they didn't. There were too many restriction on what you could pay in. That has since changed. It is important that you at least try to understand the rules because pensions have a lot more knobs on now.

One benefit of the pensions system is that you can start a stakeholder pension for your child as soon as s/he is born - up to a maximum of £3,600 a year (gross). You pay in (£2,880), the taxman pays in (£720), the kid gets rich. Do this from the year your child is born and with 6% estimated growth the account will have £491,120 by age 38.

Add that to your £537,634 and your child has more than £1m.

And that is how to make your child a millionaire before their first mid-life crisis. Imagine how many sports cars and therapists that could pay for.

This lunchtime you need to

>> Read these easy-to-follow pensions guides
>> Get some free saving for children brochures
>> And some free pensions services brochures

It's not work.

Make your child a millionaire
Part 1 0-£40,025
Part 2 £40k-£500k
Part 3 £500k-£1m

Comments

[tightjock]

im 35 ...is there anything you can do for me? a bit late now maybe but your advice will be appreciated