Toddler pensions: parents saving £50 a month per child

A couple revealed how it pays £50 a month into funds

Speaking to the the BBC, Richard and Caitlin Brain revealed how they have opened pensions for their two children.

The Welsh couple's kids are just 20 months and five months old, and each child gets £50 a month paid into a Junior pension fund.

Under current UK private pension rules, that money is locked away until they turn 57.

This means that for the couple from Swansea, their eldest child cannot access the fund until 2082, while the youngest will have to wait until 2083.

How toddler pensions compare with Junior ISAs

The couple have also opened Junior ISAs for each child, paying £60 a month per account.

However, unlike pensions which stay locked until 57, that money becomes available when the children turn 18.

The Brains say that it could go towards university, a house deposit or starting a business.

Why Richard and Caitlin say the sacrifice is worth it

Richard is a 30-year-old investment firm worker and earner of under £90,000 a year.

His wife, 28-year-old Caitlin, is currently on maternity leave from her job at the local council, after her statutory maternity pay ended.

According to Richard, paying into the children's pensions lets the family plan beyond their own lifetimes.

"Paying into their pensions means we can play a part in their future far beyond our own years," he said, adding that "the money has decades to grow."

The extra saving comes at a cost day to day, the couple has admitted.

"We're not on the breadline, but investing this money does mean doing a little less," Richard said. "We don't eat out as often as we used to, which as foodies is a pain."

What is a toddler pension and can parents save for children to access the money earlier

The pension is a Junior SIPP opened by a parent or guardian, with the money invested until the child turns 57 under current rules.

Meanwhile, a Junior ISA lets parents save for a child, with the funds released when the child turns 18 rather than locked away until 57 like a pension.