Think beyond the headline projection
A large number several decades away can be compelling. It also rests on assumptions about returns, fees, inflation, contributions and rules. Do not compare a pension illustration including tax relief with a cash illustration excluding it without understanding why the totals differ.
Who does what?
A parent or guardian sets up the pension, and other family members can contribute subject to provider rules. At adulthood, your child becomes responsible for the account. Keep statements and contact details in a place that can be passed on, especially when contributions come from several relatives.
Tax relief is not an investment return
The provider normally claims basic-rate relief through relief at source. Its timing may differ from the original payment. The relief adds to the money invested; it does not remove investment risk or charges. Confirm the child’s eligibility and the applicable contribution rules with the provider before making a large payment.
Understand the commitment
Think carefully about giving up access for decades. A pension cannot normally pay for a teenager’s expenses or help with an early adult deposit. Future legislation may affect when and how benefits can be taken. Plan around that uncertainty rather than promising your child access at a particular age many years from now.
Keep the arrangement understandable
Record why the pension was opened, where it is held and how investments are selected. Review charges and keep contact details current. Avoid turning a long-term gift into a forgotten account. Consider regulated advice if this forms part of a wider tax or estate plan.
This guide explains general options, not what is right for your family. Investments can lose value. Tax rules and account terms can change. For personal recommendations, speak to a regulated financial adviser.
Sources & further reading
Core rules checked against the following sources on 28 October 2026. Check current terms before acting.
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