Junior SIPPs are a self-invested personal pension product for under 18s. This type of pension account offers a tax-efficient way of saving for your child’s retirement as when your child reaches 18 it turns into a regular SIPP.
Good Money Guide has tested, ranked and reviewed the best Junior SIPP account providers in the UK that are regulated by the FCA.
AJ Bell: Best Provider For Low-Cost Junior SIPP Investing
- Investments: Shares, ETFs, bonds & funds
- Minimum deposit: £500
- Account charge: 0.25%
- Dealing fee: £1.50
AJ Bell Junior SIPP
Product Name: AJ Bell Junior SIPP
Product Description: AJ Bell is the cheapest Junior SIPP account we cover. With this Junior SIPP, you can invest in UK shares, international shares, investment funds, investment trusts, ETFs, and bonds. There is also a regular investment service that allows you to make regular investments from £25 per month cost-efficiently.
Capital at risk.
IS AJ Bell's Junior SIPP any good?
Yes, AJ Bell charges 0.25% for a Junior SIPP. Share account fees are capped at £3.50 a month. Dealing costs are £1.50 for funds and £9.95 for shares but drop to £4.95 where there were 10 or more online share deals in the previous month
Pros
- Very low account cost of 0.25%*
- Wide range of investments
Cons
- High minimum deposit of £500
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Pricing
(4.5)
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Market Access
(5)
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Online Platform
(4.5)
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Customer Service
(4.5)
-
Research & Analysis
(4.5)
Overall
4.6Bestinvest: Personal Expert Advice On What To Invest In
- Investments: Shares, ETFs, bonds & funds
- Minimum deposit: £1
- Account charge: 0.2% – 0.4%
- Dealing fee: £4.50 shares (£0 Funds)
Capital at risk
Bestinvest Junior SIPP Review
Product Name: Bestinvest Junior SIPP
Product Description: One of the key advantages of Bestinvest’s junior SIPP is that you can ask qualified investment experts for advice on what to invest in for your children’s retirement. As well as a wide range of funds and UK/US shares you can also invest a range of ready-made portfolios which gives you access to a wide range of investments in one go.
Summary
- Investments: Shares, ETFs, bonds & funds
- Minimum deposit: £1
- Account charge: 0.2% – 0.4%
- Dealing fee: £4.50 shares (£0 Funds)
Pros
- Advice on demand
- Low account charge for ready-made portfolios
Cons
- Limited international shares
- Higher account charge for funds and shares
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Pricing
(4.5)
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Market Access
(3.5)
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Online Platform
(3.5)
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Customer Service
(5)
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Research & Analysis
(4)
Overall
4.1Hargreaves Lansdown: Widest Range Of Investments For A Junior SIPP
- Investments: Shares, ETFs, bonds & funds
- Minimum deposit: £1
- Account charge: 0.45%
- Dealing fee: Shares £5.95, funds £0
Capital at risk
Hargreaves Lansdown Junior SIPP Review
Product Name: Hargreaves Lansdown Junior SIPP
Product Description: We have ranked Hargreaves Lansdown as the “best Junior SIPP” in 2023 and 2022 due to its market range and added value. Through the HL Junior SIPP, you can invest in a wide range of UK shares, international shares, investment funds (there are over 3,000 funds on the platform), investment trusts, ETFs, and bonds. It’s also worth noting that you can trade funds for free.
Capital at risk.
Summary
- Investments: Shares, ETFs, bonds & funds
- Minimum deposit: £1
- Account charge: 0.45%
- Dealing fee: Shares £5.95, funds £0
Fees: HL charges 0.45% for a Junior SIPP. Shares charges are capped at £200 per year. Funds are charged at 0.45% for the first £250,000. There is no charge for buying funds, but shares are charged at £11.95 per deal or £5.95 if you do over 20 deals per month.
Pros
- Huge range of investments
- £1 minimum deposit
Cons
- 0.45% account fee relatively high
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Pricing
(3.5)
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Market Access
(5)
-
Online Platform
(5)
-
Customer Service
(5)
-
Research & Analysis
(5)
Overall
4.7❓Methodology: Good Money Guide Chose The Best UK Junior SIPP Accounts Based On:
- 17,000+ customer votes in the annual Good Money Guide awards
- Our review team’s experiences testing the providers with real money
- A detailed comparison of the stand-out features offered by each Junior SIPP provider
- Good Money Guide’s exclusive interviews with the Junior SIPP provider platform CEOs and senior management
What Are Junior SIPPs?
A Junior SIPP (self-invested personal pension) is a retirement account designed for children, that converts into an adult SIPP at age 18.
With the Junior SIPP allowance, you can contribute up to £2,880 per year into the account.
Contributions are subject to 20% tax relief which means that if you contributed the full annual allowance of £2,880, the government would contribute another £720 for you, taking the total contribution to £3,600.
They must be opened by a parent or legal guardian on behalf of the child.
As with a regular SIPP, money in a Junior SIPP can’t be accessed until the account owner turns 55 (57 from 2028 onwards). This means that the money invested is locked away for the long term.
Compare The Best UK Junior SIPP Providers
You can use our comparison of what we think are the best junior SIPP providers to compare how much it costs to invest in and hold a range of funds and shares.
| Junior SIPP Provider | JSIPP Account Fees | Minimum Deposit | GMG Rating | More Info |
|---|---|---|---|---|
| 0.45% (max £200 a year) | £1 | View JSIPP Capital at risk |
|
| 0.25% (max at £3.50 a month) | £500 | View JSIPP Capital at risk |
|
| 0.2% – 0.4% | £1 | View JSIPP Capital at risk |
⚠️ FCA Regulation – What You Need To Know
All junior SIPP providers operating in the UK must be regulated by the FCA. The FCA is the Financial Conduct Authority and ensures UK junior SIPP platforms are properly capitalised, treat customers fairly and have sufficient compliance systems in place.
Good Money Guide only features junior self-invested personal pensions that are regulated by the FCA, where your funds are protected by the FSCS.
Are Junior SIPPs A Good Idea?
There are many benefits to opening and contributing to a Junior SIPP.
By putting money into a Junior SIPP for your child, you can potentially give your child a financial head start. Money in a Junior SIPP has decades to grow meaning that by the time the child reaches retirement age, they could have a considerable amount of pension savings.
Contributing to a Junior SIPP is also a tax-efficient way of investing. Contributions come with 20% tax relief, and all gains and income within the SIPP are tax-free.
- Related guide: SIPP tax relief explained
Pros
- Compounding returns: Investing money for your children while they are young could help them build up considerable pension savings over the long term. This is due to the power of compounding. Compounding is the process of generating earnings on an asset’s past earnings. Over time, it tends to result in the exponential growth of an investor’s money
- Tax-efficient: Investments within a SIPP are not subject to income or capital gains taxes. Meanwhile, contributions come with 20% tax relief. This means that for every 80p you pay into your child’s Junior SIPP, the government will add another 20p for you, taking the total contribution to £1
- Family and friend contributions: Anyone can contribute to a Junior SIPP, including grandparents. It’s worth noting that there can be Inheritance Tax (IHT) exemptions for grandparents who make contributions to Junior SIPPs for their grandchildren
Cons
- Reduced access: The money within the account is locked away for the long term. Currently you can’t access money within a Junior SIPP until age 55. However, this age is set to rise to 57 in 2028 and likely to rise further going forward. So, with this type of investment account, you must be comfortable gifting the money and locking it away for decades
- Tax rules can change: So, there’s no guarantee that Junior SIPPs will always offer the level of tax-efficiency that they do today
- Potential loss: With any investment, you can receive less back than you put in if the investments you choose perform badly
- Investment decisions: You’re responsible for managing the money in the account. If you are worried about this you can opt for a robo-advisor, which is a form of managed pension account
Calculate Your Child’s Junior SIPP Returns
You can use our free and easy Junior SIPP calculator to see how much their pension pot would be worth when they turn 18.
👀 Spoiler alert: If you invested just £240 a month from birth your child’s junior SIPP would be worth over £84,000 based on 5% annual returns when they reach 18.
If then your child didn’t make any further contributions, based on compounding interest of 5% when they retired at 55, their pension pot would be worth over £510,000 or if they didn’t retire until 65 it would be worth over £830,000.
However, if your child continued to invest only £250 a month their adult SIPP at 65 would be worth nearly £1.4 million.
That is quite a staggering amount of money for £250 a month.
Please note these returns do not incorporate account or underlying investment fees. Past performance is no guarantee of future results.
What Can You Invest In A Junior SIPP ?
With Junior SIPPs, the investment options vary from provider to provider. Some SIPP providers, for example, offer access to more stocks and investment funds than others do. However, popular providers such as Hargreaves Lansdown, AJ Bell, and Fidelity all offer access to a wide range of investments. Here are a few junior SIPP investing ideas:
You can also keep money in cash within the SIPP if you wish to. This can be useful if you haven’t decided where you want to invest the money, or you are waiting for a better time to invest.
How you invest your child’s money within a Junior SIPP is down to you. Until the child turns 18, you are responsible for managing the SIPP and have full control over the investments within the account.
Junior SIPP Alternatives
There are several alternatives to Junior SIPPs that may be worth considering depending on your requirements and financial circumstances.
Junior Stocks & Shares ISA
A Junior stocks and shares ISA is a tax-efficient investment account open to those in the UK aged under 18. As with Junior SIPPs, all gains and income within the account are tax-free.
One of the main advantages of a Junior ISA, compared to a Junior SIPP, is that the annual allowance is significantly higher. Currently, the annual allowance for Junior ISAs is £9,000.
Another advantage is that money can be accessed by the account owner at age 18.
On the downside, contributions into a Junior ISA don’t come with tax relief. So, any contributions into the account won’t be topped up by the government.
Stakeholder Pensions
A stakeholder pension is type of managed pension offered by some financial services companies in the UK such as Aviva.
As with Junior SIPPs, you can invest £2,880 per year into these pensions, and contributions come with 20% tax relief. One benefit of stakeholder pensions is that they allow you to hand over the responsibility of choosing investments to the account provider.
This means they can be less time-consuming to manage. On the downside, stakeholder pensions usually have far less investment options than Junior SIPPs.
Typically, you can only invest in a limited range of funds, and you can’t invest in individual shares.
Junior SIPP FAQs:
No. A Junior SIPP cannot be converted into a Junior ISA because they are very different investment products with different tax benefits and allowances. Once you invest in a Junior SIPP it becomes an adult SIPP at 18 and you cannot access it until 55. The main differences between a Junior SIPP and a Junior ISA are that a Junior SIPP is for retirement and a Junior ISA can be accessed by your children when they turn 18.
When your child turns 18, the Junior SIPP automatically becomes a regular low-cost SIPP, and control of the account is passed on to the child. This means that from the age of 18, they are responsible for managing the money in the account and deciding how and where it is invested.
Further reading: You can find out more about regular SIPPs and how they work here.
With a Junior SIPP, you can contribute up to £2,880 per year. Contributions are subject to 20% tax relief which means that for every 80p you put in, the government will add another 20p, taking the total contribution to £1.
So, if you contribute the full annual allowance of £2,880, the government will top this up to £3,600.
You can have as many Junior SIPPs as you want. However, you can only invest a total of £2,880 (the annual allowance) across all your accounts.
One thing to consider is the Lifetime Allowance (LTA). This is the total amount of money you can build up in your pension accounts while still enjoying the full tax benefits and not paying tax surcharges in retirement. At present, the LTA is £1,073,100 but this figure is likely to rise over time to account for inflation.
You can contribute a total of £3,600 per year into a Junior SIPP (after tax relief) and there is no limit as to the level that the money invested within the account can grow to.
You can open a Junior SIPP for any child under the age of 18.
Be aware, however, that if the child is over the age of 16, they may need to provide consent by signing the application form.
No, Vanguard does not offer Junior SIPP accounts. Infact, Vanguard does not offer SIPPs, they offer personal pensions.
Richard Berry
This article contains affiliate links which may earn us some form of income if you go on to open an account. However, if you would rather visit the junior SIPP provides via a non-affiliate link, you can view the product pages directly here: