Thursday 24th January 2008
Opening a pension for your child along with a Child Trust Fund is a "great idea" for parents looking to provide their offspring with long-term security, a financial advisor has said.
Anna Bowes of financial advice firm AWD Chase de Vere said that relying purely on a Child Trust Fund is risky.
This is because at the age of 18, when the beneficiary will be able to access the fund, "there's a potential that they will do something irresponsible with that money that their parents have been saving into their whole lives," she said.
However, by opting for a pension at the same time, you can guarantee that they will come into some cash when they are older and wiser.
Ms Bowes commented: "I think a pension is a great idea. The child won't be so stoked, because you're going to be saving into money they can't get hold of until they're 55.
"But actually, when they get to that retirement age and they've potentially got a very large sum of money in their pension, and that's going to give them a good, safe income, then they're going to be much more grateful."
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