You can now leave your pension to be inherited by family members, potentially tax free, but it's not the only way to help your loved ones.
Invest for your spouse
A great way to maximise pension savings is to save for your spouse. If they are unemployed, you can save £2,880 a year into a pension for them, on which they will receive £720 tax relief, and this could be more, if they are working.
Invest for your child(ren) and/or grandchild(ren)
If your child(ren) and/or grandchild(ren) are over 18, why not open a pension through Chelsea?
They will simply need to complete an online questionnaire and our dedicated pensions administrator will pre-populate the paperwork ready for them to sign. You can then invest a lump sum and/or regularly invest into a pension on their behalf. Pension saving for Christmas may not sound glamorous, but could be worth it in the long-run.
It is often difficult to start saving for retirement in your 20s and 30s, with competing priorities on the agenda like university fees, buying a house and just generally having fun. So why not give your children or grandchildren the head start they need?
There are just a few things to bear in mind, particularly as the pension investment would not be for you.
Relevant earnings, annual allowance and tax relief
When paying into a scheme for someone else you need to remember that this will affect their annual allowance and tax relief, and the amount that can be paid in is dependent on their relevant earnings, not yours.
For example, if you are a higher rate tax payer, but your daughter is currently unemployed, the most she can invest into her pension (from third parties and personal contributions), and receive 20% tax relief on, is £2,880. By investing the £2,880, you do not lose this from your annual allowance.
Please be aware that in most cases the account holder cannot access the money before the age of 55.