Leaving Money To Grandchildren

[Henry1865]

I'm not leaving it for them to squander so want to ensure that most gets put into their pension schemes. Is it lawful to make it a condition that a bequest is to be paid by cheque to their pension provider?

[Hymie]

In principal I believe such a bequest condition could be stipulated; it is quite normal for a Will to limit the availability of someone having access to the bequest until they are say 21.

 

But with such a generality as being paid into a ‘pension’ is fraught with potential issues; the person may not have a pension plan or may have a works pension – but there would be no issue with them opening another personal pension.

 

Bear in mind that currently someone can have access to their full pension pot at age 55 (soon to be 57) which could mean they can have all the money anyway by putting it in a pension and then immediately withdrawing it all.

 

If the sum of money you plan to bequest by this method is substantial, I’d advise you get professional advice on how to do it – there may be a better way of ensuring the money is not squandered (other than paid into a pension).

[Ken4155]

If the amount is substantial, you may be able to have it awarded to them gradually on an annual basis? Of course it won't ensre it isn't squandered, but it will ensure they won't blow it all in one mad spending spree.

[Hymie]

There are also tax implications to consider in that tax is paid on money paid out of pensions, but paying in a lump sum may not be tax efficient.

[Henry1865]

Many thanks Hymie and Ken4155 for your advice.

[webbo3]

https://www.sjp.co.uk/individuals/news/should-you-start-a-pension-for-your-child

[andres]

I plan on giving money to my grandchilgren before I die. I want to see the joy they get from spending it. 

[Maydup]

I agree that you should take some advice on this. It might be safer in a trust fund for example or as a new pension fund, just in case they don't have pension providers at the time of your demise. 

[Peter Pedant]

they cd have pension schemes now. The parents have to set them up. 

https://www.sjp.co.uk/individuals/news/should-you-start-a-pension-for-your-child

is a good site for info. I have standard life stakeholders for my young heirs. and then you start contributing immediately.

Your plan is for one bliddy great payment on your death and is not tax efficient. Drip  feeding is. for minors it is sset at £2880 per year ( as the article)

Plan A ( open stakeholder now)is fraught with problems. I  have had four parents REFUSE - ( dont believe in  them / dont need them). I waited until two reached age 18 so they cd do it themselves, and the boy threw a Kevin fit " oh it is so unfair, I said I had  signed the form ( he hadnt) and sent it off ( he hadnt) so i dont see why...." The two refusers who never got around to it, have missed out on £78 000 in conts. slowly slowly catchee monkey

It mounts up.The clerk who set up the stakeholders said " do they have any idea what you are doing for them?"  and I said 'no'

[Barmaid]

How much each are we talking about?  It is also possible they may not have a pension provider.