What is a Junior SIPP? A plain-English guide

A Junior SIPP (Self-Invested Personal Pension) is a pension for a child. Opening a pension for someone who hasn't started school can sound odd, but a government top-up and a very long time to grow make it worth understanding, even if it isn't right for every family.

How a Junior SIPP works

Any UK resident child under 18 can have a Junior SIPP, opened by a parent or legal guardian. The main points:

The government adds 25% to every payment, as tax relief
The money grows free of income tax and capital gains tax while it's in the pension
Your child can't use it until they reach pension age: 57 at the earliest under current rules, and likely later for today's children
Up to £2,880 a year can be paid in, which the top-up turns into £3,600
The money can be invested in funds, shares and more

The 25% top-up

This is what makes a Junior SIPP different. For every £80 you pay in, the government adds £20, making £100.

Paying in the full amount:

You pay in: £2,880 a year
The government adds: £720
Total going in: £3,600 a year

The top-up is tax relief at the basic rate. It's added even though your child doesn't pay tax, and it's claimed by the pension provider, so you don't have to do anything. It usually arrives a few weeks after each payment.

What could it grow to?

Here's an example using 6% a year, a careful figure for illustration. Real returns go up and down and nothing is guaranteed.

£80 a month from you, from birth to 18

You pay in: £17,280 over 18 years
The government adds: £4,320
Total paid in: £21,600
Could be worth at 18: about £38,000

The money then stays in the pension. If nothing more is added and it keeps growing at 6% until your child is 57, it could be worth about £370,000.

That number sounds huge, so it's worth a caveat: it's in future pounds. Prices will have risen a lot over 57 years. If prices rise by 2.5% a year, £370,000 then would buy roughly what £90,000 buys today. Still a real head start on retirement, but not a fortune.

Our Junior SIPP calculator lets you try your own amounts and growth rates.

Junior SIPP or Junior ISA?

They do different jobs.

Junior ISA

Money can be used from 18
Up to £9,000 a year
No government top-up
Useful for university, a first home or starting out as an adult

Junior SIPP

Money can be used from pension age (57 at the earliest, likely later)
Up to £2,880 a year paid in (£3,600 with the top-up)
25% government top-up
Only for retirement

Some families use both: a Junior ISA for flexibility at 18, and a Junior SIPP for the very long term. Others start with a Junior ISA and add a SIPP later if they can. There's more in our side-by-side comparison.

How to open a Junior SIPP

Choose a provider. Investment platforms such as AJ Bell, Hargreaves Lansdown and interactive investor offer Junior SIPPs. (Squids-In is independent, and we don't earn anything from any provider we mention.)
Compare charges. Look at the platform fee and the fund charges together.
Apply online with your child's details. Only a parent or legal guardian can open one.
Choose investments. Many families pick a low-cost global index fund.
Set up regular payments, if that suits you. One-off payments are fine too.

What can it invest in?

Within a Junior SIPP you can usually hold:

Index funds (low-cost and spread across many companies)
Other funds and investment trusts
Individual shares
Bonds

For a child's pension, many families keep it simple with one low-cost global index fund, such as a global all-cap or all-world tracker. With decades ahead, a wide spread and low charges matter more than anything clever.

Who can pay in?

Anyone can pay into a child's Junior SIPP:

Parents
Grandparents
Other family
Friends

The £2,880 limit covers everyone's payments added together, not each person's. If grandparents pay in £1,440 and parents pay in £1,440, the limit is reached for that tax year.

What's good about it

The top-up grows too

The 25% top-up is invested alongside your money, so it grows as well.

A very long time to grow

Money paid in at birth could have 57 years or more to grow. There's no longer time frame than that.

It can't be spent early

A Junior ISA becomes your child's to spend at 18. A Junior SIPP can't be touched until pension age, so it stays put for retirement.

Things to weigh up

It's locked away for decades

Your child can't use this money until pension age. That protects it, but it means it can't help with university, a first home or anything else before then.

The limit is lower

£2,880 a year is much less than the £9,000 Junior ISA limit.

The rules may change

The pension access age has gone up over time: it's 55 now, 57 from April 2028, and could rise again before today's children retire. Tax rules on pensions can change too.

It isn't all tax-free when it comes out

Growth inside the pension isn't taxed. When your child takes money out in retirement, up to a quarter can usually be taken tax-free, and the rest is taxed as income under current rules.

Charges

Some providers charge a yearly fee. Over decades, small differences add up, so it's worth comparing.

Common questions

Can the money be taken out early? No, apart from rare cases such as serious ill health. It stays in until pension age.

My child will pay into a workplace pension later. Is there any point? Money paid in during childhood has far longer to grow than money paid in during their working life. Whether that's worth it for your family depends on what else you're saving for.

What if my child lives abroad as an adult? The pension stays theirs, but how it's taxed when they take the money may depend on where they live then.

Can I move it to a different provider? Yes, you can transfer a Junior SIPP to another provider.

Who might find it useful?

A Junior SIPP can make sense if:

You're happy for the money to be locked away until retirement
You like the idea of the 25% top-up
You already have a Junior ISA, or you'd like to use both
You can keep up regular payments without stretching yourself

It may be less suitable if:

You'd like the money to be usable before retirement
Money is tight for other things now
You'd rather your child had everything at 18

Getting started

Try some numbers in our Junior SIPP calculator, which shows the 25% top-up over a lifetime
Compare providers on charges and the funds on offer
Open an account online, which usually takes 15 to 20 minutes
Set up payments, regular or one-off

Conclusion

A Junior SIPP is a pension for your child, with a 25% top-up from the government and decades for the money to grow. Even modest payments can make a real difference by retirement.

The catch is the lock: the money can't be used for anything before pension age. That's why many families start with a Junior ISA, and add a Junior SIPP if and when they can.

This article is for education only and isn't financial advice. Pension and tax rules can change, and the value of investments can go down as well as up.