Glossary · UK

What is Junior SIPP?

A self-invested personal pension for a child, letting a parent or guardian build retirement savings with tax relief until the child can access it.

Full Definition

A Junior SIPP (Self-Invested Personal Pension) is a pension wrapper opened by a parent or legal guardian on behalf of a child under 18, giving wide investment choice across funds, shares and other assets. Contributions attract 20% basic-rate tax relief even though a child is a non-taxpayer, so a GBP 2,880 net payment is topped up to GBP 3,600 gross each tax year - the maximum that can be paid in for a non-earner. Anyone, including grandparents, can contribute. The child takes control at 18 but cannot normally access the money until the minimum pension age. Because contributions are invested over decades, compound growth can be substantial, making a Junior SIPP a powerful long-term gift. It is distinct from a Junior ISA, which gives no tax relief but allows tax-free access at 18. Specific minimum pension age rules apply - check gov.uk for current limits.