What is a Junior SIPP?
By Team SalaryCalculate · 7/13/2025
A Junior SIPP (Self-Invested Personal Pension) is a type of personal pension designed specifically for children under the age of 18. It allows parents, guardians, or even grandparents to start saving for a child's retirement in a tax-efficient way — long before they enter the workforce.
While retirement might seem a lifetime away for a child, starting early can offer significant long-term benefits thanks to the power of compound growth and generous tax relief.
How Does a Junior SIPP Work?
A Junior SIPP functions just like a regular SIPP but with a few important differences:
- Ownership: The account is opened and managed by a parent or legal guardian, but the pension belongs to the child.
- Contributions: Anyone can contribute, but there's an annual limit (currently £2,880 per year).
- Tax Relief: Contributions qualify for 20% tax relief, meaning the government adds an extra £720, bringing the total to £3,600 per year.
- Investment Control: The money can be invested in a wide range of assets like stocks, funds, ETFs, and bonds.
- Access Age: The child can’t access the funds until age 55 (rising to 57 from 2028 and likely later in the future).
Key Benefits of a Junior SIPP
- Free Government Money: Every £2,880 you contribute is topped up to £3,600 with tax relief.
- Compound Growth: Starting from birth gives the pension decades to grow.
- Investment Freedom: Choose how the money is invested, from cautious to adventurous portfolios.
- No Income Required: Even though the child isn’t earning, they’re still eligible for tax relief.
Who Can Open a Junior SIPP?
Only a parent or legal guardian can open a Junior SIPP, but once open, anyone (including grandparents, relatives, or friends) can contribute — up to the annual limit.
Junior SIPP Contribution Rules
| Feature | Value |
| Maximum personal contribution | £2,880 per year |
| Government tax relief | £720 (20%) |
| Total contribution with relief | £3,600 per year |
| Investment options | Wide range (shares, funds, ETFs, etc.) |
| Access age | 55 (57 from 2028) |
Things to Consider
- Locked-in Funds: The money is inaccessible for decades, even in emergencies.
- Risk Exposure: Investments can rise and fall — long-term growth is expected, but not guaranteed.
- Retirement Planning Complexity: If the child later has a workplace pension, they’ll need to factor in multiple pots at retirement.
Junior SIPP vs. Junior ISA
| Feature | Junior SIPP | Junior ISA |
| Annual limit | £3,600 (with tax relief) | £9,000 |
| Tax relief | Yes (20%) | No |
| Access age | 55 (57 from 2028) | 18 |
| Use of funds | Retirement only | Any purpose |
| Investment options | Broad | Broad (varies by provider) |
Both have their merits — many families choose to open both.
Is a Junior SIPP Worth It?
If you’re thinking long-term and want to give your child a head start on their retirement savings, a Junior SIPP is one of the most tax-efficient ways to do so. While the money is tied up for decades, it can grow substantially over time, providing a solid financial foundation for the future.