I’m a money expert – 5 tips to ensure you’re a millionaire by the time your baby retires

A money expert has revealed five tips to ensure your baby has a £1 million pension by the time you retire.

The cost of living has increased and your disposable income has decreased after having a child, but that doesn’t mean you have to struggle with cash.

Megan Jenkins, a certified financial planner and partner at wealth management firm Saltus, offered advice on supporting children financially.

She outlined how parents can fund university costs or a down payment on a child’s first home, and how a newborn baby can retire with a £1 million pension pot.

This is a viral meme about Kylian Mbappé’s parents promising to subject their children to grueling training sessions in order to spur his meteoric rise to stardom and wealth after winning the Soccer World Cup.・It was born after Mbappé.

Economic experts said the most difficult part will be readjusting the lifestyle and potentially reduced income that parents once enjoyed.

You may need to reconsider spending on new or expensive toys and clothes and opt for second-hand items.

She explained: “Children can receive a pension from birth, and there is no minimum age.”

“Only parents or guardians can open a pension for their child, but once it’s started, anyone can make contributions, including parents, grandparents, godparents, friends and other family members.

“Junior pensions are a fantastic tax-efficient way to build your child’s retirement nest egg through the power of compound growth.

“Setting up a pension as soon as possible means even small contributions have more time to grow, even if your children are decades away from retirement. You will help ensure their future financial well-being.”

“The maximum you can save each year in your junior pension from birth to age 18 is £3,600, which includes up to £720 of tax relief paid by the government and up to £2,880 from your family or individual.”

“Control of the pension automatically passes to your child when they turn 18, but the money is locked up until retirement age (usually available from age 55, but from 2028 it will be age 57) .”

“But by delaying access to the money until age 65, your child can retire with a pension pot of £1 million through the power of compound interest (at 5 per cent each year until age 65, £100 This equates to over 10,000 pounds, which is potentially a return of over 2,000%.

She told new mothers and fathers not to be afraid to ask their parents for financial support through a pension.

“If grandparents plan to leave their wealth to their children, they may want to leave some money to their grandchildren through a pension as a way to chain wealth to the next generation.

“The appeal of leaving a pension to a grandchild is that it will be taxed at the beneficiary’s marginal tax rate if the grandparent is over 75, depending on their age when they die.

“This means that if you have a minor or university-age child who is receiving money from a pension, they can effectively access the pension tax-free because they have an annual personal allowance of £12,570 available to them. “and this allows them to take advantage of it.” It’s about phasing it out.

She gave the example of a grandchild inheriting £50,000 from his grandmother’s pension, which he could use to fund three years of university by receiving £12,570 a year tax-free.

Ms Jenkins advised parents to set up a Junior ISA where various family members can contribute.

She said, “You can start using it as a way to pay for college, and if your child decides not to go to college, you can get a head start on your first property deposit.” You can save up to £9,000 each tax year and that’s tax-free money.

“Families can contribute as much as they like to this account (according to the donor’s terms) and it will probably be more beneficial than buying material gifts for the child.” , you have to think about the long term, that they will thank you when they turn 18. ”

Other helpful tips include taking out Family Income Protection Insurance or Family Income Benefit Insurance and updating your will.

She says, “Childcare and childcare costs are high during the early years, so household income benefit insurance is worth having.” This insurance is a policy that allows one parent to take out the insurance before the child turns 18. Provides additional income in the event of death.

“The initial cost of insurance may seem high, but for example if you wanted £20,000 a year until you turned 18, you would start at £360,000, but if you died after 10 years, you would receive £360,000. It’s £120,000 instead of £120,000, so it’s a lot of money.”The sum insured paid by the insurance company is much lower, but comparable to the maintenance costs of having a child if one parent dies. It will be cheaper.

“It is also important to ensure that your will, including any accompanying wills, are up to date.”

The irony is that other parents across the UK train their children from an early age to become accomplished soccer prodigies and, hopefully, enjoy the same meteoric stardom as French ace Kylian Mbappé. We are embracing the latest trends.

Regarded as one of the best players of his generation, the 25-year-old had already won a World Cup and four Ligue 1 titles by the time he was 21.

He is expected to leave his current club Paris Saint-Germain this summer, with Spanish giants Real Madrid a likely destination.