Can one make an initial lump sum of £500 followed by a regular monthly amount of £25?
28 May 2021
Question by Garrie
My mother would like to open a pension for her daughter/my sister who is 53. My mother would like to make an initial lump sum of £500 followed by a regular monthly payment of £25. My questions are: 1. Is this possible? 2. Do you know which companies may offer this? 3. What questions we should be asking of these companies?
Answered by Rachel Efetha
Thanks for your question. Yes, this is possible. Any third party can make payments into another persons pension subject to a maximum of £3,600 per year including tax relief. All major pension providers offer third party payments. In terms of what to ask, you just need to make sure that you understand the costs and the risk that you are taking in the particular fund that she chooses. You can look at the Boring Money Best Buys here https://www.boringmoney.co.uk/pensions/pensions/
Chartered Financial Designer
Rachel has nearly 30 years’ experience in Financial Services, with the last 21 years advising clients. She advises on a holistic basis but particularly enjoys Cashflow Planning to see when her clients can afford to retire, and has reduced grown men to tears twice by telling them they could afford to resign right now. As a divorcee herself, Rachel loves coaching women going through divorce to take financial control, and has successfully argued with solicitors to gain her clients a much bigger slice of the pension pie.