We're saving £100 a month into pensions for our toddler and baby - here's why

Richard and Caitlin Brain have two young children - 20 months and 5 months old - and they have already set up pension accounts for them. The couple, from Swansea, South Wales, contributes £50 per month to each child's account, totaling £220 a month, which they will not be able to access until the children are 57 and 58 years old, respectively.

Despite the long wait, Richard, a 30-year-old investment firm employee, and Caitlin, a 28-year-old mother recently returned from maternity leave, believe they are making a wise decision for their children's future. The couple also has Junior ISA savings accounts for their children, into which they contribute £60 per month, with access to the funds at age 18.

This combination of Junior SIPPs and ISA accounts is seen by the couple as a way to provide both financial security and potential opportunities for their children's education, business ventures, and housing. Junior SIPPs were introduced in the UK in 2001, allowing parents to contribute up to £2,880 per year, with the government topping up the contribution with £720 in tax relief, making a total of £3,600.

The popularity of Junior SIPPs has grown in recent years, with providers like Hargreaves Lansdown and Fidelity reporting significant increases in account openings. While paying into their children's pensions may mean the couple lives more frugally, they are convinced that their investment will pay off in the long run, and their children may even be able to retire earlier than the state pension age.