Financial gifts for Christmas – hmm.

December 3, 2009 4:30 pm by Alice Ross

Obviously, I am all in favour of being financially aware. But giving your kids a financial gift for Christmas may be pushing it.

Hargreaves Lansdown, the financial adviser, sent me something yesterday saying “Forget Playstations – what kids really want for Christmas is a secure financial future.”

At least Tom McPhail, their head of pensions, had the grace to add “Well, maybe not.” But he still thinks setting up a pension for your kid is a good idea.

Actually, the issue of Christmas presents aside, I agree. There are some pretty compelling figures showing that if you pay into a pension that early in life, the benefits could be enormous later on. McPhail says that saving into a pension from 0-18 would give you a better pension than if you saved in from 18-55 – because of the longer time the pension investments will have to grow.

So, I’m all in favour. I’d just recommend the pension alongside the Playstation, rather than instead of it.

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Lucy Warwick-Ching is the FT’s new Money Online Editor and has been a UK Companies reporter covering tobacco, pubs and leisure companies as well as the deputy editor on House and Home.

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Ellen Kelleher has been a personal finance reporter in the UK for close to four years. Before arriving in London, she worked in the FT's New York bureau where she covered the insurance sector.

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Josephine Cumbo has written about all aspects of personal finance but currently specialises in insurance. She also covered company news for FT.com. Prior to working at the FT she was a news reporter for the ABC.

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