David and Maria are British citizens who lived and worked in the U.S. for several years. Their daughter, Isabella (8), was born in the U.S. and is a dual citizen. They returned to the UK three years ago, but do expect to return to the USA, but as their daughter is a US Citizen, they want her to have the choice to experience working and living there in the future. To ensure compliance with UK and US rules, they wanted support to help her long-term savings. They want to set up a vehicle for Isabella to save that can work across borders, has flexibility but is geared to long-term goals not when she becomes an adult.
Challenge / Considerations
- Dual U.S. birth/citizenship = potential exposures to U.S. tax/IRS / reporting.
- The parents are concerned that most investment vehicles (in either country) aren’t really set up for dual-citizenship children (PFIC, UK pensions residence).
- Family wants a vehicle that can continue to take contributions even after the child turns 18, and shares their value around financial inclusion — she may not have a lot of capital now but they want to begin making a start.
- They also like the concept of “future independence” for their daughter, rather than only directing money toward university; they want her to have the flexibility to choose her own work, retirement age, and lifestyle with a financial cushion at retirement.
Solution & how a junior pension meets the need
- Edale suggested the parents open a UK-SIPP for Isabella and take full advantage of the annual contribution allowance (£3,600) each year when possible. Key features:
- Contribution: Up to £3,600 gross per year (20% tax relief top-up included) available into the SIPP for the child.
- Investment horizon: With ~49 years until age 57 (assuming this access age remains) fund benefits from long compound growth and long-term time horizon.
- Locked-in nature: The fact funds are locked until 57 means money is inherently focused on true long-term security — to help child later in life regardless of residence location.
- Post-18 contributions: Contributions can be made once child turns 18, which adds flexibility to family (or child themselves) to continue investing.
Social mission / financial inclusion: Edale makes clear that they work with parents with modest contribution levels as part of a wider mission to widen access to investing and long-term planning, not just HNW individuals. This particularly resonates with David & Maria. They appreciate the inclusive, no-minimum-barrier approach. Edale
Cross-border suitability: Edale’s experience with U.S./UK citizens means they are able to navigate cross-border complexity and manage the U.S. side of the equation so that the SIPP setup is carefully structured to help mitigate issues such as U.S. tax/reporting (careful coordination of residence, potential U.S. tax on growth, etc).
Results / Client perspective
David and Maria are contributing £2,880 per year to begin with (with the plan to ramp contributions after age 18 if income allows for extra monies). They appreciate the “set and forget” nature of the junior pension, knowing they are doing something helpful for their daughter’s long-term future, even if she chooses to stay in the UK, return to the U.S., or spend time in both countries. It also helps that the structure inherently encourages long-term thinking and is less about reacting to immediate life stages or needs.
Key take-aways
- Annual UK SIPP contribution allowance can be a powerful tool to set up long-term retirement assets for children (including dual citizens).
- Tax-relief boost and locked-in until age 57 align well with the retirement, long-term security focus.
- Flexibility for post-18 contributions adds useful ongoing value.
- Working with specialist cross-border adviser familiar with U.S./UK issues is very helpful.
- Social mission of financial inclusion — small contributions starting early can have major future impact and Edale opens these account as part of its social mission rather than profitability.
At Edale we believe that everyone — including parents and children with dual UK/US citizenship — should have access to long-term, tax-efficient financial planning. Our inclusive approach means we can help get these modest contributions, focus on long-term compounding rather than requiring large initial sums, and make investing accessible without high minimum barriers.