The lights were twinkling, the turkey roasting, and my family and I were sitting around the decorated tree. Christmas Day last year could not have been more festive. That is until I gave my sister her Christmas present.
Instead of handing her something delightful, beautifully wrapped and tied with a ribbon, I asked: ‘What’s your National Insurance number?’
I gave her a pension for Christmas. I whipped out a laptop and talked her through setting one up. The initial set up took just a few minutes. Then, before you could say Self Invested Personal Pension, we were back to present opening and mince pie scoffing.
I realise it’s unorthodox gift – but surely I’m not the only one to have done it?
Curious, I asked some of the biggest investing platforms how many accounts were opened on Christmas day last year.
Ten Sipps were opened on Hargreaves Lansdown, plus 42 stocks and shares Isas and 25 Lifetime Isas. AJ Bell confirms it gets new account openings – and they get quite busy between Christmas and New Year. Nineteen Sipps were opened on Christmas day with Vanguard – as well as 132 Isas. The number of account openings was even higher on all three platforms on Boxing Day.
No doubt some of this activity will be people taking the opportunity to sort out their own finances while they have a quiet moment.
But I’m sure a great deal is as a result of loved ones coming together over the festive period and finding time to talk about and help each other with their finances.
A conversation with an older family member who already invests may inspire a younger one to take the plunge and do the same.
Or occasionally – as in my case – a family member may help someone to set up an account.
And perhaps most commonly – an account opening may be precipitated by someone receiving money from a family member of the festive period and wanting to put it to good use.
Sarah Coles, head of personal finance at Hargreaves Lansdown, thinks this will become increasingly common. ‘We can expect that trend to grow this year, after inheritance tax changes to pensions may have persuaded people to make more lifetime gifts,’ she says.
You might say thinking about pensions and Isas on Christmas day is all a bit humbug. But I can’t see that the gift of a more comfortable retirement is any less merry than a pair of socks or bath salts.
And for some families, Christmas may be the only time that they get together and have time to have conversations about finances.
In the case of my sister, I put the sum I would have spent on her present into the pension. But the real gift was helping her to get started.
The most important bits of financial admin are often those that get stuck on our to-do lists for the longest.
They can start to feel insurmountable. Sometimes a helping hand from a loved one is all it takes to kick start you into action.
Of course, it’s essential that the recipient is on board with the idea, understands the implications and is happy with the choice of platforms and funds. But time and again surveys show that the most common financial regret is not starting an imperfect pension – it’s not starting one earlier or at all.
As families so often help each other with long-term saving, I wonder whether there is further scope for the industry to innovate and support them to do so.
Three-quarters of savers don’t even realise they can pay into someone else’s pension, a survey by financial adviser platform group Nucleus found earlier this year. I’ve no doubt more would if they knew.
In theory, spouses can pay into each other’s pensions when one person takes time out of work for caring responsibilities. It’s a piece of advice that is often offered by wealth planners to ensure that one person’s retirement savings don’t fall behind. But I’ve yet to hear of any couple who does it.
In its Women & Retirement Report 2024, Scottish Widows put forward the idea of ‘family pension plans’. Couples would collectively accumulate funds to provide for them both in retirement.
A striking concept – which also made me realise how rarely we hear of new ideas such as this.
Greater innovation from the pensions industry to help families save together and support each other as we know they already do? Now that would be a great Christmas present for us all.