Parents should consider investing for education before investing in stakeholder pensions for young children, says Tunbridge Wells Equitable Friendly Society.
Chief executive David White is concerned that parents will be attracted by the tax breaks in stakeholder schemes and invest for their children without considering more pressing needs such as education.
He thinks parents should prioritise investments to budget for costs such as university fees rather than put money in a stakeholder which cannot be accessed until at least 50 years old.
He points to the Government's aim of getting half of school leavers into university despite abolishing maintenance grants. One in three school leavers currently goes on to higher education.
He says: “Should parents tie up money in a stakeholder pension for a child when the money cannot be accessed until they reach 50?
“No, not until plans have been established for funding university education unless they are one of the few who can afford to fund both.”