London, 03 August 2026: Families of disabled children understandably focus on immediate care and support needs, but early financial planning can also play an important role in securing their child's long-term financial future.
PensionBee warns that for many disabled young people, where money is saved can be just as important as how much is saved. Savings held directly in a child's name may later affect entitlement to means-tested benefits or create difficulties if they lack capacity to manage their finances independently. Taking professional advice can help families choose the most appropriate way to save.
This guidance from PensionBee follows its recent report, Sick, Tired and Never Retired?, which found that a young person disabled before entering the workforce could retire with a pension pot £245,327 smaller than a non-disabled peer, highlighting how disability can affect financial wellbeing across an entire lifetime.
While wider policy reform remains essential, there are practical steps parents, grandparents and other relatives can take to improve long-term financial resilience.
Six ways families can help
1. Start saving as early as possible
The earlier money is invested, the longer it has to benefit from compound investment growth. Even relatively modest monthly contributions made throughout childhood could grow substantially over several decades.
2. Consider whether a Junior ISA is right for your family
A Junior ISA allows family members to save tax-efficiently towards a child's future.
However, because the money legally belongs to the child and becomes accessible at age 18, it won't be suitable for every family. Savings held in the young person's name may affect means-tested benefits, and unrestricted access at 18 may not be appropriate where they lack capacity to manage the money themselves.
Families saving for a disabled child should consider taking professional financial advice before opening a Junior ISA.
3. Think about pensions early
If a disabled young adult has earnings, even from part-time work, pension saving can be especially valuable because contributions usually benefit from tax relief and decades of potential investment growth. Family members may also be able to contribute to an existing pension on their behalf.
Alternatively, a Junior Pension allows contributions of up to £3,600 a year (including basic rate tax relief) even before a child enters the workforce, helping retirement savings begin much earlier. At 18, this becomes an adult pension in their name, however pension assets do not affect means-tested benefits until the person reaches State Pension age.
4. Make birthdays and Christmas count
Instead of another toy, grandparents and relatives may wish to consider making regular financial gifts towards a child's future.
Small but consistent contributions over many years can make a meaningful difference. Where appropriate, families may decide it's more suitable to keep savings in their own names, earmarked for the child's future needs, or to pay directly for major expenses such as equipment, housing adaptations or care when required.
5. Consider trusts as part of long-term planning
Families planning to leave significant assets, including life insurance proceeds, may wish to seek specialist advice about trusts and other arrangements that can provide financial support while helping to protect entitlement to means-tested benefits where appropriate.
Professional advice can help determine the most suitable arrangement for each family's circumstances.
6. Don't overlook protection planning
Families should also review:
- Wills, including whether a trust for a disabled beneficiary would be appropriate
- The appointment of guardians and trustees
- A Letter of Wishes setting out care preferences and guidance for future carers and trustees
- Life insurance
- Lasting Powers of Attorney (where appropriate later in life)
- Pension expression of wishes
Forward planning can help ensure financial support continues if the worst happens, and parents or carers are no longer able to provide support.
Becky O'Connor, Head of Pensions at PensionBee, said: "No family expects to spend years thinking about retirement when they're coping with a child's disability, but the earlier long-term financial planning starts, the more options it can create later in life.
"Our research showed that someone disabled before entering work could retire with a pension pot more than £245,000 smaller than a non-disabled peer. Families can't solve that structural problem on their own, but they can make small, deliberate financial decisions throughout childhood that build financial resilience over decades.
"Parents and grandparents often ask how they can help. The answer isn't always simply saving more money - it's making sure savings are held in the right way. Sometimes that means contributing towards a pension, sometimes it's considering trusts, and sometimes it's simply setting money aside for future needs. None of these removes the need for wider reform, but together they can help strengthen long-term financial security."
Rhiannon Gogh FPFS, Specialist Chartered Financial Planner, Founder of SENDA and Carers Academy, and author of Planning With Love, said: "Saving is always a good thing. But for families of disabled children, where you save can be just as important as how much you save.
"We've seen this with Child Trust Funds and Junior ISAs, where many families have faced unexpected challenges because mental capacity, financial vulnerability and future means-tested care weren't considered from the outset.
"Often, the greatest financial security comes from building the right plan around the person through trusts, Letters of Wishes and a strong support network that can continue throughout their lifetime."
PensionBee's research found that 91% of disabled people worry about their future financial security, while 84% say disability has negatively affected their ability to save.
Whilst closing the disability pension gap ultimately requires structural policy reform, careful long-term planning can help families build greater financial security for disabled children throughout their lives.
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